What is the Value of an MBA?

As I was discussing a few managerial topics with my colleagues, I was asked about the value of MBA. It is indeed a fascinating question. 

MBA is best approached as a framework degree, allowing us to synthesize our experience, our worldview and our background into a cohesive set of management tools. As it currently stands, MBA is a gateway into the modern world as no other graduate degree currently is. It prepares students to run large, complex organizations that increasingly characterize today’s society. They do not have to be business enterprises – any organization where humans interact to create more than the simple sum of their outputs will benefit from someone who can apply broad social, philosophical and economic frameworks to shape the organization into something more nimble, more productive – in short, into something better.

The notion of collective enterprise arose from a human need for cooperation in order to achieve results that are magnitudes greater than what individuals can achieve on their own. There is a need for individuals who can see farther then their own office, their own department or perhaps even their own firm. There is a need for individuals who can tie it all together and out of an incomprehensible alphabet soup of information form a coherent strategy to achieve the goal in question, and then to have enough on-the-ground knowledge to implement it. This is as true for GE as it is for US Army, and the individuals who are best prepared to do this are unquestionably the MBAs.

There is constant carping (ironically, from professors in MBA programs) that there is nothing really leaned in the hallowed halls of world’s business schools, that all MBAs can do is repeat the frameworks. I submit that that’s the way MBA was intended! We are pushed to develop an expertise in an area of interest, but not as end in itself. It is but a tool for being better managers, organizers and motivators. It helps infinitely during one’s first few years out of MBA college to know how to create models, explain a multiple regression or interpret a Monte Carlo simulation. But in the long-term, when someone reporting to you is doing all of the above, what truly matters is the ability to help them be more than they were before beginning to work for you – in short, to manage them, to inspire them, to lead them. And that is what an MBA is all about.