Value Of An MBA | Harvard Business School Graduate Perspective

Is the MBA worth it? What is the value of an MBA?
David White, founding partner of Menlo Coaching, discusses how to assess the value of an MBA degree to help you decide if business school is right for you. We spoke with Jamie Cheney, HBS MBA graduate, to share how her MBA degree has benefited her career and life in general.
Content of this video:
0:00 - Intro
0:39 - Financial return
5:05 - Greater chances to find the right career
6:41 - Useful skills
8:09 - Network
12:32 - Conclusion
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#valueofmba #ismbaworthit #mba #topmbaprograms

[@luke6350]

When I grow up I’m going to play in the MBA

[@carsonsugden9807]

This comment made my day

[@khalilelfakhri8243]

hahahahahha

[@Felishad11]

😂😂😂

[@kelvinnguyen6048]

🤣👍🇺🇲💪💯

[@ilikethatboulder.thatisani5496]

ur future is bright

[@MsUmwolverine]

Ironically, I think the problem with MBAs is that they are over confidently walking into every room thinking they are qualified to be there.

[@simba8665]

You are not the only one, i was just watching Elon Musk say the same thing lol. Saying people take MBA's to parachute into the boss position, instead of working, doing useful things and earning it.

[@natashaa2832]

True. So many MBA graduates seem entitled without ANY experience.

[@babajamal6599]

A good MBA is one that will have a growth mindset and be intellectually humble enough to learn from others. One has to have a learn it all attitude instead of a know it all attitude. That has served me well.

[@babajamal6599]

As a career switcher, my MBA helped me successfully get roles in two of the top 3 tech companies in the world without significant experience in any of the roles. It really is a valuable tool in my toolbox

[@jhs634]

I’ve been deciding to go to MBA or not. A lot of people told me I shouldn’t go to MBA if it’s not the top schools What do you think? Unless it’s not top schools, it’s not worth it?

[@juanshaftpatel7488]

how much debt are you in?

[@babajamal6599]

@@jhs634 personally, I would advice same only because a top 20 program will put you in a position where you can easily gain a good job to make the investment worthwhile

[@babajamal6599]

@@juanshaftpatel7488 the issue of debt is real. However, with a good job, that’s something you can easily pay off.

[@jhs634]

Thanks for your tip!:) I’ll take this into account

[@ynkybomber]

Companies love you to have an MBA because having a highly educated management team makes the company look far better to potential investors. I had maxed out my potential in sales so I came to get my MBA so I can take on a leadership role with confidence. It will feel funny though the first time I am interviewed by someone I am clearly more qualified then.

[@leonlawrence5854]

Great video and David’s sound is so soothing

[@MenloCoaching]

Thank you, Leon! We appreciate your feedback. :)

[@keydiddy10]

MBA is worth it if your undergrad was free.

[@LightSkinIverson]

NBA is worth it if you get drafted 🤣 look at James Harden or Lebron.

[@keydiddy10]

Hahah my bad.

[@abhishekkambanor2294]

Mine is

[@WillKalili]

I've met many MBA's working the same jobs and making the same amount of money as individuals with only a bachelors degree. Unless you get an MBA from a prestigious university, an MBA may not be the best option since they are too common and easy to get these days. However, you can try to supplement an MBA with a certificate or additional degree in Information Systems to stand out from the crowd. A dual degree in Business and Info Systems will also help you look more well-rounded and twch savvy.

[@MenloCoaching]

Yes, for the purpose of this video we are talking exclusively about top MBA programs with good reputations, selective admissions standards, and high-quality educational programs. The cutoff for which MBA programs are worth attending depends on each applicant's career history -- the better your current career, the better MBA program you must attend to justify leaving the job -- but the majority of applicants we coach are targeting Top 10 programs, with the rest aiming at Top 25 or so.

[@rocky13m]

You just sound salty that you couldn’t cut it

[@a_numbers_girl7025]

Unless you are going Ivy League, please skip the MBA. Instead, consider a degree that will compliment your bachelor’s degree.

[@i123456987654]

thank you for sharing this video! super helpful!

