Graduate study is not essential to a successful career in finance. The highly fruitful careers of a great many men who have not had graduate training for business, or for that matter college training, provide abundant support for this statement. But graduate training should help--later on in this article I will indicate just why and how.

There are many quite different graduate programs which are aimed at preparing men for a career in business and in finance. Since my experience with education for business has been primarily at the Harvard Graduate School of Business Administration, this article is written primarily in terms of graduate work at this school.

The more important question regarding graduate study facing the undergraduate considering a career in finance is: "Will graduate study help me enough to be worth the cost?" or in financial terms, "Will an investment by me in graduate study yield a satisfactory return?" As the bold type suggests, the answer to this question depends a great deal on the individual and his particular circumstances. The price of the investment and the value received are each highly subjective.

Time Factor

Monetary cost is the first consideration in weighing graduate study. Almost all current college graduates can find a job in finance upon graduation in which they can be self-supporting. If they undertake a two-year graduate program, the total cost averages between $4,000 and $5,000 for single men and obviously more for married men. Even after one subtracts $500 to $1,200 for income that could be earned during the two summer vacations, the amount for all but the wealthy men is a very significant one. Fortunately, in many graduate schools scholarships and other financial aid now are available in substantial amounts. At the Harvard Business School financial aid is in the form of long-term loans rather than gifts, but we are proud of the fact that any student who is willing to take on a substantial obligation can obtain the funds to finance his graduate study.

For most men the time invested in graduate study is more important than dollars and cents. This is particularly true for men who must devote two or more years to military service after graduation. In general, the older the man is after college or service, the more important is the time investment in graduate study. The man coming out of college or the service might well profit more from two years on the job than from two years in further study. This is particularly true when the graduating senior has an especially attractive job opportunity that may not be open two years later.

Also to be considered is the cost in effort involved in graduate study. A good program calls for rigorous, consistent effort for everyone regardless of their ability. The work week is long, with heavy study at night and through much of the weekend. Many men find the work harder than would be experienced in actual business. We do have a few men like a recent Harvard College graduate who resigned from the Harvard Business School in mid-November frankly explaining that "to me it just is not worth the hard work I am putting in."

Risk of failure in the graduate program might also be considered a cost of graduate work. Despite a careful selection process, not all men admitted the school can handle the work and some are dropped for scholarship reasons. The man with a good college record finds failure in graduate school a most unpleasant experience.

There is the additional hazard that the immature graduate student will gain the mistaken impression that his graduate work places him on an easy escalator to high responsibility and success. On the job such men soon find that education is no substitute for hard work and "drive" and discover vigorous contemporaries with sharp elbows and keen if unlettered minds moving past them.

Now let us consider what the typical man can expect to get out of his considerable investment in money, time, energy, and risk-taking in graduate study; then more specifically how this investment can help in preparing for work in the field of finance. It would be helpful if I could forecast the extra earnings that will accrue as a result of his graduate study. Although considerable data has been accumulated on the business progress and incomes of our graduates, we do not have enough to justify any real conclusions. Several factors limit the usefulness of the available data--for example, the fact that reports from graduates are voluntary and thus may not be a representative sample, and the more basic fact that it is difficult to judge whether one's success or lack of it is due to the Business School. We do know that starting salaries for our graduates in 1954 average $4,800, which seems significantly above levels for arts college graduates generally. But starting salaries by themselves mean little.

Sharpen Thinking

Without reliable statistical data as to the results of graduate training I will speak in terms of my own experience with students at the Harvard Business School and what I think I see happening to them in their two years here. First, through such a graduate program, almost every man appears to sharpen his ability to think constructively on business problems. During his two years at the Business School the student studies more than 1,000 case problems drawn from actual business situations. He is asked to analyze these cases and to work out a sensible program of action on the problem. Although the elusive and yet extremely important quality of good judgment is not easily learned in school, judgement based on habits of this careful analysis is likely to be very much better than judgment based on hunch or snap conclusion. Consequently, the individual's ability to tackle a problem and reach sensible judgments should be advanced in important degree by his graduate study.

Second, the man should enhance his ability to express his ideas both orally and in writing. He learns to put forward his own ideas and to defend them against the attacks of fellow students or the intellectual assault by his instructors. Skill in these respects is no small asset in business.

