Do You Really Need An MBA?
Seems like a fairly brain-dead question, doesn’t it? I mean, it’s November, CAT just got done, and if you did not want to do an MBA, what even are you doing on InsideIIM? Or even worse, if you’re already in an MBA program (like me) this might appear to be too little, too late. But there usually comes a time, either during your preparation to get into an MBA program or a few months into the program when you ask yourself, “Is this really worth it?” And it is a valid question! I wanted to take this time to emphasise what exactly an MBA program gives you, and what I feel you should aim to take away from the program.
By now, you’ve seen what the options are. But how does an MBA compare? I’m going to walk you through this as I did about a year ago. Let’s assume that, like me, you don’t know what you want from an MBA, or you have a lot of needs, and you need to decide whether to do an MBA or something else. A quick look at the results of the survey shows us that there are many reasons for doing an MBA, and many people have more than one reason for it. For me, the biggest reason was location – I was in New York for four years, and I wanted a way to come back to India.
Let’s say you’ve decided to do an MBA. There are two options ahead of you. Executive, or full – or in IIM-speak, PGP or EPGP/PGPX. There are two major factors that determine which program you pick. First, how much work experience you have. According to IIMB Admissions, folks with over 5 years of work experience are recommended to apply to the EPGP program. EPGP is a one-year, full-time residential program. The biggest advantage is that an EPGP course takes you away from active work for only one year. It is not long enough that you fall out of touch with the industry, and yet long enough that you get the MBA experience. The second big reason is if you want to shift into a managerial role from a technical or functional role. In the one year of EPGP, you can take electives tailored to your aspirations. The thing to consider before taking up this option is the opportunity cost of this course. From a cost perspective, it costs about as much as the PGP course. But the opportunity cost is one year of work. It is up to you to evaluate whether the returns of the program justify the advancement one more year working will grant you.
Now, I’m a fresher, EPGP was not even within my consideration set. Given that, I looked at PGP. What does an MBA have to offer?
Network. The network you build at a B-school is one of the most diverse and powerful in the world. Your network does not end with your peers. Your network will include alumni, corporate recruiters, as well as well known, successful corporate leaders and entrepreneurs. Naturally, it is up to you to determine how much work you do to build this network.
Brand. Depending on the B-school, the brand is powerful. While it may seem trivial, the “@iimb.ac.in” email is more likely to be read than an “@gmail.com” email. The brand gets you through the door, what you do inside it is on you.
Skills. For some reason, this is majorly underplayed as a takeaway from MBA life. The soft skills of communication, leadership, managing people, and so on, are the biggest takeaways from a B-school. Anyone going into finance will learn how a balance sheet and P&L work on Day 1. Anyone doing marketing will know what the 4 P’s are on Day 1. You don’t need a B-school to teach you that, but instead, you need it as a platform to develop, practice and hone these skills. Hell, if nothing else, you will learn the art of bullshitting convincingly!
Money. Remember all of those options in my previous article? You will reach a level of pay comparable to that post-MBA in a longer time span. It could be 2 years, or 10 years. Fact is, that the CTC for an MBA graduate is higher than that of an undergraduate or a MS/M. Eng. graduate. More often than not, it takes longer to get a PhD. than an MBA. As such, for the PhD to be worth it, purely from a monetary compensation perspective – you need to earn enough post-PhD so as to cover everything you would have made in the years after your MBA. (Opportunity cost in a nutshell).
Technical switch. An MBA is a good place to switch from one line of work to another – engineering to finance, or operations to consulting. While lateral hires from the market are possible, placements are a safer bet in some respects
Location. This was my personal reason. An MBA lets you change where you are based. In my case, it was a desire to be closer to home and my family – something that would have been difficult working from the states.
Resources. You can access amazing resources that allow you to produce some amazing work and research at an MBA college. The faculty are brilliant, and working with them lends perspective and knowledge.
Clearly, there are several pros to doing an MBA.
But what’s the flip side?
Classes. You’re going back to school. It’s fine if you’re a fresher and used to studying regularly (not me!) but more often than not, that’s not the case. Adjusting isn’t easy.
Fees. It’s expensive. At 20+ lacs, it’s not cheap. This isn’t including living expenses, mess bills, and all the cash spent on the alcohol folks end up consuming on campus.
Opportunity cost. I know people who have passed up a promotion that places them at the same level as a hire from final placements. Essentially, B-school has set them back 2 years – which is severe.
Value creation. An MBA doesn’t add anything exclusive, per se. More so, it speeds up the process. The skills and network that you build at an MBA college is one that you will acquire over time. In fact, it’s likely that a network you build through the course of your work will be much more meaningful and relevant than the network you build at a B-school. I mean, there are only so many situations where, as an investment banker, I will need to call on a sales friend. However, I am more likely to communicate with a contact in a private equity fund – who I’m more likely to meet on the job.
Okay, so bottom line. Do you need an MBA? Not really. You don’t absolutely have to have one, because it doesn’t add anything exclusive. There are many successful CXOs (my dad is one of them), who don’t have an MBA. What it does do, however, is help you speed up the process a bit. It’s a concentrated two years of learning and fun. So even though you don’t need it, you can certainly take away a lot from the program. So good luck, and hopefully, now you know why you’re applying to MBA college!