Since it is the new year, I thought I’d tackle the big question – “Why bother with an MBA?” At any given time, there is a fair amount of opinion in the press on the MBA. Some say it is useless, others warn us about possible pitfalls and a few dare to be bullish.
My view is that the truth, like most things, in life is somewhere in between. So, here are a collection of my thoughts based on what I’ve seen and learnt –
1. The biggest trouble with an MBA is that there is no single consistent academic experience. Most Masters in Computer Engineering programs teach the same core concepts. Yes, you sort of do that with an MBA. But, then again, not really. You have a lot of freedom and flexibility to learn things you care about. Then, the next problem is that practically every university has an MBA program. That’s where the rankings come in.
2. The rankings have all sorts of faults. Most of them don’t measure what a school should actually be measured on simply because the data isn’t easily available (or the publications just couldn’t bother). But, if you aggregate them together, there are consistent patterns in the schools that show up in the top ten, the top twenty and so on. This distinction matters for calculations on return-on-investment.
3. I know this seems like a really mercenary way to approach this. But, I’d like to get it out of the way because return-on-investment matters (ROI) a lot. Students spend roughly $200,000 in the two years and a lot more in the opportunity costs of missing out on two years worth of earnings. They’re also doing so in a high-growth phase of their careers. For a large proportion, this is an opportunity to level up and move to a career that’ll give them more opportunities and/or more income. ROI matters. I’m not clear what the ROI numbers are – but what I am clear about is that the degree is, unfortunately, not equal. Just as a Masters in Engineering at an MIT will always be valued much higher than most other places, similarly, being lucky and skilled enough to be able to get into a top school changes a lot.
4. Once we’ve got the financials out of the question, what is the experience really worth? We interviewed venture capitalist Brad Feld over Skype yesterday and one of my classmates asked him a similar question. He reflected on his own experience at MIT-Sloan and said – “An MBA is a nice two year vacation from reality. And, in many cases, such a vacation is very useful.” And, he went on to talk about the ability we have to think about our long term careers, switch career tracks, and make decisions that can alter the course of the life. And, it is true. It is not always we’re presented with opportunities to do that with so many options.
5. The other idea I will pick is a recent post from Seth’s blog. This post was shared by our Professor in our introductory Microeconomics class just two days ago.
Doing calculus with Roman numerals
Quick, what’s XIV squared?
You can’t do advanced math without the zero. And you can’t write precise prose without a well-developed vocabulary.
The magic of the alphabet is that twenty-six letters are all you need to spell every word. The beauty of Lego blocks is that you don’t need very many to build something extraordinary.
Imagine how hard it would be to get anything done, though, if you only knew 17 letters.
In most fields your work is hindered if you only have a few of the most basic tools. Understanding more of the building blocks of finance, or marketing or technology are essential if you want to get something important done.
Here’s my advice: Every time you hear an expert use a word or concept you don’t understand, stop her and ask to be taught. Every time. After just a few interactions, you’ll have a huge advantage over those who didn’t ask.
The way I see it – the bold-ed bit is what an MBA gives you. It doesn’t do enough in terms of explaining the building blocks of technology as yet. But, there’s already a fair bit of choice in many schools and it is on the rise. It always takes education a few years to catch up with change.
6. Does that mean everyone needs an MBA? Absolutely not. There are so many ways to get this sort of knowledge on the internet and in books. So, if you really wanted to get the knowledge, you can (you can just just follow Seth’s excellent advice). My view is the following – if you value learning about business (academics), if you value/need taking some time out to think about what you really want to do (career), and if you value working with, getting to know, and building relationships with peers from many different backgrounds, many of whom also tend to have similar hopes and dreams as you, then I think you’ll really enjoy the MBA experience.
7. There are many reasons MBA grads get flak from employers – too much entitlement, not enough value added, etc. And, I daresay there are always going to be a few who will give others a bad name. But, on the whole, I do feel there is a lot of value the education brings. In my first quarter alone, I feel like I have gained insights that would have been very helpful in my jobs over the past few years. The nice thing about this learning is that it is all connected and reinforces each other. Accounting inter links with finance which inter links nicely with building companies which requires marketing and so on. I think it’ll help future entrepreneurs and business owners avoid a few fundamental mistakes and it’ll help anyone working in a company make better decisions (if they paid attention in class). And, who knows, maybe avoiding a mistake in giving out equity could save you half a million dollars as your business scales. That’s already the cost of the degree and more..
8. As you can tell, this is clearly a collection of my unstructured thoughts on the subject. I am, of course, biased. I can’t say much about whether this investment will lead to x or y result in 20 years. I honestly don’t care that much. I am here because I really wanted to learn, to think about what I really want to do, and to meet, work with and build relationships with some very interesting people. And, so far, the experience has stretched me, made me think, and given me an incredible amount of learning opportunity. And, the sheer intensity has kept me on my toes. In short, I’m loving it.
9. I do, however, think it helps keep perspective that this is just a wonderful way to spend 2 years of my life. It is learning geek paradise in some respects. It is not practical for many and definitely not a necessity. For this, I will go back to Hunter Walk’s brilliant post on “It’s fine to get an MBA, don’t be an MBA.” If you haven’t read it, please do. Here’s my favorite bit.
Getting an MBA means you’re curious to learn broadly about theories and explore how these techniques can be applied to various businesses. Being an MBA means you think you’re getting taught the one right answer to problems – to a hammer everything is a nail – and that only MBAs know these dark arts.
Getting an MBA means offering your perspectives and experiences to your classmates. Being an MBA means looking at your peers as networking targets.
Getting an MBA means thinking about your degree as just another attribute of who you are – I have brown hair, a wife, work at Google, enjoy citrus fruits and possess a Stanford degree. Being an MBA means you are “Hunter Walk, Stanford MBA,” elevating the matriculation to a level of undeserving primacy.
Getting an MBA means you shoot out of school wanting to prove yourself and see what you can contribute to others. Being an MBA means thinking the world owes you something and that your value 10x’ed just from spending two years on a campus.
At the end of the day, just be who you are, which is a collection of skills, abilities, successes, failures, fears, dreams and hopes. The most important degree you possess is Human University.
This, of course, applies to any accomplishment. Results happen to us due to good processes and a fair dose of luck (e.g. in this case, being born in the right place) – don’t let them define you. It is the same deal with this degree – if you think it’ll add value, it will. If you want to make it meaningful, it will be. Don’t do it for the tag. Do it because you’ll learn and get better. And, if you don’t do it, that’s okay too.
In either case, we’re on this planet for a short period of time, at least in the giant scheme of things. Let’s just focus on making it meaningful, making it count.
A Learning a Day 