Are MBAs Worth It?
Level 2 - Admissions 101
Welcome back!
Today we are going to depart from undergraduate admissions and touch on something else - the MBA.
For those who are unaware, an MBA is considered a terminal business degree. It used to be a ubiquitous degree requirement for any aspiring C-Suite executive, and to some extent, it still is.
But there are a lot of questions about the value of an MBA in the long-run, particularly now. In an era where even a college degree is being questioned, how valuable is an MBA?
First, let’s discuss the various forms of the MBA. It sounds simple, but there are actually a few different types of MBAs.
Online MBA - a traditional MBA offered strictly online that allows individuals to earn the MBA through online courses
Executive MBA - an executive MBA designed for senior and executive level to fill management gaps
Traditional MBA - either full-time or part-time, the MBA program designed for individuals with some business experience but not necessarily executives - often helps individuals to specialize
The focus of this is the third category - traditional MBA programs.
Now when you think about an MBA, there are only three legitimate reasons to get an MBA:
Credentialing
Skillset
Networking
Any other reason has absolutely no purpose. Yes, even in circumstances where someone will pay you to get an MBA, you should not waste the time getting your MBA unless it is one of those three reasons.
Let’s dive in more.
Credentialing
Once upon a time, once you reached a certain level within a company, you needed an MBA to advance.
That requirement has started to fade away, but there are still some jobs where an MBA is certainly an advantage in positions.
The question is whether an MBA is a requisite because of a specific skill set, because of a credential, or because someone writing the job description is simply lazy.
We will get to the skill set, but if it is a credential, then it is likely to make the role feel as if there is more to it than anything else.
But sometimes, people include an MBA because rather than actually look for specific skill sets, they suggest that an MBA should make them qualified.
Skill Set
Some get an MBA because it is an easy way to get relevant business skills in a comprehensive environment.
This is particularly relevant for applicants who may be from non-financial backgrounds (e.g., engineers) but are looking to pivot into a different role.
This is a bit of a mixed bag. A lot of people will say that you can learn most of what an MBA teaches on a variety of online courses for a fraction of the financial cost of an MBA.
Others will say that an MBA is useful because it is incredibly difficult to self-diagnose what deficiencies you have.
Our view is a little more nuanced. In our opinion, the less financial your background, the better an MBA will serve you. In our opinion, it is very difficult to try to learn new skills independently and with no formal plan.
Networking
If this is your goal, the MBA landscape significantly changes. If you are not attending a top 15 MBA program, it is not worth attending.
The only exception is if you attend a regional MBA powerhouse and you have no intention of leaving that program.
For example, even though UNC’s MBA is not top 15, it is a strong program with a lot of influence in the region, particularly in the Carolinas. If you know that you intended to remain in the Carolinas, you can ignore the top 15 and focus on being at the pre-eminent program in your space.
But beyond that, there is no point. Why? Because networking is a numbers game. Even in the traditional view of networking, you want to be surrounded by as many winners as possible hoping that when you need someone, you can call them for help.
If that is the case, you need to maximize your chances of success. That means you pick the best business school to attend.
Other Considerations
When you consider the ROI for an MBA, there are two factors that go in:
Time
Money
Time is not really thought of, but a full time MBA program is typically completed in two years. If you give up two years of prime earning, you have to believe that the MBA is going to cause your trajectory to exceed the value of those two years.
Money is the other consideration. The ROI is completely different if a firm is paying for your MBA as opposed to you paying for your MBA out of pocket. Job security and not having to take 200k in debt is a lot different than looking for a job and having $200k in debt.
Ultimately, whether an MBA is worth it is your call, but our view is that you pursue an MBA in the following situation:
You want to pivot and learn a new skillset
You want to build a business network
You have someone paying for you to get an MBA
If you have those three boxes checked, then it is probably worth pursuing.