To MBA or not to MBA?

[Mr Beau]

Quick history:
Age 29, degree in Mechanical Engineering from U of Alberta, spent 4 years in Detroit working in the auto industry. Two of those years were for a large engeering services company and then I changed jobs where I worked another 2 years as a Program Manager (different companies but the 2nd was a joint venture of the second).

Life and money was OK but one day I came across an ad for a French automotive supplier (international company with ~4000 employees) that was looking for someone with my profile. To make a long story short, 6 months later I found myself living in France (near Geneva). The goal was for me to work 2-3 years in France and then move back to Detroit and work as a liason between the French and the Americans (different cultures you see :-) ). Things worked out and they wanted me to move back after 2 years and replace the guy in the US working as the North American Sales Manager.

Well, two weeks into the new job, I was informed that they had decided to pull out of the US and close the office... This was only 10 days before my 'official' move! We reached an agreement to part ways, and I have about 3 weeks left before I start collecting unemployment here in France. At least I'm more or less fluent in French now and can ski the Alps!

Which brings me to my question. I've been thinking for a while of doing my MBA. It seems to me that I'm in a situation where it's pretty much now or never. And as luck would have it, I fit the 'profile' of your average student with respect to age, work experience etc.

I've been moving more and more away from the technical end of things which was initally a worry, but I've grown to like it. It's a different sort of challenge, one that is not easily learned from a book.

MBA programs in Europe tend to be 1 year commitments whereas North America is typically 2 years (in addition quite a range of tuition).

I think I have a shot at a top 15 or 20 school, which means about $50k/year just in tuition PLUS the opportunity cost of not working. So I'm looking at $100-200+k investment... not a decision to be taken lightly!

So, any thoughts on those of you who have gone down the same path? I think I'd be well suited to a consulting position with my experience, but the finance sector (specifically investment banking) seems like it could be interesting. As much as I love all things automotive, it can be a tough industry.

As far as schools, I'm thinking along the lines (in no particular order) of INSEAD (near Paris, 1 yr), IMD (Lausanne, Switerland, 1 yr), London Business School (2 yr), U of Michigan, Chicago/Northwester, and perhaps Wharton and Columbia.

The other option is to try something on my own but with all the associated pluses/minuses. Pelican Europe anyone? :-)

Thoughts/comments?

[svandamme]

get a job at a big multinational
work and study at the same time , most wil actually refund part of the costs once your graduate. still an investement , less risk , and refunds...

[Dennis Kalma]

Personally, having worked as an executive for the past 12 years and in management for much of the 15 years before that, I find MBA's HIGHLY overvalued. It is rare to find anyone who came out of an MBA programme anywhere that has balanced analytical, people and strategic skills...the programmes seem to beat the humanity out of the graduates and instill them simultaneously with the arrogance that they are actually better than the people they lead and the customers they serve.

I pretty well automatically relegate resume's with MBA on it to the "maybe" pile and have hired few of them in my history. Oh yeah, and my test to find whether someone has an MBA or not (short of asking or checking the resume) is to ask them about the department...if they refer to their staff as "resources" you probably have an MBA on your hands...

I know this is unpopular, but near as I can tell MBA programmes are more a way for universities to fund their other programmes than they are a method of developing management talent for industry......

Good luck whatever you decide....

Dennis

[RoninLB]

In NYC MBA's can open doors. The latest starting youngsters is $90,000us.

[1967 R50/2]

My advice would be to do a NPV analysis first, which you are, so that is good. Then figure out how much incremental money you'd have to make per year for the rest of your working career to ever make a profit on the deal.

Then ask: "Would I make that money anyway if I had two more years experience under my belt?"

$200K down (plus interest) is a tough hole to dig out of, but if the answer is "Yes, the incremental income will get me out of the hole and I'll have more in the bank at the end of the day than if I had slugged it out with two more years experience." then go for it. If not, then don't.

The other factor is that a lot of people get an MBA so they can change the career path to a different industry. Tough to place a value on that.

Yes, I have an MBA and I am still juggling these variables myself. Hindsight is not necessarily 20/20.

[cowtown]

I was about your age (29) when I started mine. I bailed from a fairly high-paying technical position in SF right after the dot-com crash and went to school full time. It was always something I wanted to do, because I was a technical guy who wanted to know how finance and marketing operate. I didn't really know if I wanted to get into those fields, but wanted to understand them. A lot of it was about personal development for me.

Has the degree helped my career? Impossible to say. I made some compromises in my career so that I could free up some time for my family life, at the cost of a bit of salary potential. Your priorities might be different.

Here's my point: There's more to the decision than the salary angle. Now that I have a two-year-old and am 35, I wouldn't go back to school today. The time to decide whether to do it or not is now. If this is more than a financial decision for you, and part of it is tied to personal fulfillment, the 100K (or whatever) cost is a minor point.

