Why should you (or NOT) Hire an MBA Grad

Spiros Tsaltas

This is an extended and update article that I posted 8 months ago. I am very aware that this is an extremely controversial subject- but now that I got your attention let’s continue please.

First of all, if you are looking for a worker (emphasis is on ‘worker’- not on ‘manager’ or ‘leader’) with a well- rounded business knowledge, please go ahead and hire an MBA graduate only from a very good school (if not from one of the best).

But let’s examine a few aspects of the MBA education.

History of the MBA programs.
It seems that formal business training might have started around the 18th century in both Germany and France. France is the first country with a business school in 1819. The 1st Graduate Business training was offered by Dartmouth College in the US around 1900- 1906 named Masters of Commerce.

A year or two later, Harvard introduced a similar program and changes that name to Masters of Business Administration. (for your convenience, I am attaching an infograph at the end of this article)

The Myths about the value of an MBA

  1. MBA Students Learn Leadership skills
    This is hmmm…a joke. If you follow a generic ‘book based’ MBA training, how can you even have built management skills? And …people claim that MBAs offer not only management skills, but also leadership skills?

Can then a Case-Study based MBA training create Leaders? If you have access to Henry Mintzerg’s book (‘Managers, Not MBAs’, 2004), please refer to page 155 for the grand failures table he has created for Harvard MBAs.

Sure, some MBA graduates become great leaders, but this is not because of their MBA training.

  1. MBA Graduates Have the Ability to Think Critically

Please refer to my comments on the #1 point above- same logic and thinking.

Btw, if you wait to go to postgraduate school to develop Critical Thinking… what can I say? Out of respect, I will keep my mouth shut.

  1. They Are the Obvious Choice for Hiring and In-House Promotion

Sure. That is because there might be a plethora of incompetent HR (and other hiring) Managers out there. Will someone ever accuse you for hiring or promoting a useless Harvard or IMD or INSEAD or Stanford or LSB useless graduate (sorry, I have seen plenty of these)? Of course not! You can always blame the school for a bad hire! No one can ever fire you for hiring a useless Harvard MBA!! It’s the equivalent of the old phrase: ‘no one even got fired for ordering IBM computers.

  1. Once hired, an MBA Grad Will Stay Longer and Become More Valuable to the Company

Maybe that was a truth in the 1950s and possibly it is try for the big consulting companies (if you work for BCG how can you leave and find somewhere else at the same salary level?).

Today, like everybody else, most MBAs will abandon instantly your company if they get headhunted with a better offer. Loyalty depends on an employee’s personality and not on their postgraduate training.

  1. It Shows a Company’s Commitment to Quality

Nope. It is just a marketing ploy. Not all MBA Programmes are the same and no single company can hire only MBAs from Harvard and Stanford. And maybe, companies should look to the quality of their hiring process instead to the quality of the names of the degrees of their employees.

  1. MBAs are trained to Delegate Authority and Tasks to Produce Results

To me, that has always been a scary statement. Sure, no one should go to the micromanagement edge, but delegating authority it can come also with potentially been able to delegate blame too. If you have no accountability, delegating authority is not a major accomplishment- it can be more of a sign of  ‘I have no clue how to do this’.

And honestly, what kind of a University training can teach you from reading books and case- studies, how to delegate authority?

  1. MBAs Possess Basic Financial Acumen
    I taught MBAs at the Rotterdam School of Management (at that time one of Europe’s top 5 MBA programmes) and other Universities. So, have seen this not to be true with my ‘own eyes’.

