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Full-Time MBA Programs – Are They Worth It? UPDATED
I posted the blog post below over a year ago and I wanted to re-post it again as we continue to discuss with JMOs the merits of and options of MBA programs as they pertain to a JMO transitioning to the business world. I’ve updated the original blog post to reflect some new information and perspective. I hope you will find it helpful and informative.
I recently read an article regarding the value of full-time business schools and I included the link below:
I wanted to expound upon some of the points in the article as it pertains to the Junior Military Officer. So, is full-time graduate school worth the investment? The short answer is it depends. It depends on how marketable is the officer toward business with their current objective assets (undergrad degree, military experience, etc.) and what are their career goals? In some cases, attending Full-Time MBA programs post-military career might make a lot of sense if they have a degree that does not point to business and/or they desire to enter a sector in business directly from the military where a business degree is most likely required such as a corporate finance position, investment banking, strategic consulting (which is different than business process and risk consulting, which we represent with clients such as EY and PWC), etc.
We interview thousands of officers annually and the topic of graduate school comes up quite often. Some officers see it as a prerequisite to making the transition to business or as a means to take time to figure out what they want to do. Case in point, I recently spoke with a 10-year Army officer with an undergraduate degree in business with a very strong track record of military performance. As he’s explored his options, he has received advice from family members and friends that he needs to go back to school now before he gets any older (he is in his early 30s by the way) and that he should use that time to determine what he wants to do in a business career. When I asked him about his career goals, he was really interested in opportunities where he could readily use his leadership skills in Corporate America but also in business project management positions; both opportunities he would qualify for without an MBA. I wanted to share some of the thoughts I shared with him that may be applicable to many JMOs:
- Using graduate school as a way to figure out what you want to do. According to the above article, the average cost of a top-10 MBA program is currently just over $58k annually in the U.S. which does not include opportunity cost, meaning lost income during those two years you could be employed. So, if someone earned $80k annually, the total cost of that education would be over $275k during those two years. That can be a very expensive course of action as a way to determine what it is you want to do.
- Complete graduate school before you get any older. In the instance with the officer I spoke to being in his early 30s, if he were to go to graduate school he would be almost 35 years old by the time he started his business career. And he would be competing against other 35 year olds who have spent close to 14 years already working in business and many of them would also have an MBA. The tradeoff is those 2+ years could already have been spent starting and building his career in business and not delaying it any further than necessary. This officer has a very marketable background in which he could launch his career without having the MBA. Statistically, only 30% of the candidates we work with in our program have masters degrees and not all of those degrees are business related. So, the MBA is not necessarily a prerequisite for making a successful transition to business.
- What other options are out there? Ten to 15 years ago, the full-time programs were probably the best and most viable options to get an MBA. With the advancements in technology in the past decade and with more employees concerned about losing income to go to full-time school as a result of the economic crisis a few years ago, there has been a surge in part-time professional, executive, and distance-learning programs. Some schools, like Wake Forest, have nixed their full-time program. At Southern Methodist University where I earned my MBA, their flagship program is now their Executive MBA program because of the increased desire for those to pursue an MBA while still continuing their professional careers. So, while the full-time programs still offer a quality education, there are many different and also high quality, ways to pursue an MBA today that may be more conducive to one’s lifestyle, economic situation, and career goals.
- The MBA will separate me from the pack. If you are attending a top-5 school, this is most likely a fairly accurate statement, although if you are able to get into one of these schools, you most likely have already separated yourself from your peers. Interestingly enough, according to Statisticbrain.com, in 2013 there were over 800,000 MBA applicants and over 1 million MBA students enrolled that year. The average graduation rate is over 156,000 MBA graduates per year. Expounding on my bullet point above, there has been a significant increase in the number of business schools and MBA program options. This has resulted in universities conferring 74 percent more business degrees than they did in the 2000-2001 school year. So, the MBA is certainly a worthwhile degree and very marketable, but just because you earn one does not mean you’ve “made it.” It should be viewed as another tool (albeit an important one) in the toolkit to aid you throughout your business career.
- The MBA will provide a great Return on Investment. According to the article above, Harvard Business School returns 14.8% on a graduate’s investment after one year with Wharton being only 6.3%. Some in-state schools may be higher because the cost of education is lower. As I discuss in the point above, more and more schools have created part-time MBA programs to increase their ROI, allowing students to keep their full-time jobs. Most people account for the debt they will incur when doing an MBA program but often overlook the opportunity cost of lost wages. With part-time and executive MBA programs, the student does not have to forego loss of income from their jobs to achieve their goal of advanced education.
- The MBA will teach me what I need to know to be successful in business. Again, yes and no. There is no doubt an MBA program will provide a very solid foundation for business concepts to include finance, marketing, operations management, organizational behavior, etc. But, for those officers who go straight to business school from the military there are fewer contexts from which to draw upon because of how differently the military functions versus Corporate America. Think back to your first military schooling you attended as a new 2LT or Ensign. You learned a lot but it wasn’t until you got to your unit, ship, etc. where you really learned how to be an effective leader and officer. With actual business experience first and pursuing a concurrent part-time MBA program, it provides that important context and experience from which to draw upon so what you are learning in the classroom will make more sense and be reinforced.
- How will I market myself? Schools like Harvard, Wharton, Stanford, etc. are all excellent MBA programs but they are not very good at marketing a JMO’s background to business. When choosing to attend a full-time MBA program, what you are ultimately choosing to do is, upon graduation, market yourself as a new MBA graduate and no longer a JMO. MBA schools understand how to market their graduates that way because that is their area of expertise. Schools like a Harvard or Wharton can do so nationally where schools like SMU, Duke, Georgia Tech, etc. will probably do a better job regionally because they don’t have the national presence like a top-5 MBA program. But, they do not understand the JMO background so you are in essence foregoing that experience in most cases to lead with your MBA. So, when looking at options, it is important to decide how you will market yourself and what you choose to lead with – your JMO experience or your two-year MBA?
These are some of the points I felt had merit and consideration when deciding about full-time graduate school as a JMO. My goal in writing this blog post is not to convince anyone reading it that there is not merit in attending a full-time graduate school program but rather to provide some insight and information to consider to help you in your decision process as to whether full-time graduate school or coming straight to Corporate America may be the right path.
If you would like to learn more about your specific trade-offs of earning an MBA to transition to business versus getting one in an Executive or Part-Time program before you transition or while working in corporate America, please email me at firstname.lastname@example.org.