9 Things An MBA Won’t Teach You
I’m Glad I Got an MBA, But it Couldn’t Have Taught Me This
For years I wanted to go back to school to pursue my MBA. It seemed like the next logical step in my career, but I put it off for one thing or another. Travel. Family. Cost. Time. Eventually, though, I did get my MBA and I’m very grateful for it. Though it wasn’t Harvard and it wasn’t Wharton, it was still a very good school. I learned a great deal and it gave me a whole new perspective on both managing a team and running a business.
In hindsight, despite my procrastination and excuses, my MBA ended up being timed perfectly. Throughout my two year program, it seemed like I’d read a chapter in, say, my accounting textbook on Monday night. Tuesday morning, when I happened to be meeting with my finance manager to talk budgets, she’d use a term I’d just learned the night before. Perfectly timed.
But, having gone through those difficult two years during which I was balancing a full time job, my home life, and trying to remain somewhat healthy, I look back and realize that there was a lot that my MBA – or any MBA from even the very best institutions – could not teach. Only real, hard, personal experience can teach you certain things about business and management.
While I absolutely encourage managers and business leaders to pursue an MBA for the skills and career growth that such a degree can provide, in the MRH spirit of helping other managers, I wanted to share some insights as to some of the things that that even a very expensive academic degree can’t provide. Here are 9 of those things.
1. Uber Isn’t a Good Example
Often times, when reading magazines and new articles, you’ll uncover a story about how a young couple had an idea for, say, a new way to store perishable food to reduce waste and to stretch their limited budget as far as it could go. At the end of the article you’ll read how that same couple just three years later was bringing in millions of dollars a month with their invention.
Such stories of startups rocketing to success are very real and are certainly inspiring. Uber, for example, seemed to flourish overnight. But the reality is that they are also extremely rare; far more business fail than ever succeed. And those that do succeed rarely do so as a result of a single idea hatched in a kitchen one night. In your MBA program, you’ll read case study after case study about a given business or management problem. But few will discuss the arduous journey those businesses endured to get to that point.
Most highly successful businesses become that way after very careful, methodical, and strategic planning in conjunction with hard work. While they may have had humble beginnings, strong and sustainable business growth is usually the result of an incremental series of decisions (and failures), as well as the careful placement of building blocks along the way.
The role of the manager is to focus employees on those incremental steps and to lay the bricks on the path to success.
2. Great Marketing Doesn’t Guarantee Cash
Every MBA will teach you the importance of cash flow – essentially generating and having more money on hand a given day than you have going out. And, it will teach you about the psychology behind marketing and tapping into the human emotion to motivate consumers to buy. But, it’s not like great marketing will by itself generate the necessary cash flow you need. To quote a radio interview I heard years ago “Marketing is not like pizza toppings. More is not necessarily better.”
Great marketing isn’t a fix-all solution, and is only about generating brand awareness. It is about making your presence known to potential consumers and would-be customers. Earning cash, however, requires you engage with your customers and help offer them value and solutions that help them solve a given problem. Thus, a clever marketing campaign and spending a lot of money on advertising will not guarantee a sale by itself.
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3. Hiring Great Talent Isn’t the Answer
…It’s just a small piece in a very big puzzle. In the many business cases I studied during my MBA program, I recall reading that familiar phrase we’ve all heard on a regular basis: ‘their employees were their greatest asset.’ Now, I don’t mean to trivialize the importance of hiring really good people. In fact, here at MRH we have countless resources and articles full of tips on how to best identify and bring on great workers, and we do this for good reason. Hiring great workers is an essential component of building a viable company. But honestly, this is just the beginning.
Many managers wrongly think that after all their effort in finding and hiring the perfect candidate, they’re done. Mission accomplished. However, having led and managed countless teams myself, I cannot express enough the importance of being vigilant and going to great lengths to ensure we hold on to the great workers we worked so hard to get..
Not only does attrition disrupt workflow, and wound morale, it also forces you as the manager to start the recruiting process all over again. Perhaps more importantly, when you lose a good employee, all that training, experience and knowledge walks out the door with him or her.
Everyone talks about the importance of bringing on great people, the need for which is undeniable. But equally and just as important to finding those people is holding on to that talent once you are so lucky to get it.
4. Diversification Only Works If It Surrounds A Core Strength
The word diversify is a very popular business term that is often used to describe a strategy that, in simple words, means you don’t put all your eggs in one basket. Diversification can mean you work in different industries or it can mean you generate revenue through a number of channels. That being said, even if a business appears to be ‘diversified’ to an outsider, more often than not its various business units and revenue streams are actually just shades of color on the company’s inner canvas.
Let’s take Amazon, for example. Everyone loves Amazon and its one tap bring-it-to-my-door ability. Today, Amazon has its own Airline – Prime Air – flying packages and goods all over the place. It bought up Whole Foods, the high-end supermarket chain. And, it has an online streaming video service. Some may say Amazon is diversified because of these extremes.
“Why would I ever buy a book off the internet when I can just go buy it down three street?” many of us asked, But at its core from its pioneering beginning as an online retailer of books, what Amazon did was build an online platform that connected consumers to products they could not buy down the street.
Case in point: a few years ago, a veterinarian recommended a special type of food for my dog to keep her healthy. Two years later, when we moved across the country, I could not find a store to purchase that same brand. Guess what? One click on Amazon and my pup’s food arrived the next day.