Top reasons for NOT HIRING an MBA
Let me please start with some quotes:

  • “Professional managers—MBA CEOs—are not very creative or adaptable, and their skills don’t suit a startup.” Elon Musk in Business Week (28 April 2011)
  • “When valuing a startup, add $500k for every engineer, and subtract $250k for every MBA.” Mint founder Aaron Patzer
  • Peter Thiel once warned a young entrepreneur: “Never ever hire an MBA; they will ruin your company.”
See Also:  Encouraging financial awareness

(both those 2 quotes above come from Ben Horowitz’s blog of 17/5/2012 on pando.com)

  1. They can’t run a business. – As one of my mentors used to say, “(Most) MBAs are trained to work for others, not to run their own business”. If they can’t make it on their own, do you want them working for you? MBAs aren’t Entrepreneurs!
  2. They usually lack real-world experience. – This is almost a Universal truth with the exception of a few excellent and highly performing MBA training Programs. I will be most sceptical hiring a graduate from any University that accepts MBA students without a minimal of 5 years work experience. While MBA graduates can be better equipped in possibly understanding the nuances of operating a business than their peers, the ones that are fresh out of college have no real-world experience.
  3. Lack of original thinking/ No ideas of their own. – Which, it’s not that bad if you just want someone to execute your business plan.
  4. Too specialized or too generic knowledge. –If their expertise fits well with your business then it can be a great mutual match. Usually an MBA is a generic ‘low- level’ education in all aspects of business. ‘Low- level’= don’t expect an MBA with Advanced Knowledge in Marketing, HR, Finance, etc.
  5. MBAs Rely on Order, Structure & Framework – When foundations are shaky, MBAs tend to fall back on their education to tide them over.
  6. MBAs Can’t Bootstrap. – Getting things done when the going is tough is not something an MBA program prepares you for. Sadly, MBAs often find themselves out of depth in fast paced and uncertain or complex or unforeseen situations.
  7. MBAs Suffer from Outdated Knowledge/ Information – The word on the street is, MBA graduates are knowledgeable but most of what they know is outdated. In the Internet Age (or whatever else you want to call it), all business- concepts and processes are transforming faster than ever before and it takes toooo long for MBA curricula and books to be updated.

Other strong criticism – the Case Study Fallacy.

Do you really expect someone who took some courses and sat for some exams to have been trained and developed their Management Skills?

But you think a Case-Study based training can do that miracle?

Historically Case Studies were developed by and at Harvard University. FYI: since then almost all major business schools publish case studies.

Case Studies were written with the assumption that they can be solved within 4 hrs and that a Harvard MBA student can solve 3-4 cases per day (individually and with team work).

So… You as a student read something on paper about a company or an organization that you know nothing about, that you have never visited and you have never seen their products or experienced their services, or you have never interviewed any of its employees or even talked to its customer support. Do you think that the Instructor had that experience?

And you think that you really can come up with an innovative/ creative solution?

One that is identical to the Business Case Solution provided by Harvard (or whoever else published that Case Study) to your teacher? Do you even think that your teacher could even solve that Case on his/ her own? I had colleagues in several MBA programs who will not use Case Studies which have no solutions provided by the publisher.

This is a long discussion and a completely different topic, but the only reason that Case Studies survived so long was because of the McKinsey consulting firm.

Case studies will create awareness in you (of various business situations) and might foster group cooperation and discussion among MBA students, but they will not turn you into a leader.

Sorry for the bitter truth.

Are there MBA Alternatives?
Sure there are… let me list some of them please.

  1. CMI’s Level 7 and Level-8 Diplomas.

The Chartered Management Institute (CMI) offers a UK Level -7 Diploma Qualification (Master’s Level) on Strategic Management & Leadership and looks a lot similar to the core 1st Year programme of most MBAs but at 1500 GBP is extremely cheap compared to the average 1st Year MBA costs.

CMI also offer a Level-8 Diploma in Strategic Direction & Leadership. According to CMI: “Level 7 courses are developed for Directors and Senior Managers who have the responsibility to translate organisational strategy into effective performance. CMI is the only organisation that offers Level 8 (equivalent to a doctorate) which is suited to C-level senior managers”.

Their website has a list of authorized Long Distance Centers and some of the Level-8 online providers I talked to, they already have Ghanaian Students.

See Also:  Establishing a Financial Stability Council    - Which model works for Ghana?

