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There’s a discussion going on over at Brazen Careerist. Andy Drish is trying to decide whether to get an MBA or not. His dilemma came about because his employer is offering to pay for part of his MBA and he’s finding that to be too good an offer to refuse. Among the things that have been brought up in the course of the discussion are:
What I noticed was not being considered – and it was something I thought about when I looked into getting an MBA – is the opportunity cost. While I was kicking the tires of local MBA programs in Sydney, something became evident early on. In a labor market where everyone and anyone has an MBA, the degree no longer makes candidates stand out as much. As a consequence the increase in pay is not as significant as it was a few years back when not as many job candidates had an MBA. In a nut shell, I found the return on investment in an MBA to be questionable.
That puts an interesting spin on things. Ten years ago, getting an MBA was the no-brainer thing to do if you wanted to rise up the corporate ladder at a faster than average rate. Today the answer is not as black and white as that. In an increasingly diverse and complex environment, traits like entrepreneurship and resiliency are powerful commodities. Neither of which can realistically be mastered in the comfort of an air-conditioned class room. Both are the result of living through real experiences and maneuvering through real challenges. As such, putting yourself on the line and starting your own business or taking time to travel and explore the world, are two experiences that will make you stand out from the pack. Speaking for myself, I do not have an MBA. I’m not saying that I never will get one, but I know that my experience as an entrepreneur has landed me jobs that I would otherwise not have been considered for.
If it’s the knowledge that you’re looking for in an MBA program, today there’s so much information outside of the walls of academia that personally I do not see the need to sit in a class just for that. As long as you’re making time to read quality material and to listen to pod casts, it’s possible to stay on top of the major trends in management, finance, accounting, strategy, change among other things. Here’s one of my favorite sources of information: Harvard Business IdeaCast
‘What about networking?’ you say. Sure it’s likely that you’ll meet like-minded go-getters and high achievers just like you in an MBA program. But that’s not the only place where these type of people congregate. If you have $50k to spend and the time to spare, I think you’ll be better off joining the most prestigious golf club, tennis club or sailing club in your area. There, for even less money and more fun, you’ll get to meet the who’s who of the business world. And even better than at a university, there will be a cross-section of people. At clubs it’s likely that you’ll find more than just cubicle bound employees in their 20s and 30s like you looking to get ahead. For example business owners, CEOs and other decision makers of a variety of age groups – who either got an MBA years ago or never got close to academia. Another effective way to make good connections is through doing volunteer work. The major perk is you get to support good causes while you meet people who may one day be key in your career.
I’m not saying that MBA’s are dead – and that people should stop getting them. Personally, I’m still open to the possibility that one day I’ll enroll.
However, I am asking people to look at an MBA degree for what it’s worth. I’m asking you to be open to other possibilities. An MBA is not a cure-all for career stagnation. Other things like starting your own business, traveling and writing a book are also solid ways to breathe life into your work life. If you do enroll in an MBA, I hope that it is for the right reasons.
I’d LOVE to hear your thoughts.
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Writing a book or starting your business is a great accomplishement in itself, but it is not something that will increase your career growth in coorporate america as much as an MBA. The skills that you learn while owning a small business are valuable to small businesses but not as valuable to large corporations. Writing a book also has a major drawback too. Both of these suggestions take you "out of the loop" in regards to growth in a corporate environment and the things you learn from working in a team on major projects, both things are inhanced through an MBA.
Anonymous: In regards to team building, I can't think of a more valuable learning experience than starting your own business or joining a startup. You learn to rely on the strengths of your peers and discover where your true potential lies as well.
In solo business ventures you probably don't get as much of the team experience, but most of the young entrepreneurs I network with are not doing it on their own.
Question in regards to corporate growth: How does an MBA prepare you? I've never gone through the process ... do they really teach you how to climb the corporate ladder effectively? Is that what you're referring to?
Silvana - Thanks for the response. A few thoughts of mine:
First, I completely disagree with @Anonymous. People who know how to run a small business are much more valuable to a large company because they have experience that the corporate world and the classroom will never provide. They have a different mindset that makes them more effective in a corporate environment.
Second, The internet has filled the world with free information like the Harvard Business IdeaCast (and I think I'm addicted to TED)... but if I'm spending a few hours each week educating myself on these topics, why not get the degree along with it?
Third, "networking" is a great perk of getting an MBA... but it's a dumb reason to start classes. Like you suggested, networking is easy enough to do outside of the classroom.
