What's an MBA good for?

I received my MBA a year ago after spending 15 years in a series of Fortune 500 companies. It was one of the best decisions I made.

As founder and President of my marketing firm, I season my marketing expertise and deliverables with foundational business principals that I provide to my clients. For example, I don't provide a marketing plan without a profit and loss projection statement. It is important for me to know what a businesses services and costs are and what products/services are generating revenue and which ones are not. This plays into how I put together a marketing plan that is further integrated with a business plan that gets results. What I have found in my industry is that there are a lot of marketing consultants who recommend for clients: a quarter cup of Facebook, a half cup of LinkedIn and 1 teaspoon of Twitter...so to speak, and behold clients and fans will come and the revenue will grow. This is just not true.

It is important and in fact appreciated by clients who have limited budgets for marketing and want to do it right the first time and have a solid marketing plan that is tied to business goals and objectives.

As this relates to answering the MBA question, the business principals I learned about in grad school I apply every day in my business and my 18 months getting my degree taught me to be more focused on truly integrating marketing principals and tactics to the business. This has become incredibly important considering all the choices and the continuing changes that are occurring in the economy and business in general.

As someone who's considered the option for years but still hasn't done it, I see two key benefits for the person acquiring the MBA:

1) Validation -- at least in the case of getting one from a top, name-brand school it shows that you have the intellect and academic credentials to be accepted into the program. It also serves as a clean form of qualifier for an employer. It can open doors.

2) Networking -- most of my colleagues and friends who have an MBA speak to this as probably being the biggest benefit of the degree. Access to a diverse and connected alumni network.

Does hiring an MBA mean you're hiring a more qualified person?
Flatly, no.

Why pursue an MBA?
I pursued my MBA for three reasons. Two of them were mentioned by Nip - validation (I call this signaling) and networking. The third reason was the education. More than one-third of my MBA class was comprised of those with little-to-no business knowledge - engineers, teachers, ex-military, etc. I myself entered business school from the health care sector. Learning the basics of finance, accounting, and marketing was critical to being prepared for the transition into the business sector.

What MBA program to enter?
While you can get a good education at almost any business school, my personal opinion is that an elite program has the biggest payoff in terms of job placement, average salary, quality of the network, etc. After the top 10, the value of getting an MBA can quickly diminish especially in poor hiring markets. There are plenty of circumstances when you'll want to consider business schools farther down the list:
1. If you're company is willing to pay for your education while you continue to work, most business schools in your local area will do the trick.
2. If you're looking for a job in a particular geography, most business schools are very good at placing students locally. For example, even though NYU isn't a top five business school, they're probably top five in placing MBAs at investment banks in New York City.
3. If you're looking for a very specialized job, some business schools have specialized curriculum and therefore attract relevant employers. Think international business, not-for-profit management, health care management, etc.

Hiring Manager’s Perspective
I have almost 15 years experience in hiring (and not hiring) MBAs for marketing, product management, and business development positions. I have often considered a tier one MBA as a filter within a resume pool to identify top candidates. So, yes an MBA can help you get in the door, but it doesn't get you the job. An MBA is far down on the list in determining whether I'll hire the person.

Do the ROI Calculation.
Like any other professional school, an MBA is not cheap. There is the direct cost of business school, and for most people, there is the indirect cost of giving up two years of income. You’re talking about hundreds of thousands of dollars in costs. To make this worth it, you'll need to find a job that you could not have gotten without your MBA - one that either increases your earning power or one that you love even if the money isn't there.

In my experience, earning an MBA does help a person learn the business skills that will help advance their career, however, it is dependent on the available latitude and scope. As result of getting an MBA, I found that I outgrew the options available to me at the time and ventured into my own business. I use skills I otherwise would not have had I not done an MBA. I grew exponentially as a person and improve every day, in terms of my own capabilities, outlook on life, the way I perceive the world and the things around me, the emotional intelligence levels I tap into when dealing with others and how I render my business competitive.

I agree that when hiring an MBA you are hiring a more qualified person (they have the paper to prove it). The quantitative question is whether they’re able to put those skills and qualifications into practice in a manner that delivers ROI and adds to the growth and development of the organisation.

I also think that the MBA prepares you far more for business challenges than real-world experience. Businesses tend to morph and evolve in a confined space created by the culture inherent in the business influenced marginally by industry developments. The expanse of an MBA is vast and extensive and when combined with real-world experience provides so much more leverage for advancement. Without the knowledge and experience gained from an MBA, the individual and workplace just continue to evolve into a different element of its former self as a result of evolutionary change. Having an MBA gives the individual, the business and the corporate entity access to the skills, idea generation and innovation to effect revolutionary change, a fundamental factor that the modern organisation requires in order to cope with current volatile global demand.

Key insights about what an MBA provides, and doesn't provide, include:

• A Masters in Business Administration is the first step into executive leadership. However, it is only a license to practice, not an automatic open door into the executive ranks.

• All education is foundational, but no education replaces experience. Newly minted undergraduates believe that moving on to a Masters is the best way to skip the long years it takes to become a leader, but this is truly false. Experience is the greatest educator and coupled with foundational learning prepares a future leader. Education, however, never positions one for leadership.

• An MBA demonstrates a willingness to invest in one’s career as a life-long learner. There are many who want to be given opportunities, but only when one demonstrates the willingness to learn, invest, and explore one’s capabilities, without direct and immediate rewards, does one prove the ability to be a life-long learner. There are many tactical achievers in the world, there are very few success learners.

Well, one did help us name our company!

Our CEO, Richard White, met with a potential MBA hire. He said the first thing he'd do is rename the company (this was before Justin Timberlake made that hip). When asked what he'd name it, he said "UserVoice...unfortunately, it's already owned by a Richard White from North Carolina."

Yep, that's our CEO's name. We already owned the URL.

Rich sent him home and promptly changed our company from UserSuggest to UserVoice. We didn't hire the guy. But hey, the name has done well for us. :)