MT asked a batch of successful business leaders who have fulfilled many of their career ambitions whether the effort of getting their MBA qualifications had paid off. For most of them it had been tough (but fun), had boosted their confidence and put them on the fast track. It could do the same for you. Stefan Stern reports
Are business schools worth the time or the money? Professor Meyer Feldberg, dean of Columbia Business School, New York City, has no doubts about the answer. (A forthright man: on his desk stands a sign marked 'No whining'.) When Feldberg spoke a while ago at an RSA lecture in London he could not have been more bullish about the employability of the hungry young executives that his business school offers up to the world.
Feldberg presented a portrait of a phenomenally intelligent and talented elite, in the '98th percentile of the world' in terms of educational achievement, storming through two years of hyper-activity on the path to greatness, riches, and global dominance. Truly, the graduates of business schools will inherit the earth.
'Almost 60% of our students will end up working for the investment banks,' Feldberg revealed. 'In Goldman Sachs and Morgan Stanley we have around 250 Columbia alumni in each of those firms. Of the top 15 people at Morgan Stanley, seven are our alumni. It sort of becomes a self-fulfilling prophecy.'
Columbia's savvy graduates know exactly what their two years at business school are all about, and demand value for money. 'The overall cost of doing an MBA degree at Columbia, Harvard, Stanford, MIT or Chicago is close to dollars 200,000,' Feldberg explained. This figure includes fees, the opportunity cost of two years' salary, and living expenses 'That turns out to give the students a certain amount of clout. They are now customers as well as students.'
All of which confirms that the investment of one or two years in a high-quality Master of Business Administration course is a serious business proposition. Leo Murray, director of Cranfield School of Management, agrees. 'The MBA is a very big investment of time, cash, emotions,' he says. 'You should treat it like a business project, evaluating it fully in advance. It makes great demands on you and your partner. You can't do an MBA on a wing and a prayer. The moral remains: caveat emptor.'
MBAs are a branded, big-ticket, fast-moving consumer good, 'one of the most successful marketing stories of the post-war years', as Cranfield's Murray puts it. In the US, business schools and the 'science' of management have been around for over a century - the first was founded by Joseph Wharton at the University of Pennsylvania in 1881. Through the 1960s and '70s, there were far more Europeans studying for MBAs in the States than in Europe. It was not until 1979, after a critical report from Charles Handy on management education, that the British government allowed any university to develop its own MBA programme.
The US remains the biggest player in the game, with more than 600 MBA programmes and 70,000 full-time MBA students. Numbers in Europe are now on the up, with about 10,000 full-time and 15,000 part-time MBA students. There are more than 100 business schools in the UK, over 70 in France and 20 in Germany.
This goes some way to explaining why the elite US schools have established a dominant reputation internationally, and why they usually command seven or more of the top 10 places on most of the hotly contested and highly controversial business school league tables. In Europe, only Insead, the London Business School (LBS) and the IMD in Lausanne have managed to break into the premier league and stay there; a host of vibrant institutions in the UK and the rest of Europe are knocking at the door. But wherever you go, you won't find gender equality. Any school with more than 30% female students is doing well.
The aggro over the league tables - 'life and death to the director of a business school,' says Murray - reflects how competitive the business school business is. MBAs can be studied full- or part-time, over one year or two. You might go straight on to an MBA course after university - perhaps armed with a Masters or a PhD - or pursue a career in business first before taking up the MBA trail in your late 20s/early 30s. The Executive MBA is a part-time option, where you hold down a job as you complete the course.
Payback, the return on investment for an MBA, is one of the hardest aspects to measure - hence the league table rows. American MBA students are getting younger and more likely to go to business school straight from university, whereas we in Europe like to think about it for a year or two. The leap in salary for the fresh-faced 24-year-old who walks straight into an investment bank after a first degree and an MBA is proportionately far greater than for a 35-year-old whose MBA follows several years' experience at the coalface in manufacturing.
