mbas and alternatives - intelligent...

MBAs and alternatives

intelligentexecutive

In this article, we’re bringing you insights into the merits and realities of MBAs, and touching on some of the alternatives. The article has three sections: section one provides an introduction and some initial discussion; section two looks at the pros and cons of MBAs; and section three considers the merits of some alternatives to an MBA.

Section 1: Introduction

An MBA, or Master of Business Administration, is widely considered to be a highly desirable qualification. Originating in the US, the idea behind it is that graduates are well versed in a range of business functions, including operations management; financial management; accounting; sales; and so on. Having said that, an MBA graduate should not be considered to be a “jack of all trades”, but is rather a generalist with genuine and valuable knowledge and experience of the broader business spectrum. This gives them the ability to see the big picture and to take a holistic view of business decisions, understanding their impact on and implications for not just the area in which they are implemented, but the organisation as a whole.

MBA students would generally be expected to have both a bachelor’s degree (or equivalent) and some work experience, and these are usually included in the acceptance criteria for the course.

From an employers’ perspective, having an MBA on your team is likely to give you a certain level of assurance that any decisions made have been thoroughly thought through against the backdrop of the business and the marketplace. It may also perhaps protect against any deficit in knowledge and experience of home grown talents, who may be expert in one function or environment (company or industry) but have knowledge gaps in others. Specialists are valuable assets, but may have a blind spot; the vision of an MBA graduate can be perceived to be 20:20. (That is not to say that it is not possible for an MBA course to include specialisation; some do, but generally only after a year of wider study.)

MBA graduates can be well qualified to contribute to the setting (and achievement) of both strategic and operational objectives, and they can be expected to help write business plans. For consultancy firms, MBA credentials often help instil client and stakeholder confidence, and with companies pitching for business or finance (such as venture capital funding, for example) having an MBA on the team is viewed as a positive asset.

For the individual, and that’s what we’re concerned with most here – helping executives and aspiring executives make the most of their career opportunities – having an MBA can help accelerate your career progression, take you to the next level and ultimately to the top CEO job. In fact, 36 per cent of CEOs in the Fortune 100 are MBAs!

Seen by many as the holy grail of business qualifications, the true value of this iconic degree can be obscure, and opinions differ as to whether or not an MBA is worth the investment required in terms of both time and money.

Copyright 2012. An Intelligent Executive white paper from Armstrong Hall.

White paper: MBAs and alternativesintelligentexecutive.com



02“Not all MBAsare created equal;where themajor corporates

are concerned,the Ivy League types(Stanford, Harvard, INSEAD, London Business School and possibly Cranfield)

would be the ones to get you

noticed.”

“The MBA allowed me to easily change industry. Securing a job with Deloitte Consulting gave me experience with the high tech industry, which then allowed me to make my next transition to Microsoft.”

When Karina Bickel left Cambridge University with a science-based degree, she joined an automotive company in Michigan, USA.

With a $15K contribution by her employer, she studied her MBA at Ross School of Business.

“I spent almost every waking moment outside of my job either going to class, working on a project, or studying for exams,” said Karina.

For example, Josh Kaufman, author of The Personal MBA, says,

you don’t need to go to business school. You do need to learn the

“If you want to master the art of business,

fundamentals of modern business practice

– how to systematically understand how real businesses operate, how tomaximise your personal productivity,

and how to consistently conduct intelligent experiments to

improve your results.”

Our research suggests over 2,400 MBA programmes exist worldwide; however, there are in addition more than 10,000 other Masters and advanced business courses available.

Originally conceived as a general degree, providing the knowledge and practical experience for its holder to make a significant contribution to the overall function of an organisation, MBAs are now being developed to give post-experience students wider opportunities. These degrees are available in a range of subjects including international management, finance, marketing, operations management, entrepreneurship, e-commerce, and information management.

Costs vary dramatically according to where you study: expect to pay up to c. $100k at a top business school in the USA for a two year course and £30-50k in Europe for a one year course. Alternatively, an MBA can be studied via distance learning for considerably less (c. $15-20k / £5-10k).

It’s not unusual for employers and hiring managers, particularly in those corporations seen as the best employers to work for or who see themselves as employing the best of the best (the top 1 per cent), to only see merit in an MBA from an Ivy League business school.

Which are the Ivy League business schools? The most prominent are: Stanford, Harvard, University of Pennsylvania (Wharton), London Business School, Columbia Business School, INSEAD (Paris & Singapore), MIT Sloan, IE Business School (Spain), IESE Business School (Spain) and Hong Kong UST Business School.

Any employer considering a pool of candidates (whether external or internal) for a key appointment will take qualifications into account as part of the decision making process; however, they’ll not only consider those with an MBA (and its source) but are likely to give merit to other recognisable or relevant qualifications relating to the business function or their particular line of business. Someone with specific business-related qualifications is likely to be viewed positively.

What is clear is that in order to make the right choice, you have to be absolutely certain of your own career goals and ambitions, your intellectual and emotional resources, and your financial situation.

