Monday, April 03, 2006

MBAs are not BS

MBAs are not BS
There seems to be a movement underway to say that MBAs are an antiquated and unnecessary. Josh Kaufmann's Personal MBA program offers the belief that one can achieve the same results by reading 40 great business books. Brad Feld says that an MBA is BS, and also cites the example of my old friend and classmate Chris Wand.

With all due respect to Josh and Brad (as well as Chris), their arguments may explain why the MBA isn't for everyone, but they do not mean that the MBA isn't for anyone.

Like parenting, there is no substitute for a top-tier MBA program. That doesn't mean everyone should go--most should not--but it does provide you with benefits you'll have a hard time getting elsewhere.

If you deconstruct the benefits of a Harvard MBA, they fall into several categories:

1. The brand
2. The network
3. The learning
4. The people
5. The opportunities

The brand is self-explanatory. Businesses are generally interested in talking with Harvard MBAs, and this is especially true in Venture Capital, where HBS grads represent 20% of the industry--a remarkable concentration. You don't need the brand to succeed--Bill Gates, Steve Jobs, and Michael Dell seem to have done just fine without even a college diploma--but that doesn't mean it can't help.

The network is incredibly powerful. I've been able to get Fortune 500 CEOs on the phone, simply because they were fellow HBS alumni. And with 80,000 living alumni, many of whom reside in the highest positions in business, this is a pretty strong benefit. Of course, you still have to be good, but it gets you in the door.

The learning is highly underrated. HBS teaches using the case study method. You have to conduct analyses, make decisions, and persuade others of your point of view. Sounds an awful lot like the core of being a business leader. You can't experience the same thing simply by reading books and commenting on a few message boards, especially when for a significant number of cases, the protagonist actually visits the classroom.

The people are incredible. Your fellow classmates are a remarkable bunch, and if you build relationships that last a lifetime, you'll always have friends and supporters. This is no different than the college experience. Many people still have a core group of their closest friends from their college days. The intensity of the experience creates bonds that are practically unbreakable. It's much harder to build such bonds on a message board.

The opportunities are helpful. If you go to a top-tier school, you will be heavily recruited by prestigious employers like McKinsey, Goldman Sachs, Microsoft, and so on. You could eat out at the finest restaurants for a month if you accepted every interview. It's like the sushi-boat version of a job search: mouthwatering delicacies simply flow past, and you're invited to partake of whatever suits your fancy.

Yet while this is often mentioned as the strongest selling point of B-school, to me this is the weakest, since it only affects your life once, when you decide on your first post-MBA job.

The bottom line is that an MBA has a lot of different benefits. Each person will place a different value on those benefits, which is why the MBA makes sense for some, but not others.

Ultimately, the arguments against getting an MBA are similar to the arguments against getting a college degree. After all, a college degree takes even longer, and costs even more, with fewer clear professional benefits.

You could easily obtain the reading lists for the core college curriculum, or even download the free courseware for almost any course you wish.

Yet few of the people who call for avoiding the MBA are also calling for an end to undergraduate education. Why?

I'll let them comment, but my intuition is that people are still uncomfortable with business as a subject of serious study. Politicians may call for more math and science grads, but not MBAs.

There's no question that MBAs have made a lot of mistakes over the years, but so did everyone else, and of the whole crop of bad apples, only Jeff Skilling of Enron holds an MBA. Dennis Koslowski, Ken Lay, Martha Stewart, Bernie Ebbers, not one of these jailbirds has an MBA.

Anti-MBA discrimination? It sounds absurd, but I think that an anti-MBA prejudice is just as bad as a pro-MBA prejudice.

8 comments:

Ben Casnocha said...

Fair points, I think your breakdown is accurate. The learning component is not the only thing you get.

Being associated with a high quality brand undoubtedly helps, but aren't we moving away from this model and more towards "personal brands"? It always amazes me when executives or entrepreneurs don't have a personal web site. They need to represent themselves out there, not let other people's blog posts show up first on a Google search of their name. You can choose to be transparent, or others will make you such.

With personal blogs and web sites, then, it is far easier to find out who a person *actually* is, and we can rely less on stereotypes; e.g. he went to HBS, thus he's competent.

"I'll let them comment, but my intuition is that people are still uncomfortable with business as a subject of serious study."

I tend to agree with this. So much of business problems and solutions are the same. Case studies always put a slightly different spin on the same, fundamental problem. If we lived in a business world where rational intellectualism was rewarded above all, I could see "serious study" as applicable. Unfortunately (or fortunately) we live in a world where emotional, charismatic leadership wins esp in start-up setting. It's very hard to boil this into books and articles.

