Value of an Elite MBA

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Fredfig
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Value of an Elite MBA

Post by Fredfig » Fri Feb 23, 2018 11:33 pm

I love the philosophy of this website and the people on it. You folks do a tremendous job of focusing on real, verifiable value both in investing strategies and in life more generally, if you have the time, I'd love to get your thoughts on the value of an Elite MBA (Top 5) in light of its costs.

Question:

I'd love to hear your thoughts on the value of going to an elite MBA (Harvard, Stanford, UChicago, etc.) in light of its sky-high costs. This would be for someone not interested in Investment Banking or Management Consulting. Have any of you taken this path, and if so, how did it turn out?

Context:

I was accepted to a Top 10 MBA program out of undergrad. Turned it down because I had no work experience to contribute to the classroom beyond internships. I went after another opportunity to grow a business, and have been considering the merits of going in the next 2-3 years.

Pros:
1. Pedigree: You get credibility having a good school on your resume.
2. Network: Due to the selectivity, a number of very talented people are brought together there. Odds are, some of those people will end up doing cool things you can get involved with.
3. Career Advancement: I know that some positions require or prefer an MBA, although I'm unsure to the degree to which this is true in all cases.
4. Case Study Approach: Most top schools are making the classes discussion-based, which can help with developing your own personalized expertise in business decision-making.

Cons:
1. Ludicrously expensive.
2. If you don't like Investment Banking or Management Consulting, you've wiped out half your opportunity. Most top schools send ~50% of their students there.
3. Actual technical skills added are minimal.
4. If you look at the MBA landscape right now, it's increasingly becoming a world of "haves" (elite MBAs, largely driven by network) and "have-nots", and this could be an indication that the underlying value is going away, and that it is just delayed at the higher-end schools due to prestige.

I'm struggling with this decision and would love your guys' and gals' advice. With an MBA approaching the cost of a house, I'd like to take your collective advice and avoid being "MBA Rich, Cash Poor" as is the case when someone takes on too big of a mortgage.
"Don't invest for yourself; invest so that you can do good for you family, your community, and your world." - Carl Ackermann

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whodidntante
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Re: Value of an Elite MBA

Post by whodidntante » Sat Feb 24, 2018 12:03 am

My employer paid for a part-time MBA. It was a ton of work but I enjoyed the subject matter and the connections I made. If I were going to shell out 100k+ of my own money, I would have a specific career path in mind. And I would go to the school that is known for that. You are partly getting an exclusive tattoo, so make sure it is the correct one.

HermosaSurfer
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Re: Value of an Elite MBA

Post by HermosaSurfer » Sat Feb 24, 2018 12:05 am

I suspect the Boglehead approach would be to get your employer to pay for it through an executive or part-time MBA. I really enjoyed my MBA experience (which my employer funded) and have made more money as a result.

It's not just the network, it's the signaling (what you call Pedigree) which makes an "elite" MBA valuable. A friend of mine joked that it's the white collar union card. A significant number, but not all, of the recruiter requests I get from LinkedIn reference the MBA.

You've stated what you don't want to do (investment banking nor management consulting), but you haven't stated what you want to do. Before you can answer the question "is it worth it?" you ought to try figuring that out.

One last piece of advice because this is the Bogleheads Forum. If you get the "elite" MBA don't buy the expensive car/house/vacation to show your friends you made it. You probably already knew that, but just in case...

Best of luck to you!

Hermosa Surfer

Jacotus
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Re: Value of an Elite MBA

Post by Jacotus » Sat Feb 24, 2018 12:22 am

I think you have a fairly accurate and dispassionate analysis of the pros and cons.

Bogleheads often counsel that buying a house should be a lifestyle decision and not an investment decision. I think that here, too, committing 2 years of your life to an expensive, elite MBA school, as well as altering the course of your career trajectory, should primarily be a lifestyle decision, not an investment decision. Do it if you want to and you can afford it. [The calculation of affordability would require somewhat uncertain projections if you would have to take on debt.]

Rayandron
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Re: Value of an Elite MBA

Post by Rayandron » Sat Feb 24, 2018 12:41 am

My biggest conclusion from undergrad was that surrounding yourself with and making friends with really smart people has a tremendous positive impact on your life in both financial and non-financial ways. For that reason, even though I did not care for the consulting industry I worked in after undergrad (and I knew i-banking/quant finance wasn't for me), I knew I wanted to attend a full-time MBA program.

I studied HARD for the GMAT (4-5 hours/day, 7 days/week for 8 weeks) and got a 99th percentile score. I believe the studying was time well-spent as I received 90-100% scholarship offers at 2 schools that are consistently ranked in the 8-15 range (or better) by all the major publications. In my opinion this so-called 2nd tier of the "elite" schools is the sweet spot for value because it's easier to get a significant scholarship/discount off the sticker price at these schools, but the quality of your classmates is still very high. I would argue the top 30+% of the class at any of these schools is basically indistinguishable from your typical Harvard/Wharton/MIT/etc MBA student.

How did it work out for me? I got my first job out of bschool thanks to bschool networking to run a very small business that I grew and sold a couple years later, and I got my next job (also a small business leadership role) thanks in no small part to having an MBA from the same program as the company's owner. So yea, an MBA can definitely be worth it for people not going into consulting/finance, but I would recommend being strategic about where you go and how you can minimize the financial cost.

Edit: Forgot to mention, my wife has an MBA from one of the top 5. She took out a bunch of loans to do so and agrees that I got a better deal on my MBA than she did. My non-Top 5 MBA was plenty adequate to signal to her I was no dummy when we met and started dating. :beer

Edit #2: I would also recommend applying to a lot of schools. Acceptance letters and (especially) scholarships are something of a crap shoot imo. I applied to 9 schools to mitigate this to the extent possible.
Last edited by Rayandron on Sat Feb 24, 2018 10:14 am, edited 1 time in total.

hookemhorns
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Re: Value of an Elite MBA

Post by hookemhorns » Sat Feb 24, 2018 1:40 am

Rayandron wrote:
Sat Feb 24, 2018 12:41 am
My biggest conclusion from undergrad was that surrounding yourself with and making friends with really smart people has a tremendous positive impact on your life in both financial and non-financial ways.
Bingo. This was my experience at a top 10 MBA program. The top programs bring a lot of value beyond the tangible compensation bump. You meet intelligent people, build good relationships, and also have experiences that would be difficult to replicate elsewhere. Personally, I accepted a long time ago that not everything in life was about money and I figured a top MBA was a good bet even if it was a wash financially.

Looking at it from a pure financial standpoint, the return on a MBA is a function of how much you made pre-MBA and what field you enter post-MBA. In my case, I had good compensation pre-MBA (low 100) and more than doubled it my first year post MBA, so the breakeven was very quick. However, I can also imagine a scenario where the return would have been poor or even negative had a chosen a different career path or struck out on a few interviews and ended up at a second or third tier company in my field.
Fredfig wrote:
Fri Feb 23, 2018 11:33 pm
If you look at the MBA landscape right now, it's increasingly becoming a world of "haves" (elite MBAs, largely driven by network) and "have-nots", and this could be an indication that the underlying value is going away, and that it is just delayed at the higher-end schools due to prestige.
This is an astute observation by the OP. In my opinion, if you're paying 100% out of pocket you should only attend a top 10-15 program. You need either scholarship money or employer reimbursement for a lesser ranked school to make sense. I would not attend a school outside of the top 30 unless 1) you absolutely cannot attend a better school, perhaps due to location restrictions and 2) the tuition is fully paid by either your employer or the school. There are a ton of bad MBA programs out there which add almost no value and make no sense if you're paying out of pocket.

daggerboard
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Re: Value of an Elite MBA

Post by daggerboard » Sat Feb 24, 2018 9:57 am

I have an MBA from a Top 5 school, so keep that in mind as I answer. I also have been hiring MBAs post my own MBA for 15 yrs.

My thoughts:

a) Only go to a good school (say top 50) otherwise your time is wasted IMO
b) Only go to a top school (say top 15) if you are paying your own way otherwise your money is wasted
c) Go full time if you want a career or major income change; vs part-timers you are much more advantaged in getting a big pay jump (why would current employer pay your much more? for a piece of paper?) and you have more opportunities to pick new industries (say switch from banking to tech etc); also as a full timer your network will be much richer - less of a network of acquaintances, more network of good friends
d) Dont go to bschool if you arent good w people - the network - next the the "stamp of approval" of your school brand - is the most important value; if you cant build a network or leverage it later, the value of an MBA will be diminished
e) Do go to a bschool where you dont click - i.e. if the school has a frat house vibe and that isnt your solo cup of keg beer, or if the school has a very international vibe and you arent interested in venturing our of your circle you wont make meaningful friends and the network value is diluted; also bschool needs to be fun for you to survive the schedule; if you feel left out its gonna be hard
f) You need to view everything in context of your starting point; if you are already making $150k and are happy with your career prospects, then the value of going to bschool - unless you think you can make it in banking/PE/consulting - will be slim
g) Forget your current career preferences - most folks will change their mind in school several times over. Also, the career path needs to chose you. Many folks who had no interest in working for consulting or banking end up there because they never really understood what it was about before and many folks who do want that career path never got a nibble from one of those firms and went to do something awesome elsewhere.
h) I dont see value of top MBA diminishing. I have heard that siren song for 20 years now and I have not seen any change of degree perception personally. HOWEVER there are way more low end schools these days - see a) and b)

For me - and your mileage will vary - I made my MBA investment (direct costs plus lost wages from full time attendance) back in 3.5 years and to-date I have an IRR of around 25%. I paid full fee on my own, no scholarships, no employer help. Since graduating I spent roughly half my time in industry and half in consulting.

wrongfunds
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Re: Value of an Elite MBA

Post by wrongfunds » Sat Feb 24, 2018 10:43 am

My son got in to the top 3 MBA program. His employer will reimburse the tuition if he comes back to them after the completion but that would be taxed. Even though he was thrilled to get in to the program, the decision to actually join was agonizing given the loss of employment income for two years and the cost of the program itself. The school name starts with `dbluew' :-)

I was actually going to ask this question on this forum to help him nudge towards joining just so I get to brag about him!
Last edited by wrongfunds on Sat Feb 24, 2018 10:48 am, edited 1 time in total.

stan1
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Re: Value of an Elite MBA

Post by stan1 » Sat Feb 24, 2018 10:47 am

It gives you an expensive fishing license, but you still have to fish. If you get the degree but don't put yourself on a track to take advantage of it you might find you didn't get good value.

Jags4186
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Re: Value of an Elite MBA

Post by Jags4186 » Sat Feb 24, 2018 11:52 am

I still think the biggest advantage of a elite MBA and elite undergrad is the opportunity for jobs others won't even know are available. There are many companies that only recruit from a small collection of schools, and surprise they are the elite companies that pay the best.

ny_knicks
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Re: Value of an Elite MBA

Post by ny_knicks » Sat Feb 24, 2018 3:09 pm

Rayandron wrote:
Sat Feb 24, 2018 12:41 am
I studied HARD for the GMAT (4-5 hours/day, 7 days/week for 8 weeks) and got a 99th percentile score. I believe the studying was time well-spent as I received 90-100% scholarship offers at 2 schools that are consistently ranked in the 8-15 range (or better) by all the major publications. In my opinion this so-called 2nd tier of the "elite" schools is the sweet spot for value because it's easier to get a significant scholarship/discount off the sticker price at these schools, but the quality of your classmates is still very high. I would argue the top 30+% of the class at any of these schools is basically indistinguishable from your typical Harvard/Wharton/MIT/etc MBA student.
Went to a school in the same range w/ large scholarship. Would eco this posters sentiment. Unless you are going for PE/VC most of the schools in the 10-15 range will offer the same opportunities as those ranked higher and often offer significant scholarships to attract top students.

You'll see a lot of people emphasize going part-time with an employer paying for it. That might be the right path for some but that route leads to sacrificing the majority of the benefits an elite full-time program would bring. You get one chance at an MBA use it wisely.

Pegging an actual "value" on an elite MBA is tough. Everyone uses it for something different: career change, expanded network, immediate bump in compensation, access to the top firms, to take a break/have fun, personal/management development etc. The more of these boxes you check the more "value" you'll get.

Consulting/IB are the most common paths and the ones that are the highest compensated. But they aren't the only options. Technology, marketing and rotational development programs all jump out too. Find MBAs who went into the career path you're targeting and get their opinion.

Personally, it was one of the best decisions I ever made. Talking with my classmates the overwhelming majority of them seemed to agree.

Hillview
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Re: Value of an Elite MBA

Post by Hillview » Sat Feb 24, 2018 3:42 pm

Build a calculator and figure out your break even based on current salary and MBA cost to you. Don't forget you will have living expenses in addition to the school costs. In the 1990s when I did the calculator the break-even for me (I was well paid right out of school, making what a Harvard MBA was making, according to US News and World report the year after b-school and managing MIT/Sloan school and Harvard MBA kids at the time) was 15-20 years which seemed like a long time. I didn't go (or apply -- might not have even gotten in!) and have no regrets. I think a calculation helps frame things up. I do agree with OPs if you are going into finance that may be another calculator altogether.

drk
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Re: Value of an Elite MBA

Post by drk » Sat Feb 24, 2018 3:47 pm

Hillview wrote:
Sat Feb 24, 2018 3:42 pm
I was well paid right out of school, making what a Harvard MBA was making, according to US News and World report the year after b-school and managing MIT/Sloan school and Harvard MBA kids at the time
Just to clarify, are you saying that you were managing fresh MBA grads and making the same amount that they were?

Hillview
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Re: Value of an Elite MBA

Post by Hillview » Sat Feb 24, 2018 3:53 pm

drk wrote:
Sat Feb 24, 2018 3:47 pm
Hillview wrote:
Sat Feb 24, 2018 3:42 pm
I was well paid right out of school, making what a Harvard MBA was making, according to US News and World report the year after b-school and managing MIT/Sloan school and Harvard MBA kids at the time
Just to clarify, are you saying that you were managing fresh MBA grads and making the same amount that they were?
Sorry, to clarify I was making more than those working for me (this was a couple of years later maybe ~'97), at the time (~'95) of the calculation I was making what Harvard MBAs were making according to US News and World report (appreciate that this was likely an average from the magazine and that there was a wide range of salaries out of school) -- was during the dot-com era and I was lucky to be in this space at this time.

LeSpy
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Re: Value of an Elite MBA

Post by LeSpy » Sat Feb 24, 2018 4:54 pm

The value of an elite MBA vs tier 1/2/3 MBA is IMO no different than comparing the value of most degrees obtained at an institution that is considered elite for that specialty. So in that sense, education/degrees in general is a world of haves and have-nots more or less.

So if post-MBA, you are looking to enter the upper echelons of social connections (IMO most important factor), pay & prestige then an elite MBA is certainly very helpful if not required. Otherwise, it will still be a good learning experience whose eventual results in the future may not be clear. That isn't necessarily bad.

I found the MBA very educational in the sense that it revealed to me how large corporations work and the economy is managed. Some of the content was revealing and some of it was quite comical/magical thinking. After I was done, I was turned off from a good bit of the potential career paths I was originally interested in.

informal guide
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Re: Value of an Elite MBA

Post by informal guide » Sat Feb 24, 2018 8:16 pm

The scholarship situation and funding at top 10 schools is bizarre, IMHO. My child, several years out of college with ample resources available between child and parents, applied to 4 full time top 10 programs a year ago, got into three with one wait list. With no request or financial aid forms submitted, one school offered around 10% of cost as scholarship, another offered no scholarship aid, and the third offered 38% scholarship - -all for each of the two years. These scholarships were simply included in the admissions letter - -my child and I were both amazed!

A number of my child's colleagues at the top 10 B-school are there with a full ride from consulting firms (read McKinsey, Bain, etc), structured as loans from the firms that will be forgiven over the subsequent two year period if they go back to the consulting firm. According to my child, many of those folks don't take schoolwork as seriously as others who are paying their own freight (but boy do they crank out beautiful team presentations quickly!)

My child reports that the Banking firms are becoming much less popular on campus, because of lifestyle issues. The void they leave is being replaced by tech firms, ranging from Amazon (a huge hiring force today for elite MBAs, even though there are mixed reviews for its work environment), Microsoft, and Google to start-ups.

JBTX
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Re: Value of an Elite MBA

Post by JBTX » Sat Feb 24, 2018 9:05 pm

Fredfig wrote:
Fri Feb 23, 2018 11:33 pm
I love the philosophy of this website and the people on it. You folks do a tremendous job of focusing on real, verifiable value both in investing strategies and in life more generally, if you have the time, I'd love to get your thoughts on the value of an Elite MBA (Top 5) in light of its costs.

Question:

I'd love to hear your thoughts on the value of going to an elite MBA (Harvard, Stanford, UChicago, etc.) in light of its sky-high costs. This would be for someone not interested in Investment Banking or Management Consulting. Have any of you taken this path, and if so, how did it turn out?

Context:

I was accepted to a Top 10 MBA program out of undergrad. Turned it down because I had no work experience to contribute to the classroom beyond internships. I went after another opportunity to grow a business, and have been considering the merits of going in the next 2-3 years.

Pros:
1. Pedigree: You get credibility having a good school on your resume.
It’s been several decades, but I went to one of the 15 top 10 business schools. :wink: I went straight from undergrad, had good gmat and grades and got partial fellowship - maybe roughly half tuition. Indeed it does help at times. It really depends on who is looking at the resume. Obviously the farther you go in career the less difference it makes.

2. Network: Due to the selectivity, a number of very talented people are brought together there. Odds are, some of those people will end up doing cool things you can get involved with.
This is true. There were some impressive people there. A good friend of mine there had a dad who was CEO of major company. He was very entrepreneurial and I might have been able to work with my friend but I was too green and too conservative to realize it. I am generally introverted so I haven’t taken full advantage of these contacts. One of the people in the class before me who I saw but didn’t really know is now a household name.
3. Career Advancement: I know that some positions require or prefer an MBA, although I'm unsure to the degree to which this is true in all cases.
If you want to be in upper financial management (or other corporate management) it is not an absolute prerequisite but it is a big “nice to have”. Either that and/or CPA. If you don’t have CPA then I’d say you need MBA.
4. Case Study Approach: Most top schools are making the classes discussion-based, which can help with developing your own personalized expertise in business decision-making.
It really depends on how it’s done. Not having much work experience I don’t think I gained as much insight as I could have. You read a 3 page Harvard business school case and then discuss it. I guess it has its merits. But at times seems superficial.

Cons:
1. Ludicrously expensive.
Yes it is. If I had to do it over again now would I spring for the full cost of a top 10 mba at today’s prices. I’d probably say no. Luckily for me the cost was manageable with the fellowship and before some of the obscene price inflation. Even then when I was sitting in class I would think am I really getting $xx per class hour for what I’ve spent - although you really can’t look at an mba that way.
2. If you don't like Investment Banking or Management Consulting, you've wiped out half your opportunity. Most top schools send ~50% of their students there.
Agree. If you are not gunning for either of those two it may make sense to get in the highest ranking state / (balanced with affordability including any scholarships )school you can get into.
3. Actual technical skills added are minimal.
Mostly true. I had my undergrad in accounting. I worked far harder in my accounting classes than mba classes. Most of what I covered was somewhat redundant to what I had previously learned.
4. If you look at the MBA landscape right now, it's increasingly becoming a world of "haves" (elite MBAs, largely driven by network) and "have-nots", and this could be an indication that the underlying value is going away, and that it is just delayed at the higher-end schools due to prestige.

I'm struggling with this decision and would love your guys' and gals' advice. With an MBA approaching the cost of a house, I'd like to take your collective advice and avoid being "MBA Rich, Cash Poor" as is the case when someone takes on too big of a mortgage.
Good luck. It is tough decision. A big name mba can open doors, but you have to be of the social/networking nature to fully take advantage of it. If I had worked 3 years and making decent money and had to pay the whole tuition myself I doubt I would have done it. That was one reason I went ahead and did it. Having financial assistance, and some help from parents made it an easy decision for me.

Malinois000
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Re: Value of an Elite MBA

Post by Malinois000 » Sat Feb 24, 2018 10:50 pm

Elite MBA programs open doors that tier 2 and 3 schools do not. I saw that clearly through my kids that both attending top 10 schools. Good luck.

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patrick013
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Re: Value of an Elite MBA

Post by patrick013 » Sat Feb 24, 2018 11:03 pm

Went to a smaller school myself with 100% corporate tuition
reimbursement. Took 5 years at night, very easy schedule.
There's enough jobs around but certainly enough applicants
also. Company relocated, lost a few big customers, downsized,
all the things that don't help one's career. Other jobs weren't
bad but not alot of upward mobility, more buyouts etc.. Recently
planning on becoming a brook trout fisherman.

Besides the CPA only crowd the BSAccounting/MBA thing with
Finance or Economics specialization was supposed to catch the
big fish in the corporate circle as well as the Engineering/MBA
thing for operations development. I think it still should. The
feather in the hat is still the feather in the hat. Could be very elite.
age in bonds, buy-and-hold, 10 year business cycle

itstoomuch
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Re: Value of an Elite MBA

Post by itstoomuch » Sat Feb 24, 2018 11:13 pm

OP, so are you happy in what you do now?
Where are in you in your compensation? Personally and Work wise?
Did you attend a well-known, well-regarded undergrad school? How well did you do?
YMMV
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Big Dog
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Re: Value of an Elite MBA

Post by Big Dog » Sat Feb 24, 2018 11:51 pm

attended a top ~10 MBA program and EVERY job I have had since graduating has been obtained via my b-school classmates. Your class network cannot be over looked.

magicrat
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Re: Value of an Elite MBA

Post by magicrat » Sun Feb 25, 2018 10:21 am

OP - If not banking or consulting, what is it that you DO want to do?

Helo80
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Re: Value of an Elite MBA

Post by Helo80 » Sun Feb 25, 2018 10:26 am

Jags4186 wrote:
Sat Feb 24, 2018 11:52 am
I still think the biggest advantage of a elite MBA and elite undergrad is the opportunity for jobs others won't even know are available. There are many companies that only recruit from a small collection of schools, and surprise they are the elite companies that pay the best.


I agree --- besides the networking aspect with fellow students, it's the networking with companies that are seeking top talent for jobs that are not posted on Indeed.com or any other job boards.

Nowizard
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Re: Value of an Elite MBA

Post by Nowizard » Sun Feb 25, 2018 10:38 am

Child and spouse with MBA's, one from the top school in most polls, one from a top 15 school. Both in same area of work. "Top school" earns approximately 10% more than "Top 15" and obtained degree three years later. Both benefit from networking, but "Top school" networking is more widespread. What I mean is that excellent schools in a given area may be preferred by employers over a "Top 15" school due to local bias, but "Top school" is desired anywhere with a few exceptions. "Top school" may not be offered a job, for example, in a company having none from that school if they feel their needs are met by one from a well regarded school. "Top 15" had a more positive experience with teachers and earns a salary well above average while having fewer costs associated with the degree. When one has attended a school in the top 20, I suspect that it is easier to get a job with a "Top school" reputation but advancement is likely to be related to performance.

Tim

stan1
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Re: Value of an Elite MBA

Post by stan1 » Sun Feb 25, 2018 10:55 am

Malinois000 wrote:
Sat Feb 24, 2018 10:50 pm
Elite MBA programs open doors that tier 2 and 3 schools do not. I saw that clearly through my kids that both attending top 10 schools. Good luck.
This I agree with. Spending almost as much as you would for a Top 10 school on a Tier 2 or 3 school is where the ROI really falls off. There may be some geographic situations where a Tier 2 or 3 school is viewed very highly within that city or state because there are a lot of graduates from that same program (for example Pepperdine in Los Angeles but elsewhere people may not have ever heard of it).

jminv
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Re: Value of an Elite MBA

Post by jminv » Sun Feb 25, 2018 2:02 pm

One of the cons you didn't mention was the lost earnings while you are in the program. The two year MBA program itself is outdated and is being replaced by shorter programs that provide a greater ROI. Consider INSEAD (France/Singapore), depending on the range of things you want to do post-MBA, particularly if it involves working internationally.
Last edited by jminv on Sun Feb 25, 2018 2:16 pm, edited 1 time in total.

oilrig
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Re: Value of an Elite MBA

Post by oilrig » Sun Feb 25, 2018 2:15 pm

Agree with the poster above. An MBA from Texas A&M will open a lot of doors in Houston and Dallas, but in California or New York probably not. Location matters.

Pacman
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Re: Value of an Elite MBA

Post by Pacman » Sun Feb 25, 2018 2:39 pm

I would be most interested in hearing from people who attended an Elite MBA and regretted it. I know they are out there.

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Watty
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Re: Value of an Elite MBA

Post by Watty » Sun Feb 25, 2018 3:36 pm

No MBA background(I was a techie before I retired) but a few general comments;

1) If you go back to school full time then be sure to factor in the lost income, and lost retirement savings into the costs. That could be comparable to the tuition costs when you factor in benefits. While you are in school you may have no disability insurance so there is a small risk that you could be disabled and in a bad situation.

2) Carefully and brutally consider what your natural people and management skills are and if that fits in with your long term goals. Before I retired about half the MBA's that I ever dealt with were pretty much glorified accountants that might have been good with spreadsheets but really were not good people managers. I doubt any of them ever made it into senior management.

3) No training program has a 100% completion rate. Be sure to know what the graduation rate is before you start the program.

Out of curiosity(that I then got a bit obsessed with) I looked at the Harvard MBA website where I assumed that this would be easy to find but I did not have any luck in finding out what the graduation rate for their MBA program is.

If they did have a high completion rate it seems odd that they don't post that on their statistics page.

I decided to dig a bit deeper, here is where they list some of their MBA programs statistics,

https://www.hbs.edu/about/facts-and-fig ... stics.aspx

It looks like a bit over 1,800 students start the MBA program each year.

I dug some more and it looks like they graduate a bit over 900 MBA students a year;

https://www.hbs.edu/recruiting/data/Pag ... ?year=2017

I might not be looking at that right but that seems to imply that only about half of the people that start the Harvard MBA program actually finish it. That seems unrealistically low to me so you might want to dig into that more. I spot checked a couple of other elite MBA programs and while they all give statistics on how selective they were, I did not see any that touted having a high graduation rate.

If anyone finds out what their graduation rate actually is I would be curious to hear what it is.

Getting an MBA at night from the local college is likely worth more than starting an elite MBA program that you do not finish.

Boglegrappler
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Re: Value of an Elite MBA

Post by Boglegrappler » Sun Feb 25, 2018 4:08 pm

It all depends on what your ultimate target is. If you're a smart person who is thoughtful, the things you learn in most MBA programs will likely be learnable by you in some other way.

However......if you want to become a CFO someplace, you'll need to get an entry level job in one of those organizations that is well recognized, and to get such a position you often have to have been recruited out of a top MBA program. There may be other sources of talented people for those companies to tap, but they only have so much time and energy to look for people and they often choose to do it at Harvard, Stanford, etc.

The value of your networking might be significant in the first few years you get out, but you'll only need it if your job choice turned out to be wrong. Your really valuable network will come from people who have worked with you and around you. If you present yourself as professional, competent, and highly productive, you'll have a big network after 8-10 years or so, regardless of what school you attended. If you aren't outstanding, your network will be of marginal value even if you attended Wharton or Tuck.

The biggest question is what path you intend to target. There are some where the top 5 program isn't as necessary as others. But to make up your mind, you need to get some specific idea of what type of job and what type of company you're targeting. Then you can find out what their hiring behaviour is.

In any case, my opinion is that the most valuable aspect of an MBA is a chance to compete for entry positions at some remarkable companies. Figure out your target positions, and find out where they hire from. That will answer your questions.

drk
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Re: Value of an Elite MBA

Post by drk » Sun Feb 25, 2018 4:22 pm

Watty wrote:
Sun Feb 25, 2018 3:36 pm
3) No training program has a 100% completion rate. Be sure to know what the graduation rate is before you start the program.

Out of curiosity(that I then got a bit obsessed with) I looked at the Harvard MBA website where I assumed that this would be easy to find but I did not have any luck in finding out what the graduation rate for their MBA program is.

If they did have a high completion rate it seems odd that they don't post that on their statistics page.

I decided to dig a bit deeper, here is where they list some of their MBA programs statistics,

https://www.hbs.edu/about/facts-and-fig ... stics.aspx

It looks like a bit over 1,800 students start the MBA program each year.

I dug some more and it looks like they graduate a bit over 900 MBA students a year;

https://www.hbs.edu/recruiting/data/Pag ... ?year=2017

I might not be looking at that right but that seems to imply that only about half of the people that start the Harvard MBA program actually finish it. That seems unrealistically low to me so you might want to dig into that more. I spot checked a couple of other elite MBA programs and while they all give statistics on how selective they were, I did not see any that touted having a high graduation rate.

If anyone finds out what their graduation rate actually is I would be curious to hear what it is.

Getting an MBA at night from the local college is likely worth more than starting an elite MBA program that you do not finish.
The Statistics page where you pulled the 1,800+ number from is confusing because it mixes admissions and enrollment data. As far as I can tell, in 2016, 935 students matriculated (i.e. started the program), bringing the MBA program's total enrollment to 1,859 students (i.e. roughly twice the number of matriculants). I don't see any graduation data, but I don't think it's particularly meaningful: the hardest part about getting an MBA from HBS is getting into HBS.

While on the topic, comparing HBS to a local part-time program is kind of like comparing Warren Buffett and Jack Bogle. They're in roughly the same business, and they're both valuable, but they serve entirely different aims.

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Watty
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Re: Value of an Elite MBA

Post by Watty » Sun Feb 25, 2018 7:35 pm

drk wrote:
Sun Feb 25, 2018 4:22 pm
The Statistics page where you pulled the 1,800+ number from is confusing because it mixes admissions and enrollment data. As far as I can tell, in 2016, 935 students matriculated (i.e. started the program), bringing the MBA program's total enrollment to 1,859 students (i.e. roughly twice the number of matriculants). I don't see any graduation data, but I don't think it's particularly meaningful: the hardest part about getting an MBA from HBS is getting into HBS.
That makes sense, I was confusing matriculated with graduated. I played with the percentages and numbers on that page and I would not get it to balance out, but it looks like there could be a non-trivial number of people that don't complete the program. If the OP is seriously looking at that program it would be good to contact them and ask for more information.

One thing that has not been mentioned in this thread is just because people that get an elite MBA have a good career it is not necessarily because of what they learned in the MBA program, in part it is because those schools do a good job of selecting people that will perform well. There was a study that looked at the careers of people that were accepted at an elite college but did not got to that college. Their earnings were the same.

https://www.usnews.com/education/blogs/ ... nings-myth

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patrick013
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Re: Value of an Elite MBA

Post by patrick013 » Sun Feb 25, 2018 8:16 pm

Boglegrappler wrote:
Sun Feb 25, 2018 4:08 pm

In any case, my opinion is that the most valuable aspect of an MBA is a chance to compete for entry positions at some remarkable companies. Figure out your target positions, and find out where they hire from. That will answer your questions.
Alot of experience is industry specific. Start in a techy
order entry job, go to night school, leave production for
Accounting when you get your degree. Get promoted, vested,
or get laid off.

Get an MBA somehow for your own personal edification. Is your
prior industry the only industry you really can compete in ?
Is your best match a midstream position in that industry or a
staff position in a new industry ? Many companies promote
from within then. It's like putting somebody from a cannery
in a leasing company or putting somebody from a bank in charge
of manufacturing. Need friends for sure.

But at least it sounds like there's some MBA's available. :)
age in bonds, buy-and-hold, 10 year business cycle

wrongfunds
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Re: Value of an Elite MBA

Post by wrongfunds » Mon Feb 26, 2018 11:04 am

Here is the quantitative data to "prove" how Elite MBA "helps"

https://www.forbes.com/sites/kurtbadenh ... 9a7aa52e2a
https://www.forbes.com/business-schools/list/#tab:rank

Unfortunately, I have NOT been able to independently validate the numbers provided in the above research. The school/department web site numbers are nowhere as inflated as they are in the above link. It is possible that the school/department does NOT have the numbers after the graduate is out for couple of years and the big jump in the compensation happens later but I am looking for confirmation for it. In general, I am always skeptic when it comes to these kind of articles which do not have solid and well disclosed raw data.

Here is the extract from the above article
"==================
The MBA class of 2012 entered the job market during uncertain times. The worst of the financial crisis was over, but unemployment was still 8.2% nationally and big banks were licking their wounds from massive losses triggered by the subprime mortgage crisis. Nonetheless, most grads from the top 25 U.S. business schools landed on their feet, with 90% securing jobs within three months of graduation.

Total compensation for those grads reached $177,000 on average last year, up 9.2% annually since graduation (before inflation). The growth rate is on par with the class of 2010 from elite programs. Both figures are well ahead of the U.S. average, which was 2.7% over the past five years, according to the Bureau of Economic Analysis.

The result: the average payback period for graduates of top 25 schools on their investment in an MBA (tuition and forgone salary) was 3.9 years, similar to two years prior (4 years). However, both are off substantially from the pre-financial crisis classes of the late 1990s, for whom the payback period averaged 2.7 years.

The University of Pennsylvania’s Wharton School ranks as FORBES’ best business school in the U.S. for the first time in our 10th biennial ranking with a “5-Year MBA Gain” of $97,100. The previous high-water mark for the business school was second in 2001 and 2005. Wharton ranked seventh in 2015.

The Wharton School was the first collegiate school of business established in 1881 when iron miner Joseph Wharton donated $100,000 to U Penn to found a “School of Finance and Economy.” These days most Wharton MBA students head to finance or consulting jobs upon graduation (79% of the class of 2012), which traditionally are the most lucrative areas for MBAs. The concentration in these sectors pushed Wharton’s current total compensation for the class of 2012 to the highest of any school in the world at $225,000.

The top employer for the 2012 class was consulting firm McKinsey, which hired 53 out of 805 Wharton graduates. Other major employers: Boston Consulting Group, Bain, Deloitte and Goldman Sachs. The biggest employers for the most recent class were the same outside of Amazon.com replacing Goldman Sachs.

“Wharton was a great springboard to make a transition geographically and job position-wise with a strong brand name and network as well as providing practical knowledge,” says Thomas Jueng, who traded a telecom job in Seoul for a venture capital career in Menlo Park, Calif., upon graduation.

Our ranking of business schools is based on the return on investment achieved by the class of 2012. We examined more than 100 schools and reached out to 17,500 alumni around the globe. We compared graduates’ earnings in their first five years out of business school to their opportunity cost (two years of forgone compensation, tuition and required fees) to arrive at a five-year MBA gain, which is the basis for the final rank. Schools whose alumni had response rates below 15% or a negative return on investment after five years were eliminated (click here for a detailed methodology).

=================="

SeaToTheBay
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Re: Value of an Elite MBA

Post by SeaToTheBay » Mon Feb 26, 2018 12:36 pm

I graduated from a Top 10 full-time program 5 years ago. What has been said here is mostly accurate IMO.

I actually am probably one of the lower-ROI grads - I paid the whole cost, was making $80k+ already when I left in 2011, and didn't get a massive pay bump due to moving to a somewhat lower-paying industry than typical MBA (not consulting, IB, etc.). However, it was still a good deal for the following reasons:

1) If I wanted to move back to my old industry, I could do so much more easily due in large part to the high-tier MBA. I have actually interviewed with top companies in my old function, but ended up turning them down for various reasons.

2) It allowed me to switch industries without starting at the bottom level. If I had wanted to switch into my current industry without an MBA, I would've had to start out at the same level I would be if I had just gotten out of college, despite 5 years of work experience. The majority of FT MBAers are career switchers.

3) I have a network I can call on whenever I need career referrals or advice. I have friends or acquaintances from MBA that work at most of the companies I'd want to work for.

4) A mantra of mine earlier in life is I never want to be held back by something I didn't do. I didn't want to see a job that I really wanted, but be passed by due to not having an MBA. I was already getting some of that when looking for a new job pre-MBA, and knew I didn't want that limitation. I may not end up being a CFO, but at least by checking the box of a top MBA, I know if I decide that's my goal, I'll have less standing in my way.

5) While this isn't a financial/logical reasons, I had some amazing experiences and it was a wonderful two years off from work. Yes, it was expensive, but I met a whole new network of smart, interesting friends, which includes the woman who is now my wife! Hard to put a price on that. As a pretty intelligent person, I remember going to class for the first time and realizing I didn't have to slow down or explain things to anyone - everyone just "got it" and conversations/learning moved along very quickly.


As for my wife, she worked in an industry not very closely related to what she's doing now, and is now making 6x what she made before (she was grossly underpaid) at a top company to work for. And she got a full ride. And she met ME! So she got a whole lot out of it :P

rjbraun
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Re: Value of an Elite MBA

Post by rjbraun » Mon Feb 26, 2018 1:47 pm

Interesting responses, a good amount of which generally seem reasonable to me.

I have an MBA from a top 15-ish school. While I have come across a good number of "Elite MBAs" in my career (Wall Street / asset management), I can't really comment directly on the education and network associated with an Elite MBA, but I guess to some extent it may ultimately come down to the person. In other words, someone who is a great networker will make important contacts regardless of whether they have an elite MBA, imo. Similarly, having an elite MBA may get you an introduction, but if you're not personable, don't follow up and come across well, etc. who cares if you have a prestigious degree.

In college, I sometimes studied in the university's (graduate) school business library. I promised myself that I would never apply to or attend that program (top 5-10). I was just underwhelmed with the students (admittedly, primarily just based on impression) and the atmosphere. An MBA is a professional degree, and I will admit that I probably put the credential kind of lower on the list, as professional degrees go. That said, I do have tremendous respect for great "business minds" and can even be impatient with people who don't have that mindset.

I decided that there were only two business schools that I would consider going to on my own dime. In one case, the school had a program that was very geared to my then interest (public policy, though in hindsight I'm not so sure the school truly had that niche focus), the other school was such a brand name I figured it would be hard to turn down if accepted.

I ended up enrolling part-time in an MBA program, largely to take accounting, something I had not taken previously and figured was good training to have no matter what I decided to do. Next thing I knew, I was pretty much caught up in the program and figuring out how I could finish in reasonable time. I completed the program in three years. I enrolled part-time the first two years, with my employer footing the bill.

Given some changes going on at my then-employer and as I now had a specific job target in mind, I decided to return full-time. I was fortunate to get a job as a graduate assistant, which pretty much covered my tuition (perhaps I even received a small stipend, no longer recall). I think I may have paid for a semester or two in the summer, between when I left the job and before I was awarded the grad assistant position.

As I was a full-time student, in in essence my second year of b-school, I was able to participate in the on campus recruiting program for post-graduation, full-time positions (didn't hurt that I worked in the career placement office :D). I landed a job in the training program of a "bulge bracket" investment bank, spent several years there before moving on to other positions in investment management. Ultimately, I did become a Managing Director at a large financial services (banking) institution.

Kind of hard to provide OP with specific advice without knowing him or her, but perhaps sharing my story may be of help or give some ideas.

TerryDMillerMBA
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Re: Value of an Elite MBA

Post by TerryDMillerMBA » Mon Feb 26, 2018 2:08 pm

"It depends."--MBA aphorism and old inside joke.

All of the points others have brought up are things to be considered. It is very wise of you to really consider value, and not just blindly assume that the elite school program would be what you need.

rjbraun
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Re: Value of an Elite MBA

Post by rjbraun » Mon Feb 26, 2018 2:21 pm

Watty wrote:
Sun Feb 25, 2018 3:36 pm
3) No training program has a 100% completion rate. Be sure to know what the graduation rate is before you start the program.
Understanding why the completion rate may be less than 100% is also worthwhile, imo. Someone I know apparently dropped out of HBS for personal reasons, perhaps related to the workload. I think I've read of people dropping out (or at least seriously contemplating dropping out) because they feel they have some great business idea, for which the market will not wait. In the former case, maybe the person should not have enrolled to begin with. In the latter case, I found it refreshing to hear that someone was so committed to their venture that they were prepared to drop out early lest they may miss their great opportunity.

Neither Bill Gates nor Mark Zuckerberg completed their college degrees at Harvard. Not sure that Harvard or Gates / Zuckerberg made a bad call in their respective decisions.

e5116
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Re: Value of an Elite MBA

Post by e5116 » Mon Feb 26, 2018 2:24 pm

I think if you want to change industries and get off on a great foot, an elite MBA is a good way to do that. Amazing networking, learn new skills, and a "stamp" on your resume that demonstrates ability/intelligence that will allow you to switch industries in an easier manner than somebody in the midst of a job. Similarly, if you want to go into a very specialized field or be at the top of the banking/management consulting world, then that's your avenue in it.

However, for people that are doing well in their career and want to stay in the same industry but just move up, I think getting an MBA is questionable at best (except for a very small number of companies). A large number of companies these days don't care at all, and you'd have been much better off just continuing to get more work experience. There definitely has been a shift since 20 years ago. You might get some minor boost with the MBA, but lose out on 3 years of salary where you should be getting raises anyways, so I'd argue the 3 years of work experience serves the person much better in the end. Getting an MBA is VERY expensive and there is a HUGE opportunity cost. For example, I know somebody who worked at a top digital advertising company, went to a top 5 MBA, and got hired at the same company when they finished....at the same level when they left. I've heard of countless stories like this although others have newfound success because of their top MBA, so it's not totally one sided. Again, depends on the field/industry and what the person wants to do.

There is something to be said beyond the financials, though, and sometimes people want the degree for personal fulfillment, which is a fine reason. But based on talking to others (I don't have an MBA myself, but considered it at one point), it seems to not be all that valuable for the majority of people. The extremely talented people I know who could into elite MBA programs do well regardless.

JimSmiley1850
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Re: Value of an Elite MBA

Post by JimSmiley1850 » Mon Feb 26, 2018 2:48 pm

My 2cents as a grad from a top 5 MBA. It is worth it for all the reasons mentioned let me not some other intangible outside the classroom reasons too. The programs and speakers open up a wide view of careers and organizations. Yes many people go into consulting and finance but in the elite programs you can find people want to go on to be government executives, run advocacy non-profits, manage art institutions, ministers, etc.

The career placement office at a top school is way above what such offices are in middle of the pack programs.

On graduations rates — they don’t let you in if they don’t think you can make it. If you work you will get through they don’t want a big drop out rate as they have invested in your selection.

And of course don’t forget. There is no BS like HBS.

larsm
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Re: Value of an Elite MBA

Post by larsm » Mon Feb 26, 2018 3:03 pm

Graduate of Chicago. My case, well worth it. Allowed me to punch out at 38. YMMV.

The fundamental question is what do you want to pursue as a career. If it is middle of fairway of what MBA schools do best (Investment Banking, Consulting, etc.) then a top tier school will open the right doors and give you a chance to step through.

If not, well, tougher call...

davewi
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Re: Value of an Elite MBA

Post by davewi » Mon Feb 26, 2018 4:03 pm

I'm an MIT MBA from the 1990's. I can honestly say that every single alum I'm in contact with considered their time at MIT to be life changing and absolutely worth the time and expense. I have never heard anyone voice regrets over attending.

JBTX
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Re: Value of an Elite MBA

Post by JBTX » Mon Feb 26, 2018 7:53 pm

rjbraun wrote:
Mon Feb 26, 2018 2:21 pm
Watty wrote:
Sun Feb 25, 2018 3:36 pm
3) No training program has a 100% completion rate. Be sure to know what the graduation rate is before you start the program.
Understanding why the completion rate may be less than 100% is also worthwhile, imo. Someone I know apparently dropped out of HBS for personal reasons, perhaps related to the workload. I think I've read of people dropping out (or at least seriously contemplating dropping out) because they feel they have some great business idea, for which the market will not wait. In the former case, maybe the person should not have enrolled to begin with. In the latter case, I found it refreshing to hear that someone was so committed to their venture that they were prepared to drop out early lest they may miss their great opportunity.

Neither Bill Gates nor Mark Zuckerberg completed their college degrees at Harvard. Not sure that Harvard or Gates / Zuckerberg made a bad call in their respective decisions.
My experience is that for a private top name MBA program, getting through isn’t that hard. You really have to have slipped through he cracks to not make it academically (surprisingly it does happen) You can work your arse off to get an A average or do a reasonable amount of work and get a B+ average. Unlike an undergraduate public school accounting or engineering program where the curriculum is designed to weed out the bottom half of the pack, there is no weeding in a highly selective mba program. The weeding is getting into the school in the first place.

2tall4economy
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Re: Value of an Elite MBA

Post by 2tall4economy » Mon Feb 26, 2018 8:20 pm

My personal experience as a guy who has hired many mbas and has lead or developed mba recruiting programs: the only thing that matters to employers in my experience is where you went.

My advice to people who ask is if you don’t go to a top 40 school or so don’t bother and if you really want to get something from it, it needs to be top 10 / top 15.

Big companies see mba admittance as just a prescreening to get the best potential candidates with less effort, not as great educations or networks.

I’ve personally been part of a mba recruiting group that had 21 resume piles, and we were allowed to select 3 candidates to interview from each pile. One pile each for the top 15 mba schools(including overseas) one pile each for the 5 largest regional university’s near the hq, and pile number 21 for every other university in existence. Your chances of getting an interview if you weren’t in one of the first 20 piles was approx one in 200. If you were in the first 20 is was about one in 3.

And as a last data point, when I went to get my mba I called a bunch of employers to ask what I should study. Every one of them responded with some variation of “what school are you going to? Oh, yeah we’ll take you. It doesn’t really matter what your concentration or gpa is”
You can do anything you want in life. The rub is that there are consequences.

RRAAYY3
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Re: Value of an Elite MBA

Post by RRAAYY3 » Mon Feb 26, 2018 8:28 pm

I’d get an MBA that was most affordable, than earn more money and maintain a similar lifestyle while saving /investing your increased income

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Fredfig
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Re: Value of an Elite MBA

Post by Fredfig » Mon Feb 26, 2018 9:11 pm

Everyone, I am blown away by the thoughtful responses, and really thankful for you all taking the time. I'll try to address some comments in turn.
davewi wrote:
Mon Feb 26, 2018 4:03 pm
I'm an MIT MBA from the 1990's. I can honestly say that every single alum I'm in contact with considered their time at MIT to be life changing and absolutely worth the time and expense. I have never heard anyone voice regrets over attending.
I absolutely love MIT's program, and it would certainly be on the list of the ones I am struggling to evaluate. The challenge I see comparing the 1990s landscape to now is the rise in the prevalence of MBAs (diluting competitive advantage given), the increased cost in real terms, and the increased reliance on technology driving a higher demand for technical backgrounds. Seems like it may be more valuable to get a masters in computer science from somewhere like MIT than an MBA even in the business world, although I'd love to hear your thoughts on that.
e5116 wrote:
Mon Feb 26, 2018 2:24 pm
I think if you want to change industries and get off on a great foot, an elite MBA is a good way to do that. Amazing networking, learn new skills, and a "stamp" on your resume that demonstrates ability/intelligence that will allow you to switch industries in an easier manner than somebody in the midst of a job.
You are undeniably right on this point. In my particular context, I am currently working in M&A for a large corporate firm. I aspire to find a job in a small company (as a founder/operator/major stakeholder) due to the autonomy it gives me in my living situation. I don't find a lot of good information out there on this point, as it doesn't seem too common of a path for MBAs outside of the nascent search fund opportunities (Stanford, HBS, Dartmouth in particular).

SeaToTheBay wrote:
Mon Feb 26, 2018 12:36 pm

1) If I wanted to move back to my old industry, I could do so much more easily due in large part to the high-tier MBA. I have actually interviewed with top companies in my old function, but ended up turning them down for various reasons.

...

3) I have a network I can call on whenever I need career referrals or advice. I have friends or acquaintances from MBA that work at most of the companies I'd want to work for.

...

As for my wife, she worked in an industry not very closely related to what she's doing now, and is now making 6x what she made before (she was grossly underpaid) at a top company to work for. And she got a full ride. And she met ME! So she got a whole lot out of it :P
1) Do you find this to be true in most industries? I've gotten the impression that an MBA is a free reset to your career focus, but that was your main shot. If you went out and tried something entrepreneurial, do you think you could've transitioned back even 2-3 years post-MBA?

3) Do you think someone rooting for you on the inside is enough to qualify you at these companies? My experience in this area has mostly been limited to PE/boutique IB, and in those cases they still require someone to have the experience paying their dues at the lower levels more often than not.

Your wife seems like a very lucky lady, pretty cool that getting an MBA on her resume would also get her a Mrs. by her name!
Boglegrappler wrote:
Sun Feb 25, 2018 4:08 pm

The biggest question is what path you intend to target. There are some where the top 5 program isn't as necessary as others. But to make up your mind, you need to get some specific idea of what type of job and what type of company you're targeting. Then you can find out what their hiring behaviour is.

In any case, my opinion is that the most valuable aspect of an MBA is a chance to compete for entry positions at some remarkable companies. Figure out your target positions, and find out where they hire from. That will answer your questions.
I am hoping to find a company where I can have responsibility as an operator, and the autonomy to control parts of my schedule. My dream is to be able to make enough to support a solid lifestyle while being able to leave work at times for things like a child's soccer game. The best path I have seen that mirrors that from MBAs is the purchase of a small business via a search fund. The problem is most MBAs don't go to other established companies (I've found it to be less than 3% across top MBAs), and it is hard to tell whether that is because people do not like the work, or if the hiring process is just not in place there. If I dropped out of the clouds to apply to somewhere like Glenair (Peter Kaufman, friend of Charlie Munger's company) with a HBS MBA, would that be a huge difference maker?
jminv wrote:
Sun Feb 25, 2018 2:02 pm
One of the cons you didn't mention was the lost earnings while you are in the program. The two year MBA program itself is outdated and is being replaced by shorter programs that provide a greater ROI. Consider INSEAD (France/Singapore), depending on the range of things you want to do post-MBA, particularly if it involves working internationally.
Alas, my heart is in the Midwest (Indiana born and raised), and so I plan to return there. From a pure supply/demand perspective, there's only 1-2% of elite MBA program grads who end up there, so perhaps that gives some sort of edge?
daggerboard wrote:
Sat Feb 24, 2018 9:57 am

My thoughts:

b) Only go to a top school (say top 15) if you are paying your own way otherwise your money is wasted

...

f) You need to view everything in context of your starting point; if you are already making $150k and are happy with your career prospects, then the value of going to bschool - unless you think you can make it in banking/PE/consulting - will be slim
b) To give you a little more context: I was accepted out of undergrad to a Top Ten program, and turned it down for an opportunity in M&A that I couldn't refuse. I also help run a company I founded with mid-6 figures revenue (figured doing both of these would be better for personal development). I have received a stronger test score since then, and have a major figure in elite admissions backing my application. Unfortunately, scholarships don't seem to be very forthcoming, especially in light of the Stanford MBA need-scholarships controversy...

f) What would you think would be the cutoff at which the value-add would be much more pronounced? Sub-$100k?




Thank all of you again for your comments and thoughts. You've given me a lot to chew on!
"Don't invest for yourself; invest so that you can do good for you family, your community, and your world." - Carl Ackermann

staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 9:40 am

Re: Value of an Elite MBA

Post by staythecourse » Mon Feb 26, 2018 9:27 pm

I have a biased view. I have cousins who went to all the top 3 (HBS, Stanford, and Wharton). Heck, in total we may have 6-8 folks in our family alone that have attended just those 3. Only one became successful and no surprise it was in finance. Without a doubt not one of them got anywhere they wouldn't have already just because of the MBA "name".

Because of them I definitely will not encourage my kid to do it unless someone other then him/ her or I am paying for it. Again I am VERY biased, but again my experiences have led me to the same conclusion that not many pieces of paper you put on the wall really guarantee any level of professional success.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

itstoomuch
Posts: 5343
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Location: midValley OR

Re: Value of an Elite MBA

Post by itstoomuch » Mon Feb 26, 2018 9:39 pm

fredfig wrote:I absolutely love MIT's program, and it would certainly be on the list of the ones I am struggling to evaluate. The challenge I see comparing the 1990s landscape to now is the rise in the prevalence of MBAs (diluting competitive advantage given), the increased cost in real terms, and the increased reliance on technology driving a higher demand for technical backgrounds. Seems like it may be more valuable to get a masters in computer science from somewhere like MIT than an MBA even in the business world, although I'd love to hear your thoughts on that.
DS (32) got a MS-CS (2008) with a entrepreneurial and design emphasis, immediately after undergrad from well known private university (2006). A mix up with MIT got him into another grad school but on full-ride. His undergrad was in the same concentration plus ME. He is starting his 5th year with this company as senior engineer. He functions as internal house consultant.
He does have a very large network. He has a nice salary but he is in technology field. New CS grads are approaching his pay range. Seattle competition.
Good Luck. :sharebeer
YMMV
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daggerboard
Posts: 130
Joined: Tue Jan 24, 2012 2:16 pm

Re: Value of an Elite MBA

Post by daggerboard » Mon Feb 26, 2018 9:58 pm

Fredfig wrote:
Mon Feb 26, 2018 9:11 pm
daggerboard wrote:
Sat Feb 24, 2018 9:57 am

My thoughts:

b) Only go to a top school (say top 15) if you are paying your own way otherwise your money is wasted
...
f) You need to view everything in context of your starting point; if you are already making $150k and are happy with your career prospects, then the value of going to bschool - unless you think you can make it in banking/PE/consulting - will be slim
b) To give you a little more context: I was accepted out of undergrad to a Top Ten program, and turned it down for an opportunity in M&A that I couldn't refuse. I also help run a company I founded with mid-6 figures revenue (figured doing both of these would be better for personal development). I have received a stronger test score since then, and have a major figure in elite admissions backing my application. Unfortunately, scholarships don't seem to be very forthcoming, especially in light of the Stanford MBA need-scholarships controversy...

f) What would you think would be the cutoff at which the value-add would be much more pronounced? Sub-$100k?
Scholarships are hard to come by - or were at least in my era at the top schools. I was offered free rides from two Top 20-50 schools which I turned down to pay full bore at a top 10 school. And no regrets at all from my end today.

I dont think there is a hard cut-off, but I would start to question it hard north of $150k or $200k. Keep in mind lots of kids making that kind of money at consulting companies still go to biz school, but for many of them its a requirement from their employer. Plus these days many are pining for a job in elite PE where there is much more money to be made post consulting / post MBA.

One other benefit - you meet smart, like minded ppl.

At an alumni weekend a few years back I was chatting over cigars with an old friend and class mate and we both realized that we were both bogleheads and active on this board.

SeaToTheBay
Posts: 177
Joined: Thu Jun 08, 2017 6:11 pm

Re: Value of an Elite MBA

Post by SeaToTheBay » Tue Feb 27, 2018 1:30 pm

Fredfig wrote:
Mon Feb 26, 2018 9:11 pm
SeaToTheBay wrote:
Mon Feb 26, 2018 12:36 pm

1) If I wanted to move back to my old industry, I could do so much more easily due in large part to the high-tier MBA. I have actually interviewed with top companies in my old function, but ended up turning them down for various reasons.

...

3) I have a network I can call on whenever I need career referrals or advice. I have friends or acquaintances from MBA that work at most of the companies I'd want to work for.

...

As for my wife, she worked in an industry not very closely related to what she's doing now, and is now making 6x what she made before (she was grossly underpaid) at a top company to work for. And she got a full ride. And she met ME! So she got a whole lot out of it :P
1) Do you find this to be true in most industries? I've gotten the impression that an MBA is a free reset to your career focus, but that was your main shot. If you went out and tried something entrepreneurial, do you think you could've transitioned back even 2-3 years post-MBA?

3) Do you think someone rooting for you on the inside is enough to qualify you at these companies? My experience in this area has mostly been limited to PE/boutique IB, and in those cases they still require someone to have the experience paying their dues at the lower levels more often than not.

Your wife seems like a very lucky lady, pretty cool that getting an MBA on her resume would also get her a Mrs. by her name!
1) Really can't say as I don't have personal experience. But I do think a top MBA gives you credibility which would ease you back into corporate life after trying say a startup - I know many people have done that. Much harder if you just decided to start a business one day and then went back.

3) Depends on the company, but in my experience a personal reference will get you in the door and interviewing a lot faster than just applying online without a reference. It may not get you the job, but it definitely helps move the balance in your favor.

Yeah, wife and I started dating 6 weeks before graduation, when we were headed to FT jobs in different cities. Thankfully after a few months I was able to transfer!

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