Sometimes that hidden gem is in the one place you don’t look. For MBAs looking for opportunity, retail may just be that gem.
“Retail wasn’t on my radar,” says Omar Bouknight, who got his MBA from Harvard Business School in 2004. Nor was it on the radar of many other African-Americans in his class. “Maybe 5 percent of us went into retail,” adds the co-author of Your MBA Game Plan.
Why wasn’t retail on the top of the list? “From a financial standpoint, the field wasn’t that attractive. The hot areas back then were private equity, hedge funds and consulting,” says Bouknight.
“Hotshot MBAs are not looking at retail,” Jeff Greene, a partner at the New York City-based recruiting firm Battalia Winston Amrop Hever, concurs. “There are a lot more lucrative fields and [MBAs] have loans to pay off.”
Retail salaries are generally much lower than what Wall Street offers. MBAs can earn in the high five figures in retail, occasionally six figures if the individual had some significant work experience in between college and graduate school, estimates Gregg Smith, Global Head of the recruiting firm Boyden’s Diversity Inclusion practice.
The numbers reflect the lack of interest in retailing. According to the 2006 Current Population Survey from the U.S. Census Bureau of Labor Statistics, African Americans make up roughly 10 percent of retail employees. Of all retail employees 25 years and older, only about 3% had master’s degrees, according to BLS.
A 2004 study by Business Design Consulting, a research and consulting firm, revealed that of 927 merchandising executives surveyed from 77 companies, approximately 9 percent were of color, (2 percent African-American, 4 percent Asian and 4 percent Latino). Of the 462 planning and allocation executives identified, 16 percent (3 percent African American, 9 percent Asian, and 4 percent Latino) were of color.
But those at the MBA level, who venture into historically uncharted territory for minorities, are finding a sea of challenges and opportunity.
“Retail is one of few industries where you can stretch as a leader,” says Michael Brown, MBA and author of Fresh Customer Service. “Why? You can work with ages 17-79, learn how to motivate them, figure out how to cope with an ever-changing environment and get a grasp of cost control,” says Brown. “That’s a solid foundation for any career.”
The jobs for MBAs run the gamut of support functions, including finance, treasury, accounting, marketing, information technology and more. MBAs don’t fare as well in the merchandising side, which Smith says is typically the route to the chief executive suite.
“The perception is that African-Americans are not good in merchandising,” says Greene.
But there are internships and rotational programs that can help to level the playing field.
April Crosse, who graduated from Harvard Business School with Bouknight, broke the mold. After Harvard she was hired at Neiman Marcus as the manager of merchandise planning, where she used her financial expertise in the buying office, budgeting, forecasting, and managing merchandise flow. For the last 18 months, Crosse has been a buyer of women’s couture – traveling from Neiman Marcus’ Dallas headquarters to vendor showrooms and runway shows in New York and Europe – to help choose styles that will grace the aisles of Neiman Marcus’ 35 stores.
“I don’t hobnob with Anna Wintour,” she jokes. But Crosse, who worked in retail as a teenager and in college, realizes she’s in an elite class. Of the store’s buyers, only about 5 percent are African-American.
After completing undergraduate studies at West Point and serving in the Army, Noah Johnson went through Wal-Mart’s internship program in 2005. He wasn’t interested in retail per se, but the internship in operations was enticing. He was exposed to finance, merchandising, various areas of the company and its leadership.
“We worked on a real time project, something current, vital, not just created for the internship program,” Johnson says. He was assigned a mentor, and says the experience was so good that he wanted to work there full time. After receiving his MBA from Stanford in 2006, he joined Wal-Mart’s rotational program, working for several months in a variety of divisions – the stores, learning how to run day-to-day activities, a stint at Sam’s Club, merchandising and in international.
“I was tapped on my shoulder about a strategic management position. Management asked me what I wanted to do,” he recalls. Today he is Senior Manager Corporate Strategy and Insight for Wal-Mart. “I’ve been given a lot of responsibility, early. I must know what is going on in China, Europe as well as here. It’s challenging, and exciting.”
How to succeed in retailing
There’s plenty of room to grow, if you know what it takes to flourish in what can be a tough environment. Retail is extremely competitive, given the Internet, ever-changing consumer tastes, the economy, and numerous other factors. It’s not a field for the faint of heart.
