The MBA

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Is business school the new design school?

People are often surprised when they hear that I earned my master of business administration degree, or MBA, as a side-hobby while I was a tenured professor at MIT. Even MIT’s human resources department was perplexed that I’’d want to apply for the employee benefit to partially support my tuition costs. My motivation to do so was simple: I’d spent most of my life in the research world interacting with corporations during my years at the Media Lab, but I often got lost when the business folks would bandy financial or other business terms around me. So I wanted to defeat my lack of knowledge, by acquiring what most of them seemed to have: an MBA. Fast forward ten years and a few professional changes later, my interest turned back to business schools again. This year after releasing the #2016 DesignInTech Report, it turns out that all of the top ten U.S. business schools have design clubs led by students. The trend was remarkable, and to give credit where it is due, it was my KPCB partner Jackie Xu who brought this fact to the foreground. So we set out to interview student leaders at three business school clubs: Yale School of Management, MIT Sloan School of Management, and Rotman School of Management at the University of Toronto. Respectively, those schools are represented by Wilma Lam, Anita Wu, and Jeremy Fish in a recent KPCB Ventured podcast. Below are some key takeaways from our discussion. Design is being embedded into traditional businesses Fortune 500 companies are beginning to use human-centered design to think about problem solving rather than traditional hypothesis testing, which is why we are seeing more than 10% of Fortune 100 companies place design as an executive...

5 Ways An MBA Can Help Entrepreneurs

A Master of Business Administration (MBA), whether you earned it from an institution such as Northeastern University’s D’Amore-McKim School of Business, is perceived to be highly beneficial. This type of degree is costly, but many believe it is money well spent. However, as an entrepreneur, you might be questioning whether you really need to bother earning such a prestigious qualification. After all, you don’t need to have an online MBA degree to make your business a success if you’ve already got what it takes. On the face of it, you might be right. Many entrepreneurs do perfectly well without a college education or an AACSB (Association To Advance Collegiate Schools of Business) online MBA to their name. They are able to turn their businesses into global success stories and live the high life. However, having a master’s degree in business administration can be invaluable, and here’s why: 1) How To Run A Business There are many different ways to run a business. By the time you have completed your MBA, you should know all of them. The expert knowledge you gain will give you valuable insights into the inner workings of large, successful businesses. You can use this knowledge to inform how you run your own business. Therefore, instead of making mistakes, you can learn from the mistakes made by others. 2) Valuable Contacts Your fellow students on an MBA course will all be high achievers in their own right, so the connections you make will come in useful when you start your own business. You will find that people you become friends with during the program often turn into valuable contacts a few years down the road. 3) Human Resources A growing business needs talented employees. One of...

Today’s MBA candidates have a clearer vision for the future...

Business school applicants consider applying to fewer programmes and are more focused on a particular postgraduate career path according to a new study by the Graduate Management Admission Council (GMAC). The 2016 mba.com Prospective Students Survey Report was conducted amongst 10,000 individuals worldwide. The survey showed that on average, prospective students considered 2.8 programme types in 2015, down from 3.1 in 2014. For their postgraduate careers, 71 per cent of those surveyed cited a single industry of interest, compared with 58 per cent in 2014. In addition, 61 per cent of prospective students cited a single job function of interest, compared with 46 per cent in 2014. According to GMAC the current status of the economy might play a role in this phenomenon as prospective students may perceive it to be easier to go after their “dream job” in this market compared with the post-recession years. The other interesting outcome of the survey was that students seem to show greater interest in specialised business master’s programmes. One-fourth (23 per cent) are considering only specialised business master’s programmes, such as Master of Accounting or Master of Finance, which represents an increase since 2009, when just 15 per cent of candidates were considering only specialized master’s programmes. Slightly more than a quarter, or 28 per cent, are considering both MBA and specialised business master’s programmes whereas 50 per cent of prospective students are still only going for MBA programmes. In Western Europe, however, the pipeline has notably shifted toward specialised (pre-experience) business master’s programmes, especially within the past seven years. In 2009, 49 per cent of prospective students were considering only MBA programmes and 22 per cent were considering only specialised business master’s programmes. In 2015, the tables have turned with...