All of those limbs – Prime Air, Whole Foods and its streaming video service – are just branches built on the trunk of Amazon’s core – a platform that connects consumers to any product with the tap of a button..
5. There is a Downside to Stock Price
In my own MBA program, I grew tired of how often the coursework would mention that a manager’s decision making should center on stockholder and investors. While it may sound a little off-putting, focusing on investors and stockholders indeed transcends many aspects of a successful business.
First, adding value to shareholders and increasing the value of your stock draws future investment – bringing in cash for you to further grow your operation. Additionally, high performing stocks earn press and news coverage, which in turn can lead to things like brand awareness and even bring about some indirect marketing juice.
Your MBA program will undoubtedly teach you how to calculate things like earnings per share (EPS), market capital and all those other numbers you see when you look up a given firm’s stock symbol. Then, once a quarter, you host a conference call with investors and report results. Sounds straight forward, right?
Well, as Apple CEO Tim Cook reminds us during an interview with Fast Company magazine, there’s more to running and growing a complicated business than stock price. “… If you look at America, the 90-day [quarterly] clock … is a negative. Why would you ever measure a business on 90 days when its investments are long term?”
When business leaders focus only on the short-term results, they inadvertantly compromise their long-term strategies objectives.
6. An Organization’s Health Extends Beyond Its Income Statement
Naturally, a great amount of focus for managers and business leaders is the financial strength of the organization. And it goes without saying that things like profit and loss are critical factors in a business’s ability to remain alive and to grow.
But positive cash flow and high profit, while essential, are merely financial numbers that only represent two vital signs of an organization’s real health. Now, you may ask “if it’s profitable, what else matters?” I’ll explain.
Few managers and business leaders I know ever really discuss their organization like it’s a living being – but they should. A living being can be alive, but unhealthy. It can have a heartbeat, but be sick. And that sickness can have any number of debilitating and negative effects.
Thus, while income is absolutely essential – it’s the heartbeat – for an organization to survive, there are many more factors that play into its overall well-being. Innovation, employee morale, efficiency, and a positive public reputation are just some examples of other vital signs managers need to consider. If your business is bringing in 20% profit with a dissatisfied workforce, antiquated process and poor quality, image what it could do with a happy workforce, modern technology and superior quality.
7. There is No Easy Way to Deal with Ethics
Now, full disclosure. Many MBA programs do require you to take courses in Business Ethics, as did mine. Many of the course examples, though, will fall into one of two categories. Either they are examples of horrible news-making situations (a la WorldCom, Enron and the likes), or they’re simpler in nature where a manager is facing a given dilemma and while difficult, the right decision is always fairly clear. The coursework will certainly teach you about the importance of ethics.
But, no MBA can teach you the real-life consequences and considerations you have to make as manager when it comes to business ethics. While the news-makers are often so extreme (and I hope you nor I are ever involved in such a thing), often times we face ethical matters without even realizing it’s an ethical discussion. And the situations we encounter are always unique, different and circumstantial.
No matter what the coursework will tell you or what the given lesson from an assignment may be, dealing with business ethics is far more difficult than we ever realize – that is, until we’re stuck dealing with such a situation.
8. The Limitations of Policy and Frameworks
Many MBA programs have focus programs. Mine happened to be International Business, but there were other options like Human Resource Management, National Security, and Entrepreneurship.
Such programs will teach you how to deal with specific scenarios and perhaps even go as far to teaching you how to develop a relevant policy and what to consider in that field. And while you realize that a policy is good for say, 80% of the situations you’ll face, the classwork cannot teach you how to deal with the other 20% of the very real situations you’ll encounter.
For example, if you happened to focus your MBA work on Human Resource Management, you may learn how to develop a business policy around attendance and time off for workers as part of your coursework.
But consider a scenario where one of your employees, Alex, has a sudden personal need to stay home with a very sick child. Policy says he only has 15 days of vacation and 5 days of sick leave. At this point in the year, Alex has used all of his time off. What do you do? What does policy say? What is best for the company? What is best for Alex and his family? What is fair to other employees? To the discussion in point 7, what’s the right thing to do?
9. There’s Only One Thing That Can Take a Good Organization and Make it Great
Superb marketing, a top talent workforce, innovative technology and stellar quality standards can make a successful business. But there is only one thing that can take all these things, unify them, and make a business truly exceptional: leadership.
Some MBA programs will require students to take a semester in leadership, and learn how it’s a pivotal part of an organization. But, nothing quite teaches you the value of leadership like working with, for, or alongside a great leader. Whether he or she is an up-and-comer on your own staff, or you work for a great leader yourself, you will know it when you see it.
The only thing that can take a good business and make it exceptional is strong and virtuous leadership at the top, with other great leaders peppered throughout the organization. Great leaders inspire; they are charismatic, likable, and have a natural ability to motivate all those talented people within the organization to be at their best.
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An MBA Is Very Much Worth It
Now, after all this, by no means am I trying to dissuade you from pursuing an MBA if you were contemplating it. In fact, I highly recommend it to anyone who has aspirations to grow their career outside their function and to reach higher levels of organizational leadership. Any MBA program will add tools to your management toolbox and equip you with essential knowledge of running a business. Mine did. But recognize that there are just some things that an MBA cannot teach you that only personal experience can.