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Accepted founder Linda Abraham discusses when pursuing an MBA justifies its cost [Show Summary]Linda Abraham, Accepted’s founder and president explores the latest headlines about the value of an MBA. This is a must-listen for anyone trying to decide whether or not to get an MBA degree.
Why we’ve been asking the wrong question about the value of the MBA [Show Notes]Headlines scream “Is an MBA Worth It?” and frequently conclude, as did an editorial in the WSJ in the fall, that an MBA usually isn’t worth it in an era of low unemployment, high tuition, and declining enrollment for U.S. business schools’ flagship, two-year, full-time MBA programs. Other articles conclude differently and trumpet that the MBA is almost always worth it because of the value of the MBA education and network. In my opinion, they’re both asking the wrong question. The right question is:
“When is an MBA worth it?”This is not a categorical question, or one that an op-ed can answer across the board for everyone or even “most.” It’s something that individuals must assess and analyze individually. If you’re a prospective MBA applicant trying to decide if you should apply or attend if accepted, ignore the headlines (for the most part). Approach the question, with this maxim in mind.
The MBA is worth the investment in time and money when anticipated benefits – both financial and non-financial – exceed anticipated costs.That sounds straightforward, but let’s unwrap it. To analyze the situation, record in a spreadsheet your anticipated costs:
- Out-of-pocket tuition, fees, travel expenses
- Opportunity cost – lost salary for the time spent in school less the amount you anticipate making during your summer internship.
Another common question: Is an MBA worth it if you can’t attend Harvard, Stanford, or Wharton?The star status of Harvard, Stanford, and Wharton, or H/S/W to their friends, blinds many would-be MBAs to the strengths of other programs. They assume it won’t be worth their while to attend “lesser” programs. This is frequently false. H/S/W do boast outstanding programs, brand value, name recognition, networks, placement centers, and salaries upon graduation. However, the table below shows that they aren’t the only programs whose graduates sport stratospheric salaries.
Median total compensation for 2019 MBA grads*
|School Name||Median Total Compensation|
|University of Pennsylvania (Wharton)**||$175,000|
|Massachusetts Institute of Technology (Sloan)||$173,670|
|Northwestern University (Kellogg)||$165,080|
|University of California–Berkeley (Haas)||$162,147|
|Dartmouth College (Tuck)||$170,000|
A good question: How do I decide where to apply?Assess your qualifications for each program, as well as each program’s ability to help you follow your North Star, the realization of your short- and long-term, post-MBA goals. For each school that you consider, evaluate the following:
- Employment reports. Does this school place a significant percentage of grads in the industry and job function that you find most attractive at a salary that makes your MBA worthwhile? For example, 19% of Vanderbilt’s 2019 MBAs went into healthcare, making that school a smart target for applicants interested in this space. 37% of Yale SOM’s 2019 class went into consulting.
- Curriculum and educational approach. Will you perform better in a highly structured program, or a flexible one? (Darden has a one-year core curriculum that all students take. In contrast, Chicago Booth has only one required course and a flexible core.) Do you want a program that is case-based? (Darden and HBS) Highly experiential? (Ross, Haas, and MIT Sloan) Or a mixture of case, lecture, and experiential? (Kellogg and Yale SOM)? Do you want to concentrate or perhaps earn a certificate in a specific area relevant to your goals? For example, do you seek a globally focused program (INSEAD, anyone?), or one that offers advanced courses in a specific area? Duke Fuqua excels in Energy Finance courses; Georgetown McDonough is strong in the intersection of business and government; and UCLA Anderson, USC Marshall, and NYU Stern are all known for their Entertainment and Media offerings.
- Extracurricular opportunities. Important learning takes place outside the classroom. Look for special programs, competitions, events, treks, and other opportunities where you would like to contribute and learn.
- Personal factors. Do you have a significant other or children? Do you thrive in big cities, or in smaller communities? Can you handle snow? Or oppressive heat? If you visited different campuses, where did you feel at home? Where could you really envision yourself being for two important years of your life?
Another good question: What if I’m not competitive at the schools I’d love to attend?You have three options:
- Improve your qualifications. Take classes in your areas of weakness, especially if business-related, and earn A’s. Prepare again, retake, and raise your GMAT/GRE. Look for opportunities to expand your responsibilities and impact at work. Assume leadership roles off the job. Obtain international exposure.
- Look at other programs with an open mind. Find programs that can help you realize your aspirations and where you are more likely to get accepted. Your dream program may be a stretch, but give it a try! No need to reject yourself, but also apply to programs where you are competitive and that support your goals.
- A combination of 1 and 2.
The MBA is worth it to some and not to othersWhile the blaring headlines may be attention-getting, you should base your decision whether and where to apply for an MBA on a solid foundation of self-reflection, research, and analysis. Done properly, this process should be deeply purposeful and even gratifying. For today’s MBA applicants, declining application volume means you are a buyer in a buyer’s market. Even elite programs are wooing applicants with bigger fistfuls of scholarship dollars, helping you achieve a richer ROI. The MBA may be in an era of retrenchment, but it is hardly toast. In fact, if you go after your MBA thoughtfully and purposefully, you could someday eat the lunch of those who focused on the sky-is-falling-down headlines and unwisely chose not to apply to a program that could enrich the rest of their professional lives and is enriching yours. Related Links:
• Is an MBA Still Worth It? • Paying for Your MBA • Accepted’s MBA Admissions Consulting ServicesRelated Shows:
• A Conversation About Today’s MBA Marketplace • Entrepreneurship at HBS: How Stride will Help You Fund Your Future • How to Leverage an HBS Education: The Story of LeverEdgeSubscribe: Podcast Feed