Friday, December 14, 2012

Does an MBA degree benefit ENGINEERS? / Do Engineers benefit from Graduate Business School education?

From the link:

Interesting read from the link above. Some points have been mentioned below:

  • Instrinsic value of studying business
  • Promotion in job with current company / employer
  • Career transition using the MBA
  • Tremederous catalyst to increase salary (when applicable)
  • Expanding contacts and professional networks
  • Opportunity Cost
  • Not necessarily a pre-requisite to leadership positions
  • MBA will not necessarily increase your pay
  • Employers are occasionally biased against MBAs
  • Not all MBAs are equal
  • MBA study material not particularly challenging for engineers

Bottom Line: Is Getting an MBA Worth it as an Engineer?

“Yes” if
  • You want to move into a managerial or C-suite position for a large corporation or a traditional employer.
  • Your job (or anticipated job) will require managing a budget or forecasting.
  • You would like to change careers, especially if you are looking outside of engineering altogether.
“No” if...
  • You want to remain the go-to problem solver or technical wizard.
  • Don’t want to fork over two (or more) years of your time and incur expensive student loan debt.
  • Want to remain with a traditional engineering firm.
  • Need a guaranteed return on investment.

An MBA is a change agent when applied to a conventional engineering career.
Caveat emptor obtaining an MBA does not necessarily mean you will be promoted or see a salary increase – and it will entail your advance on a significant time and monetary investment.
But if you want to be considered for management or C-Suite position within your current firm, make yourself a more valuable candidate to be recruited by another company, or transition out of engineering altogether- an MBA is a considerable asset.

What can Engineers and MBAs learn from each other?

From the link:

What engineers can learn from MBAs:
  1. Every decision should include a financial aspect. Spec a part; look at the cost. Design a process; look at the cost. It’s not good enough just to say “hey this part functions best.”
  2. Look at everything from a total cost of ownership point of view. It’s not just piece part cost, it’s yield, it’s field returns, it’s overhead, it’s inventory tied up on the water.
  3. Understand cash flow. This probably should be number one, but it’s tough. If you buy a part in China, have it sit in WIP in a factory for a month then two months on the water, that makes a difference.
  4. Learn to calculate IRR. Use it to make financial decisions (1), calculate total cost of ownership (2), and to do an IRR calculation you gotta understand cash flow (3). Hint: IRR = Internal Rate of Return, an ROI type calculation, but better suited for development type projects with uneven cash inlays and outlays. It’s the inverse function of NPV = Net Present Value. And it’s in Excel, although it can be tricky to use (it’s an iterative calculation so sometimes it needs a seed…).

What MBAs can learn from engineers:
  1. What a BOM is (Bill of Materials); what an ECN is (Engineering Change Notice); what EOL is (End of Life).
  2. Understanding the age old engineering adage: On time. On budget. Works. Pick Two. Engineering is about compromise. And Murphy was an engineer.
  3. What a product development schedule really entails, and how to budget and schedule for the real world. Engineers know what it really takes to get a product out the door; they know that real product development involves iterations; and that novel products and technologies take a lot of efforts. Yes DFMEAs and validation testing cost money up front, but they decrease the total cost of ownership. See above.
  4. That engineering is very often about good enough; that no product will be perfect; that compromises are in order. And that saving money does no good if the dang product doesn’t function properly
Of course there is always the option for engineers to just plain enroll in a b-school, but not all of us have the luxury of the time and money to do so. But that doesn’t mean we engineers shouldn’t learn the key points. And maybe teach an MBA a key point or three about engineering as well.

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