What value an MBA?
An MBA is the qualification of choice for investment bankers and management consultants, but many people in other professions regard an MBA as a way to break through a glass ceiling that prevents them progressing into more senior positions. I’d counsel them to hesitate.
A great deal of the management and leadership training I’ve experienced was modelled on MBA courses so I’ve a reasonable idea of what it involves: case studies.
My over-riding memory is of one particular case study that followed the launch of Guinness in Italy. Extensive market research and testing established that Italians liked clear, pure beer and found the taste of Guinness strange. Guinness went ahead with their launch, and it failed. The lesson implied in this case study is that evidence for the failure had been available and should have been listened to. What I found fascinating instead was the way managers ignored evidence their plans would fail and pressed on regardless. Despite the criticism implied by the case study, I am not convinced Guinness were wrong.
The events in the Guinness case study took place around the time Red Bull was being adapted for launch in Austria. Now, if Red Bull had carried out market research on their product I feel sure ‘tastes strange’ would have been one of the key messages. Had they followed the lesson of Guinness, they might have pulled the launch and kept it as a specialist drink for the Thai market.
The practical lesson from the Guinness case study is unconnected to whether the launch succeeded or failed. It is that the Guinness management had decided to launch anyway. The market testing was never going to be decisive. I’ve worked in large global companies. Their business model is, in essence, to take what works in one market and roll it out across the world. Although they make a nod to ‘local tastes’, in essence, the model is ‘global brands’. Guinness were simply applying their strategy. The real mystery is why they bothered with market research at all!
In my experience, decisions get made in this sort of intuitive way, and trial and error soon sorts out the good decisions from the bad ones. This is as it should be.
If that’s how decisions are made, what then is the value of studying ‘management’ as a professional discipline at all? As it happens, plenty. The sort of analysis that is done by people with MBAs is important to avoid making errors. Although part of the decision-support process, analysis will rarely be decisive. Anyone can do the maths. A decision only becomes a ‘decision’ when nothing remains but uncertainty, and no one knows what’s going to happen. This is where judgement comes in. When they reach this stage some managers get stuck, while others lead. The value of an MBA is that it allows you to analyse a problem a long way down the path until other qualities such as your insight, character and judgement take over.
Why then would I counsel anyone to hesitate before doing an MBA? Firstly, it’s a hard slog. Secondly, outside of banking and consulting the MBA doesn’t have the cache in the UK that it does in the US. But mostly, I’d have more confidence in your ability to break through the glass ceiling in other ways. Take on project work outside of your core skill area and impress through your achievements. It might work out a better use of your time. Because if you can’t break that glass ceiling this way, the chances are an MBA won’t help you.