Getting an MBA is a Waste Unless You Do This

MBAAt some point in your business career, you will look around at your colleagues and wonder how you can get ahead. What can you do to separate yourself from the pack? How do you stand out from the crowd? Is there any way to boost the upward trajectory of your career and make yourself more marketable?

Your search to answer those questions will inevitably lead you to consider pursuing your Master of Business Administration (MBA) degree. Several years ago, I was in this same exact position – searching for a way to gain a critical edge in the competitive, often dog-eat-dog business world.

After doing a fair amount of research, I concluded the MBA pathway was appropriate for me and I got started on the application process. Here I am about 8 years later (no, it did not take me that long to graduate!) and, when I reflect upon my full MBA experience, I realize I learned some invaluable lessons. Below are some of my key takeaways on getting an MBA.

Attend a Top Ranked Business School

I won’t beat around the bush here – you must attend a quality university for your MBA. If not, you’re most likely wasting your tuition. Am I talking about the upper echelon of business graduate schools? Harvard, Stanford, MIT, UC Berkeley? Yes – if possible!

Undergraduate degrees are mainly about learning. Is the school name on your diploma irrelevant? No. Getting your undergrad degree from Yale is going to get you much further along than one from the University of Phoenix. However, you can learn just as much from a top notch university as you can from a “lesser” college. Generally, the curriculum will be the same. Heck, they might even use the same textbooks.

When it comes to your MBA, the prestige of the business school definitely matters. Why? Because you’ll get the best return on your time and tuition. MBA graduates from the top schools get heavily recruited and not only start off with more respectable salaries and signing bonuses, but tend to rise through the corporate ranks much faster and earn considerably more over their career.

Now, I’m not saying you should abandon your MBA dreams if you can’t go to Wharton or the University of Chicago. These top schools are very competitive and have extremely low acceptance rates. You can still do very well for yourself if you attend a nationally ranked program that’s slightly below the leading schools. Don’t settle for attending your nearest local state university or some unheard of private school though. I’m fairly confident doing so won’t get you to where you truly want to be and they’ll still cost a pretty penny!

You Must Network

Your time in an MBA program will provide ample opportunities to network with fellow students and even the professors. You absolutely must take advantage. This is the time to forge the foundation on relationships that can span the rest of your career or even lifetime. Don’t sit there and be a bump on a log! Even natural introverts need to make efforts to establish solid connections.

The professional and personal friendships you make in business grad school will provide you with a far greater ROI (return on investment) than anything else. These are the folks that will reach out to you if a spectacular job opportunity arises at their firm. They’ll be there to help if you are perhaps looking to make a company/career change. At the very least, your MBA network connections can serve as a sounding board for any concerns or ideas you may have. Speaking of ideas, many bright MBA minds have innovative entrepreneurial ideas. Perhaps you’ve got one yourself. With a solid network in place, you’ll enhance the opportunities for collaboration.

If you don’t create and maintain a network, then you are selling yourself short and not fulfilling the true potential of your MBA.

Learning is Last!

That sounds horrible, right? Why are you paying the exorbitant MBA tuition fees if you aren’t there to learn? Well, you are there to soak up the knowledge, but your focus shouldn’t necessarily be so steadfast on the curriculum. Here’s why:

  • As pointed out above, networking should be the most critical aspect of your MBA pursuits. In the end, if you’ve done it right, the network you establish will be a far more valuable asset than the knowledge base you acquire.
  • A good portion of the material covered will be a repeat from ungrad (particularly if you were a business major). The MBA program will cover the finance, accounting, and marketing basics. It’ll be a nice refresher if you haven’t touched those subjects in a while, but there won’t be any earth shattering revelations at that point.
  • A fair amount of your classes will be interesting and provide intriguing learning opportunities. However, they won’t necessarily be applicable to your career. MBA programs generally are structured to give you a well-rounded perspective. For example, a commercial real estate finance class might not provide much benefit to those in the bio med industry.
  • Truth be told, if you are self-motivating, you can learn a decent portion of the subject matter on your own. Yes, it’s oftentimes nice to have a professor lecture to you and be available to answer questions or guide you along. Don’t fret if you aren’t able to take class because it’s full or it doesn’t work with your schedule. You can always look into the subject yourself at a later time.
  • Don’t forget, some of the most valuable learning does not come in the classroom setting. Don’t underestimate on-the-job training and learning experiences. While an MBA will help you stand out and be a resume booster, your “real life” work performance is still a crucial part of overall career success.