[@MenloCoaching]

We're glad to hear that! Make sure you're subscribed to our channel for more videos like this. We post videos frequently. :)

[@Dinosaurrvi]

Great informational video. I am a graduating senior and have been thinking about go straight to a MBA project. What are your thoughts on going directly into an MBA program after graduation vs going out to the job market and going back to school later in life?

[@MenloCoaching]

If you want to pursue business education immediately after your Bachelor's degree, then a more suitable option would be a Master in Management degree, which is designed for someone without work experience. On average, students at top MBA programs have around 5 years of post-university, pre-MBA work experience.

[@dogestranding5047]

I was thinking about this too. An advisor at my university also said that most have work experience when going for an MBA, but there must be some people who go straight for the MBA. I'm considering the latter.

[@johnkadirkadim7649]

@@dogestranding5047 it depends on the school, most top schools require working experience, idk bout the non presitgious schools though

[@jmsalvador23]

In love the tone of your voice. I got a question, if you do not follow a MBA HBS, is it worth it? like for example MBA in Latin America?

[@MenloCoaching]

There are many MBA programs that are worth it beyond just HBS. Nearly all of the top US and European programs produce great career outcomes. We are not experts in Latin American programs, so my suggestion is to investigate typical post-MBA jobs for your target Latin American programs, either by searching LinkedIn or by reading employment reports published by the school, and seeing if those jobs would motivate you to do the MBA.

[@kelvinnguyen6048]

You sir have a wonderful podcast voice. Lol

[@hh5910]

what do you think about doing management and leadership certificates with job ?

[@MenloCoaching]

Certificates are different from MBAs in important ways. First, admissions is usually not selective for certificate programs (and employers know this). Second, the short (online?) format allows less networking among participants. Third, duration is shorter and focus is narrower. A certificate can be a valuable way to fill a specific gap in functional skills but is not similar to an MBA.

[@jaimesmith1086]

Thanks Menlo Coaching for creating this video. I am wondering If I can get your thoughts on this: - I have been working for over 10 years and have been feeling stuck in my career. - During coffee chats, I was suggested to consider MBA or MS Computer Science (I don't have an undergrad in CS but saw there are some bridging programs out there for those who don't). Wondering what do you think about MBA vs MS Computer Science? - I think MS if usually for those who usually have around 2 years of work experience but may not be appropriate for those with more work experience. - I think with MS CS one tends to become a software developer writing code. Pays well but just writing code. - With MBA people usually tend to go into 3 buckets (consulting, IB/financial services & tech). My perception is that the work life balance of consulting/financial services isn't great and also getting there in mid 30s is tough but tech (product management seems to be the most popular role in tech post MBA, though the current tech economy isn't great with layoffs) seems more open with better work life balance. Also, regarding MBA I hear a lot of buzz that some say it's worth it and some say it's not. There's this site/book the personal MBA that refutes that value of MBA: personalmba.com/. So don't what what to believe. Some quote this quote from the movie Goodwill hunting regarding MBA: "You wasted $150,000 on an education (MBA) you coulda got for $1.50 in late fees at the public library.” Would love to hear your thoughts.

[@stellamaxwell777]

The real value of a top MBA program which is mentioned slightly here is that it’s a massive networking opportunities: not just in your professional life but also in your personal life. It’s not just “career motivated” people who go to business school. At HBS I knew a group of friends in the real estate section where one guy’s family ran the largest CRE company in the US; his girlfriend’s family meanwhile ran the largest residential real estate company in the country. Another friend’s dad owned a huge hotel chain in India. Another friend’s family is one of the largest real estate developers in Mexico. Even a Bonaparte descendent went to HBS. For the personal and professional network you can develop, I would say the $250k is worth it, especially since most people go in their late 20s, early 30s. If you’re not going to a top MBA program, it’s correct to say the financial variables are most important to consider. I can’t say the education at any MBA is anything stellar or intellectually stimulating but I think the exposure therapy of being in these spaces, having these conversations, talking freely to both peers and superiors is healthy.

[@ixxgxx]

knocking my 15k mba out right now 😊

[@edgargonzalez5974]

Hi. What University would you consider better between Boston University and the University of Illinois at Urbana-Champaign to get the MBA Degree? I will appreciate any thought on this. Thank you.

[@mariadeasis4013]

Boston

[@MenloCoaching]

Boston University's MBA program is generally more highly regarded than UIUC's MBA program, but decisions about where to go depend on your background and future career goals.

[@edgargonzalez5974]

@@MenloCoaching Thank you very much for your prompt response. Regarding your comment, if I want to grow in Consulting, which option could be better?

[@edgargonzalez5974]

@@mariadeasis4013 Thank you for your comment.

[@MenloCoaching]

@@edgargonzalez5974 Hard to say without context. If you wish, fill out the background info at menlocoaching.com/mba-applications-and-admissions-guide/mba-admissions-calculator/, including about your goals in consulting, and I can advise you further.

[@deepasinghal4729]

MBAs are very good for niche careers limited to consulting, PE/IB in finance and general corporate strategy role. Maybe even tech these days, though tech cos. and their founders aren't brand oriented, being dropout themselves. But if one is looking at jobs other than these 3 roles then ivy MBA fails to provide it. It's best to become a founder in the field you like and dropout if it takes off. It could be that these 3 are the best paid jobs so they are the core focus of ivy leagues to justify high cost. Marketing, HR, operations are nowhere to be found. Which course/schools are marketing mavericks hired from? Where does Amazon/Google marketing, coca cola, PnG, Unilever go to?

[@MenloCoaching]

Many MBA graduates go into finance, consulting and strategy, but it is incorrect to say that MBA graduates do not take marketing roles. For example, the HBS MBA employment report (www.hbs.edu/recruiting/data/Pages/at-a-glance.aspx) shows that 13% of the class of 2020 took jobs in the marketing function.

[@ngvkhtnw22]

The true test of the real value of an MBA is to conduct control groups in a longitudinal study. One random group has an MBA and the second also random group has not. And they both started at entry level positions, and pursue management careers over a period of, say, 20 years. And then you tally up their achievements according to objective criteria such as P/L achievements by size of company, size of workforce under management, personal earnings growth adjusted for company size, etc. Then and only then, one can say conclusively and scientifically whether an MBA adds value to the quality of management. So far not even universities have conducted such a study - the one and only scientifically convincing study. Instead, we get anecdotal evidence, non-inferential statistics and story telling that are largely selective, subjective and 100% unscientific.

[@MenloCoaching]

This is a very interesting suggestion, but would give an incomplete picture of the MBA's value to the degree holder. Although part of the value of an MBA is actually becoming a better manager, another part of the value is improving the way that others, such as colleagues, business partners, and future employers, perceive you. Because top MBAs are known to have high admissions standards, then graduating from one of those programs gives you immediate credibility (regardless of what you learned during the degree). MBAs have value on both sides -- building skills, and granting credibility -- and measuring only the skill-building would be incomplete.

[@ngvkhtnw22]

@@MenloCoaching What you said can be easily incorporated into the study using the 360 degree assessment criteria. In terms of granting credibility, this issue has been long and exhaustively studied by economists in the signaling theory. It doesn't prove the value of the degree, it only helps HR people to eliminate the high volume of candidates and the whole thing has taken on a life of itself. An analogy is for big banks, "it's too big to fail," for MBAs, it's "too many to undo the current practice". In fact, Henry Mintzberg at McGill University did a small study comparing MBA and Non-MBA executives many years ago and found there was no difference in their performance and non-MBA executives actually did a little better. But the study was too small to be considered conclusive.

[@markg1631]

@@ngvkhtnw22 I am not trying to be disrespectful and only passing along my opinion, which many won't agree with- but per my longer post above this is the sort of analysis paralysis that I think strong players should avoid. If you're a strong performer, a top 10-20 MBA will enhance your career and if leveraged correctly will be career altering. I don't have facts to dispute the data you quote above, and am not trying to start an argument, but I've had exposure to 50+ Fortune 500's and clearly see a trend of achievement at the top ranks correlated with MBA's or some equivalent masters degree. Yes I understand that doesn't mean that all MBA"s get to those levels, but I decided to make a BET on myself and once I confirmed that correlation existed, and the MBA was a major enabler of my success. Many senior folks I"ve spoken with (mostly MBA's but even some without MBAs) have a level of confidence that they decided not to subscribe to such types of studies. They made a big bet on themselves, knew a top 10-20 MBA was only going to be a further accelerator, and dove in.

[@sampakpahan6749]

I got into Uc Irvine mba program which is ranked 44th. Is this still good enough to get a 100k job?

[@MenloCoaching]

The 2020 UC Irvine MBA employment report (which is a bit outdated, but the latest one findable on their website) shows a median base salary of $102,500. So, on average, yes. Most graduates will receive some bonus compensation on top of this.

[@andresparra747]

But David, I do not want a job, I want a career. How can achieve that without the job in industry or the MBA

[@MenloCoaching]

Good question! First of all, the MBA is helpful for many steps in a career, not just the first job after graduating. About the broader question, there are many ways to define and achieve career success, but we are focused on jobs in industry -- in industries such as finance, consulting, and technology -- and on how the MBA can help accelerate your progress on that track.

[@sirisaksirisak6981]

HBS knowledge that you can touch .

[@user-ht7gw9ww1c]

Yes

[@lunaski7880]

What does MBA mean? Is it masters in business administration or am I confused…

[@MenloCoaching]

Yes, correct.

[@gambit3950]

You guys should have much more than 200 subs! This is great content! I have been in consulting for 2 years and need to determine if I should get MBA. Have to consider can I climb the firm ladder without it? Can I exit consulting to a top tech company or bank without the MBA? Can I afford not working for 2 years? Can I get my company to pay for it? All good questions to consider

[@MenloCoaching]

There are definitely consulting professionals who achieve direct promotions without an MBA. The advantage of this is clear: you avoid the cost of the MBA. However, an MBA often sets consultants up to make faster promotions for several reasons. First, in a top MBA, you'll probably meet many classmates who work for large corporates, and selling projects to them (or their colleagues) is a big piece of being promoted. Second, an MBA builds your soft skills, which are useful for pitching new clients, presenting to existing clients, coaxing reluctant client staff to give you the data you need to do your job, and interacting with your own colleagues and management. Finally, an MBA is a form of insurance -- if the worst happens and you end up laid off from your consulting firm, or sidelined on an unattractive project, then the MBA gives you a great network to help plan your exit to a new, better job.

[@krpcannon123]

Maybe instead of MBA per se, an M.S. in Finance, Economics, or an Engineering discipline with business electives

[@MenloCoaching]

A top MBA is different from an M.S. in Finance / Economics / Engineering in several ways: 1. An MBA is primarily about leadership development, not about acquiring functional skills. The MBA will develop well-rounded leaders in a way that taking a few electives in business is unlikely to do. 2. Because top MBA programs are highly selective, the credential carries more prestige and opens more doors than most other degrees. The decision between MBA and M.S. depends on many factors such as whether the applicant is likely to be competitive at top MBA programs, their future career goals, and their previous academic / professional background. But for applicants who have the right credentials to win admission to top MBAs, and want to pursue typical post-MBA career paths (e.g. becoming a leader in consulting, finance, business roles in tech), it is hard to beat the MBA.

[@Mikebuddy2229]

Is it possible for a Corporate Paralegal to get into a top MBA program?

[@MenloCoaching]

Yes, this is possible, assuming that other factors in your profile are suitable for an MBA program, such as test scores, career goals, extracurricular activities, and the achievements you've made in your work as a corporate paralegal.

[@Mikebuddy2229]

@@MenloCoaching 329 GRE score and served on several nonprofit boards. Goal is to become a real estate entrepreneur.

[@MenloCoaching]

@@Mikebuddy2229 Although it's not possible to give a definite answer from such a short background, this all sounds positive!

[@bulgingbattery2050]

Good luck getting into IB without an MBA from a top 10 school.

[@MenloCoaching]

It is possible to get into investment banking straight from undergrad, but also from some MBAs that are not in the top 10. For example, Cornell and NYU Stern have MBA programs with great investment banking placement.