The tables don't always reflect this, so an institution such as Cranfield suffers by comparison. The performance of business schools, which preach the importance of measurement to good management, is notoriously hard to measure. But the elite brands grow and reinforce themselves through the professional success of their alumni and the muscular networking they indulge in. Eighty per cent of Harvard BS graduates find jobs through their networks.
Sceptics accuse business schools of churning out identikit, number-crunching managers who have a simplistic and formulaic view of the world. In the UK, the first wave of young MBA graduates did much to create that myth. The traditional amateur spirit of the Brits bristled at the suggestion that rigorous analysis and academic discipline could be applied to the 'art' of management. The old anti-MBA gag has a thrusting new manager turning up for work and asking his PA to 'bring on the first case study, please!'
But there are informed critics who question the whole business of management education. Henry Mintzberg, professor of management at McGill University, Montreal, has wrestled with the challenge of developing better managers for two decades. 'You can't create a leader in a classroom,' he says. 'MBA programmes are fine for teaching the 'b', specialised training in the business functions, but not for the 'a', administering that knowledge.'
Mintzberg queries the use of case studies, which tend to go out of date - Enron, the business that went from hero to zero (under the leadership of a former McKinsey consultant), springs to mind - and he challenges the notion that business professors are well placed to lecture all-knowingly about business life. He has developed an 'alternative' MBA, the International Masters in Practising Management (IMPM), a rolling 16-month programme taking managers around the world and encouraging as much learning from unstructured group discussion, and sharing of insights between managers, as from formal lectures. 'Kids' are not allowed - you must have several years' management experience behind you.
Enlightened business school leaders, and their satisfied graduates, accept many of the criticisms. There cannot be a one-size- fits-all school of management. In any case, as Cranfield's Murray says: 'Our students are too argumentative for us to impose anything on them. Our job is to get them to think.' A good MBA course promotes diversity, pluralism, and alternative views. Real business leaders want to create wealth and build enterprises, not follow plan A or B according to the course notes on business development.
Three years ago, John Priestland abandoned a successful career in the civil service - for which he had worked in the Cabinet Office in his mid-20s - to complete LBS's two-year full-time MBA course. He paid his own way: fees of pounds 30,000 and the loss of two years' salary. Three years later, Priestland is working for the business services firm Amey, the UK's largest provider of education services in PFI programmes - the deal struck with Glasgow city council is worth pounds 1.3 billion alone.
'The MBA was an enormously rich experience,' Priestland reports. 'I had a good set of civil service skills, but I knew they would not be directly transferable to the private sector. The MBA offers you a new way of looking at problems. It's a set of tools that may or may not be applicable in different circumstances. The real world can be a lot tougher than some MBA students expect. But you see things very differently after the two years.'
Why is it worthwhile? 'I could not have begun to do my current job without the MBA,' Priestland says. 'You are a lot more confident, more structured and more creative with the MBA behind you. It's a cliche, but you do learn at least as much from your classmates as you do from the teaching staff. The diversity at LBS is great - there are people from over 50 countries there. You leave with a rich address book and a contact list for every situation.'
Cait Hurley is halfway through a two-year part-time Exec MBA at Cranfield. When she isn't in classes there or doing her 20 hours of book work a week, she is a senior content producer at internet service provider Freeserve. 'It's very hard keeping up with all your work commitments and coping with the course as well,' she says. 'It's paradoxical: the time commitment is quite overwhelming, but you can see that it is really going to be worthwhile.'
For her, there are specific reasons why the MBA is useful. 'You have to master the business language. It means you will get taken seriously at work, but it also changes the way you think. There might be a bit of tension in the office when you come up with some new ideas - 'Ooh, listen to the MBA student!' - but if you're serious about a career then it's an important aid to getting on.'
The Harvard Business School Class of '75 boasted the usual share of future high achievers and corporate heroes. But at no time during the seminars and lectures, case studies and special projects did one of those young MBA students, George W Bush, know that he'd be getting his own intensive training in crisis management and leadership a quarter of a century later.
