Ask the Expert: MBA 2012

Economic malaise in Europe, combined with decreasing job opportunities there, mean that the Financial Times 2012 Global MBA rankings have seen a resurgence in US business schools. Meanwhile the thirst for business education in Asia continues to grow.

So, what will 2012 hold for business schools in general and MBA students in particular? As the cost of study continues to rise, and economic and job insecurity remains, will fewer managers decide to return to business school to study for a full-time MBA, preferring instead to study on part-time or online degrees? And will that mean that only the top business schools will be able to fill their classes?

Does this make it the right time for you to apply for an MBA?

On February 1, 2012, a panel of experts answered your questions about studying for an MBA.

On the panel were:

Garth Saloner, dean of Stanford Graduate School of Business, ranked number one for the first time in the Financial Times Global MBA rankings 2012. Prof Saloner, the strategy and entrepreneur specialist, was the architect of Stanford’s innovative new curriculum, launched in 2007.

David Wilson, president of the Graduate Management Admissions Council, which administers the GMAT test, the entry test for business school. The test is taken more than 200,000 times a year by prospective postgraduate students and used by approximately 5,100 business school programmes around the world.

Sandra Schwarzer, director of career services at Insead, which has campuses in France, Singapore and Abu Dhabi. Enrolling 1,000 MBA students a year on its one-year programme, Insead has the largest top-ranked MBA programme in the world.

Mehul Ruparelia, an PGP (MBA) student at the Indian School of Business, in Hyderabad. Mehul has a degree in computer science from Brunel University in the UK and has worked as a management consultant for Capgemini. He writes for the FT MBA blogs.

Della Bradshaw, business education editor at the Financial Times.

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What are the most important things to read or do before commencing an MBA? – Especially for those with non-mathematical degrees.

Henry, UK

David: The core courses today include a challenging quantitative element and if you have not had a quantitative course in recent years we would encourage you first to check with your school to see whether it offers a boot camp or pre-programme for new students. In the event they don’t offer one, you might benefit from GMAT Business Ready which offers an online programme in accounting, finance, quantitative methods and statistics. In addition, by taking the GMAT and being accepted to the business school of your choice, they are likely to be indicating to you that your quant score is sufficient for success in their programme.

Mehul: There are no important things as such that you must read before commencing an MBA. But both before and during the MBA, you should keep up with world affairs by reading a good business daily or a publication such as The Economist, as this gives you the chance to relate your classroom learning to actual world events.

For those people coming from a non-mathematical background, your business school will most probably hold pre-term or accelerator classes so that those who have been out of the classroom for a long time or do not come from a mathematical background can hit the ground running.

As for what to do before commencing an MBA – relax, travel, watch movies, catch up with friends and sleep as much as you can. Depending on the intensity of your course, you can forget about most of those for a while!

Garth: Hi Henry, thanks for your question. Students thrive at Stanford from humanities, engineering and everything in between. Your undergraduate education has helped you to think independently, to reason and write, to form and integrate abstract concepts and to see different sides of an issue. Those skills are essential in business school.

If you aren’t comfortable with quantitative concepts, you might consider a course in calculus or statistics. I’d also encourage you to get exposure to logic, perhaps through a physics, philosophy or programming course. And, given the central role accounting plays in business, you might consider a financial reporting module. Those different ways of thinking will benefit you, whether or not you enroll in an MBA programme.

While we do not offer an undergraduate business major, we increasingly offer business electives for our undergraduate students from all disciplines. Moreover, we remind our undergraduate students at Stanford University that a liberal arts education is wonderful preparation for career impact and for success in professional school.

I have a career in micro-finance consulting, with a record of implementation of micro-lending projects in countries like Georgia, Armenia, Tajikistan, Russia, Moldova and China.

I am preparing to apply to the Insead MBA programme this year. Do European MBA programmes provide assistance in finding a job for graduates with a social impact / micro-finance profile?

