Exclusivity of Ross Clubs

By Axel Steinmetz

Recently, BBA Council announced their plan to separate the biggest club recruiting event, BBA Meet the Clubs, into two events: one for open enrollment clubs and one for closed enrollment clubs. The idea to do so is a result of a broader conversation people associated with Ross has been having about the perceived exclusivity of undergraduate business clubs. Between Ross club presidents’ meetings, open panel discussions, and internal talks among Ross leaders, it’s fair to say people are thinking about this issue, including myself.

I’d thought I’d offer my own thoughts and opinions as a Ross club president. My situation is a bit unique because I’m not in Ross, yet I founded a Ross club. As such, I have no experience with BA 100 classes or the Career Development office, so I will not be discussing the disconnect club presidents have observed between clubs and other Ross organizations. My own reasons for writing this are mostly personal ones; I’ve been thinking about the issue a lot and it’s fun for me to write about controversial issues. For an undergraduate blog, I’ll enjoy the freedom I have to write about whatever I want before it might actually matter. I don’t think my writing is good enough for me to get quoted anywhere, but I should still probably say that I only speak for myself, and not all of Victors Value Investments.

The Issue Summarized

Everyone’s story is different, but the problem stems from this: students apply to many different clubs for all the reasons undergraduates join any student organization. Applicants hope to learn something new, meet interesting people, form friendships, and, for Ross clubs especially, work towards career goals. With minimal exposure to business, they can’t get into the exclusive clubs they want to. This cycle repeats itself until most people think it’s a problem that needs a solution.

The typical story is most exemplified by a hypothetical freshman who on her second Saturday on campus, shows up at the business school with a suit on for Ross club interviews. After being extremely nervous, she has a poor interview and get denied. As a result, she feels unhappy and begins to question what her career goals are.

I don’t think anyone’s completely satisfied with this process. Most applicants aren’t satisfied either because chances are they didn’t get in with the low acceptance rates each club has. Ross faculty aren’t satisfied because if they were, they wouldn’t call meetings with club presidents to talk about the issues. Finally, unless you’re a sociopath (which I don’t think Ross club presidents are for the record), turning hopeful students down isn’t a particularly fun experience. Clubs get a lot of backlash from the decisions they make.

The “hypothetical freshman idea” didn’t come from me. It came from the Ross Associate Dean, Norm Bishara, who told this story as a thought experiment for understanding others’ perspectives. Real-life examples were written about as well, like the Michigan Daily story of a freshman named Katie who had feelings of self-doubt after getting denied from some of the school’s top consulting clubs. But I digress…

The Status Quo:

I want to emphasize that we’re talking about something very concrete, something very tangible, and something that really affects people. Joining certain clubs has the potential to change the career paths of students, which is clearly a massive responsibility for the clubs. I’m taking it very seriously because I don’t want anyone not to explore their interests just because they didn’t get into the right club.

However, it’s important to remember that clubs aren’t exclusive just for the sake of being exclusive. That’s ridiculous, and there are some good arguments for why some Ross clubs should be as formal and exclusive as they are. One commonly echoed talking point is that the real-world is competitive so some think clubs are only training people for the harshness or the real-world.

This conversation brings me into my next point, which is that the number of truly qualified applicants is much lower than the number of applicants. Every semester, it’s pretty clear that a number of applicants didn’t bother doing a lot of research on us prior to applying. This behavior from applicants would be more acceptable if it was harder to find information on us, but we push our website pretty hard at recruiting events and we take additional steps on the website to give a surplus of information on VVI. No other club that I know of has a blog at this point, and other clubs aren’t as good as we are about releasing annuals and mid-year reports.

We also get a lot of applications which are only three sentences long. On our most recent application, we gave potential members 150 words to explain why they would like to be in VVI. For reference, the last two paragraphs combined are exactly 150 words, so only three measly sentences doesn’t cut it. If those applicants were really interested in joining, then they should have more than three sentences worth of reasons why.

There are also a couple of other easy ways that clubs cut unqualified people. To me, strict interview dress-codes help test who’s really going to put that extra effort in to wear a suit on a Saturday, which in turn tests who’s really going to be committed to the club. We want people to dress professionally for interviews because we think it’s good practice for the real world and it’s easy to cut those students who don’t. But, not every student owns a suit, which is something to consider as well. I can’t decide where I stand on this issue, so I’ll go with whatever the rest of my board thinks about it. If you don’t have a suit though, either borrow one from someone about your size, or explain your situation to whichever club that’s making you wear a suit — they’ll be understanding.

