Sunday, December 18, 2011

10 questions to ask before you hire an MBA: (A rather cynical view point)...

From the link:

1. Is the candidate affordable? M.B.A. degrees don’t come cheap (at least not the ones from good schools), so many M.B.A.holders price themselves high in the job market in order to cover their student loans. Your company may be paying too much for the added value that it is likely to get. Consider candidates who can do the job for less money.

2. Has the candidate traded real-world experience for book learning? Ideally, you should get all the experience you want, plus the benefits of an M.B.A. classroom program. Beware of candidates who have not been in the trenches; they may be using your company for on-the-job experience before jumping to a bigger ship.

3. Does the candidate have only one hammer? M.B.A. students specialize in one discipline, such as marketing or operations. You may be getting someone who prefers one solution to all sorts of problems. There are advantages to specialization, but the company may need someone who is flexible enough to rotate through several departments.

4. Can the candidate communicate with other employees?
The M.B.A. curriculum may result in the candidate speaking in terms that the rest of the company does not understand. Communication styles are a common cause of friction within a company. Make sure that your M.B.A. candidate speaks and writes the company’s language.

5. Is the job big enough for a person with an M.B.A.? Those with M.B.A. degrees are generally looking for a chance to show their stuff. Putting a big degree into a small job is asking for turnover, since the employee may constantly have his or her eye on the next step up the ladder instead of the job for which he or she was hired.

6. Does the candidate need your company? A small company may not be the right fit for an M.B.A. holder with big ambitions of managing a multimillion-dollar division. However, someone with an M.B.A. may do well in a small company when given opportunities to move around and rise up the corporate ladder. Does your company offer such room for growth?

7. Will your employees be intimidated by someone with an M.B.A.? Some senior supervisors and employees resent “egghead” hires, which can lead to workplace frictions. Bringing in an employee with an M.B.A. is sometimes perceived as a sign that “ordinary” employees are not good enough to get the job done. You should be sensitive to such feelings and be prepared to counter them. Otherwise, pass on the candidate with the M.B.A.

8. Can a current employee do this job? No one knows your company like the people who work there. Perhaps, with a few M.B.A. night courses, a current employee can be promoted to the position. Promoting from within is good for morale.

9. Are people skills more important than quantitative skills?
M.B.A. holders are generally trained to manage by the numbers. A job that requires a different type of leadership may not be the best place for a person with this degree.

10. Did the candidate come from a good school? There are lots of diploma mills out there that crank out M.B.A.programs over the Internet. Before you hire someone with an M.B.A., make sure that he or she attended an accredited course from a reputable institution.

There are instances when an M.B.A. holder is preferable to a less academically qualified candidate. But in general, you should avoid the temptation to inflate a job’s qualifications just to reduce the number of applicants. Hire a person with an M.B.A. only when you really need the skills taught in the particular program.

Another negative / cynical article about hiring MBAs:

The article has the title "Never hire an MBA!!!"


Why do they want to work for you?

The cost of starting a business was once very high.  You had to rent office space, hire an accounting and payroll department, buy a telephone system, etc. This isn’t the case today.  Someone who is good at running a business can start one on a shoestring budget and look just as big as anyone else.  Computers are cheap, a lot of software is free, and you can outsource many parts of your business as you go and simply pay as you go.  It wasn’t that long ago that getting a web server and email server up and running would cost you $50,000 just to get up and running.  Now you can get a web server and email accounts for $6.95 per month or even free if you use something like Google apps.

If someone has a master’s degree in running a business, why are they coming to you for a job?  Years ago, it made sense.  It was very expensive to start your own business.  That isn’t the case any more.  So if someone with an MBA is coming to you there are several possibilities:
  1. They can’t run a business. - If they can’t make it on their own, do you want them working for you?  Is it possible you can find someone better without an MBA? If you need a particular part of their skill set, maybe it is a good fit. Just be aware that if you need someone with a really good skill at running a business, you need to understand why you should trust their skills more than they do.
  2. Want real world experience. - This is a valid reason, but just make sure you aren’t paying someone for their MBA experience if they are coming to you because they don’t really have anything beyond their diploma. Someone with an MBA who says they want real world experience could be an excellent find and become a very passionate employee. However, as we’ll discuss later, one of the drawbacks of many MBAs is that they often over-estimate their skill set.
  3. No ideas of their own. – Not necessarily a bad thing if you just want someone to execute your business plan, but make sure you aren’t paying a premium for them to have good ideas.  If they can’t come up with a good business idea on their own, they may not be able to come up with good ideas for you.
  4. Too specialized. - Someone who specialized in one specific area may not have a wide enough skill set to run their own business.  If their expertise fits well with your business then it can be a great fit for both of you.  However, usually the idea of an MBA is that it is a general education in all aspects of business.