One final point -- there's nothing more hip than MBAs arguing for the irrelevance of an MBA, so i'm glad you are arguing for it.

Chris said...

Personal brands are great, but it presupposes two things:

1) The person already knows who you are

Or,

2) You're well-known enough to pop to the top of any search.

For the majority of people, this is not going to be the case. Let's face it, even if the blogosphere is a relatively small place now, it's only going to get bigger and bigger, and that means it's going to get harder and harder to get noticed.

If you're not a household name, or an A- or B-list blogger, if you don't have a vast personal network, being able to raise your hand when the job description reads "Top-tier MBA" will be a big boost to your chances.

You'll still lose to someone who has the MBA AND has a well-known personal brand, and you'll probably lose to someone who has no MBA and a well-known personal brand. But that's okay. If you can just beat out the people with no MBA and no personal brand, you'll end up ahead of 98% of the people out there.

Ben Casnocha said...

I think about it through a different light. I agree that if hte job description calls for a top tier MBA, the MBA has a better chance than non MBA.

Suppose John Doe is applying for a job. Employer now needs to decide whether to hire John. In the past employer could only go off resume, interview, and pedigree. In this case I agree an MBA from top tier school could mean a lot. Now, employer has search engines. If John chooses to have a personal web site, blog, etc. any of that information should immediately supercede the MBA in terms of value to employer.

"Personal brand" may have been wrong phrase. It doesn't matter whether you're a big name or A list blogger. If you make yourself transparent online, I expect 99% of employers to rely more on that after receiving resume than a degree, for example, thus mitigating the positive effect of the MBA in this one dimension. (there's still the learning, networking, etc. benefits.)

Chris said...

In practice, how exactly does an employer go about searching for someone if not based on the standard resume criteria or a broad-ranging reputation?

Let's say I'm trying to hire a great product manager. What do I do? If I search "experienced product manager" on Google, this is what I get:
http://www.google.com/search?hl=en&lr=&q=experienced+product+manager

82 million results. And none of the first page results are a person.

If I go to blogsearch instead, it's a little more manageable--only 540,000 search results.

http://www.google.com/search?hl=en&lr=&q=experienced+product+manager

But then what do I do? Read each blog post to identify the right guy?

Bottom line, I think people will continue to search for candidates the old-fashioned way. They may also target people who are well-known, regardless of credential, but they are not going to sift through thousands of blog postings looking for the right person.

Again, as I stated, if you've already come through the screen, your personal brand is going to help a lot. But for the conceivable future, the screen will still include things like your education and past experience.

Ben Casnocha said...

Don't you post an ad on Craigslist? Then you wait for resumes to come in. Then you sift through. No one searches Google for "experienced product managers." Most people post job ads and work their personal network.

While your sifting through, you will use various filters I agree. Education will certainly be one of them. It is here where having a personal brand -- a web site, blog, some kind of transparent identity available to the employer -- will be important. A thoroughly transparent web site will allow employer to tell if employee is a good fit or NOT a good fit, an equally important two way street that few other filters can offer.

Andrew Fife said...

I find this statement a little bit hard to to believe:

"With personal blogs and web sites, then, it is far easier to find out who a person *actually* is"

Sure Brad Feld's blog demonstrates that he is a pretty sharp dude. However, most blogs and/or personal websites are not about business topics, but rather personal topics. Also, most employers posting on Craigslist/etc. have too many job candidates to even spend more than 6o seconds with each resume so diving deeply into someone's personal website seems unrealistic to me. Spending time on someones personal website may make sense for final candidates, but without a strong resume (and a top 10 mba makes any resume strong) the job seeker may not even get past the initial filters. Furthermore, I think even for those few people with websites/blogs I doubt much of the information is relevant to the hiring process.

K said...

My issue with MBA's is that it takes time out of the workforce.

In the current workplace, IMHO one only has their 20's to experiment with different careers and learn, learn, learn.

Once we hit our 30's, we're expected to produce (and no more learning).

Plus I seriously question the ROI on an MBA (I had the opp to do a fast track Masters at the time and couldn't even get that to pay back). I earn as much or more than my MBA accredited counterparts plus I've been earning, learning, and networking all the time they were in school.

wolske said...

my answer to the time/money issue was the Executive MBA. it is a still a serious time commitment (18 months) and a serious investment (a bit less than a year's salary), but I continue to earn my full salary (opportunity costs show up in other areas, like skipping a vacation or two). it's not a top-tier school, so the brand is not as big of a payoff (I couldn't hold out for Wharton), but it's a top 25 b-school and it's local.