Have a look at http://www.managers.org.uk/individuals/qualifications/centre-finder

  1. GMPs and AMPs

General Management Programs (GMPs) are short programmes for junior or starting mature managers who cannot afford the luxury of taking a year off for an MBA course. They tend to be more dense and intense than the average MBA curriculum.

Obviously, the AMPs (Advanced Management Programs) are for rather experienced managers (some of these programs expect 10-15+ years of professional experience before you apply) – for a lot of people also ‘serve’ as a refresher a few years after they have attended an Executive MBA.

Usually most Universities refer to these programs as GMPs and AMPs, but some of them have different names, but I trust that you got the idea.

Kindly allow me to strongly suggest to google the comparison between GMPs, AMPs and MBAs.

  1. IPMP

The International Masters Program for Managers (https://impm.org) is the brain-child of Henry Mintzberg – the Strategic Management ‘Guru’. The IMPM came out of his strong (and to my opinion excellent and validated) criticism about the inability of MBA programs to train Managers.

IPMP is formally offered by either McGill University (Master of Management) or by Lancaster University (MSc International Masters in Executive Management).

My apologies, but I do not know if you can enrol in this program via the Lancaster University in Ghana.

Btw, I have no affiliation to any of these schools – so that is impartial writing.

  1. MOOCs

MOOCs (Massive Open Online Courses) seems to offer an alternative to MBAs, even some of them have bundled up to become Online MBAs. MOOCs can be either free of have a small fee per course. Google please / have a look at http://poetsandquants.com/2013/12/17/the-mooc-revolution-how-to-earn-an-elite-mba-for-free/

  1. Business Schools w/ Business Incubators.

I am aware of a lot of Business Schools that they start investing in having their own Business Incubators, so students can develop entrepreneurship (by developing their own companies) or support real start-ups and gain first hand …hands-on experience with real problems challenging their thinking and formal training – the kind of problems that only a very senior manage gets to face maybe once or twice in their lifetime in a big company (small companies usually can’t afford MBAs).

To the best of my knowledge, most Ghanaian Business Schools are not that keen at starting such investments in in-house Business Incubators. I trust that this will change.

Btw, Stanford SEED is a sort of ‘incubator’ in Ghana for existing business (and yes, I am partial to Stanford – I am a Stanford SEED consultant).

FYI- Quick Stats:

  • 45% of South Africa’s top 40 chief executives have a Master’s-level qualification, according to a Jack Hammer (a South African Headhunter) 2016 survey.
  • Less than half of those 45% hold an MBA – i.e. less than 9
  • “MBAs are particularly useful for liberal arts graduates looking for a business degree at Master’s level, but any other high-quality post-graduate business degree can do the same job” (Jack Hammer recruiter).

In Conclusion.
At the end of the day, it’s all about hiring an MBA graduate who can add value to your company because s/he has the skillset and the brains to do that. You want to make sure that he/she is the right person for your organization and not the right degree for it.

The MBA journey takes people places. Just make sure that the Captain of your ‘ship’ and its First Officers, are skilled ones who rely on each other, their experience and their brains to cross irksome seas, instead of relying on using management tools they learned at an MBA programme.

Thank you and Good Luck,

Spiros.

Disclaimer:  any products and brand / School / University names mentioned here, are purely for demonstrative and/or illustrative purposes and the author does not have any financial gain or connection of any kind with those organizations nor does he indirectly endorses them by simple mentioning them.

About the Author: Spiros Tsaltas, a former University Professor, is the Principal at a unique Customer Loyalty Startup :  HireLoyalty (www.HireLoyalty.com)- based in Accra, which is coming out of stealth mode in the next few weeks offering both Consulting and Training in anything relating to Customer Loyalty.

As a NED (Non-Executive Director), Spiros is also associated with HIREghana ( www.HIREgh.com ) and  he can be hired via them (+233 50 228 5155).

Spiros welcomes all your comments/ remarks/ feedback /suggestions at Press [at] HireLoyalty.com. HireLoyalty can be reached at +233 20 741 3060 or +233 26 835 2026

© 2017 Spiros Tsaltas and © 2017 HireLoyalty 

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