“Be prepared to work hard. It’s a dynamic, fast-paced world. You will put in the hours, comparable to Wall Street MBAs,” Danté Anderson, MBA and vice president of marketing and insights at the Sam’s Club division of Wal-Mart, advises.
But it pays off. Anderson, who’s been with the company 18 months, came in as a senior director of strategy and was promoted to her present position three months after joining Wal-Mart. She worked as a strategic consultant and at a consumer goods firm before she got her MBA from Harvard. At Wal-Mart she is responsible for two of the largest consumer segments, developing strategic plans and marketing plans.
“I didn’t realize the opportunities in retailers. It was through being a consultant, as some of the clients were retail, that I began to see opportunity,” she says.
She’s interested in running a major division in a global company, or an enterprise in her future. “I want a role that will utilize consulting, strategy, marketing,” Anderson says. She believes the possibilities are there.
The biggest challenge is the nature of the beast. “This business is about constant innovation. There is no down time,” she notes.
The economy has a direct effect on the industry. Interest rates, housing, energy prices, unemployment rates, and the amount of disposable income are just a few of the factors that assist in determining how consumers spend their dollars. “This directly affects the bottom line of retailers,” Gail Monroe-Perry, president of the Black Retail Action Group, a not-for-profit, retail-related organization, observes.
You also need to know and understand your customer and have solutions for them, according to Smith.
“You have to manage relationships with vendors, and with couture the supplier has power because there is limited distribution. It’s a small world. We want to have merchandise that Saks doesn’t have, or to have a bigger selection than Saks,” Crosse says.
Retail can also be “incestuous,” Greene notes. “Retail likes to hire at the entry level and grow their own. There is an old boys network.”
But if you play the game right, you can get what you want. Brown offers some success strategies:
“Articulate your vision and get buy-in. Think of your relationships as partnerships, it’s you and us in it together. Forget your MBA. You don’t want to flaunt your education with people who make $8 an hour.
“Planned praise, especially of the front line people, goes a long way in building loyalty among employees. Commit to the people you manage by keeping them growing professionally, whether it’s coaching, a class,” he adds.
Motivating others is key. “Our MBA curriculum isn’t really set up for this,” Brown remarks. “What we learn about how to manage people in business school for the most part is outdated, it’s about customer service, motivating employees.”
To keep management happy, you must be a consistent performer. “Being a consistent performer helps become you branded. To survive in corporate retailing – be a brand, or die generic,” Brown says.
Servant-style leadership rules in retailing, he adds. “It’s about you serving the employee. It’s about them — their growth and development. That may not be what you were taught in business school, but when you do for them they trust you, and that gets results.”
Retailers are on campus and at minority job fairs, seeking out top minority talent to move their companies forward.
“You are starting to see companies like Neiman Marcus make a special effort to recruit MBAs,” Crosse notes. “Increasingly retailers are looking for people who can be potential leaders.”
“More and more retailers are recognizing the value of the MBA,” Smith adds.
Doors are opening, and the industry is increasingly more welcoming. Over the last few years, African Americans have taken on top positions. Aylwin Lewis is President and CEO of Sears, Tracey Travis is chief financial officer for Ralph Lauren and Todd Corley is vice president diversity for Abercrombie & Fitch.
Wal-Mart boasts an office of diversity, with a slew of initiatives for employees, formal mentoring programs, associate resource groups (affinity groups), increased outreach to minority communities and businesses, and more. Wal-Mart’s 15-member board of directors includes two African-Americans, 17.5 percent of its associate base is African-American. More than half of the company’s officials and managers are minorities or females, with 23.20 percent minorities including African-Americans.
More than 37 percent of all colleges and universities from which Wal-Mart recruited in fiscal year 2007 were minority-serving institutions, including historically black college and universities. The company links compensation to diversity goals to attract, hire and retain qualified associates – bonuses are reduced by as much as 15 percent if goals are not met. In fiscal year 2007, 100 percent of its officers achieved their Placement Diversity Goals to ensure there is equal representation of women and minorities in the applicant pools for management positions.
“Some retailers are willing to create special opportunities which are attractive to MBA students coming out of school. More and more, retailers are pursuing Black MBAs,” Monroe-Perry observes. “Retail is a great field that allows you to be creative and analytical. You interface with really talented individuals with diverse skills,” she adds.
The outlook is positive, Smith says. “MBAs of color are definitely on the retailing radar. “We have a search coming up with a major retailer for a significant job. They’ve made it clear they want a diverse slate of MBAs.”