MBA motives run deep

Kirsten Woodward

A better job and more money are not stand-alone reasons for attempting an MBA.

Every year almost 25,000 students enrol in a Master of Business degree in Australia, yet only about 20 of the CEOs of the country’s top 100 publicly listed companies have one. What is more, according to a study by recruitment company Egon Zehnder, only 20 per cent of senior executives from the US, UK, France and Germany consider MBA courses help prepare students for real-world business challenges.

With course fees being $15,000–$50,000, not to mention a year without income for those who choose to study full-time, do potential MBA students need to have clearer evidence that business studies are linked to business success – that their time and money are well invested?

Opportunities and salaries are what students consistently cite as the reason for undertaking post-graduate business studies.

David Lees, a graduate of Macquarie Graduate School of Management’s MBA program in 2003, acknowledges the financial motives of most students. “On the face of it, people saw the MBA as a ticket to higher income – and some people do deal with it as a cost/benefit scenario, but for me it offered a career break after 15 years at work and a chance to get back to fundamental skills, such as organising, communicating, generating ideas and persuading other people.

“Ultimately I earn more money but, hand on heart, I couldn’t say that was necessarily the MBA. Before the MBA I was an engineer who had been promoted to management. I had no experience and felt I was living hand-to-mouth in terms of what to do. Now I am doing essentially the same job — but in a bigger company, managing three times as many staff and more complex technologies.”

Lees, who rode the internet boom at OzEmail and Worldcom, looks after the operations of Telstra’s BigPond networks. The MBA not only gave him the confidence to put himself forward for the role, but he believes it has helped him to shape and influence the job in a way he would not have previously considered.

“When I came on board the area was undergoing a major restructure, with the help of outside consultants. Straight from my MBA I was buzzing with ideas and energy. I could speak the consultants’ language, work closely with them, and see issues and solutions with great clarity.”

Lees encourages people considering an MBA to have broad expectations of the experience. “You think of an MBA as accessing information, learning skills and tricks and getting a view of how the whole business thing works. You don’t expect the very way you think to be challenged. But modules such as Foundations of Management Thought – an introduction to philosophy – and Managerial Psychology acted as a critique of the whole management process, challenging assumptions about yourself and others in a profound and fundamental way.”

Stephen Mayers, a graduate of London Business School’s Sloan Fellowship Program (a one-year MBA for experienced managers) agrees that it is what you don’t expect to learn on your MBA that can create the most lasting value. Reflecting on his studies, it is not a financial formula or a strategic methodology that springs to his mind.

“On my course they only allowed one or two people from each industry and four or five from any one nationality. There were 40 of us and we were all so different.”

Mayers remembers the general from the Israeli Army whose presence on the course was so hush-hush his name could not appear in any documentation, as well as the charismatic priest from rural Spain, always looking for the next degree to study. These were not necessarily the kind of people with whom a banker from Britain’s Midlands would expect to interact in the run of normal business.

He also remembers two weeks into the course being asked to write his own obituary as an exercise in stimulating students to consider what might be their legacy to society (an exercise the war-hardened general did not fully appreciate).

Mayers’s studies had a practical outcome: “I was part of a project team at Midland Bank charged with coming up with a different way of doing business that would allow the company to expand its reach beyond its base in Birmingham without the need to expand its branch network. The bank sent one person a year to London Business School and I was selected. The payback for their investment in my education was my thesis on direct banking, which became the basis on which the online bank First Direct was built.”

Mayers was ultimately headhunted for a challenging role in financial services in Australia, and now runs two niche consultancy businesses. But a third of his working time is allocated to community-based not-for-profit ventures. The motivation and methodology he employs there has its roots firmly in his MBA experience.

Expanding career options was a key motivator for Akiko Jackson to enrol in an MBA at Stanford University in the United States. “I was becoming very specialised after five years in banking in Tokyo and I wanted to broaden my perspective. I knew that a Stanford MBA would open doors and I wanted to see where that might lead.” Akiko was also keen to move back to the United States, where she had spent much of her childhood.

Her MBA ticked all the right boxes. Her first job out of Stanford was with management consultancy Booz Allen Hamilton in New York, eventually transferring to the company’s Sydney office. “I sometimes wonder what my life would have looked like otherwise. Perhaps I would have stayed in Japan, become a housewife, given up my career for marriage.

“I am more self-confident since the MBA, I have more options and I have an international network of friends who range from High School teachers to senior executives.”

YOUR MBA

How can you make the most of it?

* Overseas or in Australia? If you are looking for commercial connections and see your future career in Australia, then you might be better off with a local MBA according to Akiko Jackson. (Some MBAs offer international exchanges, with up to a semester in a partner business school, and lecturer exchange programs)

* Networking. Jackson and Mayers emphasise the value of mixing with people of diverse backgrounds and business experience. Mayers recommends putting effort into understanding other students and their backgrounds. It can be those who cultivate close ties with prospective employers throughout the course who walk straight into a job at the end.

* Choose optional modules with care. Explore some of the more esoteric courses which stretch and challenge your thinking, recommends Mayers. Know why you are choosing different subjects and have a compelling reason for your choice.

* Prepare your family for the time commitment. You’ll need their support and understanding for late-night team meetings and evening lectures. The teamwork that characterises many MBAs is time consuming, but increasingly facilitated by collaborative online tools and conference-calling.

* Evaluate the benefit of your MBA over time. And with more than a simple cost/benefit criteria based on your starting salary straight from the course.

The Weekend Australian, Feb 23, 2008