Whew, had a Doctor Phil moment there. But I hope you understand what I'm saying - it's not just about the money, and priorities can change quickly if and when family and kids enter the picture a little later on.

[Don Plumley]

It paid off for me in spades. I went to UCLA's Executive MBA Program 94-96. It was like working two hard jobs at once (2.5 counting the family with young kids too). It helped me break out of "Major Accounts / National Sales Manager" into strategic marketing, which lead to corporate development, which lead to my last job as GM of a $30M manufacturing company.

From my perspective, and similar to Dennis, having a top-tier MBA and minimal work experience is worthless. I wouldn't hire someone with an MBA and no significant experience - that's what the consulting and Wall Street firms are for. However, if you've had managerial responsibility, a good MBA program can help bring a quantitative dimension to your thinking that is valuable. The ability to see patterns in data, substantiate theory with fact, and back up "gut instinct" with analysis separates leaders from staff.

It's not right for everyone, nor is it the "golden ticket". You still have to be smart, motivated and in the right place at the right time. Bottom Line: Get it because you want it and because you think you will learn something valuable.

Good Luck!

[Dennis Kalma]

I get the part about them being in demand, I guess the question I ask is why?

[snowman]

I know several MBAs and have several relatives that were in your exact position. Dennis is right on.

If your good you do not need the MBA. THe time to have gone for it was back a few years ago, not now. Get the job and let them pay for it, if you really think you need it. Continuing ed is good and improves performance, and it is a LIFETIME goal that will put you ahead of the pack, not the degree itself. In other words the secret of success is to be GOOD at what you do, and to get better every day.

At this point in a career its who you know, and how good you are, and what you have to offer, that are important, all else is second. You have extremely unique and rare talents and experience, make the most of this asset. There are a LOT of MBAs out there. Take a course on how to write a good business plan.

realistically an MBA gives you a notch up, for a price, in your case $200k, you can make the same notch up for free, by "going for it" with all you got. If you fall back on getting the MBA, you probably "dont got it".

[BlueSkyJaunte]

Any resume that comes across my desk with "MBA" on it gets sent right to the recycle bin.

[alf]

I have half an MBA. Accepted a full time offer a month into my Summer Inernship.

Would i do it again? Absolutely.

Would i hire another MBA? Depends on what i need.

Does the degree add value? Nope. It is what you do with your time there, the contacts you make and how you apply what you learnt. The degree is just a piece of paper.

For the folks that summarily dismiss MBAs, you should keep an open mind.

[VaSteve]

I did my MBA at a local university (part of a bigger state school) part time. I invested no where near $50K and it has paid off well.

My opinion:

It has opened many doors for me and made me more well rounded. I already had a business background (am a CPA) but it gave me some nice insight into other things: operations, IT, fluff org behavior, etc.

It doesn't make you significantly technically competent in anything to be an expert in anything - it doesn't go deep enough. I would not hire anyone with an MBA as their sole qualification as an expert in something. They need some underlying experience to go with it. People that go straight from undergrad are cheating themselves.

What it does give you is a broad brush of a number of things that undergrad (where you get the most techincal knowledge) doesn't teach you. Once you have been in the workforce you can capitalize on it. It teachs you more of a way to think about things.

I wouldn't stress trying to get into a top 15 school, unless you want Wall Street or some other "connections". I also wouldn't go full time unless you want the "connections." I-banking will burn you out. It pays well because they work you to death. Not for me, thanks.

Do it before you have kids.


Edit: alf said it pretty well why I was typing my response.

[jyl]

It's impossible to give a one-size-fits-all answer, but in general if you have a technical background but are looking to move into management or finance, an MBA will open doors and help break you out of the "engineer" stereotype. Look at the people who are currently where you want to be and assess how many of them have MBAs.

London Business School is an excellent school, in students, faculty and recruiting. Particularly strong in finance. I'd put it up against any US school. I spent a semester there, during my MBA program (Haas Berkeley). No idea about INSEAD or other European schools. The European schools typically don't have as much reputation or alumni network in the US, something you should consider if you want to stay in Europe.

You know that some schools are reputed to be stronger in finance, others in marketing, and so on. If you know what direction you're interested in, that's something to consider. (If you have no sense of direction, I'd get one before investing in an MBA.)

The NPV analysis is worthwhile doing. Currently the average new MBA is making about $97K (just checked the Berkeley website) and my guess is that salary, and the rate of future comp increase, is higher than the average non-MBA of the same age.

However, NPV doesn't answer everything. If you want to get into certain industries, you basically can't do it without an MBA - at your age and background.

Also, I found the MBA program a lot of fun. I went back to school after 13 years in the workforce, and enjoyed learning new things, meeting new people, and so on.

Finally, while an MBA from an unranked school is valuable, an MBA from a top-ranked school is much more valuable, and the cost of getting the two is pretty similar. There are many recruiters who won't even look at someone coming from an unranked school. They are making a mistake, in my view, but that's reality.

