Value of the MBA?

Is the pendulum swinging back the other direction, towards the SME’s? And if so, can we be smarter about it this time and provide the SME’s with the business acumen they need to succeed?

In the working world, employer preferences are on a pendulum. At times you will find your skills out of favor, but the pendulum is always swinging back the other direction.

The quote above is paraphrased from a discussion I had with my father not long after I graduated with my Masters degree. I was seeking his advice for getting into the working world, and he had plenty to offer me since he had been working as an engineer for decades. This quote comes from a discussion about how, after being downsized, he ran into employer after employer who expressed their preference for someone with a Masters in Engineering, and didn’t consider his 25+ years experience as an engineer in the Power Generation field as a suitable substitute for that very expensive piece of paper. But he noted that to him it seemed the pendulum was swinging back the other direction, as employers recognized that having the knowledge on paper is very different from actually working in the sector in real life.

Last week I had an interesting twitter conversation along these same lines with tech speaker David Shipley about the value of an MBA degree. I had re-tweeted a piece from career coach Ashley Stahl in Forbes, 10 Reasons You Don’t Need an MBA. I think her observations are spot on, especially #5: It May Not Be Relevant To The Job You Want: In other words field expertise is more valuable in some areas than the generalized concepts covered in an MBA. David disagreed, pointing out the MBA teaches leadership skills and gives you a toolbox to work with in nearly any field, which is very true as well. It was a very interesting and polite conversation. By the end of the discussion, we had both agreed that an MBA is more valuable for someone who has at least five years of professional experience; someone going straight from undergrad to an MBA with no experience in the working world would get far less out of it.

I still feel the value placed on an MBA exceeds its actual values for several reasons. First, it seems to lead to a lot of people (especially in the C Suite) who are basically interchangeable; they know how to run a business, but not how their business actually works. That can be beneficial in dealing with turnover and in other instances, but every industry has its quirks and if you don’t understand those quirks because you don’t understand the industry, all of the leadership skills in the world won’t help you. Second, I strongly feel that the skills acquired in an MBA are much easier to teach in situ; teaching the basics of HR and finance and accounting is easier than teaching someone the industry specific technical skills needed to work in the field. In my experience, you can take an SME and teach them to lead easier than you can take a generalist and make them an SME. Not to mention the cost of the degree itself; in the US an MBA from a reputable school is going to set you back at least two years and more than $30,000+. That’s one thing if its paid for by your employer, but quite another if you have to pay for it yourself.

When I obtained certification in Non-Profit Management (which is basically an MBA + Non-Profit rules/regs which I will note are far more challenging than anything in the private or public business world), I was already working as a Non-Profit Executive Director. I was taking what I was learning and applying it immediately back at the office, and using my challenges at work and knowledge of my specific industry not only to focus my study, but also to filter out what information was more or less relevant to me. Had I taken the classes without that workplace experience, it would have been far less valuable to me.

Ten years ago, getting an MBA was all the rage, partly as a response to the truth that SME’s on their own are often not very good at running businesses. But since then we’ve seen what happens when businesses are run by people who don’t know how the business actually works, and the results there haven’t been good either. Is the pendulum swinging back the other direction, towards the SME’s? And if so, can we be smarter about it this time and provide the SME’s with the business acumen they need to succeed?

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