Does an MBA make a difference on a CV?

Hot on the heels of yesterday's blog post and my Linked In question, I got a great response from one person who indignantly and rightly pointed out that it was insulting to suggest a degree was not relevant after all that hard study. And particularly in his case as he had an MBA - and he was indignant that my post might further damage his job prospects.

What makes an MBA different?

Astute readers will notice that in yesterday's blog and LI question, I clearly excluded from the discussion 'vocational' degrees - those which were pretty fundamental to a chosen career path like medicine, law, engineering, dentistry, architecture etc. Having these degrees are in no way tying you to those particular professions, mind you. I once employed a dentist as a salesman because he was bored of looking into peoples' mouths. He didn't last long as a) he realised there was far more money to be made in private cosmetic dentistry and b) there was the small matter that he wasn't much good at selling. There are other examples like lawyers becoming politicians but the point being if you want to be a doctor or a lawyer you MUST have a degree in that subject as a prerequisite.

For those even more astute readers, you will have also noticed that I deliberately excluded MBAs from the discussion. And there was method in my madness as I wanted to dedicate a distinct discussion about MBAs.

There are a few reasons. An MBA degree is an advanced qualification which is specifically designed for business is the first. The second is that many take an MBA as a deliberate choice on top of a 'basic degree' and with business very much in mind - in other words it is 'vocational' to business. I don't know if there are many doctors that have MBAs but it isn't as applicable to that profession. Another reason, is that many either take time out in their career or, harder still, study in parallel to their career in order to better themselves. That shows a very high level of commitment and ambition as well as learning ability. Often these will be done with the blessing and commitment of their current employer which indicates the kind of worth employers put on MBAs as an advanced qualification. But there are those who entirely fund their MBAs themselves - that is like any entrepreneur investing in themselves for a better future and, to my mind, shows unique levels of ambition and determination.

So does an MBA make a difference?

Like having a medical degree doesn't mean that you are going to be a good doctor, having an MBA does not mean you are going to be particularly good in business. More so, at least a medical degree means that you have demonstrated you grasped the rudiments of the scope of knowledge required to be a doctor, an MBA does not mean you even remotely know all the things required to be successful in business. This was rather famously demonstrated in the excellent book http://www.amazon.com/What-Teach-Harvard-Business-School/dp/0553345834 by the late Mark McCormack. Some MBAs can be quite narrow in their focus and subject matter too.

It is my assertion that in the selection process an MBA does make a difference. For the reasons I stated above, generally it shows that someone has made a real commitment to further their ambitions and invested time, effort and money in doing so. An MBA is very often gotten through a fair degree of personal sacrifice and again this shows great determination. When you are looking at finding special qualities in people, who are prepared to dig that little deeper to get what they want or who do indeed 'enjoy a challenge', as interviewees glibly say, people with MBAs will often be those sorts of people.

Like many things in the selection process, it is only an indicator and something to explore. After all, you need to check where the MBA was gained from - there are hooky sources.

So what's special about an MBA?

I generalise here and would like to get further comments from people with MBAs and experiences from people who work with people who have MBAs, but here is my take.

MBAs take things like Business Studies to the next level. They often can be particularly helpful in understanding the dynamics of marketing, strength and importance of brand, they are very good at understanding organisation structures, corporate governance, contract law, internationalisation, global economics, geopolitics, enterprise resource management, corporate finance, capital management and raising capital, mergers and acquisitions and above all business planning and strategy. Many of those subject areas are particularly relevant to large enterprises and so MBAs are often less valued by SMEs because they see them as less relevant and there may be a fear that 'over qualified' people may affect the delicate balance of their company culture.

One particular 'profession' I believe an MBA has less relevance for is the noble art of sales. Usually, people take MBAs to move away from sales into wider business management. I find many people who have MBAs who have not been in sales lack a good deal of understanding of the subject - but then again we sales-types would say that about anybody who hasn't 'carried a bag' as my American friends would say.

Does an MBA help you succeed?

This is where we need the input of real people - I don't have an MBA so I can only give my won view. I have seen some incredibly successful MBA people. Only yesterday, I researched a company based in Taiwan and found that the entire executive management team had MBAs - don't be surprised to find they are an amazingly successful company.

MBA people have a tremendous understanding of how to prepare a business venture. With understanding in how to research markets, how to make well thought out assumptions, how to construct a proper business plan, how to concoct a real strategy that can be tested, how to budget and forecast, how to forecast capital requirements and usage - MBA people have a good grasp of some of the areas that 'seat of the pants' business people get wrong that are very often at the heart of their failure or lack of performance in business. And I will hold my hand up to that - I have failed before through poor planning.

These MBA 'skills' have a real relevance not just for large enterprises but also SME and even start ups. It's no surprise that at the heart of many US Hi Tech start ups lie MBA qualified people. The more you know the greater the chance of success in business although, particularly in sales, it is what you don't know that will often lead to failure.

The final word

As with anything in life, it often is not about what you know. It is very much about how you apply that knowledge. A great MBA student may not be the best at executing plans. But what if you teamed an MBA with a person good at execution? The US and other countries particularly in Asia have really understood how to apply MBAs in organisations. The degree is highly valued and it is certain that MBA graduates in those countries enjoy greater rewards than they would have done without the qualification - the qualification is valued. These countries have learnt how to apply the knowledge and that may not actually have the MBA person executing plans on their own but be part of teams.

This is where I think the UK is missing a trick. The MBA qualification is often seen as some kind of 'better than you'-stigma qualification and not valued. In the process of talent acquisition, I think many managers ignore it and sometimes consciously screen it out because they fear anyone more qualified or better able than themselves. It comes back to my views on the cost of bad recruitment - I think recruitment in the UK is not taken seriously enough nor are people made accountable for poor recruitment decisions that are the biggest hidden cost to any business and they are repeatable year after year.

I have lately met a lot of people who have MBAs that are struggling to find jobs and certainly not those that are willing to value the advanced qualification they have. Recruiters and recruiting managers in companies should take a long hard look at themselves because an MBA qualification will often indicate a person who has made the greatest sacrifices to better themselves in interrupting their career and investing their time, effort and money to bet on themselves. For those who haven't done that, you won't understand what I'm talking about. It's called 'Entrepreneurism'. That's something when mentioned by interviewees I am quick jump on and demand 'Show me'.

I would love to hear your views - does an MBA make a difference? From employers, to those with MBAs and those without them. Has it made you more successful? What makes it special? Is it just a show off degree and has no relevance on business?