Question: Why pay to do an MBA?
- What's the point of doing an MBA?
- Is an MBA necessary or can I study the skills on my own?
- Is it worth paying to attend a top MBA school or getting one from a cheaper school?
The value of an MBA isn't its educational course content. I'm not saying that course content isn't important. It's just that the knowledge from the course material are easily obtained from outside the program itself. There are tons of textbooks and cheaper courses out there on finance, accounting, operations management, marketing, management etc.
So why take on more debt to do an MBA? Why pay top prices for a top school when it would be much cheaper to do one at a much lower ranked school?
For those of us who decide on going down the MBA route and pay top dollar, it's not just the educational business skills we're after. It's usually because we're also after a combination of the following:
- Ability to leverage the brand name of the school
Prospective employers or customers don't really know you as a person, but they know top schools. Since we inherently subconsciously rely on pre-conceptions to interact with new people, their initial perception of you will be based on what they think of your CV. Top MBA programs are notoriously hard to get accepted into and getting admitted is an achievement on its own. As such, having an MBA from a top school on your CV automatically makes potential employers perceive you as a "quality" candidate before they meet you. This in turn has subconscious effects on how they interact with you so you're more likely to start off on a positive foot when meeting them
It also means you could potentially command a higher paycheck. After all one doesn't expect an MBA grad from a top school to come cheap.
- Opportunities to interact with recruiters from top organisations who come to you
Attracting the notice of highly desirable firms like McKinsley, BCG, Goldman Sachs etc. isn't easy. They're also very selective about where and how they do their recruiting. Granted, you could manage to network your way in, but it's certainly easier when they are coming to you at your school and you are presented with opportunities to have coffee chats with them. These firms rely on the rigor of the MBA application process to shortlist the thousands of applications that are coming in
- Opportunities to interact with top executives from top companiesTop business schools have cultivated relationships with top global companies for years. Plus it's highly likely that their alumni can be found amongst the top execs anyway. This means they are able to help students get an audience with key executives by organising various events e.g. guest speakers and conferences. Let's face it, top executives in huge global companies aren't exactly the easiest people to reach and their time is extremely precious.
- Career switchingMany senior positions seek "previous experience".This makes changing industries or job functions not easy unless you're willing to start from the bottom. The MBA program is therefore a shortcut for career-switchers to jump to the middle, thanks in part to the ability to leverage on the school name and in part to the rigor of the course.
- Instant access to a large network of successful people who are more likely to assist you with whatever you needTop MBA programs admit people who have a very high potential of being successful. The alumni network is therefore a goldmine of useful connections. You'd get far better response and assistance cold-calling an alumnus and saying that you're from the same school than an otherwise complete stranger.
- Other experiences
There are many other experiences that you get to have with doing an MBA that would be more challenging to obtain on your own. For instance seeing a problem from different perspectives due to the widely varied backgrounds of your classmates; learning to work with multiple Type A personalities on different projects; learning about different cultures through first-hand interactions; career treks....the list goes on
Basically, what you're ultimately paying for is the network, opportunities and experiences that would be difficult to obtain on your own. The value of the MBA program really lies in the people and not the content itself. In the end it comes down to what you want out of the MBA. Is it just business knowledge, or more.
Of course, an MBA doesn't automatically make you successful. It merely provides you with the opportunity. What you do with the opportunities, the network and the experiences is then entirely up to you.