Bush is the first MBA President of the US. His early months in office were marked by meticulous time-keeping, formality in meetings and generous delegation of duties. He brought business-like order to the sprawling West Wing of the Clinton era. He has already faced his greatest test. Will his record stand as a further advertisement for the MBA, or as evidence of its limitations?
WHY DID YOU WANT TO GO?
SIR MARTIN SORRELL: When I was 14 or 15, Charles Hayward, then chairman of Firth Cleveland, suggested that the best grounding for a business career would be Harvard Business School. The conversation stuck.
DON CRUICKSHANK: As a 27-year-old accountant at Alcan, I was put in charge of integrating two of the group's smaller businesses after the merger. I enjoyed it, but I was brutally aware of being out of my depth in some areas. Business school looked like the answer to those shortcomings.
TIM HOW: I wanted to get into management and knew I had to broaden my skills. Also, I thought it would be fun to go back to school. Tracking the added value of what I was doing wasn't my top priority at the time.
CHARLES MANBY: I didn't do it for money. After a classics degree from Oxford, I spent eight years as a grain trader and got to the point where I wanted to do something else, but I didn't know what. Business school looked like it would be fun.
VALERIE LACHMAN: I had worked my way up from a very low level to become director of a Frankfurt-based mergers and acquisitions boutique. I'd had to learn it all as I went along, so I was left with lots of holes in my business knowledge that I felt I wanted to plug.
GRAHAM BRYCE: I'm a qualified accountant, and if you're a numbers man people sometimes assume that's all you can do. My MBA was a good way for me to break out of that box.
NINA WANENDEYA: I was working as a surgeon for the East Anglia NHS, and wanted more managerial experience. I also wanted to try something completely different that would give me some time out.
WAS IT DIFFICULT ?
SIR MARTIN SORRELL: No hardship at all. In the last year they started to offer low-cost finance to foreign students. It was very exciting. Because of the draft, I was a member of what was described as the most naive class at Harvard. The average age was about 24 and several students came straight from university.
DON CRUICKSHANK: It wasn't financially taxing. I was sponsored by Alcan and got a grant, so I earned more than I had at work. But I did turn down an offer from Stanford - even then one of the world's very best schools - because of family commitments.
TIM HOW: Not very - my wife was working and was prepared to support me, and in those days I got a grant. I'm not sure I would have done it if it had meant getting into debt.
CHARLES MANBY: No. I was doing OK financially and paid for it by selling a house. It was a great time for my family too - we all lived within cycling distance of the campus in Fontainbleau and I saw much more of them than I do now.
VALERIE LACHMAN: Distance learning meant four years of devoting all my holidays and weekends to studying. It's a heavy workload - out of five people who started with me I was the only one to finish. And it's expensive. Fees and all the trips from Frankfurt to Warwick cost me about pounds 20,000 in total.
GRAHAM BRYCE: Not financially, it was company-funded. But the course demands 10 weeks off work a year, and even when I was at work I had to study 15 hours a week. Being single made a difference - it was very hard for those with families.
NINA WANENDEYA: You have to think quite seriously about it. The financial and emotional resources need to be in place. I was single, which made it easier, and I took a sabbatical from work. Money is very important, but if you really want to do it you can go out and get a loan.
WHAT WAS MOST VALUABLE?
SIR MARTIN SORRELL: The opportunity to learn so much about so many industries, establishing relationships with classmates, the general nature of the curriculum and the chance to study abroad.
DON CRUICKSHANK: The understanding of macro- and micro-economics has been invaluable - I'm still amazed by the number of executives who don't know how the economy functions. And the opportunity to step back out of life and industry for a while - I had 20 months with nothing to do except learn.
TIM HOW: It helped me realise what I was good at and gave me confidence that I could succeed. It enabled a major career change and I'm very grateful for that.