Is An MBA Necessary For Success In Business?

The total cost of an MBA at Harvard is an estimated $102,000 a year. At that price, how much difference does an MBA make in the real world? “I’ve got a lot of young people who are qualified up to their eyeballs with MBAs and BAs, but not a shred of common sense” said Optiv’s Wendy Hoey. Ingram Micro’s Gina Masanuano said a lot of the degree’s worth depends on circumstances. “I think it depends on where they are in their career, and it depends on the area,” she said. “Past a certain level, I don’t even look at education anymore,” she added. Verizon’s Wendy Petty agreed and said she values experience over an impressive education. Red Hat’s Margaret-Ann Bolton said for those individuals who are looking to switch to business, an MBA will help the transition. “If they’re trying to make a change in their career, like if they’re on one path and they really want to do something that’s completely different,” she said. “What I found with an MBA that is so valuable is when you haven’t done your undergrad in business, and your education is in a different area, it is a huge benefit to learn if you’re going into marketing, or finance or sales,” said Extreme Networks’ Paige Powers. Read full story:...

Glassdoor for MBAs and Startups

One of the big issues with employment review websites, such as Glassdoor, is that feedback is usually submitted only by those who had a really great, or really bad, experience at a company. And feedback is so general, it doesn’t offer an accurate snapshot for people with diverse backgrounds: A business school student fresh out of undergrad sees the same salary range as someone with an MBA, for example. Smaller companies and startups without many employees, aren’t as well represented as major corporations. University of Chicago Booth startup TransparenC is hoping to change that with curated career sites. They’re starting with a website tailored to MBA students, called TransparentMBA, but they anticipate expanding their platform to law, engineering, and tech among other niche job seekers not served by general career sites like Glassdoor and Linkedin. The idea first came to Mitch Kirby, a UChicago Booth student, last fall when attempting to look for jobs post-graduation. Glassdoor felt like “information overload” he said, and most of the aggregate information didn’t give him an idea of how his qualification–an MBA from a top-ranked business school–would translate to a position or compensation. So he decided to create a platform that gave more granular information on companies and careers for MBA students (he coded it himself), and see if his classmates were interested. They were: about 50 percent of Booth students quickly signed up, he said. Profiles for companies, jobs, and industries are built through feedback that users provide, which they’re required to submit when signing up for the platform. Users can see feedback such as expected compensation, satisfaction rates, and culture fit for an MBA at a given company and position. They can also compare the experiences at the industry level. Kirby...

How MBA Grads Can Overcome 3 Startup Hiring Objections...

Job prospects look about as sunny as possible for 2016’s MBA grads. In fact, 85 percent of employers plan on hiring as many or more MBAs this year than last, according to The Economist. I’m sure stats like this come as welcome relief to the thousands of people who have taken on over $70,000 in debt to earn their advanced business degrees. Still, if you’re an MBA grad looking to join a startup, don’t let a positive jobs forecast lull you into a false sense of security. While you might have a degree from a top program and may even know about a particular industry inside and out, you can still be an expensive hire who might not have what it takes to make a meaningful contribution in the eyes of a founder. When founders tell me that MBA candidates aren’t “the right fit,” their objections generally often fall into a few different categories: experience, attitude, and salary. If you’re serious about getting your foot in the door at a startup, here are some tips on how to overcome these three common areas of founder skepticism. You lack the right experience It’s quite possible that you have built up a very impressive resume from working at larger companies. However, a startup might dismiss your big-name business experience because it isn’t an apples to apples comparison. A founder’s line of thinking could go something like this: “How do I know you’ll succeed when you have to complete a project with significantly fewer resources and in a shorter timeframe?” The burden is on you to convince startups that you thrive in small team environments when the deadlines are tight, and the stakes are high for a project’s success or failure. If...

