Maybe you heard about (or read) a recent story in the Washington Post entitled: Are business schools graduating the wrong leaders? If so, the GMAT may be to blame. Hopefully you've been watching my blog series on this story, and tracking the various critical reasoning errors. Let's discuss another one today. The article suggests that people interested in entrepreneurship don't do as well on the GMAT, and it concludes that the GMAT discourages entrepreneurship. "Graduate Management Admission Test (GMAT) results are an important assessment criterion for business-school applications. The higher the GMAT score, the better the odds of gaining admission. A study in the Journal of Business Ethics makes the surprising finding that high GMAT scores may be correlated to some of the negative traits of American business: lack of ethical orientation, male domination of executive ranks, uncertainty avoidance, and individualism. What's more, GMAT scores may be inversely correlated with entrepreneurship." But the flaw in that reasoning is made starkly evident at what the questions on the GMAT do a brilliant job of measuring. Underneath the quant and verbal questions you'll find on the GMAT, here are some of the core skills really being tested: 1) The ability to poke holes in flawed claims (like that of this study). If an aspiring entrepreneur can see critical faults in a claim or a plan, they'll be less likely to engage a faulty plan, and thus they'll be more likely to avert failure. 2) The ability to arrive at an answer in a creative way. This skill is practically the very definition of entrepreneurship and innovation 3) The ability to know when you have enough information to make a decision and when you don't, AND the ability to know what would be necessary to make a decision. Any entrepreneur lacking these skills could meet with a failed venture in short order. 4) The ability to successfully follow instructions. Any successful entrepreneur must be able to research carefully and know the industry, and comply with any regulations. Successful entrepreneurs can't skip key steps. As you can see, since the GMAT measures some of the core skills required to succeed in entrepreneurship, it's probably very safe to say that those who wouldn't do well on the GMAT would also be more likely to struggle building a successful entrepreneurial venture. That correlation is also evidenced by the hundreds tutoring clients I've worked with. The correlation is clear: the entrepreneurs who've done better at the GMAT have also met with astounding successes early in their ventures. I've had students who've gained multi-million dollar financing and they've all been 700+ GMAT test takers. The comical twist at the end of the article knocks my socks off: "Or perhaps business schools should start recruiting students with the lowest GMAT scores." Now that would be a recipe for a cascading system failure that would likely ripple through the entire global economic system. But I must say "thank you" to the Washington Post for bringing us such a thoroughly entertaining piece. Now go rock the GMAT, and get in to the business school of your dreams!
Maybe you heard about (or read) a recent story in the Washington Post entitled: Are business schools graduating the wrong leaders? If so, the GMAT may be to blame. Hopefully you've been watching my blog series on this story, and tracking the various critical reasoning errors. Let's discuss another one today. The article suggests that people interested in entrepreneurship don't do as well on the GMAT, and it concludes that the GMAT discourages entrepreneurship. "Graduate Management Admission Test (GMAT) results are an important assessment criterion for business-school applications. The higher the GMAT score, the better the odds of gaining admission. A study in the Journal of Business Ethics makes the surprising finding that high GMAT scores may be correlated to some of the negative traits of American business: lack of ethical orientation, male domination of executive ranks, uncertainty avoidance, and individualism. What's more, GMAT scores may be inversely correlated with entrepreneurship." But the flaw in that reasoning is made starkly evident at what the questions on the GMAT do a brilliant job of measuring. Underneath the quant and verbal questions you'll find on the GMAT, here are some of the core skills really being tested: 1) The ability to poke holes in flawed claims (like that of this study). If an aspiring entrepreneur can see critical faults in a claim or a plan, they'll be less likely to engage a faulty plan, and thus they'll be more likely to avert failure. 2) The ability to arrive at an answer in a creative way. This skill is practically the very definition of entrepreneurship and innovation 3) The ability to know when you have enough information to make a decision and when you don't, AND the ability to know what would be necessary to make a decision. Any entrepreneur lacking these skills could meet with a failed venture in short order. 4) The ability to successfully follow instructions. Any successful entrepreneur must be able to research carefully and know the industry, and comply with any regulations. Successful entrepreneurs can't skip key steps. As you can see, since the GMAT measures some of the core skills required to succeed in entrepreneurship, it's probably very safe to say that those who wouldn't do well on the GMAT would also be more likely to struggle building a successful entrepreneurial venture. That correlation is also evidenced by the hundreds tutoring clients I've worked with. The correlation is clear: the entrepreneurs who've done better at the GMAT have also met with astounding successes early in their ventures. I've had students who've gained multi-million dollar financing and they've all been 700+ GMAT test takers. The comical twist at the end of the article knocks my socks off: "Or perhaps business schools should start recruiting students with the lowest GMAT scores." Now that would be a recipe for a cascading system failure that would likely ripple through the entire global economic system. But I must say "thank you" to the Washington Post for bringing us such a thoroughly entertaining piece. Now go rock the GMAT, and get in to the business school of your dreams!
