Ask Away Do MBAs Really Matter

Ask Away Do master of geschftlicher umgang administrations Really Matter Welcome toAsk Away, Recruiter.coms new weekly column Every Monday, well pose an employment-related question to a group of experts and share their answers. Have a question youd like to ask the experts?Leave it in the comments, and you might just see it in next weeksAsk Away This Weeks QuestionDo master of business administrations (and similar business-oriented degrees) really matter?Running several business, I can honestly tell you in the entrepreneurial realm, master of business administrations and other affiliated business degrees only matter if you plan on working for someone else. Even then, their earning basis is only marginally different. The biggest asset you can bring to an employer is your rolodex and how you can interact with people. As a young entrepreneur,I would highly recommend taking the $100,000 you would spend on an MBA and investing it in yourself, sharpening your speaking skills, writing skills, and interpersonal relationships, and finding out ways you can make your employer money and make their job easier. However, there is a caveat to this if you get into a top 25 MBA program where the name carries weight (e.g., a Stanford, Harvard, UPenn, Berkeley, UCLA), then it does behoove you take to take the risk, assume the debt, and further your degree. Other than those circumstances, take it from a young entrepreneur that is always looking for talent dont get into debt and welcheste your time with an MBA program that no one has ever heard of.-Michael BanovacReal Estate and Internet EntrepreneurRMB Luxury Real EstateAn MBA definitely matters. However, an MBA is leid always looked on in a positive light. In fact, one very successful company for which I worked hada no-MBA rule. While the enforcement of the rule was not absolute, therewas a definite bias against hiring people who had those three letters on theirresume. Why? In general, we found that MBAs tended to be arrogant, spoke alanguage of their own, and were difficult to train. Several companies thatI have encountered have a bias against MBAs. What explains this bias? Thecompany for which I worked was founded and run by people who didnt haveMBAs. They valued real-world experience over theory and standardized bestpractices.On the other hand, companies thathave a high concentration of MBAs inleadership and management roles tend to highly value an MBA. As theexpression goes, birds of feather flock together. By hiring MBAs, theyvalidate the importance of their own education. Bottom line if you wantto work for a company that already employs a lot of MBAs, its important tohave an MBA.-Marc ProsserCofounder and Managing PartnerFitSmallBusines.comPost-secondary education of any kind is important because it demonstratesa level of commitment to reaching personal goals. There is also acorrelation between a university-level edu cation and the understanding andpractical use of technology, specifically that technology found in an officeenvironment. Having said all this, the MBA degree in particular isnt thebe-all, end-all.Dont hire an MBA unless the position actually demands it otherwise, youllbe overpaying and risking the employee not sticking around because theycant see how to apply their MBA-related skills. We experienced thisrecently with an MBA graduate who didnt have the patience to learn aboutthe company or understand our products and processes before deciding toresign within their first 30 days.-David CiccarelliCofounder andCEOVoices.comI believe that the MBA degree is as important as ever though the price for getting one is prohibitive.Prohibitive in terms of both real costs nearing $80,000 for tuition +$40,000 for books, room, and board + $20,000 for incidentals = $140,000 and opportunity costs of lost salary at an annualized rate of $75,000 = $150,000 over two years.Total costs incurred about $ 300,000.Average post-MBA pay is up 50 percent over pre-MBA pay.So, in the example above, post-MBA pay would be $112,500. Break-even costs fordigging out of that hole, assuming a 2.5 percent cost-of-living increase yearly,would come in year 11 (assuming years one and two were spent either inschool or workingstraight through). So you basically have a lost decade, if everything movedlinearly (as it does in a spreadsheet).In my case, my MBA was back in the mid-2000s and my path hasnt beenlinear, thankfully. I credit my MBA with immersion in many significantleadership theories, plus practical business skills many of which arerelevant today and used frequently.As far as hiring, I do look for MBA degrees in certain roles, and I viewthem as a strategic asset to the candidate.-Eric QuanstromCMOPipeliner CRMI work at Tidemark in Redwood Shores, California. Were 158-people strong andgrowing. Being so small, every single new hire has a huge impact on thecompany, especially when considering tha t the department they are joiningis likely less than 10 people in total. So the question of qualificationsis an important one. MBAs and similar degrees are extremely useful, thoughnot a requirement for us. We dont make hiring decisions based on thedegree, but based on experience, intellect, and potential contribution If someone is to make an MBAreally matter, though, they will get the best results by working in theirdesired industry for 2-3+ years before going back for that extra levelof education. The students who get the fruchtwein out of those programs are theones who can contribute and relate to in-class discussions by recallingtheir own professional experiences. That way, its not just talk of theory,but of practical examples, issues, and resolutions.In short, MBAs really do matter, but not everyone should get one. As anorganization, we want and need a diverse workforce, and that includes levelof education. My advice to anyone considering one? If you want an MBA tomatter, spend a few years in the workforce before going back and gettingone. The value you will get from the program will increase immensely. Agood employer will hire you on your ability to contribute, not on a degreealone. Use the classes, experiences of classmates, and professors to learnand increase what you can offer, and then the MBA will matter.-Adam PlachtaLead Recruiter TidemarkIve been in higher education since 2004, when I took on a role as directorof business graduate programs overseeing an MBA program and masters degreeprogram in accounting.As a director of an MBA program, my ideal candidate was someone 5-10years out of college, and not necessarily with a business degree. The workexperience is important going into an MBA program. Conversely, the worstcandidate is a 22-year-old who just got a bachelors degree in business.For that student, an MBA is too much too soon. They dont get the value-added benefit as someone who has business experience.The MBA with business experience has a cont ext for the classroom learning,and then can immediate go to their professional position and apply whatthey learn.The other type of person who can benefit from an MBA is someone who majoredin something like engineering or law. The MBA gives them an extra dimensionand gives them a better shot of moving up in the organization.A good MBA is not just about learning out of a book and in a classroom.There should be case studies, group projects, intentional team-buildingactivities, international travel, visits to businesses, and real, live caseprojects to work on (i.e., an actual business with a real problem).-Rich GrantFormer Director of Business Graduate Programs at the Universityof MaineMy feeling towards the degree is that the best form of practicalexperience is still starting/running businesses even if they fail. Ifyou fail and try again, the cause of your previous failure is unlikelyto be a problem again since you can now predict it and avoid it. If yousucceed, youve also learned a l ot.The MBA I received did provide some useful experience, mainly theoretical. Forexample, when studying economics, we learned about supply and demandcharts. That is an interesting and useful tool that I hadnt learnedfrom experience alone.However, for thingslike importing and speaking to Chinesemanufacturers, the degree barely helped. We learned about internationalbusiness and cultural differences, but when it comes down to importing,there are a lot more hurdles to overcome (especially government, trust,and reliability).I cant speak on behalf of employees, but as an entrepreneur, the degreeis optional.-Daniel BradyOwnerHeavenly Hammocks