This article is an update to a blog entry I posted way back in 2007. A lot has happened since then so I thought it deserved a refresh. Here’s the second article, “Is the MBA Worth It? Part 2“. But read this one first!

Prospective students often ask me, “Is an MBA worth it?” That’s a great question considering the amount of time and effort it will take to complete an MBA. An MBA is a learning experience that can benefit anyone, in any industry at any point in his/her career. Coming from an MBA Director, you probably expected that answer. Ultimately, however, the decision to pursue an MBA depends on where you want to take your career.

The Research

I enjoy asking students, “Why are you seeking an MBA?” Some standard answers are:

• “I want more money.”
• “I want a better job.”
• “I want to position myself for success after the recession ends.”
• “I want to move up the corporate ladder.”

These are great answers, but can an MBA get you any of these things? Research indicates that it can. Here are some facts:

1. MBA job opportunities increased 24% in 2010 (TopMBA.com)
2. The average starting salary of  MBA graduates was $79,936 in 2009 (TopMBA.com).
3. Companies plan to hire more MBAs than students with other Masters degrees in 2010 (GMAC).
4. 96% of recent part-time MBA graduates are employed (GMAC).
5. Research has shown that executives who have an MBA are likely to have greater compensation than those who did not pursue an MBA. (Information Week, November 1, 2004).
6. 60% of women who possess an MBA have a greater income than their husbands (Business Week, Jan 7, 2003).
7. Employees with MBAs earn, on average, $10,736 more than their counterparts with other Master degrees. (GMAC  MBA salary Survey - opens a PDF file).

The president of GMAC recently stated;

The knowledge, skills and networks of contacts people develop in business school give them a clear edge in the job market. The remarkable success individuals with graduate management degrees continue to have when looking for employment—even in a down economy—is further evidence of the high value employers place on management education.

 An MBA + Experience + Personal Drive = Success

Statistics are wonderful but only tell part of the story. An MBA alone won’t do anything. I believe that an MBA in conjunction with work experience and personal drive is the key to building a successful career. Let me explain.

The MBA

To create business solutions, you must adopt a “systems thinking” mindset. An MBA education gives you a holistic view of an organization. Effective managers must see their “domain” in view of the larger whole. The organization is like an ecosystem. Each functional area must support itself yet at the same time act in ways to support the organization. If one area is performing poorly, there is a strong likelihood the rest of the organization will feel the impact. The MBA helps you to take the blinders off, so to speak, so you can see your organization as a whole. You will lead according to what is best for you, your department and the organization.

An MBA education also hones your critical thinking skills. Case work is the cornerstone of the MBA curriculum. Analyzing cases helps you to think beyond the obvious. You must delve deep and sift through the facts to understand systemic causes of various organizational issues. Cases also present opportunities for creative thinking. Some cases have you analyze new product launches and ask you to determine the appropriate marketing strategy based on a variety of internal and external variables. Cases force you to think beyond what is on the surface. These are the skills needed to succeed in business.

The MBA will also help you to fine-tune your soft skills. Professors will require a heavy amount of group interaction, case work, a multitude of presentations, and real-world projects where you solve real problems for real companies. In addition, many MBA programs, including ours, offer a variety of events and seminars outside the classroom to help students hone their “softer skillset”.

Experience

Though the MBA prepares you well for succeeding in the workplace, nothing can take the place of experience. Experience gives you the “street smarts” and the wisdom to understand how business works. Reading about a failed marketing plan and analyzing the case cannot teach you as well as living through a failed marketing plan. Forming and leading a team through the successful completion of a project cannot be replaced by a classroom lecture on project management.

Though work experience is crucial, an MBA education combined with work experience will give you a competitive edge. Experience can build complacency. Instead of solving a business problem in a new, different and better way, you’ll likely solve it the same way you always have. An MBA education gives you new tools to solve new or old problems. You’ll solve problems more effectively and perhaps more importantly, you’ll begin to see opportunities where you thought none existed.

You don’t need work experience to begin an MBA but the two together make a powerful combination.