[cowtown]

Originally posted by BlueSkyJaunte
Any resume that comes across my desk with "MBA" on it gets sent right to the recycle bin.

Hey that's OK. Everyone's got a stereotype or two under his belt. Better to send us to the recycle bin than to waste our time.

[Hugh R]

got mine about 20 years ago. Never got in finance or any of the typical MBA things, but it certainly hasn't hurt, and probably did help in landing some jobs. Its probably worth more than another engineering degree, although a Ph.D. in many engineering fields is valuable.

[BlueSkyJaunte]

Originally posted by cowtown
Hey that's OK. Everyone's got a stereotype or two under his belt. Better to send us to the recycle bin than to waste our time.

Hey, I'm looking for the brightest and the best in a highly technical field. If you have two years' worth of non-technical further education (that could've been better spent on an MS or 1/2 a PhD) then you're a non-starter in my book.

It all depends on the job you're looking for.

FWIW, I beat out a guy with an MS and an MBA for my current job.

And for what it's further worth, no MBA has ever cut it in our department. We've had 3 bail out so far...

[VaSteve]

Originally posted by BlueSkyJaunte
a guy with an MS and

And for what it's further worth, no MBA has ever cut it in our department. We've had 3 bail out so far...

Maybe your department sucks. Hahahahah

[Mr Beau]

Well, thanks everyone for your input. As expected, there are varying opinions... :-)

To those that think it's not worth while, I guess it's like and degree/tool where some think that it's not valuable or necessary. Sure you can often get by without--it just may take a bit longer. I've run into people who think that engineering degrees are a waste of time ('school of hard knocks' is better) but unless you've gone through it, there are just certain limitations.

With that said, the field of 'business' is such a broad term and much you need is gained by just being exposed to it, hence this thread.

Dennis,
If someone does come out of the MBA that has the 'soft skills' and doesn't have a God complex, do you find them worthy employees? One of my options is to move back to Alberta with the way things are booming, but part of me would like to live in a major center (i.e. NY, London, Chicago etc). An MBA would help in this end.

Ronin,
I think the average out of Columbia is $110k+, but with my quick calcs, that's still a ~6 yr payback period when the opportunity cost is taken into account. A 1 year program pays back much quicker, with ~20% ROI after 5 yrs. Try that with the stock market... :-)

1967 R50/2,
As you mentioned, the NPV is definitely a factor but not everything. With that said there are no guarantees especially if the economy takes a downturn. The payback is tough to judge partly due to salary assumptions after say 3 years (fresh out is obviously readily available from the schools.)

Cowtown,
It's definitely not just about the money though it does have to be taken into account. I'm single and without children (as far as I know...) so it does seem like a now or ever decision. Once I have more responsibilities, I imagine it would be near impossible to complete.

snowman,
I've made some pretty good advancements in the past 6 years, and moving to a foreign country without being bilingual teaches someone a lot about themself. I'm confident that I could go back to the business world and continue on this path, but I'm thinking the MBA would provide a bit of a jumpstart and allow a change of field more easily (quick generic stats: ~1/3 of intake are engineers and ~1/2 of all grads change industry).

BlueSkyJaunte,
Make sure to PM where you work so if I do this, I don't inadvertently send you an application! :-)

jyl,
LBS is certainly respected, and it better be at 40k pounds (say $75k) (edit: total, not per year)! FYI INSEAD is a 'competitor' of LBS but is only a 1 yr program. INSEAD is also strong in finance but focuses a bit more on an internation profile (i.e. need to speak 2 languages to get accepted and third before graduation).
My experience with engineering is that while the school has some impact on your perceived ability, the things you have done also play a major role. But with business schools, the companies that recruit and the base salaries are largely tied to the particular school. I'm not saying it's right or wrong, but just the way it is.

Thanks again for all the feedback. Time to do some more relection. I think that I'll apply to some schools (unfortunately it's rather late in the applications process but I hadn't planned this situation) and continue to search for a job that catches my eye.

[RoninLB]

Originally posted by Mr Beau

Ronin,
I think the average out of Columbia is $110k+, but with my quick calcs, that's still a ~6 yr payback period when the opportunity cost is taken into account. A 1 year program pays back much quicker, with ~20% ROI after 5 yrs. Try that with the stock market... :-)

sounds good.

The $90k was just a general figure that I recently heard. Also NYC can be very clicky about the school attended. Yrs ago it was very ethnic. I practiced interviews on some firms that I knew would never hire me.

[jyl]

Originally posted by BlueSkyJaunte
Hey, I'm looking for the brightest and the best in a highly technical field. If you have two years' worth of non-technical further education (that could've been better spent on an MS or 1/2 a PhD) then you're a non-starter in my book.

If you're looking for an engineer, naturally you're not going to hire an MBA. Even an engineer with an MBA. Presumably he went and got that MBA precisely because he wanted to get out of the "technical" pigeonhole (and out of departments like yours).