The Perfect MBA Scenario

You will receive the maximum benefit from an MBA if you attend a more prestigious, top-ranked business school while focusing heavily on networking. Don’t neglect the learning, but don’t get so caught up in the finer details that you forsake the bigger picture.

Are you considering an MBA? If yes, what are your thoughts? If you’ve already obtained your MBA, do you agree with the conclusions above? Why or why not?

Image courtesy of SFUPAMR at Flickr.

29 Responses to Getting an MBA is a Waste Unless You Do This

  1. MonicaOnMoney August 19, 2013 at 8:08 am #

    Those are good points to consider but I think that getting an MBA at a local university will still help tremendously too. This is especially true if your company will pay in full for the MBA and you’re able to take an evening MBA program while still working. Essentially, the MBA is free. Or if you save for an MBA and pay out of pocket while still working. I Ultimately, I think it comes down to what exactly someone plans to do with the MBA and how much its costs to get there.
    MonicaOnMoney recently posted…How To Be Frugal When You’re NotMy Profile

    • Mr. Utopia August 19, 2013 at 3:34 pm #

      Hey, Monica – you bring up some good points. You should always do a cost-benefit analysis. Taking advantage of tuition reimbursement from your employer and doing the part-time or “working professional” programs are also variables to consider (I did both!). I would contend an MBA is never “free.” Even if you end with no debt (which would be awesome but pretty difficult to accomplish for the higher ranked schools), there is the opportunity cost of getting the MBA.

      And, as far as a local university goes, it may indeed help one accomplish their goals. However, it may not distinguish you or help you stand out as much as you’d like or hope.

    • maite January 14, 2014 at 11:19 am #

      Hello monica,i took science subjects last year and my Igsce result werent quiet good..now im in year 12,im taking business subjects but i want to go apply for university in turkish,beacause the school im now in is not quiet good..Now i badly wana take MBa program.do u think they are goin to accept me?or what advice whpuld you give me on becoming a MBa?how is it like to become one..please help me

      • romeo May 11, 2014 at 12:51 pm #

        No.

  2. Pretired Nick August 19, 2013 at 11:42 am #

    I strongly considered getting an MBA back in my early career days. I finally decided I was learning more on the job than in a classroom. I did, however, watch many idiots with MBAs pass me by in my company, which was beyond frustrating, so I can’t say it has no value.
    However, I was able to leave corporate work at a relatively young age and don’t have any school debt, so I think I came out ahead by not going back to school.
    Pretired Nick recently posted…The best mortgage term: 10 yearsMy Profile

    • Mr. Utopia August 19, 2013 at 3:52 pm #

      Ha, “idiots with MBAs”…there’s a fair amount of those types out there for sure. I would say, in general, an MBA is more beneficial when landing initial jobs or switching companies. If you are already doing well at your current company then buckling down and working hard may suffice (although the MBA probably never hurts).

      It sounds as if you made the proper decision for you though. How did you end up leaving the corporate world at a relatively young age?

  3. Jon @ MoneySmartGuides August 19, 2013 at 4:28 pm #

    Sadly it seems that the MBA is becoming commonplace nowadays. It seemed as though when the economy was bad, everyone went back to school thinking that more education would make them indispensable, but if you don’t perform above average at work, you will still lose your job.

    The main mistake though that I see are recent grads without work experience going right to grad school to get their MBA. While this might work out well for those going to the top tier business schools, for everyone else, it’s a bad idea. I’ve been involved with several hiring managers that wouldn’t hire an MBA grad without work experience because the company didn’t want to pay them that much money. I recommend if you are going to get your grad degree, get it part-time while the company is hopefully footing the bill.
    Jon @ MoneySmartGuides recently posted…The Importance of Investment DiversificationMy Profile

    • Mr. Utopia August 20, 2013 at 3:48 pm #

      All excellent points, Jon. With the MBA becoming more commonplace, it’s more important than ever to ensure the university you attend has enough prestige to help get you where you want to go. Sure, in a way you’re paying for the name, but it most likely will pay greater dividends in the long run (even if the education quality is equal to a lesser known school).

      I also agree about the work experience aspect. It may not be standard across the board, but I believe many top schools heavily evaluate work experience as part of admission criteria. Other schools that don’t have stringent admission policies (that essentially just want your tuition money) won’t really care.

  4. Financial Samurai August 19, 2013 at 5:21 pm #

    Go Bears!

    I agree with your post. Where did you end up getting your MBA?
    Financial Samurai recently posted…The First Million Might Be The Easiest: How To Become A Millionaire By Age 30My Profile

    • Mr. Utopia August 20, 2013 at 3:50 pm #

      UC Davis alum here, Sam. Right behind Cal and Stanford as the best in NorCal!

  5. Troy August 19, 2013 at 7:00 pm #

    Awesome post man – I totally agree with you. But even then, I think that an MBA is still kind of useless. I have a brother who has a Harvard MBA and he hated it. It was all about case studies. The problem with these case studies is that a typical class goes like this:
    Teacher: Ok students, what do you see?
    Students: – talk a whole lot, a lot of which is nothing but nonsense.
    Then the teacher lists down everything that everyone says, and then the teacher concludes “ok students. That is what we learned today”.

    According to my brother it’s just a bunch of guys spewing out bullshit (sorry for the profanity – those are his exact words).
    Troy recently posted…Fundamental Reasons Why the Rich Poor Gap is Growing WiderMy Profile

    • Mr. Utopia August 20, 2013 at 3:56 pm #

      Ah, the exciting case studies. Ironically, most schools use the Harvard Business Review articles for their case studies!

      There definitely are MBA classes that work just like you described, but not all of them. Some classes were actually useful. It really depended a great deal on the professor (very similar to undergrad I suppose). A lot of times you can ask fellow students for feedback on good/bad classes ahead of enrolling each quarter/semester.

  6. Pauline August 19, 2013 at 9:54 pm #

    I went to business school in France and it was the same. Really hard to get in, once you are in (in one of the best schools otherwise you just lose your time) you can relax and network. I came from a great public university (Sorbonne) and the quality of tuition was disappointing for the cost, but it does help to have business relationships down the road. You basically pay for the alumni contacts.
    Pauline recently posted…Things to Be Aware of When Investing in American Real EstateMy Profile

    • Mr. Utopia August 20, 2013 at 3:58 pm #

      Sounds like I should translate my article into French and post it for any potential site visitors from France, Pauline. It’s interesting to know it essentially works the same in other countries.

  7. Martin August 19, 2013 at 10:19 pm #

    I’m 25 and have been considering an MBA for the longest time. The only thing stopping me is that I don’t know if I’m ready for the corporate world or not.
    Martin recently posted…Money Lessons That I Picked up From Stone Cold Steve AustinMy Profile

    • Mr. Utopia August 20, 2013 at 4:01 pm #

      Hey, Martin, I think it really all depends on what you plan to do with your MBA. You don’t necessarily have to enter the corporate world before or after. Many people with their MBA work in non-profits and even government jobs. Even though it is a master of business degree, you’ll find students with a wide range of backgrounds and diverse career ambitions.

  8. DC @ Young Adult Money August 20, 2013 at 10:13 am #

    These are really great tips. Someone I know once told me, “MBA is only a slightly amped up version of undergrad.” Networking and going to the best school cannot be stressed enough.
    DC @ Young Adult Money recently posted…7 Free Must-Have Tools to Score a BargainMy Profile

    • Mr. Utopia August 20, 2013 at 4:04 pm #

      That assessment isn’t too far off, but it really depends on what school you attend and what you make of the program. I can’t say I knocked it out of the park myself. Some of what I wrote above are from lessons I learned upon reflection and not necessarily from actually doing them while I was student. In particular, I could’ve and should’ve networked much better than I actually did.