[@bulgingbattery2050]

@@MenloCoaching What about an IB position at Goldman Sachs? They will not hire anyone without a top 10 MBA.

[@MenloCoaching]

@@bulgingbattery2050 First, Goldman hires investment banking analysts who have no MBA from any school. These analysts can be promoted without getting any MBA. Second, although for post-MBA hiring, a top-ranked school gives some advantages over a lower ranked MBA, even Goldman hires a handful of post-MBA investment banking professionals from schools outside the Top 10.

[@peter3932]

I get that you guys are trying to promote the MBA, but I feel like you’re mentioning all the good things without any of the drawbacks. For instance, a $150-200k compensation is certainly possible out of these programs, but typically these are with jobs that require 80-100 hours a week and are an utter pain. Yes the MBA is not a “magic bullet” in that it won’t land elite jobs at private equity firms, but more than that, it won’t land great roles in many industries either. Tech and consumer products like MBAs, manufacturing and energy do not. Many companies just don’t care about the “elite” MBA at all. The experience is a matter of opinion. If the MBA stereotype - outgoing, ambitious and energetic - appeals or is relatable to someone, then it may be a good idea.

[@MenloCoaching]

$150-200k is not only possible but typical at top MBA programs. The Wharton MBA employment report, c/o 2019, shows median salary of $150k, plus 60% receiving a signing bonus with median value $25k. Those figures ignore non-cash compensation, such as RSUs granted by nearly all big tech companies, or carried interest received by investors. Our top 2019 MBA graduate compensation-wise will be working for a large PE firm and making around $250k base + $250k bonus opportunity + carried interest worth $1M/year (subject to many caveats about the fund's performance matching historical averages). This is NOT typical, and these jobs are accessible only to people with exactly the right pre-MBA background, but the ceiling on post-MBA comp is very high. More important than immediate post-MBA salary is that post-MBA roles have a path to advance to much higher compensation after that, e.g. becoming a VP or MD in banking, becoming an engagement manager or partner in consulting. Long hours are typical in consulting, banking, private equity, but not 100 hours/week. Post-MBA professionals have junior staff supporting them who can do the all-nighters. Yes, there are jobs that pay $150-200k or more with reasonable hours and no MBA requirement. For example, being a software engineer at Google or Facebook. But the average person finds it very difficult to become a 99.9th percentile software engineer who could be hired in these roles.

[@peter3932]

True, $150k-200k is typical because consulting/banking/buyside are typical. The number is impressive, though less so on an hourly basis and considering that typically those jobs are in expensive cities. Also agreed that MBA can definitely offer good compensation later on, as consulting/banking have good exit opportunities. Many MBAs won’t care about the hours and actually like working more and getting experience faster. Corporate roles, as the Wharton, report shows, will generally pay significantly less, approximately $100-$150k base. These roles offer better work/life balance, but not all corporations offer “MBA roles”. If a company recruits on campus or on the site, they probably have good roles for MBAs. If you try to go for positions or companies that generally don’t hire MBAs, even if they’re business-related, it will be a struggle. Experience trumps the degree in many cases, and compensation will typically be lower. I graduated from an M7 last June and completed a coronavirus job search. My experience is that an MBA can open some great doors but is not as flexible as I would’ve thought.

[@AbhishekBindal144]

@@MenloCoaching How much do Banking VP / MDs and consulting EMs / partners make on average? It'd be great to see a video about average and top level salaries in all the roles you've mentioned in the comments here in top finance (PE / VC), consulting and tech in the first year out of MBA as well as post 5-10 years. I'm considering an MBA in my early to mid 30s, would be great to have some advice / a video on whether it's worth it or not as well.

[@MenloCoaching]

@@AbhishekBindal144 Good question. Other sources will have the best data on compensation for these types of roles, e.g. the Wall Street Oasis compensation database for banking compensation. Bear in mind that once you're in your mid-30s, assuming that you've worked since graduating college and therefore have 12+ years of work experience, it can be harder to win admission to full-time programs because the admissions teams would push you towards executive MBA programs. Career outcomes from EMBA programs are fairly different than full-time MBA programs.

