Someone forwarded me this article from the Straits Times, the most widely-read English daily in Singapore, titled “Does an MBA really help in your career?”
Since access to the Straits Times requires a paid subscription, I will summarise the main points. Jim Rogers, who made billions trading commodities, said that ‘much of what you learn (on an MBA) is incorrect, you have to start over and you’re a couple of hundred thousand dollars or so out of pocket’. Also, ‘the whole image of MBAs is a myth and MBA finance courses, for example, teach things like modern portfolio theory and the efficient market hypothesis, which are ‘totally incorrect. If you ask successful people if their MBA helped, I think they’ll say the MBA might have helped them get their first job or two, but after that, it didn’t do any good.’
Now, I am not going to start a debate about the merits of modern finance as taught in business schools (other than to say that it has served me quite well both professionally and in terms of managing my personal investments), but I will address Jim Rogers’ comments about the value of an MBA.
I would characterise Jim Rogers’ comments as being symptomatic of many people who believe that education should be solely about preparing students to be able to start a job from day one as if they were seasoned pros. They see education, whether it be an MBA, an undergrad degree or a vocational degree, as simply a time when students gain practical knowledge about facts that will be applied in their first job. And since knowledge can become dated very quickly, this school of thought believes that the value of education will drop off very quickly.
Now, I am not going to argue that education should be completely divorced from what is happening in the outside world. Far from it. The Cambridge MBA has many opportunities for students to apply what they have learnt through two consulting projects, and in many cases, students learn a lot more from these projects. Nor am I arguing that post-MBA employment is unimportant. In fact, we have invested considerable resources to enhance our career services to cater to the increasing expectations of our MBAs and I know that the Executive Director and Director of our MBA let out a collective whoopee everytime they learn of an alum who has started a job that they have been working hard to secure.
Instead, I want to argue that the frequently under-estimated value of an MBA is the opportunity for someone to learn things that he or she would never have had the chance to. Much of this learning comes from interacting with other students who have backgrounds completely different from your own. For example, there are people on our MBA who have considerable experience in the City or on Wall Street but still learn aspects of finance from their fellow students who might be entrepreneurs or have invested in early-stage companies. Then there are students who gain insights from their classmates who have worked in completely different sectors but face similar challenges.
This type of learning should not be confused with networking. The Straits Times article quotes an Insead MBA who rattled off a list of nationalities as if to suggest that she could now consult for Malaysian companies, sell consumer goods in Indonesia or deal in real estate in Israel. Networking is important and the friends you make on the MBA programme will be very valuable. But the key thing remains that the greatest benefit that you will derive from your MBA network is how they challenge your way of thinking and help you grow as a person.
This last point about growing as a person sounds nebulous and soft. In fact, most business schools have staked their MBA reputations on emphasising their strengths in the “hard” aspects of business, eg how quantitative their programmes are. However, when we polled our alumni several years after they graduated, almost all of them said that the biggest benefit of their MBA was the soft skills that they learnt, whether it be learning how to collaborate in multi-cultural teams, how to lead, and also understanding what is important in their lives. Yes, they learnt much of it through the structured part of the program, eg through study groups, but much of their learning also took place outside the classroom. Rowing for their college just months after first picking up the sport taught them how to test their limits. Presenting a complex topic on behalf of the entire class gave some the confidence which their past experience might not have provided. Hearing the life-stories of others inspired others to make significant life choices, eg switching to a different industry, starting a company, or refocusing their energies on their family. Ultimately, such “soft” learning had a positive impact on their careers.
That’s my views on the value of an MBA. I am keen to hear your views.