I recall my boss giving me the arm-over-the-shoulder treatment one summer afternoon. “It’s time you got an MBA. Everyone has one, look around you.” It was true. Many of my investment banking colleagues boasted business school pedigrees. That was all the motivation I needed. I attended Harvard Business School and spent the next two years in snow-clad Cambridge, Mass. The most frequent question I’m asked today is: Was it worth it?
It’s only a slight exaggeration to state that the path from business school is paved with gold. According to the Graduate Management Admission Council’s 2012 Alumni Perspectives Survey General Data Report, compensation for graduates of two-year full-time MBA programs in 2011 averaged roughly $100,000, broken down into a base salary of $79,806 and additional compensation of $20,657. At schools like Harvard, the figures are even more inflated. Consider, too, that theses statistics mask differences in compensation among industries. It’s not uncommon, for example, for individuals to earn double the amount at top-tier private equity firms.
Besides the allure of the almighty dollar, the MBA offers an intensive educational experience. As a student, I had the opportunity to learn about functional areas outside of my expertise such as management, operations, accounting, strategy and marketing. The rationale behind this pedagogical approach is quite simple: the 21st century business leader is expected to have a rounded perspective of the modern corporation. Soft skills such as argumentation and teamwork are also emphasized. Spirited discussion on topics such as valuation, accounting standards and strategic choices defined my classroom experience at Harvard. As in the real world, the problems we examined usually didn’t have right answers. There was disagreement and polarization. By the end of the program, I’d grown accustomed to defending my point of view before an exigent audience.
But the MBA is not all moonlight and roses. Tuition and opportunity costs of foregone income can be substantial. The calculus can be downright disheartening and creep into the hundreds of thousands of dollars. Moreover, there’s the lurking suspicion that one could learn much of the same material by picking up some relatively inexpensive textbooks. Lastly, there’s the undeniable reality that many successful executives don’t hold MBAs. To cite two examples from our own backyard in Hawaii consider Alexander & Baldwin’s CEO Stanley Kuriyama and Hawaiian Airlines’ CEO Mark Dunkerley. (Kuriyama holds a law degree from Harvard Law School and Dunkerley holds a master’s degree in Air Transportation Economics from the Cranfield Institute of Technology.)
So should you get an MBA? Well, it depends. If your aspiration is to pursue a career that places a premium on the degree such as private equity, management consulting or a management role at a Fortune 500 company, then it’s well worth considering. The same holds true if you plan to switch careers, seize the opportunity to work on your skills, and expand your Rolodex. But if the idea of returning to school isn’t appealing and you’re already on a steep career trajectory with access to professional development opportunities, don’t feel like you have to jump onto the bandwagon.