[@MrMusic55123]

Join mckinsey they will pay for full MBA at Harvard and Stanford

[@johnwig285]

Yes but if u get into Top MBAs, u automatically get scholarship along with financial aid if u aint from a rich family. So it ends up below $50K for an MBA

[@robdog114]

is this true ??

[@MsUmwolverine]

@@robdog114 haha, no

[@MariadeLourdesAniesSanch-ze7hf]

I think school

[@233hao]

I started making 75k 7 years later I know make 150k the key to my success -> learning to code on my own. In addition I have an Airbnb and I am an active investor. My boss has an MBA and I make more money than he does. If you look behind your bachelors diploma in small print it says it includes an MBA you just have to look hard, trust me you don’t need this garbage.

[@MenloCoaching]

Learning to code is a great skill and I congratulate you on your success. Without taking away from that, note that an average MBA graduate from a top 10 program makes $200k in their first year out, and more importantly, they have paths to higher future earnings. At the top end of the scale, MBA graduates in private equity frequently make $400k+ in their first year and can top $1M annual income after a few years when counting equity-based compensation. In more common fields, like tech or consulting, it is realistic to reach $300-400k/year within five years of graduating.

[@BillyBobbby]

@@MenloCoaching but in most cases the people you describe in your comment making all this money have absolutely no life outside of work, so yeah they make lots of money, but they have almost no time to enjoy it.

[@DavidWhite-tb9rn]

@@BillyBobbby Yes, nearly all typical post-MBA jobs require more than 40 hours per week of work. Most of the people at the top end of the income scale, like the investors, enjoy their work. Buying and running companies can be an exciting profession. On the other hand, $300k+ is still achievable five years out from graduation even in jobs with barely more than a standard 40 hour week, such as working in the strategy department of a tech company.

[@uiolax1967]

Degrees for the most part do not teach skills.

[@alexrowshie3344]

Engineering/CompSci?

[@user-pl4nx2bt5u]

Here is the problem… HBS and other IVY leagues think that ONLY their MBA is worth it and they ingrain this to their students, who then enforce that in the workforce.

[@SuperAlphaKirby]

Lol i think MBAs are cool but the cost isn't.

[@danielmoore9214]

Massive assumption that you will climb through the ranks of an investment bank because you have an MBA.

[@MenloCoaching]

MBA graduates join investment banks at the Associate level. Bonuses vary from firm to firm, and depending on economic conditions, but total compensation of $250-350k per year is reasonable as a first year Associate. Winning even a single promotion to VP after a few years would then bring compensation to $500k+ per year, which is more than enough to create a good ROI on the MBA investment for most students. People who are already in higher-paying career tracks, such as private equity, have higher opportunity cost to do the MBA... but they don't choose to become bankers anyway.

[@danielmoore9214]

@@MenloCoaching Sounds very good. The figures which you have mentioned sound like top of the market rates, i.e. high striations of bulge bracket and probably in origination or corporate advisory roles. Lower striations of bulge bracket are unlikely to pay that and competition will be tough to progress through each rung in the investment banking ladder. 😃

[@MenloCoaching]

@@danielmoore9214 Indeed, most MBA graduates from top programs who do go into investment banking join in M&A advisory roles, either in M&A product groups or in industry coverage groups. Anyone who wants to dive deeper on banker compensation can use the data at WSO. My figures certainly represent good jobs at good firms (not smaller regional firms or middle market firms) but are not the top of the market. For example, a former client from a few years ago made $400k in his first year at Morgan Stanley as a top bucket Associate in their healthcare group, which was exceptional.

[@danielmoore9214]

@@MenloCoaching This sounds very high to me. I have been a debt capital markets lawyer in London for the last twenty years and regularly work with origination and syndication bankers and I do not think they reach those giddy heights until MD level. Sounds great if you can get it though. I am considering a one year MBA programme though probably in England or possibly Paris or Milan. Thank you for sharing your knowledge on this.

[@MenloCoaching]

@@danielmoore9214 The UK vs. US pay gap is probably a big part of this. I would readily agree that pay is lower in London than in New York.