The 4 things you get out of business school

I have a lot of thoughts about business school and think that the traditional 2-year MBA is ripe for disruption. My goal here is to help prospective MBA applicants weigh the pros and cons of going to business school, make the appropriate decisions for their personal situations, and if appropriate - choose the right schools. I'll start the series by discussing the 4 key things you get out of business school.

Knowledge

The first and simplest thing you'll get out of an MBA is knowledge. This could be deeper knowledge in one specific area (investment banking, investment management, consumer marketing, etc.), broader knowledge across a variety of subjects, or most likely a combination of the two. Most people will enjoy surface-level exposure to a bunch of subjects and then go deep in one field they wish to pursue. In terms of objectively weighing the return on your investment, I would say that broadening your knowledge is valuable if you don't have a basic understanding of business concepts already (mergers and acquisitions, financial statement analysis, core aspects of consumer marketing, operations, etc.). If you do have a core understanding of businesses and different types of financial transactions, this aspect of an MBA wil be nice (reinforcement of things you already know) but not a killer investment.

If you don't have a lot of business and financial knowledge already, the broad exposure and training is a big plus. But realize that you can get a lot of the surface-level knowledge for cheap these days through Wikipedia, ebooks, Udemy, MIT OpenCourseware, etc. It's almost always deep knowledge in an area of specialization that will matter down the road. If you want to go to business school to get a "general education" I would quote a line from Good Will Hunting: "You just dropped a hundred and fifty grand on a f'ing education you could have gotten for a dollar fifty in late charges at the public library." Focus on your specialization and how that will accelerate your career growth.

Analytical Skills

We need to be honest and realize that the value of knowledge has dropped exponentially over the last 20 years. There used to be a giant disparity between the highly educated and the less educated in terms of access to information and knowledge. If you went to a top business school in the 1980's you literally gained access to an inner circle of knowledge and power that was inaccessible to those on the outside. Now with the vast array of rich resources on the web, information has become ubiquitous. The cost to search a meaningful percentage of human knowledge has dropped to zero. What has not dropped to zero is the ability to take large quantities of data, analyze it, extract key insights, develop a point of view, present your arguments, and drive progress forward. Those analytical skills are highly valuable and will not be forgotten. So think about skills over knowledge. World-class skills have not been commoditized. Every field is different so you should focus on the exact skills you need for your desired career.

There are various ways to develop skills. An MBA is one way, but not necessarily the best. It highly depends on what you want to do. Make sure to look at this deeply and analyze business schools based on their likelihood to materially advance your skills in your desired field of expertise. Going to Haas to get into Wall Street or going to Wharton to get into marketing in Silicon Valley are probably not the best decisions. Business schools focus on core competencies, just like you should. Remember that.

Networking

Networking is probably the most differentiable aspect of full-time business school. Networking is an annoying word, but I would look at it in two ways. The first is developing natural relationships with classmates that will give you ties to various leaders in the future (breadth of your network). The value of this depends on how many of your classmates become leaders in their fields and on how much you enjoy spending time with them (finding a cultural fit with the school and your classmates should not be overlooked). In day-to-day life you develop a lot of respectful acquaintances, but the best way to develop deep friendships is by going through hell together. If you look at tight bonds between people, they're developed when soldiers go to war, when sports teams practice their hearts out in pursuit of a championship, when co-founders start a company against all odds, when classmates stay up all night to finish a brutal project and surpass their peers, etc. I found the stress of business school to be far lower than many people make it out to be (particularly after going through engineering school as an undergrad), but I actually think that a certain amount of heat is positive in terms of the bonds it builds. When the pressure is on and you're trying to get a project done, while searching for a job, and holding down personal commitments, that's when you develop real relationships with your classmates. I don't think many deep bonds are built during easy and boring times.

The other side of networking is building relationships with people who are already in the field you're pursuing, be they alumni of your business school or just successful professionals you want to impress and get guidance from. I think of this as launching yourself into the field. Create a hit-list of top people you'd like to talk to or meet. Introduce yourself. Be very respectful and diligent about the way you reach out to people (more on this in a later post, as I think it's very important). But be somewhat shameless. Get yourself out of the building and into the industry. Go to events. Start side projects to show people you can do the work. Showing is always more powerful than telling, and generating a discussion around a project you're passionate about is much more interesting than "You're awesome and I want to be just like you." I would argue that today, in almost any field, there are really effective ways to start side projects outside of your classwork or day job that teach you the business, show others that you're willing to take initiative, and differentiate you from everyone else. Don't just be another MBA grad. Be the best at what you do and show it. Think of it less as "networking over cocktails" and more as diving into a field and enjoying the ride. Business school is great for this because there are lots of guest speakers (some schools have a tremendous advantage in this category), you can devote time to getting out and meeting people, and you don't have a boss breathing down your neck every day (you're the master of your own priorities).

Leadership

Last, but definitely not least, is leadership. Developing the skills to become a leader is the most critical part that will determine how far you get in your career. Being great at everything else, but sucking at leadership - will distinctly limit your growth. Developing yourself as an effective leader will drive your ultimate career success. However, when it comes to business school, this is the area where MBA programs are the absolute weakest. The reason is simple. Becoming a leader is 80% action and 20% analysis and discussion. Business school is the opposite - it's 80% analysis and discussion and 20% action. You can talk in a group about what a CEO should do in a given situation until you're blue in the face. It won't help you a bit when you have to actually execute a strategic decision that affects an entire team, convince a top producer to work for you, or execute a layoff for the first time. Everything I learned in business school meant nothing compared to going through the human experience of starting and building a company. You learn quickly in the real world that strategy is 10% (at most!) and execution is 90%. Business school is not effective at teaching you execution because that's not what you do on a daily basis while you're there. You can only learn how to execute in a leadership role within a company by doing it. A quarterback goes to the film room as part of his prep, but 90% of his growth as a leader is earned on the field. Think about it. Do you want a quarterback who spent the last two years leading a team on the field, has played under the lights on Monday Night Football, and has dealt with the ups and downs of a human organization? Or do you want a quarterback who spent the last two years in a prestigious film room (business school)? The film room is nice for developing knowledge, analytical skills, and networking, but it does not teach you leadership. Business school has some proxies for leadership and can prep you to take on leadership roles, but when you graduate and hit the field is when you'll truly develop your leadership abilities. Watching film and reading case studies is studying the past. Throwing passes under pressure with a game on the line - that's defining the future.

I don't want anybody to read my critiques as pro-MBA or anti-MBA, because ultimately they're neither. But what they are is my attempt to very honestly and objectively provide a framework for you to measure the potential return on your investment if you want to go to business school. It's a highly personal decision that is different for everybody. I actually think it's inappropriate to even ask the question - "Should I get an MBA?" The real questions are "What do I want to do with my career? What do I not have now that I would like to have in order to get there? What are the different options and paths I can take to cross the gap between where I am now and where I want to be? Is an MBA one of those effective paths? If so, does it make more sense for me than any of the other paths, weighing all pros and cons?"