Tatiana

David: The first step is to check that the school you are interested in has a professional and effective career services group and to see if they have a specialty in social impact and micro-finance. More and more schools are linking in to opportunities in these areas, but it is still not mainstream. So, one route is to look at is where their alumni are working. Alumni networks are often the best channel to employment. Finally, don’t rule out the possibility that you may find that working for a larger company is the route into a career with a social impact.

Sandra: At Insead, we have a dedicated team member on each campus working with students wishing to work in social impact jobs. And should you not want to continue a social impact career for now, most industries will be interested in your transferrable skills. In the past year, we have had students join organisations like the Bill & Melinda Gates Foundation, the Clinton Health Access Initiative, the Acumen Fund, the World Economic Forum, UNICEF, as well as various social impact investment funds and social entrepreneurship ventures.

Students with social impact backgrounds have joined consulting firms, banks, large global corporations as well as MBA leadership programmes and some have set up their own businesses. It all depends on what you really want to do – and we will help you understand how to “sell” your transferrable skills and motivation to make an industry switch or move up in your career.

Della: Tatiana hi. All the top business schools are trying to enrol students with diverse career backgrounds, rather than the traditional engineers and management consultants. The difficulty, as you rightly say, is trying to find a diverse range of jobs for those same students on graduation in countries around the globe. My personal view is that European schools are probably better equipped to do this than US ones as a rule, because US schools are geared up to placing graduates in US companies. The other thing I would say is, you may not want to work in this sector on graduation. While at Insead, you could well be inspired to take a different career path - that is the real value of a top MBA.

I am certified public accountant from India and have ten years of experience in the field of finance, accounts, taxation and audit across the banking, insurance and private equity industry. Given my age (35) and experience, should I go for a full time MBA or a leadership programme (MIT, Stanford, LBS and Nanyang)? I want to change my job profile. Please could you advise?

Mahesh Joshi

David: The MBA programme typically provides a broad brush of business concepts and practice. In your ten years as a CPA you have probably seen much of this. A leadership programme, on the other hand, will build from these and develop the strategic skills and softer skills that are needed for more senior leadership. So the best route for you is to think of the school where you want to study and then do an in-depth study between their MBA & leadership programmes and don’t hesitate to ask the school for advice. If you fit their profile it is likely that they will want you.

Mehul: Mahesh, you do not exactly specify what you mean by changing your job profile. Does that mean function or industry or both?

If you want to stay in the field of finance etc then I would advice a leadership programme, but if you want a more extreme change then I would advise a two year full-time MBA as this will give you the chance to do an internship which could be the catalyst for your profile change.

However, these are answers at a very high level as I need more information.

Della: I think you need to decide first what you want to do, not what you don’t want to do.

Garth: Hi Mahesh. You can apply to an MBA programme at any age and you seem to have sufficient work experience for one of the mid-career master’s programmes, as well.

You didn’t specify the kind of job you seek, but I suspect a role with the responsibility and compensation that you expect will happen through meeting people and figuring out how to repackage your skills in a way that makes sense. Going back to school will give you great exposure to people and ideas, but may not guarantee a position right out of school.

If you have the ability to visit the programmes you’re considering, you should do so. You might find that the cohort and the classroom discussions in one programme or the other help clarify your choice. If you can’t visit the programmes, then I encourage you to start the application for a full-time MBA and for a mid-career master’s degree programme. The applications provide you with a chance for structured reflection on your experiences and goals and may be helpful in finding the best match.

Sandra: It is tricky to reply to this question as there is no black or white answer. So let me try to give you some questions to ask yourself. Generally speaking, the average age in the major MBA programmes is between 28 – 30 yrs old. Now, that obviously means that there are also quite a number of students with significant work experience (at Insead, the average experience is six years in the full time MBA programme) and while in our statistics we do not see a difference in the success of finding a job, there is a higher percentage of people having to fight harder to convince recruiters of their ability to change careers.

