As a keen and diligent potential business school candidate, one question you are likely asking yourself is: What is the ROI (Return on Investment) on an MBA in today’s economy? One might consider the cost of the MBA (primarily tuition and lost income during the years you are not working) versus potential gain – salary expectation upon graduation and growth thereafter. And rightly so. In today’s economy, nothing is certain, and you want to make sure that you are getting value for your investment in further education – a good business school student would expect no less. B-schools are keenly aware of this, jockeying for rankings every year in Forbes and The Financial Times in order to appeal to the minds (and wallets) of the best and brightest candidates.
Unfortunately most people do not have an instruction guide that leads to automatic success, and financial success in particular is influenced by a number of factors that one simply cannot predict and control. Coming out of the great recession, it is clear that jobs and employment aren’t coming back at the robust pace that have defined the recovery of previous periods of slow-to-negative growth. Organizations will continue to take a cautious approach and streamline their costs (which includes their workforce) in order to compete in a highly globalized and competitive economy.
This translates to both good news and bad news for the modern day MBA graduate. According to the Graduate Management Admission Council (GMAC), 92% of graduates in 2013 from a full-time, two-year MBA program were employed, up from 85% in 2009. “Demand for talent remains strong,” states GMAC Manager Rebecca Estrada, who also says that of new grads hired, 72% will be expected to have an MBA. While this bodes well for a new grad, this fact alone should not be evidence enough to suggest that an MBA automatically leads to a high ROI. Michelle Sparkman-Renz, director of Research Communications at GMAC, suggests that in a stumbling economic recovery, employers have to prioritize MBA hires because they have to do more with less: “They [employers] want seasoned MBA talent with the strategic skills to help them make their decisions.” The MBA is becoming increasingly commoditized as individuals strive to be competitive, so the question becomes: How can an MBA make you stand out?
When people tell me they want to do an MBA, the first thing I ask them is “Why do you want an MBA?” While I often, humorously or not, get the response “to make more money” or “I’m bored at my job,” I encourage potential candidates to have realistic expectations and not focus on the end goal, but the transformative experience that an MBA can be. In order to get into an MBA program, candidates often have to complete a series of written responses describing who they are, what they want to learn and where they expect to be in the next five years. While MBA schools love individuals who are focused, ambitious and experienced, the ideal candidate actually doesn’t know who they are, doesn’t know what they want to learn, and doesn’t know where they want to be in the next five years. OK, perhaps this might be a slight exaggeration as some direction is always important, the point remains, however, that the ideal MBA candidate should want to use this time to explore themselves, to explore new interests, and to help their classmates do the same.
Having completed my degree about three years ago, I have had ample time to consider what I valued most from the MBA, and to evaluate what criteria I think enabled me to lead a rewarding career. From that reflection, I have determined four key benefits of an MBA:
- Teamwork – A good MBA program should force you to complete most assignments in a group setting, with a significant composition of your grade made up of group and class participation. Also, the majority of your days and evenings are spent meeting with classmates under stressful situations, so you quickly find out whether or not you are a strong team player.
- Leadership and confidence – You will have the opportunity to rub shoulders with some of the sharpest minds across the country – students, professors, business executives – and to express your ideas in a risk-free setting, validating that your ideas are important.
- Networking – You will have an increased awareness of the importance of relationships, both professional and personal, in order to build strong partnerships. In b-school, you are constantly networking, and while this may quickly turn some people off, constant practice makes it easier and more natural to do so. This is a skill you will need for a successful career, in any sector, and it is wise to develop it early and to improve upon it over time.
- Multi-discipline and global business perspective – You will have a better appreciation of the various facets of business and how to use this knowledge to synthesize alternative ideas into a best approach. World class schools try to diversify their classrooms as much as possible, as there is much to learn from the perspectives of others who come from different educational, professional, social and cultural backgrounds.
In the past, many of my classmates came into and out of the MBA with unrealistic expectations. Some came in expecting the MBA to automatically deliver them a new career, or a six-figure salary. A common phrase I heard was: “The career centre is not doing enough to get us jobs.” However, “the onus is on the student to imagine future possibilities,” says Murali Chandrashekeran, UBC Associate Dean at the Sauder School of Business. Nobody is going to hand you anything simply because you have an MBA, and students will get out of it exactly what they put into it. “If students are not ready for a transformative experience, then they need to think twice about (an MBA),” Chandrashekeran adds. “It is not just about the pocketbook, it is about the heart.” Ask me personally whether the ROI has been worth it, and I say absolutely. Once you discover your passion, your values and your talents, the rest falls into place.
The skills that an MBA acquires are no doubt the skills that any professional services consulting firm would like all their employees to possess. I put these skills to good use on a daily basis in my consulting roles at Online. The pursuit of growth is extremely important, and fortunately, it is a value that Online places great emphasis on.