After she graduates next year, Anna Fuller will go to work at Google. Ms Fuller is one of a growing number of MBA students lured into the technology sector
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When Anna Fuller finishes her MBA programme at Carnegie Mellon University’s Tepper School of Business next year, she will not work for a consultancy or bank, as many MBAs do. Instead, Ms Fuller will join Google as a product manager. In her previous career she was director of product for a company in the ecommerce industry.

“I’m attracted by how Google’s products can positively impact lives, such as Project Loon [a balloon-powered service] which could provide internet connectivity to people living in remote areas,” she says.

Ms Fuller is just one of a growing number of MBAs who are being lured into the technology industry. One-third of the MBAs who graduated from the Tepper school last year accepted job offers from tech employers, up from 21 per cent five years ago.

Yet with some such as Facebook preferring to hire managers with expertise in computer science and engineering, MBAs without technical backgrounds can find it difficult to land jobs.

“These companies place a premium on technical expertise because, to be able to build the products which are the bedrock of their business, managers need a deep understanding [of] how technologies work,” says Tim Derdenger, associate professor at the Tepper school.

Employer demand has spurred business schools to launch technology-focused MBA programmes, which teach core courses like leadership and strategy, but also specialist skills, such as data science and machine learning.

New York University’s Stern School of Business next year hopes to enrol 30 students with technology experience into a new Tech MBA. The programme will use a 12-month format, rather than the more common two-year model with a summer internship.

Peter Henry, NYU Stern dean, says the one-year format is a better fit with technology employers such as CommonBond, because they rely less on internships to hire MBAs than employers such as banks. Tech companies often prefer to hire on an ad-hoc basis because their businesses need to change quickly, given the pace of disruption in the sector.

The Tech MBA at Cornell Tech focuses on experiential learning, in which groups of students apply their knowledge to real challenges, augmenting case discussions and lectures. Doug Stayman, Cornell Tech’s associate dean, believes experiential learning is a more effective way to teach some subjects, particularly product development, because it can better replicate a technology workplace.

“Some courses, such as business fundamentals, are better suited to lecturing because they are more individualistic,” Mr Stayman says.

“But when it comes to building technology products and services from scratch in groups, there is no better way to learn than by doing.”

For instance, in the Product Studio class, the 62 Tech MBA candidates work in teams to develop solutions to challenges posed by companies.

Tech and beyond: the rise of the one-year MBA

The one-year MBA, favoured in Europe, is gaining ground among US business schools. Kellogg School at Northwestern University, Babson College and the Goizueta School at Emory University have all launched one-year MBAs.

Growing student interest in shorter courses drives the trend. At Kellogg School, enrolments to the one-year MBA have risen by 60-70 per cent over the past six years, says Matt Merrick, associate dean.

Students like the idea of spending less time out of the workforce, saving money on tuition fees — Kellogg’s one-year MBA is $42,754 cheaper than the two-year option — and the cost of not earning a salary. Annual pre-MBA pay for two-year students at Kellogg is, on average, $76,847.

There are downsides to the one-year format. “You miss out on a summer internship, which is crucial for securing jobs at firms in some industries like consumer goods and banking, which hire almost exclusively from that internship pool,” says Julie Barefoot at Emory school.

Nevertheless, she expects that more students will enrol on one-year MBA programmes as concerns around student debt grow. “I suspect we will see more millennials thinking long and hard about the return on investment of taking two years out of the workforce to get an MBA.”

One task posed by Google was: how can we encourage users to seek a more balanced view of controversial topics, such as gun control, when accessing news online?

In response, a group of MBA, computer science and design students developed WellRead. The app encourages unbiased consumption of news by using machine learning to build an ideological profile of readers, and recommending to them content from a wider range of sources.

David Cheng, an MBA student who worked on the project, says it taught him how to work more effectively in cross-disciplinary teams.

“I don’t need to know how to code but, as a product manager, I will need to communicate with developers in order to accurately plan a project’s timing, budget and outcome,” Mr Cheng says.

At MIT’s Sloan School of Management, an optional entrepreneurship and innovation certificate encourages students on the full-time MBA programme to launch and develop tech companies.

Financial Times data suggest that 36 per cent of Stanford and MIT MBA students — from the class of 2013 — founded a start-up while studying or within three years of graduating.

Frederic Kerrest learned how to create a business plan using Excel spreadsheets as part of the MIT certificate, then used that template to make a financial model for Okta, the business he co-founded in 2009. It provides a secure process for signing in to cloud services and raised $187m at its initial public offering this year.

“The MBA taught me the nuts and bolts of building a tech business,” Mr Kerrest says. Yet he does not think the degree is necessary to do that. “The skills I learnt on the MBA, such as sales, have been key to Okta’s success. But I could have learnt those skills in a corporate job,” he says.

$42,754

Difference between the tuition cost for Kellogg’s one-year and two-year MBA

Critics argue that MBA degrees promote risk-averse thinking, which is at odds with the technology industry, with its focus on rapid innovation. Sheryl Sandberg, Facebook’s chief operating officer, who has a Harvard MBA, said in an online Q&A in 2015 that, while she “got great value” from her experience, “I don’t believe [MBAs] are important for working in the tech industry”.

Business schools say the criticism masks the reality that tech companies are hiring MBAs in larger numbers. Amazon, for example, said in March the number of new MBA hires was 30 per cent higher than 12 months previously.

“As tech companies grow, there is increasingly a realisation that they need managers who can think holistically about how to sustain success in the long run,” says Yossi Feinberg, of Stanford University’s Graduate School of Business in California.

But he adds that, to stay relevant to the tech industry, MBA programmes will need to further evolve. “We need to train our students in the skills they will need to be technology leaders of the future.”

Copyright The Financial Times Limited 2017. All rights reserved.
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