Personal Drive

Determining what you want to achieve, setting goals, and taking action to achieve those goals is what will ultimately make you successful. Personal drive puts you, and keeps you, on the path to success. I believe personal drive is what separates the winners from the losers. An MBA education and practical experience are utterly useless unless you plan to take action. Without action, and MBA is just a piece of paper and experience just breeds complacency.

It will likely be personal drive and determination that convinces you to earn an MBA. It will be this same drive that will keep you on track with your studies and motivate you to complete your MBA program. After you’ve earned your degree, it is up to you to apply what you learn so that you can set yourself apart, do great things, and achieve the goals you have for your career and your life.

Penelope Trunk gives an opposing viewpoint. However, I urge you to read the 50+ comments to her blog where many readers express their disagreement with her argument and conclusion.

Here’s the second article, “Is the MBA Worth It? Part 2“.

A prospective student asked “The MBA has become devalued. Why would anyone want to earn an MBA?” His question goes back to my first blog post, “Is an MBA Worth it?” I’d suggest reading that article before reading this one. Is the MBA worth it? Yes and no…keep reading.
First, I’ll note that the MBA is not the degree for everyone. Your particular occupation may not require an advanced degree or may require a different advanced degree. However, if you are in the business world and have thought about earning an MBA degree, then in my opinion, the MBA is worth it.

Point #1: The Statistics Prove an MBA is Worth It.

Statistics show that those with an MBA earn more than those without one (reference my previous article, Is the MBA Worth It? for detailed stats). Even graduates from online MBA programs earn more than those without any MBA degree.

Point #2: Your Competitive Advantage

The MBA can be your own personal competitive advantage. Every organization must have a competitive advantage over the other players in market. Wal-Mart has low prices. Nordstrom has excellent service. Starbucks sells a coffee experience. Without a competitive advantage it is difficult to differentiate and draw customers.

What’s your competitive advantage? Think of yourself as a brand. How do you want to be known? What differentiates you from other prospects in the job market? Why should you get the promotion over a colleague? Why should you receive a pay increase? If your current boss or a prospective employer cannot answer these questions, they’ll give that job or promotion to someone for whom they can easily answer these questions.

The MBA is one powerful way to begin gaining a personal competitive advantage. It is not the only way, but it demonstrates your drive to learn and succeed.

Point #3: Expanding Your Mind

In the workplace, it is easy to put on blinders. You work in the same cube everyday, meet with the same people, and work on the same projects. You are presented with problems that are similar to previous problems so you use the same mental models to solve them. The MBA can radically shake your world.

Imagine that you are in an MBA program. After work you go to your class and your Operations Management professor begins discussing process improvement and change management. She discusses best practices to bring about change. Another student tells how his company failed at a change initiative and why. Another student tells of a fantastic success story of radical change. The professor notes on the board the differences between the two and asks the class why one failed and the other did not.

Ideas swirl in your head about how you can help make positive change in your workplace. You raise your hand and tell the class about your experiences at work. You ask for advice as to how change can take place given your specific situation. The professor adds her insights and students comment as well. You go to work the next morning with a different perspective. You’ve become empowered. The blinders are off.That’s the power of an MBA.

Point #4: Everyone doesn’t have an MBA. Even if they did, you better get one!

In the 1990s, there was talk about MBA devaluation. If everyone had an MBA, you could not use it as a competitive advantage and thus, it was useless. First, I’ll argue that even if MBA enrollments increase astronomically, most American office workers will not possess an MBA and therefore it still is an advantage. But for arguments sake let’s say taht “everyone” has an MBA. If everyone has an MBA and you decide not to get one, what do you think your career aspects will look like? Do you think it is a good strategy for you NOT to earn an MBA when everyone else has one? Absolutely not! In fact the opposite is true. If everyone else has an MBA degree, you MUST earn one just to stay competitive.

The MBA is known around the world as the advanced degree for business professionals. Should you get one? It depends on your short-term and long-term career goals. If you’re in business, then the MBA can only help; how much it helps depends on you.