On campus recruitment, for example, is often more tailored toward students with less than eight years experience, simply because companies can recruit in larger numbers for these positions. There are some notable exceptions, especially in the corporate sectors where some have targeted leadership programmes for professionals with ten years work experience. But what I would suggest you start doing is to really think about what career shift you want to make (i.e. for consulting, they would ask whether you are willing to “step back down” and be managed by people who may be a lot less experienced than you) and to look into stepping stones (again, some transitions might be easier for you to make, getting into marketing however will be quite difficult).

As for the EMBA, most of the time, it is not a programme intended for career change, rather for career advancement. If I were you, I would speak with alumni from various programmes to really figure out where this could take you.

I am a 35 year old male. I did my MBA in Pakistan and I have ten years of professional experience in finance and accounting. I am currently working in Kuwait as a financial analyst. I am keen to go for another degree.

Despite already having an MBA, I am considering an MBA from a good ranked business school as the best option to pursue. I believe that only an MBA from a good business school can help to polish my leadership skills and allow me to switch my profession to the core finance industry. A masters in finance from a top ranked school is my second option, if this degree can help me more than an MBA.

Kindly guide me as to whether, at the age of 35, with a family back in Pakistan, a good MBA score (though from Pakistan) and ten years experience (though not as a manager), will it suit me to apply for an MBA or should I continue my present job and follow an EMBA modular programme from Dubai or Abu Dhabi (LBS / Insead)?

I can invest all my savings in education because it is my dream to study in a top business school and gain priceless experience from my fellow classmates and professors. My friends are enjoying their life and investing savings in real estate but I am different. I am saving each and every extra penny that I can to invest in myself.

Saleem Khan, Kuwait

David: Your decision to invest all of your savings in further education is a profound one. It can bring returns that could range from substantial to trivial. So think in depth about the job that you really want; what your existing education brings; and what you still need to supplement that. Look at those companies that recruit at the schools you are contemplating, to see if these in fact are a match with your aspiration. Finally, you seem to be contemplating the choice of a full time and an EMBA programme. Both programmes, from a good school, will give you the education and the networks you will need. So think about how much of your resources you want to invest and whether continuing to work while studying would be a more secure route for you.

Mehul: If you have any intention of switching function / industry / both then I strongly believe a full-time MBA will benefit you the most as opposed to an EMBA. But I think the real question for you is, if you want to stay in the finance industry, will you gain more from a masters in finance than from an MBA? Masters in finance programmes are more specialised, usually only last a year and are less expensive than an MBA as well. Considering you have an MBA and want to stay in the finance industry, I would seriously consider a masters in finance.

Garth: Your mindset of investing in yourself will ensure that you continue to grow and learn throughout your career. I applaud that approach.

If you’re looking merely to polish your skills, however, then it’s difficult to make a case for the master of finance or for the second MBA. Do you need to take economics, operations, marketing, etc. again? You will be competing with mid-career executives who already have industry experience; as such, you might find some targeted executive education courses instead of a second MBA or a master of finance.

Della: Saleem hello. If you do decide for a full-time MBA, you probably need to find one which is targeted to more mature students - the one-year European-style MBAs tend to enrol more students as a percentage of the class than their US counterparts. But many excellent schools now offer EMBA programmes that give the same degree as the full-time programmes. Modular programmes are very time-consuming and very demanding, but will allow you to retain your current job - and your salary.

I have about 12 years of experience. I’m planning to pursue a one-year MBA programme (Insead, Stanford, Sloan). How do the placements for one-year MBA students compare with the two-year MBA students, given that there is typically no internship for a one-year programme?

Srikanth

David: Internships give you the chance to get to know the company and the company a chance to know you - and see you in action. One consequence of this process is that dividends are paid to both the company and the MBA. That process has shown to provide dividends for both. All of that said, a number of the one-year MBA programmes have been extremely effective in finding employment for their students. So check out the employment record of the programmes that interest you. Go for the programme that you feel fits your profile and gives you most value. You can’t go wrong with the management education from a good business school, whatever the length of its programme.