As far as the application goes, I believe long applications and hard interview questions are necessary to determine how qualified an applicant is. Every clubs gets a couple of applications every semester from students who refer to clubs by the wrong name. An example would be writing, “I’m interested in joining GIC…” in a VVI application. Of course, messing up the name is an honest mistake for all applicants who do it, but I don’t think it’s unfair to require a basic level of professionalism among those who actually get in. I can speak for all clubs when I say we want you to get our name right in the application.

It’s clear who’s done their homework on VVI, and it’s probably the same students who are reading this blog post right now.

I see the merit of keeping the status-quo for all the reasons outlined above. Clubs ultimately have their own motives for exclusivity, and it goes deeper than the size of certain classrooms as some presidents have alluded to.

Nothing any Ross club does is all that spectacular, I mean all we do is teach some kids accounting and finance while there are clubs at Michigan who build cars from scratch. We all act like what we do is unique and special because it’s good for us to appear prestigious, but we’re really just a bunch of pre-professional clubs which give students the opportunity to work on some projects or invest some money. Don’t get me wrong, clubs like mine also look good on resumes and the networking opportunities clubs provide are great, but I think the psychology and culture around clubs negatively contributes as well.

I believe some are often quick to blame Ross clubs for their problems. Getting denied from a Ross club is not the end of the world as some seem to make it out to be. Many students with big three offers from consulting firms are not in any consulting clubs, and there are other ways to pursue your business passions besides through clubs. For investing specifically, there’s so much literature and information online that I refuse to believe lack of information is the problem.

Sure, clubs consolidate that information and definitely give some students a leg up in the classroom if they had exposure to whatever topic through clubs. It’s not ideal, but students who may have studied accounting in high school will also have a leg up in their accounting class, so I think it all evens out. I do admit it can be hard to teach yourself if you don’t know where to start, so to attempt to narrow the gap, my next blog post is going to be on where to find resources for teaching yourself.

Cynics may argue that students should not need prior knowledge of a certain field before joining a club, and I agree, but you should know why you’re interested at the very least. For investing, we’re not going to require knowledge of accounting, but you should know what you find interesting about investing, and I’ve interviewed many students who even struggle with that. I then think, “Really? You want to join an investing club, but you can’t even tell me why?” For the two whole days I thought about doing consulting I did everything I could to learn as much as I could about it. Consulting is about helping people and companies out, problem solving, and backing your assumptions up with data. I found those aspects of consulting interesting, and if I would have pursued consulting further, I would have tried to learn more. Maybe I wouldn’t have gotten into a club, but at least I would’ve had some substance to my “why consulting” answer other than just that it pays well. Again, I digress…

Outside of the clubs, Ross also struggles with negative public perception. The idea of a “Rosshole” is well known term within Michigan, referring to stuck-up business students who tell you they’re in Ross the second you meet them like vegans or those who do CrossFit. Is this actually an issue? Meh.

To be honest, I don’t really care about the public perception of Ross. I’m a dumb LSA History major, and Ross can send all their kids to therapy if they think it’s that much of a problem. Maybe I’m contributing negatively to the issue by making an exclusive Ross club of my own, but without VVI, no other exclusive club would accept any more members than they already do. If anything, I would like to think I’ve helped fifty or so students learn a hell of a lot about investing which is one of the main goals not only of my club, but of every club.

I’ll take a moment now to talk about my own club.

Why VVI Isn’t Open Enrollment

The main reason VVI is an exclusive club is because we know that the quality of education for any individual member will go down if we take on more members than we already accept. Our goal is to teach our members everything we can on value investing, and we need a small group to do so.

We also need certain kind of environment for our strategy to work. First, we need it to be hands-on because we think that’s the best way to learn. Second, we need it to be social because club engagement greatly increases when you have friends in the club. Third, we need everyone to rely on everyone else to foster a sense of responsibility. All three of those get much harder with each additional student we accept.

My own club is not yet at the extreme point of exclusivity that some clubs bolster, but we’re approaching it by some accounts. Our acceptance rate after just two semesters was 15%, but most other investing and consulting Ross clubs have much lower rates than that. Mostly, clubs like mine want to be small because they want a tightly knit community where no one gets left behind: educationally, professionally, or socially. Besides a select few clubs with open enrollment, most clubs aren’t willing to sacrifice those things in order to accept more members

So why didn’t I make VVI open enrollment? I suppose I could have, but when the planning for VVI was being done with Jack and Frank, we always wanted VVI to be small. Last semester it was a daunting task managing just thirty students. I can’t imagine what it would be like managing 300 (which is as big as the biggest clubs are in Ross, last I checked).

Another reason is pure selfishness. I did all the fundraising for VVI, and I wanted some type of vetting process for letting in new members before letting anyone besides make any decisions regarding the club’s finances. I think some people are in finance for the wrong reasons. I know people who are only interested in finance for the money and not because of how interesting finance is as a career. We tend to favor academics who are curious about how the world works over those students who seem overly focused on money.

Also, good luck making any investment decisions with a group of 300 college students.

Finally, I didn’t think there would be as much interest in value investing as there is. Value investing is kind of a niche area of finance, and I was surprised that so many were interested. Part of me thinks that some of the interest of my club is a byproduct of students not knowing enough about finance, but I’ll take it, I guess.

For all these reasons and more, VVI was always going to be exclusive. But there is some hope for a solution.

Supply and Demand

At some level, it’s a supply and demand problem to me. There’s clearly a ton of demand for investment and consulting clubs, and it doesn’t really make sense to me why there aren’t more clubs. The balance is heavily skewed in favor of the clubs, and students are kind of getting screwed over. If there were too many clubs, some clubs would shut down because they can’t recruit members, but I think we’re far from that point. For the time being, demand far exceeds supply and it creates this weird power dynamic where clubs have (at least perceived) considerable prestige within Ross.

The split in power is completely skewed in the clubs’ favor. People describe it like a bunch of undergraduates have completely taken control of Ross to the point where nothing else matters except club status. I was in a panel discussion room where students argued that classes in Ross and Ross’s own Career Development Office are all useless, and the only thing that matters are these clubs. Sure, there’s selection bias with the types of students who would show up to an optional event like that, but it all makes no sense. How preprofessional has our society become?

I have to be careful here because I’m in no position to dictate how others should live their lives, but I do believe there is a correlation between the problems people have with Ross clubs and frustrations with career-related woes.

Complaints with the Ross curriculum have little merit in my eyes mostly because I think that students should go to school for an education and not just a job. Big schools like Michigan have way too many cool opportunities for you to only be worrying about where your junior year internship is going to be. As an undergrad I personally like the whirls of academia where I get to do something different which I’m not going to be doing for the next forty years. By the time you’re a graduate student you should be thinking about your career a lot more, but as an undergrad I think it’s okay to also learn about whatever you’re interested in even if that won’t lead to a career. Yes, plan for your future as well, but things don’t get easier when you’re an adult so you might as well enjoy your time learning cool things here.

For the record, (some) banks tend to agree. There was a Morgan Stanley recruiting even recently that some of my board members went to where the banker talking said that History majors were always the best employees. That guy was probably a history major, but again I’ll take it.

Buffett has great quotes about this as well, where he encourages people to take the job which they love, which is easy enough to say when you don’t have to worry about student debt. I think it can be applied to what you study as well, but there’s certainly a middle ground here. Either way, I’m not in charge so go nuts. Just don’t blame Ross or Ross clubs for you not being happy with your studies.

It’s important to take a step back and realize that which college clubs you were in won’t matter in the long-run. I think some of the blame has to fall on students who are a little too over eager in my eyes.

I often joke that anyone can start an exclusive Ross club. All you have to do is fill out a couple of forms, put “investing” or “consulting” in the name of your club, market your club a lot, and then you’ll get what you want. I joke but Ross makes it extremely easy to start a club and get it Ross approved.

The truth is that starting VVI wasn’t particularly hard. I met some smart people, convinced them that starting a club would be worth their time, and then got them to do all the work while I figured out how to build a website. Two years later, VVI is an exclusive Ross club by most accounts. I’ve inspired at least one other person to start their own club so far, which of course makes me feel pretty good. I hope others start their own clubs as well because I can tell you it’s a lot of fun and it’s not logistically difficult at all. If you are on the fence of starting your own club, I highly recommend it. Feel free to reach out and ask me questions as well.

Other Issues

Finally, there’s the issue that not all students are created equally. Students from affluent finance families are probably going to perform better in interviews than students from rural Michigan by most traditional accounts. We understand that and try to account for it in our interview process, but it’s not perfect and who knows what’s going on subconsciously.

This also leads me back into my supply and demand discussion from before, where I’ve had certain privileges which make it easier for me to start an investing club than the next guy. I’ve had some really incredible experiences in the niche, buy-side, value-investing space that not many have had access to. Second, I come from a fortunate background which has afforded me certain privileges that make it easier for me to start a club than the next student. I get that. But coming from a privileged background isn’t a strict prerequisite for starting a club. Also, we all know Ross doesn’t lack privileged kids as if that’s an issue.

One would think that a bunch of kids who were denied by clubs would all get together and start one of their own, which I’m surprised hasn’t happened more. I started VVI after getting denied from a different investing club, and now here we are.

Finally, I want to mention that creating more clubs doesn’t solve all the issues. Even with more clubs, some clubs will still be more exclusive than others and people would still complain about hard applications and interviews. More clubs would begin to solve some issues, but that mindset still feeds into the idea that certain clubs are for some but not others.

The New Solutions From Ross

I opened the piece with the news that Ross was making two BBA Meet the Clubs recruiting events, one for open clubs and one for closed clubs. I like the thinking this solution presents, but I still don’t think it solves all the issues. I’ll start with the pros:

I know of at least one open investing club and one open consulting club, which are great to expose students to these areas of finance. There are also a couple of open general business clubs which teach a little bit of everything, which are great as well. Separate recruiting events lets students know which clubs are which and gives students more time to meet all the clubs overall.

However, there are also some cons to this approach in my eyes. First, it’s still up for the clubs to decide how exclusive they want to be. Even though I think that’s a good thing, I think there are some problems that can arise. When I was a freshman, I applied to Michigan Business Club (MBC) and got denied. At the time, MBC had over 300 members, and was one of the largest business clubs on campus if not the largest, and I still didn’t get in. Of course, this is horribly embarrassing for me, and I think I must’ve missed an application question or something. In any event, MBC is just as exclusive as a Nexecon under this system, even if I was the only kid they denied two years ago. For the record though, MBC has changed a lot, but this whole conversation is more of a hypothetical. It’s still up for the clubs to decide if they want to disclose how exclusive they are, and a club could in theory deny just one applicant in order to get access to the more exclusive Meet the Clubs event.

More generally, splitting up the Meet the Clubs events creates an artificial divide between clubs which are open, and which are closed. Clubs exist on a scale of exclusivity, with top consulting and investing clubs at one end and open enrollment clubs at the other. Drawing the boundary at any point will always cause some issues, but again I do like where the thinking is coming from. Either way, it’s important for clubs to recruit at more places than just BBA Meet the Clubs.

Overall, I’m taking a wait-and-see approach. If this new solution works, then great! If it doesn’t, then BBA council will scrap it and try something else.

The other solution Ross is trying is free of negatives in my opinion. Ross is now requiring each club to host one open event a semester, which I think is an excellent thing to require. For VVI, I’ll probably put together an introduction lesson to value investing and present it to whoever is interested. This way, I’ll get the chance to expose more people to value investing who aren’t necessarily in VVI. Every club does different things, and I think it’s a great idea to make clubs share those things.

Conclusion

Of course, this piece is nothing close to the final say of this issue. But as far as I’m concerned, the less miserable freshman the better, so I hope this piece helps some people realize that not getting into a Ross club isn’t that big of a deal. Ultimately, I’m more or less happy with the system the way it is. As clubs, we work to educate our members and help them professionally, that’s just about it. Ross gives undergraduate clubs a lot of freedom in how they operate (including recruitment), and I wouldn’t have it any other way. At the end of the day, I’m an undergraduate student and nobody is paying me to teach people about investing. As such, I get the freedom to build the type of organization I want to build with limited restrictions. Of course, I also want to help people which is why I support hosting open lectures from time to time and I think other clubs think the same way. But until Ross starts paying me to do otherwise, I’m not willing to sacrifice the education of any individual member at the cost of educating more people. Long-term, clubs, Ross leaders, and students will continue to work towards a more equitable solution, but I think that things for now will remain more or less the same for now.

On the bright side, I believe that if you want to be in an exclusive Ross club you can for the most part. We don’t make it easy, but if you put the work in and cast a wide net, things should work out for you. Taking time to learn about each club will go a long way, as will making sure you’re interested for the right reasons. You may not get your first choice, but I think most people who put the work in get into clubs they want. The current system isn’t perfect, but it works for most, and I’ll always choose more freedom over restrictions.

Victors Value Investments

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Victors Value Investments (VVI) is the undergraduate investment club at The University of Michigan.

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