You also need to research your options thoroughly and consider all aspects of how your choice will ultimately affect your long-term career path.

The right decision will bring almost certain success and enormous rewards. The wrong one could result in disappointment and frustration.





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2,400

10,000

Advanced business courses

MBAs

“Not all MBAsare created equal;where themajor corporates



noticed.”












Section 2: MBAs

So, having established that MBAs are costly in terms of both time and money, and commitment from the student, what are the pros and cons? Let’s consider them.

Pros:

• Faced with two otherwise equal candidates, an employer will most likely opt for the MBA.

• An MBA degree is one of the most sought after in the world because of its value to people in business and administration. Irrespective of the industry or profession that you are in, or regardless of the condition of the economy of your country, an MBA degree can benefit especially those in executive and managerial positions.

• With an ever-increasing number of MBAs, employers will increasingly look to these types as a preference.

• Global appeal! In a progressively global economy, MBAs are universally recognised. In international companies, there’s a growing number of ambitious and aspirational mobile ex pats – with global experience.

• According to research from the Association of MBAs, MBA graduates can earn 18 per cent more than those without the degree, and the average increase on pre-MBA salaries can be as much as 53 per cent.

• For those leaders making the transition from leadership or officer status in the defence sector, who may already have a great pedigree established at West Point, Royal Military Academy Sandhurst, etc., MBAs are a powerful way to underpin a successful transition into the commercial world. .

Cons:

• Can you afford it? You will need to factor in lost income if studying full time, and the MBA fee isn’t the only cost – there will be extras, such as books.

• Can you afford the time? A full time MBA course in the USA normally takes two years; in Europe the norm is ten months. If you’ve got a family, the demands and pressures of an MBA could tear it apart.

• How do you feel about loss of income? You might have to sacrifice the family holiday, the new car, the expensive hobby, the house move / extension … are you and your family prepared for that?

• Can you afford the risk? You will be stepping outside of your current employment, stepping off the organisational development ladder.

• Can you take a career sabbatical? Is the timing right? Don’t expect your employer to keep your job open; they’ll have found ways to cover your post several months before you’ve completed your MBA.





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presentsideal opportunityand funding,to invest in an MBA.

redundancyFor many,

• Research suggests only 13 per cent of MBA graduates will get the consulting job they desire – apply this logic in a broader context and we can see that, once qualified, an MBA will be unlikely to secure their ideal job; it’s not a guaranteed stepping stone to success.

• You might end up with great qualifications but no experience to match your expectation of a job! Without the required work experience, an MBA may be considered virtually useless. A combination of both qualifications and experience is required for high level appointments.

“There’s nothing worse in the corporate world than someone who knows all the theory but can’t cope with reality.”

Core compulsory subjects are usually: Marketing, Strategy, Financial & Management Accounting, Organizational Behavior, Leadership, Operations Management and Decision Models.

Specialist subjects areas / options tend to include: Accounting, Economics, Entrepreneurship, International Business, Operations Management, Project Management, Organizational Behavior and Strategy, among others.

There is much conflicting statistical information available: for example, 64 per cent of CEOs in the top 100 Fortune 500 companies do NOT have an MBA. However, this suggests that 36 per cent do have an MBA. That is a significant percentage, and very much pro MBA, which suggests the time, cost and effort required to achieve one is worthwhile and, as a strategy to significantly boost your career prospects, it works.

An MBA is more geared to the corporate world where often you’ll find the biggest salaries, and stricter recruitment / qualification policies and training programs than in smaller businesses.

All things considered, there can be little doubt that achieving an MBA will both better equip you for taking your career to the next level and enhance your chances of doing so. It is a powerful tool in your management toolbox.





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When Karina Bickel left Cambridge University with a science-based degree, she joined an automotive company in Michigan, USA. With a $15K contribution by her employer, she studied her MBA at Ross School of Business.



Section 3: Alternatives

Specialist business school courses

Mini MBAs

Personal MBA books

Marginal career re-alignment

You don’t have to achieve an MBA to get to the top or fully realise your career aspirations, there are alternatives which can help you get there, such as: Mini MBAs; MBA books; specialist Business School courses in Strategy, General Management and Leadership; and marginal re-alignment of your employment. Any of these can take you to the next level or set you on a fast track to success.

And there’s some resistance in Business Schools to accept non-grad students for MBA programs, many smart, ambitious exec types will proactively pursue alternative business school training to equip them to be better able to fulfil existing roles or to be able to undertake new roles, and to equip them so that they are better qualified to secure the promotion they desire.

Specialist business school courses

These can be categorised into two types: those that are specific to a business function; and those that are more general, e.g. Leadership, General Management.

Courses with a specific business function focus:

• For example, a Master of Finance degree would be fine if you aspire to be a CFO; however, if you wish to run a business unit or be a CEO, this won’t give you the broader credentials of an MBA.