Lack of Experience

Someone with a fresh MBA looking for a job, may not come with much real experience.  This isn’t necessarily a bad thing if you understand that having an MBA doesn’t automatically make someone good at their job.  A large number of people are going back to school to get an MBA after having worked for a number of years. On one hand, you may find someone who has a great deal of real world experience that they can apply to your business problems.  On the other, you may be dealing with someone who is making a significant career change.  When you look at someone’s experience make sure you aren’t throwing them into a situation that goes well beyond what they are capable of doing.  It is easy to tweak a resumé to showcase skills in the past to align with the jobs they want in the future. If their resumé says they have “management experience” don’t automatically assume they possess the skills to handle having 40 people reporting to them.  Make sure you understand exactly what they managed, the extent of their authority and the results the achieved.

Lack of experience seems to show up the most when you put someone in charge of managing and leading others. If their only experience with leadership is being under the leadership of others, they are likely to emulate all of the bad habits without picking up on any of the good ones. If you need a manager, don’t give someone this position based solely on their MBA. Make sure they have real experience with good results in management either before or after getting their master’s degree.


This is more of an issue with people who have had very little real work experience. While most MBA programs offer good content, simply being exposed to a lot of great ideas doesn’t say much about your ability to implement those ideas in real life. Just because someone took a class in negotiations doesn’t mean they are any good at it.  Worse, they may think they are good at it and blindly cause a number of problems.  Confidence is good, but not when it blinds you to your inability. A person with a bunch of confidence in their ability to fly a plane, but no actual skills is infinitely more dangerous than someone with a lack of confidence and a minimal amount of skills. Someone without confidence will double-check their results.  Someone with a lot of blind unfounded confidence won’t know there is a problem until right before they crash.

I once met with a newly minted MBA who was taking a new position.  I asked about what she considered her greatest strengths.  She gave me a list of 5 or 6 things that she felt she was really good at.  A few months later in a 360 degree evaluation (where everyone evaluates everyone else) her weakest attributes exactly matched the list she had given me a few months earlier.

If you think you are bad at something, it probably doesn’t hinder you much.  When you get to a situation that requires that skill, you are extra careful, ask for help, delegate, etc.  People who think they are bad at driving on ice, rarely have ice related accidents. However, when you think you are good at something its easy to overlook obvious signs that you are doing something wrong.

In looking for ways to reduce accidents, some experimenters removed all the road signs from a city and watched what happened.  The number of accidents went down. It turned out that the signs made people overconfident.  They paid attention to the signs instead of to other obvious clues–like the truck that doesn’t look like it is going to stop.  When there weren’t any signs or lights, people had to make eye contact with the other drivers to decide whose turn it was to drive. The signs made people less careful.

I went to a college where everyone was required to pass a swimming proficiency test to graduate. It wasn’t that hard if you had ever done any type of swimming.  You had to swim across the pool and tread water for five minutes.  However, there was one guy named John who had no skills in swimming, but he tried to make up for it with sheer confidence.  John was a nightmare for the life guards because he kept jumping in the deep end and sinking to the bottom–confidence and all.

For an MBA, the pretty piece of paper they have hanging on their wall can make them less careful. It can encourage them to jump into things that they have no preparation for. It doesn’t take too much life experience to correct this, but you may or may not want to be their employer during this learning experience. Further, the value of the MBA is quite a bit lower if their real skill set is developed on the job at your expense.

Economy and Education

A down economy is great for the educational sector.  When people lose their jobs they often go back to school to improve their skills. People with just a bachelor’s degree who can’t find a job after a few months may start looking at MBA programs. Going back to school can help pause their existing educational loan payments and let them get another one at a very low rate. Both of these things will help them keep their head above water while they wait for the economy to recover. Getting a degree also helps make the gap on their resumé look less damaging and it can help give them a better shot at positions that require highly educated employees.  So all in all, this isn’t a bad idea.  You get laid off and can’t find a job–go back to school.

But, if you are hiring, you may want to consider a bit more how the economy works.  When companies need to cut back, they generally want to get rid of the employees that have the least amount of productivity according to this formula. In many situations the highly productive employees are often many times more productive than the average–but usually they aren’t paid many times more. This means that of five employees the top two or three are probably going to still have a job.  (This assumes a rational employer, which isn’t always the case, but the idea works when dealing with dealing with large statistical samples.)

So the person who gets laid off and goes back to school for an MBA is somehow a less profitable investment than the other employees.  Either they weren’t as productive as the others or their pay was high enough that they were more expensive than less skilled help. However, the wildly productive employees are still working and are thus less likely to go out and get their MBA. People who have reasonably good jobs during economic uncertainty are less likely to drop $20k to $50k (or more) on a master’s degree.

So a fresh MBA right after an economic downturn may have the MBA because they weren’t an ideal employee in the first place.  Obviously there are exceptions to this and there are all kinds of things that can happen on an individual level, but these are things worth considering when looking at the MBA job seekers as a whole.

You may get a better employee by hiring the guy who had a job during the downturn because his employer couldn’t afford to let him go.  He may be worn out from doing the work of several people so a different job may look very attractive.

Of course with this logic, it may never be a good idea to hire someone who doesn’t currently have a job.  You don’t want to hire someone else’s problem employee. Yes there are exceptions, but if you are trying to increase your odds… Just be aware of the timing of someone’s MBA.  It might be a bit more complicated than an overwhelming desire for self-improvement.

No comments: