MBAs Don’t Merit the Cost
Amid the financial crisis and recession, placement rates and salaries for MBAs have taken hits, making the degree less valuable. Pro or con?
Pro: Exposure and Experience Matter More
What situation screams for an MBA? Many scenarios cry out explicitly for a doctor, engineer, firefighter, or lawyer. When exactly do you need an MBA? In our current economic climate, the MBA degree in and of itself is not valuable. Why? It often constricts imagination, producing clinical but narrow thinking and falling short of teaching intellectual flexibility. B-schools position innovation as formulaic, resulting in rigid but acceptable ideas. Experience teaches that to drive value for yourself and your company, you need to be a rebel and constantly question what’s right in front of you.
We both have advanced degrees, but formal education did not fully prepare us for careers in line management and consulting, working with venture capitalists and on the front lines of startups as well as Microsoft (MSFT), IBM (IBM), and American Express (AXP). Over the years, one truth became evident: Questions (not education) are the most powerful tool in your arsenal. Not theories or frameworks, not business plans or spreadsheets but rather, insightful questions.
According to Clayton Christensen, author of The Innovator’s DNA, a passion for inquiry counts as one of the five main drivers of success. The person who asks the best questions is often the smartest person in the room. The challenge today is not the mastery of information available but the judgment to use it. And while education trains you to dive into relevant topics, there’s no guarantee it will help you read situations, think under pressure, and ask the right questions.
In Outliers Malcolm Gladwell states that you need 10,000 hours to become an expert. While one can debate the actual number, clearly nothing can replace experience and hard work in developing the skills and perspective needed to master your profession. Consider this: Will a driver’s license mean you’ll be an excellent driver? Similarly, a business degree does not necessarily make you better suited to successfully drive, lead, or expand a business.
When we interview candidates, we ask if they play poker because leaders must bring answers that don’t fit a formula. Reactivity, insight, and ingenuity are the needed attributes. Can you drive rapid growth and deal with ambiguity? Can you respond effectively to crisis situations? A piece of paper from a B-school will not determine this.
Con: You Can’t Dispute the ROI
In this challenging job market, many have argued that advanced degrees have lost their value, citing examples of leaders who rose to the top without attending business school.
There will always be amazing individuals who achieve great things whatever educational route they take through life. For many, the MBA degree offers a wonderful springboard. It opens doors, creates opportunities, and provides critical skills and knowledge that graduates can apply throughout their careers. It’s a lifelong investment that will pay back in many different ways forever.
Still skeptical? On average, executives with MBAs earn more money than those without advanced degrees. In fact, London Business School alumni enjoy an average salary increase of 132 percent upon graduation, demonstrating the tangible return on investment of the MBA degree.
MBA degrees can also increase your chances of landing a career, crucial to keep in mind in light of still-dismal unemployment numbers. According to our recent MBA Employment Report, 91 percent of graduates in 2010 found employment after three months, despite the shaky economy.
These graduates weren’t just finding "jobs." They were securing careers at a wide range of companies such as Amazon (AMZN), American Express, Facebook, Johnson & Johnson (JNJ), GE Capital (GE), the Boston Consulting Group, Goldman Sachs (GS), and many, many others.
For some who might argue it’s not what you know, it’s who you know, the MBA (and B-school experience) comes into its own. While pursuing an MBA degree, students forge invaluable connections with those in their school community (peers, faculty, and alumni all over the globe) and leverage the brand strength of their institution across the business world. Business education is a time for reflection and exploration. Students need to be courageous and try everything they can during their time at B-school.
However, the key to this argument that MBAs are worth the investment lies in where you decide to study. There are huge numbers of courses offered by thousands of institutions; they are not equal. The lifelong return on investment pays off only if you choose wisely, selecting a school with strong global connections, great faculty, and outstanding students.
Business education gives future executives and entrepreneurs the critical skills they need for their positions. It’s the best opportunity and environment to test business ideas and in some cases, change career paths or direction. It’s a life-changing experience well worth the investment. Make sure you choose wisely and give everything you’ve got while you’re there.