Should I get an MBA? More and more people seem to be asking that question, with a 9.9 percent drop in applications for two year MBA programs, the third consecutive year showing decline. Meanwhile, more specialized degrees, like a Master of Finance, are seeing increases. Is the MBA no longer about training tomorrow's captains of industry and more about training the next Richard Fuld, last CEO of Lehman Brothers and infamously dubbed the "Worst CEO of All Time"?
While, certainly, a few bad apples have given MBAs an aura of infamy, I'd like to bust a few commonly held myths about MBAs.
Full disclosure: I have an MBA. Fuller disclosure: I went to HBS. Even fuller: I am inextricably linked to Hult International Business School.
Myth #1: MBAs are greedier.
MBAs are occupying the world. On the hunt for more money and power, the typical MBA looks no further than their paycheck for career and life goals. WSJ cites the stats to prove it: the typical MBA expects twice the salary of an undergraduate, an average of $85,854 to the typical undergrad's expected $42,859. No wonder, as MBAs tend to gravitate to the most mercenary of places -- Wall Street. The top industry choices of your average MBA graduate? Finance and consulting, by a long shot.
More and more business school graduates are looking to impact the world. Case in point? The dream employer for graduating MBAs is Google, by a wide margin. For five years in a row. According to a Google spokesman, "People want to work here because they know they'll be doing innovative work." (Stock options help, too). CNN Money reports that MBAs going into the Internet field expect to be making nearly 30 percent less than their banking counterparts five years into their career. Business school students seem to be looking beyond their paycheck and considering their impact on the world.
Myth #2: MBAs can't do anything useful.
While MBA may stand for Master of Business Administration, there are plenty of alternative acronyms -- "Master of Business Advancement," "Master of Barely Anything," and a few other, less choice names. MBAs know everything -- but specialize in nothing. Time's article "Why a Rise in MBAs Coincided With the Fall of American Industry" contends that America's once-proud automotive industry was destroyed by MBAs and that America needs to "fire the MBAs and let engineers run the show."
There is a vast number of MBAs who truly want to change the world, whether through business or social enterprise. Wharton School of Business reported this year that more students than ever are crafting careers around the nonprofit sector. In addition, students from almost all of the FT's top 100 business schools, including Harvard, Columbia and Stanford, participated in the Hult Global Case Challenge, the biggest case competition in the world that crowdsources ideas from MBAs. In total, over 20,000 consulting hours were donated by top business school students for charities such as Water.org, Habitat for Humanity, Solar Aid and One Laptop Per Child.
Myth #3: MBAs have low ethics.
Bloomberg reported that "MBA students cheat more than other grad students," a closer look reveals a more nuanced story. Even more telling, after the financial crisis, students at Harvard Business School circulated an ethics pledge -- that was only signed by 1 in 5 students. Business Insider demeaned the effort as "silly and infantilizing" and Jon Stewart parodied this well-intended but ill-received pledge on the Daily Show.
While 56 percent of MBAs admitted to cheating, so did 54 percent of engineers. The vast majority of MBAs aren't corrupt, power-hungry businessmen. Many are at the forefront of much needed social change. From HBS grad Salman Khan of Khan Academy to Columbia Business School grad Warren Buffett to the executive team of Teach for America, this "silent majority" of MBAs spend their careers making changes instead of making headlines.
Myth #4: MBAs are Master of Bull...
MBAs are notoriously good at talking and even better at making themselves look good. The Management Myth, written by Matthew Stewart, declares that "MBAs have taken obfuscatory jargon -- otherwise known as bullsh*t -- to a level that would have made even the Scholastics blanch." Bullsh*tting seems to be built into the business school curriculum. MBAs spend their time analyzing case studies, talking to classmates, making PowerPoints, networking and learning the jargon: "Let's incentivize the best of breed to monetize the paradigm shift to create a win-win for all stakeholders."... Huh?
Actually, the best storytellers are usually the best brand builders. Take Phil Knight of Nike or Joe Coulombe of Trader Joe's, both Stanford MBAs and marketing giants. Joe knew the power of a good story. His grocery stores were born in the shadow of then-giant 7-Eleven, which was big, cheap and had the best locations. Joe's strategy wasn't to out-compete in prices or offer better service. Instead, this American franchise managed to convince their target demographic (the over-educated but underpaid) of its "exotic neighborhood store" pedigree with faux-Caribbean oars and steel drum music. More than 60 years and $8 billion in revenue later, Trader Joe's proves that a little "obfuscatory jargon" can make a big difference.
Myth #5: MBAs can't think outside four quadrants.
MBAs come out indoctrinated with business school principles and theories that don't do much good when they hit the real world. MBAs often don't have the experience in relevant fields, but are sure their "business insights" will lead to a breakthrough. This leads to MBAs trying to fit everything inside their neat models, which might fit inside PowerPoint, but are out of sync with commercial reality.
You don't have to look far to see that MBAs are definitely not only thinking outside the box, but redefining it. We find MBAs at the helm of America's best tech companies -- Facebook's COO Sheryl Sandberg and Apple's CEO Tim Cook. HBS alumnus Sheryl Sandberg is not only revolutionizing the web, but also whole societies, as we saw in the Arab Spring (and, incidentally, she was an awesome college aerobics instructor!). Duke Fuqua MBA Tim Cook has inherited Steve Job's mantle at Apple, the disruptor of at least a half dozen industries. Tim can't rely on four quadrants for easy answers as the rest of the world looks to him to redefine them.