Once upon a time, a high-school diploma was a sufficient credential to get a good executive job. Then, as more people went to college, a high-school diploma was no longer enough. A college degree sufficed for a time, but as more people got master's degrees in business administration, even a college degree was no longer enough. That was the case in the 1970s. Since then, the number of people getting an M.B.A. has increased to the point that simply having the degree is insufficient for landing plum jobs. The quality of the M.B.A. program has become determinative.
This "degree creep" has been matched by the recognition that managers now have far more demands placed upon them than in the past. It's no longer enough to master a narrow function. In addition to developing strong technical skills, managers must possess a range of such soft skills as the ability to influence people, manage interfaces with other departments, negotiate with individuals from all walks of life, manage their own career in a complicated job environment and more. Managers also must know how each part of the company fits with the other parts, how the company competes, and how it should compete. The disappearance of much of middle-management means that, even at what were once junior positions in a company, this sort of knowledge is becoming more critical. It's even more important in smaller organizations, start-ups and entrepreneurial ventures, which are responsible for more employment. This increased complexity has made advanced managerial education much more necessary than it was in the past.
The educational key to managerial success is getting an M.B.A. that both trains you well in your chosen field and is of the highest possible reputation. This doesn't mean that everyone needs an M.B.A., but there are a host of people who sensibly view it as a major stepping stone to career success.
Some Common Reasons for Getting an M.B.A.
The M.B.A. is a flexible degree, which can serve either to broaden your knowledge of business or develop your knowledge of a particular function, such as finance. Therefore, it's often viewed as having something for everyone. Although this is obviously an overstatement, there are certainly many valid reasons to get an M.B.A. Some of those most commonly expressed by prospective M.B.A. students are to:
- Change careers.
- Advance in their current fields.
- Shift from individual contribution to managing others.
- Learn to manage a technical or artistic field they're currently in.
- Use time between jobs well.
- Gain an intellectually challenging and interesting experience.
- Get an advanced degree needed to obtain a useful job in their country or field.
- Gain sufficient skills to start and run a business.
- Grow their small or start-up business, but need more skill and credibility for dealing with lenders, investors or customers.
- Improve their pay.
- Develop their network of contacts.
- Work in a different country or region.
All of these are sensible reasons for getting an M.B.A.. There are others, but it's possible to go into too much detail in enumerating them. London Business School, for example, classifies would-be M.B.A.s into two categories: "vertical" and "transitional." In other words, those wishing to climb the career ladder in their current field are classified as "verticals," whereas those wishing to change fields are "transitionals."
What Does an M.B.A. Program Do?
A good business program will teach lessons that can't ordinarily be mastered on the job, such as finance, statistics and managerial economics. It also can compress the time necessary to learn lessons that can be taught on the job, but only over a long period and with great effort and luck. In addition, it shows how different functions work, how they're related, how companies in different industries compete, and how they manage in different environments. The best programs also prepare students for the new global, information-driven environment.
An M.B.A. program does all of this by being, in part, a boot camp for managers. Students are drilled in the basics and forced to crunch through a massive amount of material, cooperate and compete with colleagues very different from themselves, and, in general, live life at a faster pace. The net result is a graduate with broadly recognizable skills and attributes.
Of course, graduates gain more than just a set of skills and attitudes. The reputation and connections of the school, along with a hard-working career-services department, will help you to gain an appropriate job. The alumni network of the school, plus the contacts you develop during the course, will be assets forever. Indeed, the degree itself will have long-term value on your resume.
A Caution for Career Changers
Many professionals seek M.B.A.s to facilitate a career change, but a word of warning is in order. Those who intend to make a dramatic change need to plan carefully. It shouldn't be difficult for a medical doctor to become a hospital manager, given her substantial experience in hospital operations. However, the same is unlikely to be true for a commercial photographer who wishes to become an investment banker. This switch will probably be possible only if she has strong quantitative skills and does a great deal of work in business school on projects concerning investment banking, including part-time work of a related nature.
Your prior experience will be important in determining the potential employers that will be interested in you. To overcome a lack of relevant experience, take full advantage of the time that you are in business school. Go beyond just taking relevant courses. For example, do an independent study with a professor who is well-known in your field. Even better, demonstrate a track record in your field by getting an academic internship at a relevant company or doing volunteer work to get your foot in the door of such a firm. Get active in relevant student clubs or groups and join a branch of the industry association most closely tied to your target field. Those in two-year programs can go further, by working in their field or a related one during the summer between academic years and on a part-time basis during the second year.
Even with these ideas in mind, however, don't blithely assume that you can make the career change you desire. Be sure to discuss your proposed change with the career-services professionals at the relevant schools to determine whether and how you should go about it.
Getting an M.B.A. represents an extremely large investment of money, as well as time and effort. The tuition for a two-year program may be $50,000 or more, and the income forgone may be $100,000 or more. Books, computer hardware and software costs, travel to and from the program and other assorted expenses may add thousands more. The cost of a two-year program is therefore likely to exceed $150,000. A one-year program may cost 50% to 65% more, given the often higher annual tuition fee for such programs.
Is an M.B.A. worth this large sum? Although not everyone will be financially better off from getting an M.B.A., those attending the top M.B.A. programs are highly likely to benefit. In fact, almost no one who attends a top program ends up regretting the experience. (In contrast, a majority of graduates of American law schools are sorry they ever went.)
The payoff of an M.B.A. is partly a matter of increased earnings. It's also a matter of increased career options, confidence, security (no matter what happens, jobs are available for M.B.A.s from top schools) and status. In addition, most people feel they lived life more intensely at business school, met the most interesting people they've ever known, and formed their closest friendships there. It's therefore probably a mistake to view the decision to get an M.B.A. on a purely financial basis, despite the sums involved.
Who Hires M.B.A.s?
The traditional M.B.A. employers have been firms in financial services, management consulting and consumer goods. They remain the biggest employers of M.B.A.s to this date. The trend in recent years, however, has been for smaller firms in a variety of different industries, including high-tech start-ups and nonprofits, to hire them, and for graduates to start their own businesses. Government employers have joined the fray, too, often preferring M.B.A.s to those with master's degrees in fields such as public administration, public health and international relations. The mix of employers varies from year to year, depending largely upon the health of their own industries.
Is an M.B.A Right for You?
If any of the reasons for getting an M.B.A.that were listed above struck a responsive chord, an M.B.A. is probably right for you. If you intend to be a better manager, progress rapidly in your current company, start your own business, give yourself better career options or just earn more money, an M.B.A. is likely to be a sensible investment.
It's critical to note, though, that you should view the decision to pursue an M.B.A. as an important career decision and one that merits considerable thought. The starting point for your decision making should be an evaluation of where you want to go and how best you can get there. If this is a complete mystery to you, by all means consult the career literature, which is abundant.
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