Sandra: There is no significant difference in the percentage of students finding jobs (we don’t “place” anyone, rather we help students find out what they want and advise them on their strategy to get there, depending on their experience). But there are some limitations with regards to the on campus recruiters and “extreme” career change can become more challenging the more you have acquired experience in one field.

At Insead, we actually do offer an internship to our January intake, which would allow you to gain experience in the field you are targeting. If you are generally talking about differences in MBAs with jobs in a one-year vs two-year programme, the percentage is obviously lower at graduation (as, for example at Insead, many companies will still be interviewing at that time). But it is fairly similar three months out – last year, 93 per cent of Insead graduates reported at least one offer three months after graduation.

Mehul: Srikanth, you need to clarify what you mean by “compare”. A two-year MBA has the advantage of an internship but placements depend on a variety of things, not least your profile, the state of the external economy etc. I do not think placements should be your primary reason for applying for a MBA programme. Instead, you should be thinking about the schools and length of programme that best match your requirements and then apply accordingly. You should then be looking forward to getting the most out of your MBA experience and placements are just one of those things, in my opinion.

Garth: Hi Srikanth. For Stanford, it’s difficult to compare the one-year Stanford Sloan Master’s Programme with the two-year Stanford MBA given the programmes’ distinct student cohorts, experiences and aims.

In both programmes, the majority of students will pursue a tailored search, working with alumni and career advisors to identify compelling, individualised opportunities. The opportunities that appeal to an MBA with three years of experience as a classroom teacher or seven years of experience as a product manager differ from those that appeal to an MS student with, say, the twelve years of experience that you have.

As you surmise, the summer between the two academic years of the MBA programme offers a great chance to explore a new industry, function, or location; this helps both student and employer. For the one-year programme, the student’s track record plays a larger role. However the students in our one year programmes often have a clear idea of where they are headed given their experience and they place extremely well.

Della: We always measure placement success as part of our Global MBA rankings and there is little real difference in the data reported by the top schools, particularly in a strong economic climate. But this year we ran a poll of nearly 2,000 students that graduated in 2008, at the beginning of the financial crisis, about the value of internships.

We found that alumni who completed an internship proved more likely to re-orient their careers. Of those who did an internship, 92 per cent changed job and 69 per cent changed sector on graduation. Among those who did no internship, the figures were eight per cent and 12 per cent lower respectively. While 75 per cent of those who completed an internship found employment within one month of finishing their programme, only 69 per cent of those who did not complete an internship were as successful. Even 12 months after completing their MBA, the unemployment rate for those who did not have internship experience remained higher.

Recruitment firms say one in a thousand job specs specify a candidate with an MBA. Does this mean they aren’t universally valued - or that employers assume candidates at a certain level have one anyway?

Helena Pozniak

Sandra: I think it simply means that most recruiters look for talent, not degrees. We advise our students not to focus only on the “MBA” jobs as they probably only represent five per cent of the opportunities open to them. Now, if you look at the MBA alumni population you will find that most of them hold the jobs you might be interested in.

The MBA helps them in several ways – it gives them a continuous education (and which company does not like employees who are so keen to grow?), a great learning experience and a global network. If you are an alumni of Insead, you can find fellow alumni virtually everywhere in the world as they live in over 160 countries. But the MBA alone won’t get you the job – it will be a combination of your skills, your drive and motivation, your passion, your education and the value you can create for the company.

David: Recruitment firms cover the entire array of commercial and professional positions. Sometimes no degree is needed. Sometimes a professional degree, for example, accounting and sometimes a technical specialty, for example, industrial chemistry.

As it turns out, just last night I had a meeting with a CEO of a very large recruitment firm specialising in executive and managerial placement worldwide. We were talking about the kinds of placements which his firm engages and the kind of candidates that they are seeking today. The vast majority of the searches that they undertake are for people within excess of 15 years of work or professional experience. While he himself is a strong advocate of the MBA degree, he said what is far more important in the searches that his firm undertakes is what candidates have built in the 10-15 years since they earned their MBA.

