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There's been all kinds of trash talk about whether the modern day graduate with an MBA is worth his or her salt.....
Last week's article in Ad Age" adds fuel to the fire, much to the chagrin of American Universities. The article, entitled "M.B.A.'s May be a Marketing Liability" highlights a recent survey of 22 consumer products companies, including General Mills, Post, Nestle, Pfizer, Hazbro and others. It also used scanner and panel data from VNU’s ACNielsen.
In short, the study shows that marketers from companies with significant market-share gains are far less likely to have M.B.A.s than those from companies posting significant share losses. Further, the study shows that marketing executives from underperforming companies were twice as likely to have been recruited out of M.B.A. programs than marketing executives from out-performing companies.
The article is worth a read, and here are a few more highlights (as quoted or as summarized from the article):
In underperforming companies 90% of executives had MBA degrees vs. 55% in outperforming companies.
The out-performers in the survey got about a fifth of their marketing executives from undergraduate programs and another fifth from advertising or marketing agencies or other industry vendors. None of the executives from underperformers had been recruited as undergrads and only 5% came from agencies or suppliers.
Out-performers averaged one marketing executive for every $37.9 million in sales, compared to one for every $28.5 million in sales at the underperformers. Staffing levels were also higher at companies with a high level of marketing outsourcing.
Out-performers in the survey placed a much higher value on personal and professional development once they hire people. The survey showed the share winners far more likely than the losers to support attendance at industry conferences and seminars, involvement in industry associations and peer-share groups, internal training groups, formal mentoring programs and graduate-level seminars.
In a consumer driven society, we need people who understand business and think like customers … people who understand how to create comprehensive, measurable user experiences that drive solid results. The article indicates there's a strong benefit in hiring individuals with practical, hands-on experience and maturity... especially in competitive markets. However, as product commoditization places an increasing emphasis on the comprehensive customer experience, there's also increasing demand for individuals with new skillsets; individuals who understand cross-channel experience management, integrated marketing, interaction design, usability, cultural ethnography, analytics and more.
What’s your opinion of the modern day M.B.A.? When you look at the performance of individuals possessing an M.B.A. degree vs. other individuals in comparable positions, do you find anything that's missing? What qualities are most important as you consider hiring innovative, seasoned professionals? Weigh in by leaving a comment!
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Comments
I have a hard time believing in the value of M.B.A.s when I see online ads for Phoenix Online University everywhere. It cheapens the term and projects a negative image. Plus, if I receive another direct mail from Queen's University about their Executive M.B.A. I'm going to [fill the blanks].
Posted by: Spamouflage | 03.30.06
Actually, I read this and immediately sent the editor a letter that they published this week...here is what I wrote:
Re: (MBA's May Be a Marketing Liability). Before I would pay much attention to this new study, I would make sure that the authors and those who turn it into "news" used some basic statistical concepts (much of this can be learned in an MBA program). For example, what goes into "marketing" is so different at every firm (is it advertising, sales, PR, advise on product development, etc.) that it's not even clear what marketing means, let alone what an MBA contributes to sales figures. In short, to what extent, if any, is having an MBA degree really related to sales after controlling for all possible alternative explanations and are any differences really statistically signficant. Although it does make for a good headline, laying the key explanation of systematically lower sales on an MBA seems like a stretch.
Posted by: Allen Weiss | 03.31.06
Thank you for the enlightening read. I have been grappling with the idea of pursuing an MBA (I even spoke to a rep from the referenced U of Phoenix at a trade show). For me the question has been more about diminishing returns on investment in the evolving marketplace. I still do not plan on dismissing the possibility, but I am glad to have this additional perspective now.
Posted by: Michael Spilzinger | 03.31.06
The biggest value in doing an MBA was how it actually helped provide context and theory to things I had already experienced in business. I think doing an MBA at 30 something is a bit more valuable than doing it at 20 something because so much of an MBA is about competing theories. I did a rather non-traditional MBA that was focused on design management, so it wasn't the usual accounting focused MBA, and was a little more holistic in how it looked at problems. The other good thing about having an MBA is it provides you the vocabulary to "call bullshit" on other MBA's.
Posted by: karl | 03.31.06
I agree w/ Allen ... I'd like to see the underlying methodology of the study ... there's a lot of spurious correlations out there ... correlation is not cause ... it's hard to believe having an MBA hurts one in marketing ... it's a general business admin degree ... you don't really go that "deep" in most of the areas, but you have a rounded-out view of the different functions w/in a business (operations, marketing, finance, HR, etc.). I've met a lot of idiots w/ MBA's and some very smart people who dropped out of college ... at the end of the day, the most successful people in large organizations have good IQ's, but probably better EQ's and political acumen.
Posted by: Michael Perla | 04.01.06
I think there are two underlying issues. One issue is whether people get an MBA to be more MARKETABLE or get an MBA to be a more credible and more educated marketing professional. I think it's the former and I believe that's the main reason why outperforming companies have fewer MBA's than underperforming companies. I think we have a case here of "Too many Chiefs and not enough Indians" in the underperforming companies.
The other issue is actually the employer. For the most part I believe employers have been oversold and too focused on the MBA. Many companies I know have gone from "nice to have" to "must have" honestly believing that marketers must have an MBA in order to be successful on the job. This line of logic has prevented them from considering non-MBA candidates with successful track records in the marketing profession.
I like Leigh Duncan's article because it seems to validate what I have observed in an 18 year career with Toshiba in an executive marketing and product management position. I have seen lots of MBA holders come and go. The ones that leave (or asked to leave) are the ones trying too hard to validate a theory they learned at school. The ones that stay are the ones that have a knack for determining and predicting the "unmet" needs of the customer and have a personal business philosophy and beliefs that are customer centric.
I'll close by stating that "marketing" existed long before the first MBA and marketing degree were ever issued. Frankly speaking, I do believe that Marketing is the OLDEST profession and that Jesus Christ started the Church with 12 marketing managers.
Posted by: Conrad Mangapit | 04.05.06