You’re a few years out of college, sitting in a conference room. It is your first, second, maybe third job you’ve held post-graduation, so you’ve learned a thing or two. You might be taking notes or even called upon to answer a few questions in the meeting. You look around the table at the leaders and decision-makers, the ones running the show and wonder how they got to their positions of power and authority. They seem confident and prepared, like they’ve faced the problem you’re attempting to solve before. If you perused their LinkedIn profiles or their resumes, you might discover a commonality: a Masters in Business Administration, or an MBA degree.
An MBA can certainly prepare you to helm those meetings, though not without investment – both financially and energetically, and for that reason, the return on investment of an MBA degree (a formula its students enthusiastically learn to calculate) is a challenging one to derive. According to Experian, the average MBA costs $66,300, (an MBA from a top MBA program will cost significantly more) though nearly 9 out of 10 MBA students say their degree was worth it, meaning there often can be significant upside.
An MBA is ultimately an investment to be leveraged. Investments require collateral and a certain degree of risk, and they, hopefully, result in reward. How then, should a prospective student evaluate if an MBA is worthwhile for them and their unique situation and goals?
Understand Your Intention
In the wise words of Yogi Berra; “if you don’t know where you are going, you might wind up someplace else.” The key is to start with understanding your intention.
The decision to pursue a graduate degree often comes at a fork in the road in life; when you may be feeling like you want to be on a different path, or even just a steeper path, career-wise than the one you are on. A vague ennui or feeling of boredom is likely not going to translate to a well leveraged MBA degree, though the pursuit will certainly keep you busy. Rather, any MBA hopeful should take considerable time to interrogate where you are, where you want to go, and what you need to do to get there. That will help you decide if an MBA is right for you.
This can be easier said than done, but thankfully excellent resources exist. The book Designing Your Life is phenomenal for helping to determine your dream future and lifestyle, not to mention career, and was spawned out of an innovative and well-attended Stanford University class. The accompanying Workbook can be used to map out what brings you joy and then incorporate those insights into work that inspires you.
Or perhaps you already know what career goals you want to pursue long-term– you’re one step ahead. From there, you’ll need to inventory the skills you possess today compared to the skills your desired future roles require. This will include some inquiry and research. Start by recording your skills- you could refer to prior performance or 360-degree reviews from work or even use a tool like Strengths Finder 2.0. In order to understand the skills you’ll need down the road, you can conduct online secondary research or reach out to some folks on LinkedIn with industry experience you’re targeting and see if they’re open to chatting.
MBA Pro Tip: if you have a warm, straight-to-the-point intro suggesting a few times you are free, you’re more likely to get a reply.
Finally, you’ll want to look at programs and schools that have a strong reputation of excellence in the skill areas you’re looking to enhance. In an MBA program, students can typically select from a general management curriculum or a more specialized track, and some schools are renowned for specific departments. For example, the University of Chicago Booth School of Business is touted for its rigorous quantitative courses. Examine all areas of schools’ offerings- from experiential learning opportunities to the backgrounds and networks of their faculty and alumni. The best MBA programs have clinical professors that are highly connected in their industries.
We’ve heard students express myriad reasons for obtaining their degree, including sports professionals who are taking on more of the business and operations aspects of a club to third-generation family business descendants who want to be prepared for the responsibility they’re inheriting to first-time people managers who seek to develop some hard skills. Overall, an intentional MBA is much more likely to be a successful MBA- with the measure of success defined by you, of course.
Once you’ve outlined a clear reason for pursuing an MBA and potentially picked out where you’d like to do so, there are a few options for how you pursue your MBA degree. There are a many options to consider, including:
- Full-Time or Part-Time
- Traditional or Executive
- Student Loans, Employer-Sponsored or Self-Pay
- Timeline (Accelerated or Standard)
The Type of Program (Full-Time vs. Part-Time, Traditional vs. Executive, In-Person vs Hybrid vs Online)
One of the key choices you’ll need to make is whether to go full-time or part-time. Both will require a significant time commitment, there’s no bypassing that, but a full-time MBA will require your daytime, weekday availability for classes and meet-ups, whereas a part-time MBA will depend on you taking night or weekend classes, alongside plenty of weekend homework and study sessions.
There are evident trade-offs to each arrangement. A full-time commitment does allow for more mental bandwidth to devote to classes and projects, though the looming necessity of financial pressures and recruiting for a full-time role (unless you are employer-sponsored, more on that later) may add additional weight to an already intense season of life.
A part-time degree allows you to continue to earn full-time income, though burnout risks are heightened due to a lack of free-time and competing priorities. If you are a more experienced candidate (with on average 14 years of work experience), an Executive MBA program might be the best choice for you, as it allows for more tailored schedules around its students’ higher-level roles. The resulting EMBA degree is largely similar to the traditional MBA.
Additionally, if a prestigious name on your diploma is paramount, school choice can be an important factor to the decision-making process, as Poets & Quants states that your likelihood of admission to some schools can as much as quadruple when pursuing a part-time option over a full-time commitment. Many recruiters and hiring managers agree that a degree from a top MBA school does hold more weight than a lesser-known school.
If part-time seems like a more feasible option, make sure your employer is supportive of your decision. By taking the time to highlight the value of this educational milestone, you may even be able to negotiate early-outs ahead of class days or work-from-home days post. Another relevant decision is whether or not to pursue a sponsored MBA, meaning that some or all of the cost is covered by an employer. These arrangements will usually require the recipient to return to the organization for a set number of years post business school, which could be worth it or not, it all depends on each applicant’s unique situation.
Financing Your MBA
Student loans are also an option, with many students making the calculation that the interest payments are worth the post-MBA salary gains. According to mba.com, the median starting salary for MBA graduates is $115,000. Do the math- it might make sense to borrow.
MBA Timelines
As if there are not already enough variables to consider, an MBA can be flexible in terms of how long it takes to complete. Some institutions offer 1-year accelerated programs, which may be especially appealing for those with an undergraduate business degree, as this may allow you to test out of some core classes. Typically, though, a full-time MBA program takes about 2 years, and full-time programs allow for a summer internship to apply your new skills midway through.
Part-time programs can offer flexibility with how long they take to complete, so students can ebb and flow their workloads with the seasons of life. Online programs are also an option regarded for their flexibility. For example, University of Michigan’s Ross School of Business estimates their online program to take 3-4 years to complete.
Let us not forget the coursework and extracurriculars associated with MBA programs as well, which can be both as impactful and time-consuming as class time. There will be more social engagements and networking opportunities than there are days in the week, which will help you engage with your studies and broaden your perspective. Understanding your free-time and whether that number is fixed or variable is an important consideration to determining if you can invest fully in the facets of an MBA program- inside and outside of the lecture hall. Knowing your personal needs and setting solid boundaries during your program so you don’t stretch yourself too thin is paramount.
This is where the value of an MBA gets extra squishy. It is impossible to place a dollar value on building relationships. The network and connections you build while pursuing an MBA could get you a job one day, connect you to valuable resources, teach you something new, or just be someone to lean on in tough times– the benefit of all is immeasurable
So What’s the ROI?
Unfortunately, there is no magic formula. Ensuring you are pursuing an MBA for the right reasons and have the proper resources- both monetarily and mentally- will set you up for success in your MBA pursuit, but what you make of it is up to you. Yes, the homework begins before you even set foot in your first classroom.
Why An MBA: interested in learning more about why professionals get an MBA degree? Check out these stories