The title isn’t clickbait. I see more money wasted on MBAs than anything else. MBAs can be a game changer. But they aren’t for everyone. And if you do get one you need to pick the right school (probably another blog entry by itself) at the right time in your career and do it for the right reasons. Here are 3 common myths about MBAs:
You will make a lot more money immediately upon graduation: I can’t tell you how many conversations I’ve had with someone in the process of completing their MBA, ready for a job change and expecting a 50% bump in pay because they now have their MBA. You should make more over time but it doesn’t happen over night. MBAs become more valuable when combined with experience which comes with time. You need to pick the right school at the right time AND be really good (an MBA won’t make an average performer a rock star). I know…business schools tout impressive salary figures for their MBA grads. Those numbers are propped up by the top percentile and are usually the students that enroll full time and attend on campus: It looks something like this: IU Undergrad with high GPA + 5 years at Eli Lilly + Northwestern MBA (full time on campus) = big offer from another Fortune 100. I’m not saying you won’t make more money with an MBA. You should over time. It’s just not as simple as adding the 3 letters by your name.
You will immediately be qualified for higher level opportunities and promotions: Similar to the salary conversation, MBAs become more valuable when combined with experience. You don’t walk out with the diploma ready to jump multiple levels and pay grades. Yes, some companies will hire on potential and offer a “step up” opportunity for someone with an MBA, especially Fortune 100/500 companies. Although even some of those companies are doing it less than they use to. Small to mid size companies (Indianapolis has a lot more of these than Fortune 100s or even 500s) don’t have the luxury of hiring on potential as often as bigger companies do, for a variety of reasons. For most, it takes some time. Think about it from a different angle. If you’re interviewing for an opportunity a few levels up (if you even get the interview) who do you think you’re competing against for that job? Probably someone with 5 more years of real life relevant work experience that can make an immediate impact. Jumping from Analyst to Director immediately upon getting your MBA isn’t realistic.
You will be better at your current job: What you learn from completing your MBA will add the most value to an employer when you are in roles of increasing responsibility making significant business decisions and/or leading people. For example, if you’re a financial analyst and complete your MBA it might make you a little better at your analyst role but you’re still spending a lot of time in spreadsheets cranking out reports for the decision makers. Over time you’ll draw from your MBA and work experience to start influencing decision makers and then become one of them. That’s when your MBA will really start kicking in. If you want to be better at doing your current job or even a very specific job, consider a CPA or relevant certification for your field. An MBA is a general business-management degree, designed to train people in a variety of topics to help them run a business. Some people are more interested in learning deeply about a single business related subject, such as accounting or economics. If this sounds like you, seek out a specialized graduate degree program in your subject or a relevant certification. An MBA isn’t always better than a CPA, for example. They’re different. You need to consider your career goals when deciding whether or not to pursue an MBA.
I am not against MBAs. I just see a lot of people getting them for the wrong reasons, at the wrong time or at the wrong school. Or, worse, someone that shouldn’t be getting one at all.
An MBA is a huge investment. Make sure it’s right for you and, if so, do it the right way.
Who should get an MBA? People with a plan, someone that aspires to be a high level business leader, people in industries that require MBAs for advancement. I’ll expand on this in a future post.