  9. Michael | The Student Loan Sherpa August 20, 2013 at 6:30 pm #

    I think a lot of people are hesitant to offer this advice because it sounds elitist. To a certain extent it is, but the economics of the situation pretty clearly show that many MBA programs, on average, just are not worth the money.

    I’d also add that with the number of law schools growing and the number of law jobs not growing, law school seems to be headed in this direction.
    Michael | The Student Loan Sherpa recently posted…Federal Government: Your Student Loans are Being TransferredMy Profile

    • Mr. Utopia August 20, 2013 at 7:15 pm #

      My intent was not to come off as elitist. The headline was a bit strong, sure. The networking and curriculum advice can apply to any business grad school. Any elitist aspect would be related to my comments about attending a top ranked school.

      I’m not taking an absolute stance. I do know those who have gotten an MBA at the “lesser” schools and have done very well for themselves. It’s just that your odds at overall career success increase drastically by attending a ranked school just from the reputation alone.

      I can definitely see a similar scenario unfolding with law school (although I’m not as familiar with the law school landscape).

  10. AverageJoe August 21, 2013 at 5:15 am #

    I love it. Learning, while important, really is last! If you believe that much of success is about proximity, then you should take advantage of the fact that you’re around some other awesome minds who are going to go on and do great things….many of which can help your career!
    AverageJoe recently posted…It Appears My Magic Stock Picking Machine Might Be BrokenMy Profile

    • Mr. Utopia August 21, 2013 at 12:56 pm #

      That’s exactly it! I know I’ll never get hired as an MBA recruiter by delivering this type of message, but it really is true.

  11. EL @ MoneyWatch101.com August 21, 2013 at 7:26 am #

    This is the perfect way to describe how to take advantage of the MBA experience. I will have to agree with all the details behind getting an MBA the Mr. Utopia mentions, as Networking will serve you well. It appears that most MBA programs are taught in a theory based scenario because you cannot duplicate a business environment in a classroom.

    • Mr. Utopia August 21, 2013 at 12:59 pm #

      There is a lot of “theory based scenario” teaching that goes on, but it’s not necessarily always that way. The top schools (as well as others I’m sure) often have relationships with local businesses. It’s not uncommon to do real life collaborations or projects in partnership with these businesses. So, there is some real world application involved.

  12. Andrew@LivingRichCheaply August 21, 2013 at 11:41 am #

    Great article…I think what you said is true and it’s refreshing that you were so honest about it. You would never read something like that in the mainstream media. I agree with Student Loan Sherpa in regards to law school. This probably applies to most grad schools.
    Andrew@LivingRichCheaply recently posted…Opportunity Knocks: A Two-Income FamilyMy Profile

    • Mr. Utopia August 21, 2013 at 1:05 pm #

      That’s true – the mainstream media generally doesn’t have the freedom to be so unbiased especially because they don’t want to ruffle feathers or jeopardize advertising income. I suppose this article doesn’t stand much of a chance of getting picked up by one of the media outlets!

  13. Kenny July 9, 2014 at 8:18 pm #

    Great post… but can you please give me ideas why student should not pick a local state with low fees and same MBA text books than paying over $100,000 for the same curriculum at the top part-time MBA schools. Worse yet, some part-time MBA programs from the top schools even don’t have On-Campus Recruiting. Those students must hunt the jobs for themselves while the tuition debts are much burden for those who graduated from the part-time Top school. It’s just my 5-cents though. Please correct me if I am wrong 🙂

  14. NEHA July 16, 2014 at 1:01 pm #

    hey hi, i have read the article and its very helpful. I stay in india and have done BCOM from pune university and now planning to get into a college which is in australia in queensland. i have done my homework for it. Knw the question is that if i do my mba from there and not india wil my salary be affected which i will get after my completion of mba in marketing. I mean wil be there scope for me. Wil i be able to setlle there.. HELP

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