• In addition, a Master of Science degree in Industrial Administration or Master of Engineering Management again will help you become a recognised subject-matter expert in that function, but won’t give you the broader business skills necessary to be CEO.

• Additional qualifications may help move you to the next level and give you the necessary credentials to become a Senior Manager / VP and gain a seat on the board – see our note about alignment.

General management courses:

• If your employer has the budget and / or the inclination, you might get them to pay for a “General Management Program”; for example, we spoke with a GM who attended a course at Cranfield School of Management (UK). A program consisting of two, two-week residential courses cost around £20K.

• “The program placed emphasis on working better with other departments, and in particular heads of other business functions, the purpose behind this being to synergise departmental functions and to create a high level view so that





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The majority of individuals

time simply do not have the

to invest in an MBA,

nor the money

they have commitments (family etc) and don’t want put their

career at risk, by stepping out.

departments operated in the best interests of the business vs. as silos,” he said. “They put us in pressured situations to see how we would respond, and then gave us feedback.” It wasn’t just theoretical, it was practical too – “It showed us how to interact better, to be more impactful and to get better results. I got a lot of 360 degree feedback on myself and my style.”

• Large global giants often have considerable in-house learning programs / their own business schools – like IBM, for example, which is renowned for developing world class / best in class talent. Such companies will often develop people’s skills in house.

Plugging skills gaps and enhancing credentials.

• A great example of a popular and incredibly useful course, often self-funded / paid for oneself, is “Finance for non-financial managers”. This is often a two day course, sometimes three to five days, costing c. $3-4k £2k.

• There are numerous courses related to specific business functions: e.g. HR; Customer Services; eMarketing; and some of these in the right subject areas and undertaken at Tier 1 business schools can greatly enhance credentials. Ivy League names and flashy titles can greatly enhance a CV Resume.

• Talk to top head-hunters and they’ll tell you they regularly see courses from Ivy League business schools on aspiring executives’ CV Resumes and Linkedin profiles – for example, courses in Strategy; General Management; and Business Development. Expect these to cost c. $10-30k, £5-20k at the likes of Ashridge; INSEAD; Erasmus, in Rotterdam; and Wharton, in Pennsylvania. These represent a fraction of the cost of an MBA, undertaken in a fraction of the time.

Small and medium-sized employers will often pay for training; however, justifying this may not be straightforward and they’ll want to know they’re getting a return on their investment.

Mini MBAs

Mini MBAs can vary in quality, content, duration and cost, and typically require less than 100 hours of total learning. They may be residential, classroom-based or distance learning courses. In some cases they are a kind of “boot camp” lasting just five days, in others they might take three months. As well as coming in different shapes and sizes to suit different learning appetites, they are also geared to different budgets, ranging from $2-10k / £1k-7k, typically $2-4k / £1.5-3k.

A mini MBA can be a great course for someone who has been made redundant and who has both funds and a genuine motivation to learn, and sees value in acquiring new skills. In addition to knowledge-building, for many managers and execs, a job search may take four months plus. When an interviewer asks, “What have you been doing whilst unemployed?” being able to answer, “I’ve been studying a mini MBA,” is impressive!





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Personal MBA books

What if you’re determined to acquire the knowledge and skills associated with an MBA, but don’t have the necessary qualifications or financial resources? There are a number of first-rate self-help books available which claim to teach you the skills you need for minimal financial investment.

These will help you acquire business smarts in Marketing, Strategy, Financial and Management Accounting, Organizational Behavior, Leadership, Operations Management, and Decision Models allowing you to acquire much of the know-how to think, speak, and act like an MBA.

A self-help solution will give you knowledge; however, it doesn’t give you a recognized certificate / qualification, which employers or investors may seek when considering succession planning, key appointments, and promotions.

Marginal career re-alignment

People considering an MBA typically would be doing so because they are ambitious; however, you should be cognizant that the top jobs are ordinarily appointed to people with one of three backgrounds, those being:

• Finance & accounting.

• Sales.

• Deep expertise relevant to the core line of business that that firm is in, for example:

• Manufacturing firms: people with operational backgrounds; engineering, production, design, etc. – who understand the complexity of such a business, when combined with commercial / senior management experience – may see career progression from engineer, manager, senior manager, COO, and ultimately to President.

• Professional services firms: people with backgrounds in the firm’s specialist area can do well. For example, in a human resources consultancy, it would be highly likely to find a CEO from a background in HR.

• CPG firms: as these are heavily marketing-led, marketers at CPG companies often rise to the top.

So if you’re ambitious and want to move up, consider the merits of moving into an industry in which you can excel in an environment in which your background adds the most value.





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noticed.”















noticed.”












Final word:

An MBA thinks, speaks and acts in a certain way!

One which is logical, credible, and impressive. You don’t have to undertake an MBA to develop your thought process, speak in their language and act as they act – there are alternatives.

Whether you are studious or someone who simply is not a glutton for academic punishment, there exists the need for “continuous learning” without which your skills, style and substance will quickly become obsolete in this fast-paced digital world.





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learning

opportunity

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