Does an MBA help grow?

There has always been a debate on how helpful an MBA is.

Many successful CEOs and Business magnates have not been MBAs. This is an oft quoted arguement against linking MBA to becoming a CEO.

However now the authors of the Harvard Business Review article ranking the world’s top 100 CEOs recently wrote in BusinessWeek that their research has led them to conclude that MBAs make better CEOs than non-MBAs.

Some interesting finds from that article (entire article worth a read)

While analyzing the performances of 1,999 top CEOs, Herminia Ibarra, Morten T. Hansen, and Urs Peyer were able to obtain the educational records of 1,109 of them. Of this group, fewer than one-third were MBAs. But the MBA minority had some impressive stats on their side:

• CEOs holding an MBA ranked an average of 40 places higher in the list
• CEOs with MBAs had average shareholder returns of 93 percent, compared to 81 percent for non-MBAs
• 100 of the MBAs reached CEO by age 50, compared to only 40 in the non-MBA group
• Five out of the top 10 CEOs attended MBA programs (though only four graduated)

 

Why the MBA advantage?

The researchers offer a bit of speculation as to why the MBA can be a CEO’s “magic” ingredient. Here are a few ideas:

• MBAs have better skills, adding “right-brain creativity and warmth to left-brain logic and financial acumen. Or vice versa. It can even help get the hard and soft skills working together,” they write.
• MBAs’ networks “pay out” during their entire career
• MBAs are more willing to work on themselves and are open to new ideas
• MBAs develop broader perspectives