Wednesday, March 23, 2005

More MBA

Lots of MBA-related posts following Harvard rejecting a bunch of people for hacking their site.  I've done a few posts about the value of the MBA (here and here) and I found all the stuff below on other people's sites.  In the comments of this post on my site I have the following response to a question posed about going to school to actually learn something:

What is the real value of a MBA? When I look at all of the business classes that I took in undergraduate, the curriculum looks extremely similar to that of many MBA programs that I have looked at. In fact, some of the undergraduate classes that I took, though not required for a MBA degree, were heavily attended by MBA students because they were so interesting.

I haven't been out of undergraduate school for that long, so I wonder if the value of the MBA is not so much in what is learned (don't get my wrong, I am not saying that I know everything by any means, nor am I saying that I would not learn in a MBA program), but more in the ancillaries.

From this post on Seth Godin's blog:

So, for 119 Harvard MBA students, the phone rings. "Buddy, you're not going to be admitted to the MBA program because you decoded a poorly written website and found out your admissions status too soon." [This means, of course, that for the next two years, you don't have to pay Harvard more than $150,000 in room and board and lost wages, and  you can build your own business or join a non-profit or run for the Senate].

So what's the bad news?

Plenty of handwringing about the ethics or lack thereof in this case (the media loves the turmoil) but I think a more interesting discussion is what a gift these 119 people got. An MBA has become a two-part time machine. First, the students are taught everything they need to know to manage a company from 1990, and second, they are taken out of the real world for two years while the rest of us race as fast as we possibly can.

I get away with this heresy since I, in fact, have my own fancy MBA from Stanford. The fact is, though, that unless you want to be a consultant or an i-banker (where a top MBA is nothing but a screen for admission) it's hard for me to understand why this is a better use of time and money than actual experience combined with a dedicated reading of 30 or 40 books.

Further on the above from this post on Seth Godin's blog:

Let me make my point in a more MBA-esque sort of way:
What if an MBA cost $2,000,000?
What if an MBA took five years?

Would it would be worth it then? Of course not.

So my question really is: is the marginal value (in terms of opportunity cost, time value of money and capital expenditure) higher or lower than the current cost? I think it's pretty close to a no brainer.

From this post on Signal vs. Noise:

Want to succeed in business? Paul Graham argues that an MBA won't help you nearly as much as real world tech experience (from "How To Start A Startup").

If you work your way down the Forbes 400 making an x next to the name of each person with an MBA, you'll learn something important about business school. You don't even hit an MBA till number 22, Phil Knight, the CEO of Nike. There are only four MBAs in the top 50. What you notice in the Forbes 400 are a lot of people with technical backgrounds. Bill Gates, Steve Jobs, Larry Ellison, Michael Dell, Jeff Bezos, Gordon Moore. The rulers of the technology business tend to come from technology, not business. So if you want to invest two years in something that will help you succeed in business, the evidence suggests you'd do better to learn how to hack than get an MBA.

Josh Kaufman's "Personal MBA Program":

. . . the MBA is a still a stamp of approval for some careers, like consulting and investment banking. I think that's a damn shame, but I don't run those HR departments. Maybe it's my personality, but I have a hard time working my butt off simply for a "stamp of approval." I think that the primary purpose of pursuing an education is learning something valuable, not adding a line to my resume. (For what that's worth.)

In the context of learning useful knowledge that will make you a more productive and valuable employee, I maintain that you can educate yourself effectively for less than a quarter of the time and money spent in most current MBA programs.

Here are the books (and blogs) that are a part of my "Personal MBA" reading list. (Blogs and online resources are marked with a *.) Some are directly related to business, and some are included for a broader understanding of the world and how we live in it.

Also check out the MBA Review blog.



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