Business Knowledge

Third, the student should increase his ability to work with others in group activities. Much emphasis at the Harvard Business School is placed on group efforts, on cooperating and working with other men in getting a job done.

Fourth, in the course of his study a student should gain a considerable knowledge of business. He should esquire a sizable body of facts about business and an understanding of the vocabulary of business. For example, he will get a basic knowledge of accounting, which in many respects is a language of finance. Furthermore, the cases be considers often are about key problems in business. Yet at the Harvard Business School the acquisition of substantive knowledge about business is an objective definitely secondary to the object of developing effectiveness in constructive thinking. In line with this view, the number of courses offered in the various functional areas of business such as finance is limited in comparison with the offerings in some other schools more concerned with imparting substantive knowledge in specialized subjects.

In the course of his study the student should mature rapidly. Many men grow up fast in graduate school, gaining poise and self confidence. The college graduate lacking maturity and allied characteristics upon entry into business will come along slowly into business. As an executive commented to me recently, "We have a young Phi Beta just out of college in our bank. He is a big gangly kid. Unless he develops on the job much faster than I expect, it will be quite a while before we can have him represent the bank with important customers."

Further, graduate study helps many men to mature fast and to find their own career interests. Many men just out of college know little about business or what they want to do in life. In planning their carcers, such men are highly vulnerable to reliance on such cliches as "I want to do personnel work because I like people." Through his graduate study the man has the opportunity to learn more about what work in the various aspects of business will be like and to reduce the chance of false starts in lines that are unproductive. For many men graduate study opens up career opportunities that are better than those available to them just out of college. The able man can gain something from the reputation of the alumni and the School in being considered for excellent opportunities.

Study and Finance

So far I have spoken of graduate study as training for business in general. Now let us consider how such training can contribute to a career in finance.

A first comment is that the word "finance" is applied to a wide range of jobs. To make my point I shall list a few of the different types of institutions offering job opportunities in finance. There are some 14,000 commercial banks in the country, along with numerous savings banks, cooperative banks, and savings and loan association. There are many job opportunities too, with investment companies, with trust companies doing investment work, with those large amassers of capital, the insurance companies, with the finance companies and other firms administering the tremendous volume of consumer credit in this country, and with commercial credit and factoring companies. Jobs within these companies differ widely, including work predominant in sales, personnel, general administration, or service activities.

Often overlooked are the large number of opportunities in connection with the finance function within manufacturing, retailing, and other nonfinancial concerns. While the "financial" jobs in these various financial and nonfinancial institutions and functions are quite varied in nature, finance is business. Although work in finance does require some special knowledge and skills, the executive in finance is continually concerned with the various aspects of decision-making and administration common to all business, so in a real sense, training for business is training for finance.

Broad Thinking

In many financial jobs breadth of thinking is particularly important. Take the case of a loan officer in a rather large bank nearby who must intelligently administer his bank's credits to companies in the following industries: chemical, leather and shoes, finance (consumer lending), lumber and wood products, and building materials. The pressing problems of the company are inseparable from, and often the common denominator of, all the activities of the firm. To administer credit effectively, the banker must be above all a good businessman. He must understand business and the activities back of the figures with which he works.

Further, most financial businesses have to be effectively operated to make money under current conditions. The balmy days of the 1920's when the personable college graduate with good contracts and a nice smile could make good money as a customers' man are over. Salesmanship and contacts still are useful in finance, but financial business needs men with more assets than these. As other doubtless will write in this edition, there are excellent opportunities for men coming into finance jobs today. But the excellent opportunities are for good man, well trained, who can product results ino a competitive, not a lush, environment.

Long-Run Investment

Graduate training for finance is very definitely a long-run investment. Starting salaries in finance are not high, and, unless the man takes a highly specialized program in one aspect of finance, his academic work is no substitute for training programs dealing with particular operations and affairs. Although less true today than 25 years ago young men do not advance fast in finance. So in his first years on the job he may see few direct results from his graduate work. But the graduate training should put him in a position to learn more readily from his job and to profit more from his experience on the job.

If it has sharpened the individual's ability to think effectively, graduate training should speed up his usefulness and help him move up the ladder of responsibility faster and further. For many men, particularly these of ability, drive, and a real desire to move to upper levels of responsibility in finance as in other areas of business, graduate training may well be worth the considerable investment required.Professor Charles M. Williams