Cheap MBAs: Costly for some

THERE’S no such thing as a free lunch. That maxim should be ingrained in the minds of business-school students, attuned to the notion of opportunity cost or Milton Friedman’s economic theories. Yet to believe the American non-profit University of the People (UoPeople), run by Shai Reshef, an Israeli entrepreneur, something close to a free lunch could soon be available to prospective MBA students. On March 15th the university opened applications for an MBA without tuition fees that it plans to launch in September 2016. That much is admirable, and certainly should be applauded. But don’t prepare to burn Friedman’s 1975 tome yet: there’s still no such thing as a free lunch. One hundred successful applicants will be enrolled onto the 15-month distance-learning course, and will be asked to pay just $200 for each of the 12 courses they will take as part of the programme. That is still a pittance, and a minuscule fraction of the cost of an MBA at the sort of business schools ranked by The Economist. “The cost of an MBA today is so expensive that many people who are qualified to achieve it cannot afford it,” Mr Reshef said when announcing his plans. Certainly, business schools can be rarefied places. So the development of a legitimate MBA at a low cost could be beneficial. Russell Winer, professor of marketing at NYU Stern and the leader of the MBA programme at UoPeople, told The Economist that the establishment can offer a cheaper programme than most by being online-only and lean-staffed. It also has the backing of faculty members from other big business schools, including INSEAD, Wharton and Oxford, all of whom have helped develop the curriculum. And yet the devil is in the detail. Some...

Calculate the Return on Investment for an MBA

A political campaigner in Washington, D.C., Kate Doehring, 31, decided to pack her bags and move to the Midwest to earn an MBA in a place with a cheaper cost of living. “I was looking at Georgetown and George Washington here,” says Doehring, who is about to finish her first year of business school at the University of Wisconsin—Madison. “To stay in D.C., just sheer cost would have been at least double or triple than Madison.” Like many prospective MBA students, Doehring looked at her MBA as an investment and weighed the cost of living, lost wages and potential debt along with a projected post-degree salary of $100,000. Average salary after graduation compared with debt, referred to as salary-to-debt ratio, is one tool for calculating the return on investment for prospective MBA students. “I used just over $100,000 annually, plus or minus $10,000,” says Doehring, who is on target to finish the program with less than $15,000 in debt. “I used $100,000 as a benchmark because those numbers were communicated when I did my campus visit.” According to data submitted to U.S. News by ranked business schools, UW—Madison had the highest annual salary-to-debt ratio for full-time MBA graduates who found jobs paying an average of more than $100,000 in salary and bonus within three months of earning their degree. Students at Wisconsin School of Business can expect a 7.4-to-1 salary and bonus-to-debt ratio. That translates into an average salary and bonus of $114,815 and $15,481, on average, in debt. Of the other ranked business schools with grads earning more than $100,000 in salary and bonuses, these schools had the highest salary and bonus-to-debt ratio for the Class of 2015: the Marriott School of Management at Brigham Young University at...

14 MBA Programs That Lead to Jobs

Landing that first job is a major concern for MBA students, and some programs are more likely to lead to success than others. Among the 129 business schools that submitted job placement data to U.S. News in an annual survey, two of them – the University of South Florida and Coastal Carolina University in South Carolina – saw 100 percent of MBA graduates who sought jobs employed three months after completing their degrees in 2015. Both of these schools, however, were ranked by U.S. News in the bottom one-fourth of the 2017 Best Business Schools rankings. In comparison, Washington University in St. Louis’ Olin Business School, the highest-ranked school among the 14 MBA programs with the highest employment rates, had a job placement rate of 97.1 percent. None of the 14 schools with the highest job placement rates ranked above No. 21 in the graduate business school rankings. Overall, top-ranked schools had higher enrollments and, therefore, many more graduates looking for jobs after graduation. For instance, Harvard University, ranked No. 1, had 672 full-time grads seeking employment and a job placement rate of 91.1 percent by three months after graduation. Of all the schools that submitted these data, Florida International University came out on the bottom of the list with a job placement rate of 27.3 percent – significantly lower than both the overall average of 83.9 percent and the average for the top 14 of 97.1 percent. Below is a list of the 14 full-time MBA programs where the highest percentages of job-seeking graduates were employed three months after graduating in 2015. Unranked schools, which did not meet certain criteria required by U.S. News to be numerically ranked, were not considered for this report. School (name) (state) |...

Why More MBAs Should Buy Small Businesses

Searching for a small business to buy and run instead of taking a more traditional post-MBA job like consulting is an idea that we’re seeing catch on at top business schools. At the Harvard Business School, for example, the number of MBAs who decide to look for a business to acquire right after graduation has gone from less than a handful a decade ago to more than a dozen, and in an occasional year, twice that amount. Stanford’s most recent study of search funds also reports a record number of active search funds. Still, we often wonder why more students don’t follow the entrepreneurship-through-acquisition path. One of the most common concerns that we hear as we advise our students at HBS is that searching for a business to buy — a full-time endeavor — is too “risky.” While everyone should surely weigh this choice based on their own individual circumstances and subjective preferences, we think that these concerns about “risk” are misplaced and that searching for a business is less risky than other career paths that are traditionally considered more stable. We put quotes around “risk” because we don’t think our students are focused on financial measures of risk — like the volatility of lifetime earnings — when they tell us that searching for a business seems more “risky” than taking a more traditional job. We don’t think there is much data to assess the actual financial risk of searching in comparison to other more traditional careers because there isn’t much historical data on financial rewards for either career. And, interestingly, while our students talk to us a lot about the “risk,” they don’t talk to us about the money differential; indeed, when they look at the business plans...

4 Stats to Measure Before Signing Up for an MBA...

As a young professional working at the International Finance Corporation, an arm of the World Bank, Bruno de Faria had a solid career but worried his business acumen was weak. “I was a political science major in college. I had a little bit of an international relations background, but my work was becoming more and more related to business – finance, accounting, marketing,” the 36-year-old says.​ “I wanted to develop, personally, those skills.” He decided an MBA would give him the knowledge he lacked, but a business school degree often comes at a cost. Many schools charge students $50,000 or more in tuition and fees per year, and full-time MBA programs usually require a two-year commitment. Business school experts recommend applicants weigh their return on investment before enrolling and how long it will take to recoup the money lost​. The investment includes the time in school, the salary a full-time student gives up while in school​ and the total cost of attendance.​ For de Faria, measuring his income before and after graduation was important. “I looked at my salary going away, our incremental expenses and then what would be the expected salary that I’d get after graduation. So, that would be the return,” says de Faria, whose wife worked while he was an MBA candidate at the University of Chicago’s Booth School of Business. “Then I looked at in how many years, more or less, what would be my payback period?” Graduates from two-year, full-time MBA programs usually recoup their investment in three and a half years, according to a February report from the Graduate Management Admission Council. Their median cumulative base salary three years after graduation is $348,000. Prospective business school students should consider four factors in determining...

Why B-Schools Struggle to Enroll More Women

Today, women are almost as likely as men to fill the seats of medical school and law school classrooms. Yet the share of women enrolled in MBA programs hasn’t risen above 37.2 percent in the past decade, according to the more than 100 schools providing full-time MBA enrollment figures in surveys by AACSB International, an accrediting organization. “There’s a frustration on the part of a lot of women, and probably men, too, that we haven’t made more progress,” says Amy Hillman, the dean at Arizona State University’s W.P. Carey School of Business. In August the White House convened 150 leaders from top business schools and had them sign a pledge to take steps to boost female enrollment by cultivating potential applicants early on in their education and by offering more financial aid. “When business schools are missing out on a large share of female college graduates, they are missing out on an extremely large share of the top qualified college graduates,” says Betsey Stevenson, a University of Michigan economist who served on President Obama’s Council of Economic Advisers and helped lead the August summit. “If they want to continue to be a relevant part of the training in the 21st century, they are going to have to make changes that will make them more attractive to women.” Deans say business schools suffer from a unique timing problem. Unlike law and medical schools, which tend to enroll students soon after they finish college, the full-time MBA program is designed for people who’ve already proved themselves professionally. Elite B-schools typically prefer that applicants have about five years of work experience, which means the average MBA student is 30 years old at graduation, Bloomberg data show. Women in their late 20s who...