"Why get an MBA?" and “Should I go back to business school and get my MBA?” These are questions I am asked (as a Founder of Fairygodboss) regularly by young professionals who are trying to figure out their career path.
It’s hard for me to believe that it’s been nearly 15 years since I graduated from business school. Over those 15 years, I’ve gone back and forth about whether business school was the right move for me. At the time, I loved every minute of it. I loved the classes, I loved the opportunities, and I loved the social life. But since, I have certainly wondered a few times -- was it worth the money (and the student debt)? Was it worth the time off?
On balance, after all this time I would now say wholeheartedly that it was worthwhile considering my experience, ambitions and my liberal arts bachelor's degree. But that doesn’t mean business school is the right path for everyone. In some cases a bachelor degree alone, or a bachelor degree coupled with the right work experience and master degree may make more sense than getting a full-time mba degree. Here are some pros and cons to help you think about it:
1. It will boost your earning potential.
If you’re looking to make an investment in your career that will maximize your earnings potential over time, business school could definitely be the way to go. As a matter of fact, a recent study by the Graduate Management Admission Council found that MBA graduates reported “base salaries that totaled more than $1 million over the two decades following graduation than if they had not gone to business school.” So that sounds pretty worthwhile.
There are some caveats here. First off, conventional wisdom says that earnings maximization from an MBA graduate is most powerful when you go to a top 10 business school. So if you don’t get into schools like Harvard Business School, Stanford, Wharton or Kellogg (my alma mater), then the payoff may be less certain.
Of course, it will also depend heavily on what discipline you decide to go into. If you want a career in finance, the MBA is going to help make it rain. But if you want to go into school administration, the return on investment may be less certain.
Finally - and perhaps most notably for us at Fairygodboss, a recent study by Bloomberg Business Week found a dramatic gender gap between men and women in their incomes post-MBA. Basically, women MBA’s make about 80% of what men MBA’s make...i.e., the same wage gap as in the broader market. But it’s off a higher base, so that means that an MBA from a top-tier program is still very worthwhile for women.
2. You will build a fantastic network.
I got a job at Google because I went to Kellogg. Ok, there were probably a few other reasons...but I say this because it’s a good case in point of how alumni networks are valuable. At the time I was hired by Google, something like 2000 people applied for each position. Yet, my resume was selected like a needle in the haystack because a senior manager in the group went to Kellogg, and was excited to see an alum from his school.
I’ve been really heartened to see the extent to which alums who I have never met have been willing to help me, and so I make a point of also helping other alums who seek me out. I have also stayed in touch with many of the people that I knew, and we have a surprisingly strong bond considering that we only went to school together for 2 years.
3. You will develop some important skills.
When I was first starting out, all the second-years would tell me that it was the intangibles - like interpersonal skills, communications skills, etc - that I would really get the most out of at school. I was extremely skeptical...but of course, just one year later, I found myself repeating the same advice to the new incoming class.
Business school curriculums have been rebuilt in the contemporary era to focus around the skills that you’ll really need when you’re working on a project in a business setting. Sure, I discounted a lot of cash flows and learned how to tell a debit from a credit, but the real power of the learning came in the problem solving in a group setting.
4. You will develop context, and a wide repository of knowledge.
In addition to the soft skills that you learn in MBA programs, I believe there is a set of context or business knowledge you learn that is invaluable. All those case studies help give you an overview of the history of business, and all the various industries and enterprises that are driving value in our capitalist economy. It helped make me a more well-rounded individual, but it also gave me a broader range of information to draw off of in the business setting. If you understand how business people solved problems in 100 different instances, it can help inspire you to figure out how to address the task at hand when you’re an executive.
5. It will improve your resume/bio for the remainder of your career.
MBA is a credential that goes a long way. ‘Nuff said.
6. You will have a lot of fun. I mean, a LOT of fun. A lot.
In my two years at business school as an MBA student, I went on trips to Ireland, Chile, Argentina, Thailand, Whistler and Maui. And of course, Vegas. I ran my first marathon and learned how to ski and golf. I went to parties every Thursday. Ok, and also every Tuesday. (Read: this is not normal graduate school). I met great people, and we had a ton of fun together. It was a fantastic two years. Don’t get me wrong. I worked hard...but as that trite saying goes, I also played hard. I still look back on the experience with very happy memories. (Thankfully there was no such thing as social media when I was in school, so there’s very little evidence to show for all that partying.)
1. Two words: student loans.
An MBA is awesome if you earn enough to repay your student debt. However, there is nothing fun at all about student debt when you’re paying off those monthly bills. So consider carefully whether you are really ready to take on the commitment to having an extra bill to pay for the next 5-10 years. These bills will not go away if you suddenly get fired, get sick, have a baby, have a sick parent, etc. It’s a really serious consideration.
2. The economy is cyclical.
For people who graduate from business school during boom years, life is pretty terrific. They have their pick of good jobs, and companies fight over them by offering lavish signing bonuses and late fall start dates to enable MBA’s to spend their bonuses on fabulous summer trips after graduation.
But I graduated in a pretty bleak time (in many ways) in the first hiring cycle after 9/11. Since the economy had tanked, virtually every company was in a holding pattern and unable to hire many MBAs, especially months ahead of a start date (as is customary). Many of my classmates graduated without jobs, and it took them several months to find them. If you can’t graduate with an offer letter in hand, it can become increasingly difficult to find a job.
3. Opportunity Cost.
On a related note, when I graduated, I actually went back to work for the same (really wonderful) employer where I had worked prior to going back to school. And yet, when I got back there, I found that many of the peers I had worked with had been promoted were now ahead of me -- because they had been there working while I was away at school. There is certainly something also to be said about gaining hands-on experience in the working world that makes for well-rounded and compelling career development.
That said, I worked in a company/industry which was not dominated by MBA’s, so it was a bit different than the experiences someone might have at an investment bank or consulting firm. But still, I think there is still a short-term opportunity cost that may come from being out of the workforce for two years.
Moreover, these days there are plenty of options for people who are understandably gun-shy about making a commitment to a two-year mba program and taking that time out of the workforce. However, with emba programs, executive mba and online mba program options, not to mention part-time mba programs, you can make a part-time mba work in addition to building up your credentials with real-world experience rather than just commiting to graduate school.
4. Plenty of successful people never went to business school.
Check it out. Plenty of CEO’s, CMO’s, Managing Directors, etc, etc never got an MBA or any advanced degree. So is an MBA critical to corporate success? Absolutely not. Never feel like if you don’t get an MBA, you don’t have a bright future ahead.
Oh, and one other thing….
What I usually tell people when they ask me if they should get an MBA? Get it part-time. That way, you can get all the benefits of the MBA program (ok, maybe not the trip to Argentina) and still have an income and job security. And, my friend who is an MBA professor tells me that her part-time students are much more engaged -- so you’ll have a better set of classmates to learn from. It may not sound like as much fun, but it may just be worth it.
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