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I’ve recently come across a numbers of posts discussing the value of an MBA today. Innovation Zen suggests MBAs are overrated saying:
I am sceptical about the value of MBAs.
and referring to an article on Insider CRM that claims to provide proof M.B.A.s are overrated, based upon comments mane by “20 people who are smarter and richer than your professors“. Interestingly only three of the people on the list actually have an MBA one being Henry Mintzberg who is quoted as saying:
The M.B.A. trains the wrong people in the wrong ways with the wrong consequences. Using the classroom to help develop people already practicing management is a fine idea, but pretending to create managers out of people who have never managed is a sham .
Which is not actually a problem with the MBA itself more the admissions policy of the business school in accepting new graduates without any management experience. It’s also only fair to note that he has his own agenda being the author of a book titled Managers Not MBAs.
Another MBA on the list is the prominent blogger and venture capitalist Guy Kawasaki who is quoted as saying:
I don’t think an M.B.A. matters very much for starting a company. A much better educational background is an engineering degree. You can always hire MBAs, but if you don’t have the ability to conceptualize and deliver a product, you’ve got nothing.
Which I don’t really agree with after all you can hire engineers too. It also seems to assume that the person with the MBA has no other experience, whereas they might just as well have done an engineering degree as their first degree. However in my opinion the right person to start a business could be either an MBA or engineer or neither. What makes them right is their vision and drive.
The final MBA on the list is Jon Huntsman who is quoted as saying:
I went to night school to get an MBA. I should have utilized that time to set up more businesses. True entrepreneurs get out of school as fast as they can and get on with life.
Which is a fair comment. I think an MBA is only going to be beneficial to an entrepreneur who has actually gone out into the world and started a business. The MBA will then add value to that experience and potentially enable them to make the next business they start better.
Wilson Ng on Reflections of a BizDrivenLife ponders SME – Should you get an MBA? In which he says:
In today’s competitive world, it is important that you are on the edge, and a theoretical foundation on how to manage one on a professional manner is simply necessary.
and Luke Houghton commented on the post saying:
I would say what I have learned about systems and strategic thinking have helped me to know more about how stuff works and how to position myself better. Some of the things I have gained from my study are actually very useful in understanding real world business problems… that said, some are not!
Which largely matches my own expectations. I think that an MBA has a lot of value to the budding entrepreneur for the theory you’ll learn, the people you’ll meet and the skills you’ll develop in undertaking the course. I don’t however believe that an MBA is essential to being a success.
It is my belief that the analytical skills you’ll gain and the broad understanding of business issues including organisational structure, strategy, marketing and finance can only improve you changes of building a successful business.
It doesn’t however magically turn you into something you’re not. A lot of people seem to believe it will make them into a top level manager, or a business guru. The reality is it will help you to develop analytical skills and will give you a grounding into the theories of management. After that you’ll still need real world experience.
So what do you think? Do you have a MBA? Do you think a MBA would help you manage your business better?
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This blog is about business opportunities and ideas that I spot, think of or hear about and think are useful and interesting. It is intended to provide ideas and inspriation for you to help you find the right business idea for you to then grow it into a successful business.
I think it is the same as with anything else. You get out what you put into it. I received my MBA while I was in the service. I would have much prefered to be working on it while I was working on one of my businesses. I think it should be a requirement that each MBA student must have a startup business to work on and try to apply the principles they are learning. Many of the concepts I learned by rote only made sense once I had my businesses.
I think that the MBA is a good tool to have when you already have a good sound engineering background and you need a way to translate a business need into technology. I do agree however, that an MBA does not make you into a manager. There is no real way to make a person into a business man. That’s plain genetics. Finally, in this world, in order to succeed, it is not enough to have a good job, you need to INVENT one!
Robert,
Interesting idea, I’m not sure that a startup is the most relevant place to apply the knowledge though. In the UK most business schools insist on the applicant having a few years experience in industry before starting their MBA so they should already have an idea how to apply the knowledge to a business.
Markos,
I couldn’t agree more with the last sentence.
Hi John
You touched a nerve here but at the same time I agree with what you say.
I finished up with an MBA by accident.
Yes I know, it’s difficult to believe.
You have to enrol at a business school, hand over a small fortune in crisp £20 notes and then work all the hours in the day to do the course work, revise and pass the exams.
I am a chartered accountant by training and we have to do mandatory continued professional development but I am a business development coach and consultant so all that boring stuff about accounting standards and tax updates wasn’t relevant.
I resented paying £500 a time to go on a day’s course where I learnt little just to keep to the ICAEW rules.
I also ran into a little bit of competitive pressure from MBAs so I contacted a few Business Schools and asked if I could do an individual module as CPD.
It cost a bit more but there was structure to the courses.
I choose Strategic Management to start with from the Manchester Business School. I offer strategic planning services and didn’t want to be seen at a competitive disadvantage.
It was great and it forced me to focus on areas that I had avoided. Business strategy (out-thinking and
out-manoeuvring competitors) is what excites me.
So I did another module and then another.
It got to the stage that when I ran up for the next I was asked to call the boss and persuaded to sign up formally. There wasn’t that much extra I had to do to earn those special letters.
It was still filling my professional obligations for continued professional development and I was hit with the impending even close.
“Paul if you sign up now the price is £xxxx but if you leave it to the next semester it will cost you £x,xxx extra and you will have to do another module that your accountancy qualification exempts you from”.
Decision made and that’s the story of how I received my MBA (with distinction) from one of the best Business Schools in the UK.
It has certainly made me more aware of management issues and helped synthesise the different skills you need to help businesses.
But an MBA is not essential to for an entrepreneur.
Instead look for a clear vision, a great idea with real profitable marketing opportunities, the courage to act, sheer determination and hard work.
As a business coach I would also say that an entrepreneur should know when to take advice.
Thanks again John. I have got carried away but you’ve inspired me to put a version of this on The Business Coaching Blog.
An entrepreneur also needs to know when to reject advise, unfortunately getting the balance right is challenging.
Hi
Like many of your respondents I think that an MBA is really valuable, but probably most valuable when you are in a position to apply the lessons and principles that have been acquired and learned.
I have an MBA from the Open University. It took me sveral years to progress through the entire route through Diploma and on to the full MBA. I even had to “drop out” for a couple of years whilst I started up a new business! So, I was in a great position to apply everything I had learned. I feel far more “rounded” in my business skills and have acquired a greater degree of self-confidence and self-worth as a result of gaining a wealth of practical as well as theoreticval knowledge.
I think also, that many of those who knock the MBA do not have one themselves. Do they have an adequate amount of knowledge of what is involved to acquire one to criticise those who have made a significant effort to learn the real craft of management?
Bill,
I quite agree and most good business schools recognise that and require real commercial experience before accepting students onto the course. As I’m sure you know.
Unfortunately there are also people with an MBA and no real business experience who do tend to be arrogant and they’ve given the brand a bad name.