How to NOT Re-Think the MBA
26 April 2010
I know when I talk about the ineffectiveness of MBA programs here, I’m largely preaching to the choir. However, I found it difficult to ignore a recent interview with Dr. David Garvin, a Harvard Business School professor, because of the sheer amount of plainly-visible psychological denial it contains, so watching it is a good (but somewhat painful) learning experience. (I haven’t read Dr. Garvin’s book yet – it’ll be here in a few days – but I’ll be pleasantly surprised if it’s different.) To watch the video, click here – I’ll wait.
This interview reminds me of three great quotes:
“It is difficult to get a man to understand something when his salary depends upon his not understanding it.” – Upton Sinclair
“To the man who only has a hammer, everything he encounters begins to look like a nail.” – Abraham Maslow
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” – Buckminster Fuller
Notice how Dr. Garvin clearly dodges several straightforward questions about the effectiveness of MBA programs during the interview? There’s a reason: comprehensive research has been done about the effectiveness of MBA programs over the past several decades, and it isn’t pretty: The End of Business Schools? Less Success Than Meets the Eye. I don’t know if it’s denial or obfuscation, but a world-class researcher who’s spent years studying this topic must know the numbers, right? It’s far safer to talk about “being better corporate citizens” and the “public / private divide.”
Here’s the TLDR summary of the research: getting an MBA essentially buys you a $150,000+ interview with a large consulting firm or investment bank, since it’s used as an HR screening criteria. (And as this recent article indicates, entry-level MBA positions are usually soul-sucking and often quite scammy.) For all other purposes, it’s a waste of time and money with a massive opportunity cost – there is absolutely no difference regarding long-term compensation, hiring, promotion, or job satisfaction between MBA-holders and business professionals that don’t have a degree. None.
Truly re-thinking the MBA means questioning whether or not it’s necessary at all. Based on all available evidence (and there seems to be a quite a bit of effectiveness research that colleges are deliberately withholding), MBA programs are not necessary at all – you can learn what you need to know to start, run, and manage a business effectively by yourself or far less expensive help from subject-matter experts, in less time, without debt.
I would LOVE if business schools actually changed the way they operate, but I’m not holding my breath for Harvard or any other business school to “re-think” their approach to business education. The model is broken, both in terms of content and cost – every business professor should know that the ROI of any investment goes down as the cost goes up, right?
I’ll believe Harvard is “re-thinking” the MBA when they start (1) treating business and management / leadership as separate skills, (2) teaching a clear, general framework for building sustainable businesses and (3) giving refunds to anyone who doesn’t get at least 10x the value they invested in the program in incremental compensation within a few years of graduation. Real businesses unconditionally guarantee their products and services – if business schools actually provide a valuable service to their students, they should do the same.
Personally, I’m betting my marbles on making the existing model obsolete. What about you?
Like this post? Join over 35,000 readers and subscribe to Josh Kaufman's email newsletter. You'll receive useful ideas, book excerpts, and resources that will help you make more money, get more done, and have more fun. It's free!
Recent Posts on PersonalMBA.com
- Hacking Higher Education - Turning Online Courses into College Credits
- LIVE from Seattle - Join Us Today For Free Business Training
- Reminder - CreativeLIVE Free Online Course April 4-5
- CreativeLIVE rescheduled to April 4-5
- CreativeLIVE - Rescheduling Due to Illness
- 3 Business Course Recommendations
- CreativeLIVE - Free Live Course Feb 14-15
- Best Essays I've Read in 2012
- Audible.com Best of 2012
- A Holistic Mission to Organically Downsize Buzzwords