As I wrote in my last post, the most common question I get as a senior leader/mentor is, “Should I get an MBA?” In order to answer this question, you need to first ask yourself, “What is the value of an MBA, anyway?” Luckily for you, I have taken a swing at answering this question here. Go read it now. Seriously. I will wait for you. Done? Good. Wow, that was fast.
So, now that you understand the corporate perspective as to the value of an MBA, you are probably thinking that there is no reason to get an MBA. Not so fast–even though there are issues with the MBA as a course of learning, and even though the value of an MBA is probably different from what you expected, that doesn’t mean the MBA has no value. In fact, I think there are multiple instances where an MBA makes sense and should be pursued. Additionally, even if the value isn’t completely clear-cut, there may be instances where an MBA may still help you achieve your career goals. So, without further ado, here is my list of times when an MBA makes a lot of sense:
1. You want to be a management consultant
There is no industry for which the MBA has more appeal than that of the management consultant. If you harbor dreams of working for McKinsey, Bain, BCG, Deloitte, or any other big consulting firms, you will likely need an MBA. Why? It all depends upon their business model. Think about it: Consulting firms “sell” the time of their consultants. In order to justify the very high cost of consultants, it helps if they can point to the strong pedigree of their employees. As such, an MBA from Harvard, Stanford, Kellogg, etc. It helps to market their product (e.g. their consultants) and justify the $500 per hour they are billing out for freshly minted MBAs. Is this logical or justifiable? Not really, but that is the subject of another post (likely titled: “What is the value of management consultants, anyway?”).
2. You don’t have a business background but want to work in business
The MBA is a great solution for people who have (accidentally or not) started out with a humanities or engineering degree but decided they really want to be in business. This is a common phenomenon, especially among engineers. The story goes something like this: You study your passion in college, whether that is literature, nutrition, or engineering. After graduating, you realize you actually need a job, panic, and end up at some company. Gainfully employed, you realize that you actually like the business world but are not equipped with the vocabulary or experience to excel. If you fall into this category, you are a great candidate for an MBA. Why? The MBA is not rocket science, largely because it is not designed to be. Rather, think of it as an introduction to the world of business.
3. You want to switch functions
I am fortunate to have grown up in a rather affluent household and my father is a successful entrepreneur (he purchased and aggressively grew a commercial construction/real estate development company). As such, one of the great mentors in my life was my father’s lawyer, a man whose advice was always “whatever your passion in life, make sure you study accounting.” Good advice indeed. However, reality is riddled with students who followed sage advice only to realize that they hate accounting (myself included). For people who took the “responsible” route and who have an undergraduate degree in a field that they later learn they hate, the MBA is a great opportunity to “pivot” to a different function. Did you study finance but found out that your passion is in marketing products? Why not get an MBA in marketing? Thought you loved marketing but realized you love the analytical world of numbers? Why not get an MBA in finance? It’s breathtaking how quickly you get “pigeon holed” in the corporate world…an MBA may be a good solution if you want to switch functions.
4. An MBA will lead to a substantial increase in pay
An anecdote will help illuminate this example. One of my best friends from college (let’s call him MM) nabbed a fantastic job right out of undergrad in a rotational program for one of the world’s pre-eminent investment banking firms. Three years post graduation, I said to MM, “your career seems to be going well… have you considered getting an MBA so you can get to the next level?” MM’s response was enlightening: “Seriously? I already make more than the standard MBA. Why would I take 2 years out of my life to get a degree that will not help me in my profession so that I can make less than I make today?” I was thunderstruck, and learned an important lesson: Take how much you make today and compare it to the starting wage of the MBA program you are interested in. If the MBA starting wage is not at least 25% higher than what you make today, you are wasting your time getting an MBA. I cannot stress this enough. What is the point of spending valuable years of your life to get a degree if it will not make you substantially better off financially? For MM, the MBA had NO value because he had already “made it” in the investment banking world.
Before committing yourself to two years of lost income and valuable work experience (for a full-time MBA) or your nights and weekends for 2-4 years (for a part-time or executive MBA) ask yourself: Will I see an increase in pay large enough to justify my investment in time and lost wages? It’s the most important question you can ask.
5. Because your company requires an MBA to move up
This, easily, is my least favorite reason for getting an MBA but, sadly, it is likely the most common reason people pursue this degree. Unquestionably, there are companies in which you cannot move up unless you have an MBA. To me, this is complete insanity, but it exists. (If you, gentle reader, can forgive a brief anecdote: I am in the process of hiring a senior leader on my team. This individual has proven himself consistently, over a decade, of having an almost inhuman ability to understand the needs of customers because he has walked miles in their shoes. He speaks their language and can translate their needs into detailed requirements for product development. This individual doesn’t even have a college degree and I am fighting tooth and nail to have him on my team in one of the most high-profile, demanding jobs in my publicly traded multi-billion dollar global company.) Some companies (and they tend to be very large) require an MBA beyond a certain level. If this is the case, the MBA is just a hoop to be jumped through. If so, distasteful as I find it, you may find that you have no other option than to get an MBA.
Before you commit your valuable time and money to pursue an MBA, review the five points above to see if you fit into any of the categories. If you do, great. You can join the proud ranks of MBAs world-wide. If not, ask yourself: What is it I am really trying to accomplish? If you want to switch companies or functions, try applying to new jobs inside or outside your company. If you want more challenging work, talk to you manager about your interests and ambitions and see if there isn’t a faster, less costly way to pursue your interest. If you want more money faster, try applying to similar positions outside your company: The rule of thumb is that you are always worth more outside your company than you are in it (due to hiring costs, development, etc.).
I want to end this post by making clear that I am NOT anti-MBA in any way. It’s just that I believe that the MBA is a largely misunderstood and misapplied degree that is diminishing in value every day. If you are interested in an MBA ask yourself what, exactly, it is that you want from you career. Maybe an MBA is the answer, maybe there is a different, less time-consuming and less costly path to your goals. Either way, knowing what is best for you and your career is much more valuable than blindingly pursing a degree that is diminishing in value with every new enrollee.