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

 

Post ISB Job ---- Money or Role or Location or Post or Brand or Boss?????

The pertinent and age old question is always "What to look for in a Job? - Money or Role or Location or Post or Brand or Boss?"

I had this question when I was preparing for my MBA and most prominently felt this same question staring at me while preparing for the Placements Season in ISB. There were the normal voices of sanity which spoke of a long term career and the choice of role. There were the "practical" voices of saying that you have to get a decent salary first because you have this large loan waiting to be repaid. Everyone finally spoke of the long term career but somewhere inside were still thinking of what would be the salary on offer.

I am still confused on what the right answer is. Of late when I have been looking for a change myself these questions came back to haunt me. It was nearly 2 years after my Placement anxiety but the feeling was the same. So basically this question I have decided is not meant to be answered at all. It finally just figures out by itself.

But one thought I will leave you all for sure, and that is from the Negotiation Analysis class which I think is critical. The anchoring that you have in a negotiation is very critical and for every job post ISB your current salary is that anchoring figure. Hence what you "get" out of ISB IS important. Money does matter. Other things matter as well but remember that do get a good salary out of ISB. It helps !!!!

More on how I made my decisions later (Fooled by Randomness)

How the MBA Helped - Peer Group Working

One thing which I have constantly noticed working with different people across the spectrum (within my organization or with that of the clients), that many of them know how to work with their superiors, most of them think they know how to work with the people who report into them, but very few people have the knack and the maturity of working with peers. And more often than not I have found people who have this ability are those who have had that experience in the past and have worked under pressure situations with people having differing skills.

This is where I also noticed that individuals who had done their MBA from top B Schools, had this opportunity during the course of their MBA. I also found that my experience at ISB helped me immensely in this aspect personally. Experience in ISB has been the most humbling experience for me ever. I went to the school thinking I was God's gift to humanity and surprisingly found out that there were more than 400 better gifts in the school. To top that I was paired with 4 individuals from differing backgrounds and an average experience of less 2 years in comparison to 8 years of mine. But when we all worked in a team for all of our assignments for 6 months (and then later in different groups as well), it was one of the most difficult times for each one of us. We all thought that our POV was the most logical and accurate. We all thought that there is just one correct answer. We took more pains to explain our POV and how that was accurate than listening to what the other person was saying. Our first case study on Splash Marketing took us more than 30 hours and 3 big fights to reach any conclusion. (By the time we were in our last days, a case study never took more than 30 minutes). The journey from that case study where we all were trying to prove ourselves to the time where we all understood that in business there is no one correct answer and that those differing voices of others not only ought to be heard but also ought to be accepted.

The experience of working in many diverse peer groups in ISB has surely helped me a lot and thus makes it easier for me to work in that kind of environment / projects / meetings where there is no hierarchy, where you cannot escalate to someone and look for a solution, where you cannot just muscle your way or throw the weight of your position around. ISB has been unique in that sense because of the diversity that the school ensures and the spread of experience that the class has.

One more thing that I learnt while doing my MBA with ISB...... seems abstract but is very tangible in experience.

Pricing - One of the things I learnt at ISB

Albeit a brief aberration in my student life, I was pretty sure that I have come to ISB to venture back into the Services Outsourcing industry or venture into the Retail industry, basically to leverage my past experience. Hence I was very clear in some of the topics that I wanted to learn.

Amongst them, learning some basics of Marketing was on top of the list. I always wanted to equip myself with the basic tools of Marketing and the MBA did help me in that. As I said in my previous post I will try to list down how an MBA has helped me in my job. Here is one example (not completely representative but pretty close)

As part of my current role our clients were looking to optimize their outsourcing contract with us and wanted our views on how we can assist them in deriving maximum value from us. This is where the idea of moving from a FTE (Full time Employee) based pricing to a TXP - Transaction Based Pricing was toyed with. We ended up proposing a very nice working model of the this approach which helped our clients pay only as and when they use our services and not pay for the extra bandwidth. This will give them a chance to save the dollars they were spending on the unutilized bandwidth. We on the other hand will get a good forecast of the revenue ahead and will help us drive our productivity better

My learnings at ISB really helped me during all of this amazing exercise. The Constrained Optimization principles helped in determining the Transaction Price. The Principles of Value based pricing (versus Cost Plus Pricing) helped us tie the actual benefits to the client. This also gave our client a clear price to charge back to its business users and gain more transparency. This was one assignment where I really put to use the various principles that I learnt in ISB proving once again that the time invested in ISB was worth it.

Anand's Answers to my Questions

While I have been posting the quintessential question of how an MBA helps, there have already been a few who have shared their perspective on the same.... So here is the take from my fellow CA + MBA friend. Enjoy

Back from Dormancy - ISB Solstice effect?

I decided to act on my New Year Resolution ...... so my first post (or Question) on Life After ISB