Lastly, MBAs are becoming a commodity. By the time our generation is in our 40's, they will be almost as common as an undergrad degree. I know I want one sooner or later... So, looking at my options, here's what I'm thinking:
If I spread the MBA out over 5 years (taking three classes each year), the MBA makes sense to start right now. Here's why:
A) One class at a time isn't a huge commitment and should be relatively easy to do.
B) I'll learn more because I'll only be focusing on one class at a time.
C) I can still work on a side project/business.
D) By the time I'm in my areas of emphasis (marketing or entrepreneurship), I'll have 4+ years of experience behind me.
E) My employer pays up to $5000/year. If I do three classes per year, my MBA will be free when I'm done with it.
Those are my thoughts at this point... Is there anything else I should be considering?
Thanks again for your response!
What about getting an MBA to, oh I don't know, learn something? Self-teaching and distance courses are great and all, but I don't think there's anything like being with a group, interacting with other students and learning from a great prof, especially one with experience in my field.
Hello, learning? More money, higher rank... When did our generation get so material-focused? I've risen in my corporation because of my knowledge set and my passion for my industry, and I'm in research analysis.
My corporate mentors have stressed to me that the desire to learn more is the only real reason to pursue your MBA. Everything else you can skip by without.
Great post, Silvana. The opportunity cost is huge, and each person needs to evaluate what they're really going to get out of an MBA and whether or not it's worth the investment, which, like Holly mentioned, is an investment in particular learning opportunities and experiences that aren't available in the work place. Then again, like you said, you can learn a lot on the job, too. So your company, your ability to learn in your current role, and what you'd be missing are all applicable to your choice.
Ryan: The main intent of your long term career goals come in to play more than anything here. If you strive to become an entrepreneur than go off and start your own business, that is what you want anyway, maybe you will get lucky. You will learn a great deal from doing so; however you are bound to make mistakes along the way. I encourage you to do some research on how many new businesses survive.
Silvana: I understand your point, and actually agree with you about small business owners, but reality is a little different. Ask any CFO, CEO, etc of a reasonable size corporation if they would rather hire someone that has owned their own small business for five years or someone with an MBA that has been working for one of the competitors or in a similar industry for the past five years. 99% of them are going to pass on the small business owner. Why would they want to take a chance on the small business owner when they have a sure thing right in front of them?
@Anonymous: I agree with you to an extent. But I think it depends on the skill set that the company is looking for. It also depends on the type of company you start.
An internet entrepreneur might have a leg up on a traditional IT business associate because they understand new social media trends and have likely been more immersed in that culture.
But there are tons of other situations where your are absolutely correct.
Wow! Thanks so much for all the input.
Thanks Holly, your comment inspired me to put together a knowledge base of sites (including blogs) and newsletters that have top-shelf material. (BTW for the past 10 years I've dedicated at least 30 minutes every day to read quality material. I've carved out a time in the morning, from 5a to 5:30a before I go to the gym)
To get the ball rolling, here are my top 10. I'd LOVE to see where everyone else goes for quality information. If there's enough response to this, I'll then write a post so we can all have it. Here goes: (not in order of preference)
1. www.ted.com (yes, Andy I'm addict too)
2. www.mckinseyquarterly.com
3. http://online.wsj.com
4. Jack Canfield - feeds my esoteric side
5. http://knowledge.wharton.upenn.edu/
6. harvardbusinessonline.hbsp.harvard.edu/b01/en/newsletters/news-hmu_home.jhtml
7. www.fastcompany.com
8.www.womenforhire.com
9.www.brandchannel.com
10. http://rohitbhargava.typepad.com
Anonymous: Your comment about the 'sure thing' makes me a bit uncomfortable mainly because as we have all seen, and a lot of lately, there is no such thing as the sure thing. The Twin Towers are no longer, Lehman Brothers has filed for bankruptcy protection...need I say more. In changing times, a different perspective is worth gold. I've lived it with my own skin. I've landed two jobs - higher up the ladder and greater pay - when I have not been from the industry or the owner of an MBA degree (or receipt) - mainly because I bring in a new outlook and entrepreneurial energy that employees who have been protected by the walls of corporations could not bring. Sure MBA holders bring a different set of skills that I cannot match either - I recognize that too. The key is to play to your strengths and not try to be all things to everyone. Focus on what you have - how you add value . Sorry, anonymous, there's no such thing as the sure thing...there never has been. An MBA, just as entrepreneurship, does not guarantee a thing. CEOs and CFOs know that.
Andy: enjoy your MBA..and send me some of the class notes so I too learn something...