CHARLES MANBY: One of the best things about business school is that you can fail in safety. I came away feeling that I had seen the competition and that I could play football against them. And the understanding that I learned of how companies make money is now vital to my job.
VALERIE LACHMAN: It opened my mind to other ways of thinking, especially about organisational behaviour, and gave me confidence. Plus, I still get calls from classmates offering me jobs.
GRAHAM BRYCE: The single most important benefit is the ability to step out of yourself and challenge preconceptions of how something should be done. What you learn is how to keep learning, and it gives you a fresh approach to tackling problems.
NINA WANENDEYA: You get to understand your own strengths and weaknesses. And space ... I'd thought of going into consultancy or the pharmaceutical business, but the MBA gave me the time to stop and think.
WHAT WAS LEAST VALUABLE?
SIR MARTIN SORRELL: Effectively, we were in a hothouse, having three case studies a day on what the chairman and CEO should do and why. We ended up believing we could do anything and rule the world.
DON CRUICKSHANK: We weren't graded or ranked. Pressure to compete could have been beneficial.
TIM HOW: I haven't needed the more technical disciplines we were taught, like statistics. And the network of fellow students is more important in other careers - banking, for example.
CHARLES MANBY: The curriculum could have been more flexible. I haven't needed to know about organisational behaviour, and I don't believe marketing is a subject for academic study.
VALERIE LACHMAN: It was all useful, but I hated the exams. Even a high-pressure job gives you longer to prove yourself than one afternoon.
GRAHAM BRYCE: The networking side is probably less significant for me than some. The others in my class were from all over the world, which makes it harder to keep in touch afterwards. And, working in the media as I do, I don't need to know what I was taught about inventory control.
NINA WANENDEYA: Ashridge was not as international an environment as I would have liked it to be.
COULD YOU HAVE BEEN AS SUCCESSFUL WITHOUT YOUR QUALIFICATION?
SIR MARTIN SORRELL: I do not believe so. I found it much more valuable than my undergraduate degree, particularly because the teaching was so powerful. The professors were really actors.
DON CRUICKSHANK: No, I could not. My MBA filled gaps that needed filling if I was to realise my ambition to become a chief executive. And I immediately doubled my salary.
TIM HOW: After LBS, I went straight from a small manufacturing company in Lancaster to Polaroid, where I became marketing director. I doubt that I could have done that without having been to business school.
CHARLES MANBY: No client has ever asked: 'Are you Charles Manby, MBA?' But it sure as hell helped me to get in here in the first place.
VALERIE LACHMAN: No way. I'm a 48-year-old poacher turned gamekeeper and I would never have had the confidence to make that change without my MBA.
GRAHAM BRYCE: That's the million-dollar question. It's not necessary; there are plenty of successful businesspeople who have little or no formal education. But I think it helps.
NINA WANENDEYA: There can be a sense that doing an MBA is the be-all and end-all to your career, and I don't think that's the case. I think I would have got here without the MBA, but it would have taken a lot longer and I would have struggled.
< sir="" martin="" sorrell,="" chief="" executive="" officer,="" wpp;="" harvard="" mba;="" 1966-68.="" don="" cruickshank,="" chief="" executive,="" london="" stock="" exchange;="" manchester="" business="" school="" mba;="" 1970-72.="" tim="" how,="" managing="" director,="" majestic="" wines;="" london="" business="" school="" mba;="" 1977-79.="" charles="" manby,="" managing="" director,="" goldman="" sachs="" europe;="" insead="" mba;="" 1989.="" valerie="" lachman,="" project="" manager,="" fsa;="" warwick="" business="" school="" distance="" learning="" mba;="" 1996-2000.="" graham="" bryce,="" managing="" director,="" xfm;="" imd="" executive="" mba;="" 1998-2000.="" nina="" wanendeya,="" new="" business="" development="" manager,="" ethicon,="" paris;="" ashridge;="" one-year="" mba="" 2000.="">