GMAC Recruiter’s Survey shows that employers all over the world continue to highly value applicants with MBA and other management degrees and that they command a premium when it comes to salary.

Della: I am not sure what percentage of jobs are for candidates who are less qualified than MBAs, but that said, an MBA is not a required qualification like accountancy, law or medicine. If you did a quick poll of all the top companies in the US, Asia or Europe, you would find that most board members do not hold an MBA. That doesn’t mean they can’t do an excellent job. What an MBA does is give you a condensed experience which can help you change direction in your career or leap-frog over your peers. But it is not an end in itself.

Mehul: While an MBA is well regarded the world over, I think there are some parts of the world that regard an MBA higher than others, such as the US and Asia. Regardless of how well they appear to be valued, I would recommend an MBA for anyone looking for a life changing experience.

How do top-ranked business schools approach the education of American and European managers so they can live and work successfully in emerging markets, where demand for jobs is soaring?

Guy Pfeffermann

Sandra: At Insead, we consider ourselves a truly global programme – our current students come from 83 countries with one nationality not representing more than 11 per cent, last year’s recruiters hired for positions in 68 countries, our professors and staff come from around the world, our campuses are in Europe, Asia and the Middle East and our alumni live in 160 countries.

So our teaching includes a lot on emerging markets – not only for American / European managers, but you would probably enjoy the discussions with Indian, Chinese, Nepalese, Zimbabwean professionals on a management case in Brazil… What works well at Insead are the intercultural learning groups – you have five people with profiles as diverse as possible needing to work together to hand in their classwork. I can tell you that this learning by doing on how to deal with cross-cultural issues is probably one of the best learning experiences. We also offer quite a lot of field trips to emerging markets for our students to meet entrepreneurs and business managers in Brazil, China, Africa or the Middle East.

Della: One of the trends I hear from all top European business schools these days is that they are placing more and more students in developing countries - particularly Brazil. However, they also say that recruiters tend to be Western companies that operate there, mitigating the problem to some extent. I suspect that in China and India, recruiters are looking for graduates that already have local knowledge and therefore recruit from local business schools.

Garth: You are absolutely correct that our graduates need to have the preparation to live and work successfully in emerging markets. Moreover, even if they choose not to live in those regions, they need to be prepared to do business with companies who are located there. Given the relative growth rates of emerging and developed economies, the landscape of global business will look very different even a decade from now.

At Stanford, when we revised our curriculum several years ago, we made several important changes. First, we introduced a required new course in the first quarter on the global context of business - precisely to ensure that every student has the context your question implies. Second, we introduced a global experience requirement: every student travels to a country or region in their first year where they did not grow up or have significant business experience. These changes, as well as the infusion of global material throughout the curriculum, ensure a global mindset.

In November, we announced the creation of the Stanford Institute for Innovation in Developing Economies funded by a $150m gift from alum Bob King and his wife Dottie. The new institute, which we have nicknamed SEED, will provide many opportunities for students to learn and gain experience in developing economies while at Stanford.

David: Hi Guy, good to hear from you. I know you are especially interested in educating managers for work in developing economies. This varies school by school. Increasingly, the top schools are becoming far more international in the topics they teach and experiences they give. For example, many have joint projects and exchanges (both faculty and students) with schools around the world.

These are good things, but they are not enough. One of the major challenges is the development of cases and other teaching materials that help students understand the special challenges confronted by managers and entrepreneurs in developing countries. If a student is uniquely interested in working in an emerging market then I encourage them to carefully research what the programmes offer, what the mix of students and faculty is and what opportunities there are. Don’t hesitate to call the school and ask what their approach is.

Mehul: I may be the perfect example of this question as I’m 33 years old and all of my education has been in the UK. I decided I wanted to work in the emerging markets after my MBA and so came to India. As with nearly all MBA programmes, the year at ISB was split into two parts. The first “core” part provided me with the fundamental business knowledge I would need to live and work anywhere in the world. The second “electives” part provided me with options to pursue subjects that were more relevant to emerging markets such as rural marketing. For me, this was the perfect balance between giving me a universal business education and allowing me to tailor it to make it easier for me to live and work in emerging markets.

I learnt the GMAT model is been changed. Can you please give me a narrow explanation of the model and when it will be implemented?

George Adutwam

David: On June 5, 2012, the GMAT will replace one of the two analytical writing assessments with a new section called Integrated Reasoning. The new section will be scored separately and the GMAT test will be of the same duration. The Integrated Reasoning section was created to reflect the changes in the nature of work that today’s MBA confronts. As the nature of work changes, the curricula that MBA programmes offer changes. It is a natural evolution that the assessment used as a part of the admission process will change too.

The Integrated Reasoning section asks the test taker to analyse, assimilate and draw information from multiple sources in order to reach a logical resolution to the questions posed. In some cases, there may be graphs, charts or tables that, together with a narrative, provide the information needed. But all sources provided in the question will contribute essential information.

Learn more about the Integrated Reasoning section and see some sample questions, here.

Garth, how do you ensure diversity at Stanford and what areas do Stanford MBAs go on to work in?

From our @ftbuseducation Twitter feed

Garth: The diversity of a Stanford class is very important because our students learn an enormous amount from each other and because a diverse class ensures a great network of graduates. The diversity of the student body also results in diverse placements after graduation as our placement report shows.

Hi, with the change in the GMAT format, will it be hard to score? The evaluation method of colleges is going to change with the change.

Akashdeep, India

David: As noted in the reply to the question above, on June 5, 2012, a new section on integrated reasoning will be added to the GMAT exam. This will be an independently scored section and the integrated reasoning will replace one of the two analytical writing assessments. So you will still get a verbal score, a quantitative score and a total score. These will not change nor will the score scales. You also will get one analytical writing assessment acore as you do today. The difference will be that you will now also get a score on the integrated reasoning. The integrated reasoning score will not impact your verbal, quantitative or total score.

As this will be new information for admissions decisions, it will likely be a while before the integrated reasoning score will be factored into any evaluation of an applicant’s ability to succeed in a programme. That said, these are skills which business schools all around the world have said are important to success on their programmes. And the fact that you are able to demonstrate your skills in integrated reasoning will distinguish you; giving both you and the school of your choice valuable new information about your abilities.

What should candidates with a lower work experience (say two years) do to have an edge over the others with four to eight years of experience in the industry?

Nandita, India

Della: You have to prove you have some other attributes than work experience - have you started your own company or charity, for exampe? Or enrol onto a masters in management degree instead.

Garth: We will look at your achievements relative to your opportunities. If you’ve had two years of work experience, then we can’t expect your absolute level of achievement to mirror that of an applicant who’s been working a decade or longer. We can, however, expect that you show a record of excellence in that two years - and in your academic experience and co-curricular activities. This gives us confidence in your ability to excel at Stanford and as an alumna.

Mehul: I was a part of the admissions committee at ISB for next year’s intake and one of the things I was on the look out for was a holistic profile i.e. academics, extra-curricular activities, personal interests, motivation and drive. It was not the case that you would be compared directly to those with four to eight years experience but it was more about what sets you apart from your peers and what can you bring to the classroom so that others can learn from you. My advice would be do not worry about being compared to others!

David: Hi Nandita. It’s not always the years of experience it’s the quality that counts. Often times eith years of experience is two years of experience four times over. Think about what you have learnt in your experience and make the case for why this is relevant and valuable to the degree of your choice. Also, don’t forget that experiences outside work, such as involvement in the community in a meaningful way, are considered relevant and valuable.

Think about when you were challenged, led a team, thought through a strategy and had an international experience of cultural insight. You can’t lead by sitting at a desk with your feet up – demonstrate that you have done something. Of course, it’s no substitute for experience but also make sure that you prepare well for your GMAT and get the best score you can. Demonstrating that you have the intellectual horse power to succeed and thrive in a programme and that you are thoughtful about the experience you have had is critical to have a winning combination.