One way to look at the MBA is that is a non-licensed trade degree. Similar to nursing, social work, medicine, etc you learn a field of knowledge but without the exclusivity of the license.
The theory of the MBA program is relatively straight forward and you can read about it on the web as some have suggested. I have found that MBA program ranked #1 and #201 all will use the same text books, same case studies, so the material isn't any different.
What you can do at the MBA program that you can't do by just reading is practice your trade. You have opportunities to do consulting projects at other companies, extra curriculars where you run conferences, or visit other companies and learn how they work. Just like all those licensed programs have practicums or opportunities to practice what you learned, that is the value of the MBA program.
The networking is how you obtain knowledge in the business world. Unlike, say engineering, where all the formulas and information is publically available, business information is held by certain groups and the more ways that you have to get a hold of that information (or even financing), the better you are.
For those who say, "Well I can just study a chapter and than practice what I learned at my job", well you don't quite have the risk free environment to practice what you learned at work since you need approval, budgets, etc. Also you only get to practice in one industry but at an MBA program, you get to practice in many.
So what you learn is just one small piece of the MBA but the opportunity to practice what you learned is a bigger piece. Also not everyone starts from ground 0 like you would in law school but people's prior experience and knowledge of what they want to do, puts them in a better position to practice at a higher level.
If you can't afford an MBA what not study for one anyway?!? Got to www.personalMBA.com. Many of the books can be obtained throught the olde library - cutting the cost of buying books even more.
Nobody seems to be talking about the time commitment it takes to do well on the GMAT. I have been studying for 2.5 months now with lots more weeks ahead. And while I dont know if an MBA is the right choice for me, doing the best you possibly can on the GMAT will open doors to you that you never thought would be possible and maybe get into a top 25 program. The scores are good for 5 years. Also, if you cant motivate yourself for a semester's worth of GMAT studies, maybe you should reconsider the whole MBA thing. My suggestion is first do the GMAT and then decide. It will give you way more time to seriously think about the pro's and con's of the whole thing.
Sam - I've been wondering about this... My two buddies (who are pretty smart guys) just took the GMAT. One studied about two weeks and got a 700... The other studied for 3 days and got a 700. (I couldn't believe it either.)
I'm confused because I've heard a lot stories of people studying for hours and hours and still not getting a score they're happy with. So I'm torn on whether to do a few practice exams and take the test... Or really put some effort into it. I'm not shooting for a 700, but i don't want to bomb it either...
If you're putting in 2.5 months of studying, what kind of score are you shooting for?
Im shooting for a 700. The test exposes your weaknesses, so just being smart or good at math isnt good enough. You really have to be good at taking the test. You should make your decision after taking a practice test. Here is a link to a free adaptive online test: http://www.manhattangmat.com/storeitemshow.cfm?ItemID=158&catid=4
Its pretty good to see where you are at. You should try to get as high a score as possible as each 10 point increase moves you ahead of about 100,000 applicants. After seening where you are, you should do some research and see how much higher you need to get to get into your reach school and base your decision on that. Personally, Im taking my time because time is what I got.
Sam - Thanks for the link!
Scott - great link. Thanks. I've been using http://www.QuickMBA.com It's got some good material and other not so good material.
I'd still LOVE to find out about your top 10 quality websites/newsletters/blogs... Enlighten me please!
When looking at graduate degrees you have to look at how they will apply to your day-to-day work and your career. There are two things that people don't take into account:
1. There are non-traditional paths that people can and SHOULD take. Just because you are getting an MBA, an Engineering Degree, a degree in Education or in Philosophy, doesn't mean that you are condemned to do just that for the rest of your life. There are opportunities for cross-pollination in jobs. You are the driver that uses the education you receive to get you to where you want to be.
2. Learning can be had outside of the classroom as many people have pointed out. However, you can get things in the classroom that you can't get by reading a book. I've educated myself on topics X, Y, Z outside of the classroom, but the classroom has given me the opportunity to discuss the issues raised in the readings, expand on the knowledge gained from the book, and seek additional resources from experts. Sort of like amazon's "if you liked this book, then you will also enjoy this one", except with subject matter experts you also get a network of people that you can contact to discuss these ideas.
3. We are still a society that likes its papers and certificates. You could learn the facts in books, but what a piece of paper signifies (or is supposed to signify) is that someone has vetted that you (a) know what you are supposed to know and (b) that you can synthesize what you've learned to solve new and unexpected problems. This (b) part you can't get certified from a just reading a book or listening to a podcast.
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