Sunday, March 14, 2010

CEOs are better-off with MBA ?

Remember Jeff Skilling of Enron? He had an MBA, while Bill Gates and Steve Jobs didn't even finish college. Probably with the recent financial crisis on banks,etc, there was also side-impact on MBA programs and few of these programs have received criticism and whether the graduates know what to look out for or just follow by the book. According to critics, they are guilty of many overlooked lapses: teaching the wrong financial models, riding roughshod over risk management, sidestepping business ethics, overheating the managerial job market, hiding from the real world. As a result, so the script goes, we have a generation of business leaders tainted by greed and short-term thinking.

What impact has an MBA on a CEO's overall position in the ranking. Findings are :

While information about educational credentials wasn't in the public domain for all countries, CEOs' academic records were widely available in France, Germany, the United Kingdom, and the U.S. Fewer than one-third of the CEOs of four countries had an MBA. So let's be clear certainly we do not say it's a necessity for getting the top job. But it could still be sufficient to improve performance.

As it turns out, seems there is a definite correlation between holding an MBA and achieving high performance as a CEO over the long term. CEOs with an MBA ranked on average a full 40 places higher than those without.

Those who had become CEO before the age of 50. The effect of an MBA was even more significant for this group. The advantage went up from 40 places to 100. Time and again, the MBA advantage persisted.

The Potent MBA Ingredient

The big question is, why? The simple answer is that something in the MBA curriculum or experience helps a CEO add value, particularly if that executive has comparatively few years of business experience. But what exactly is this magic MBA ingredient? For some graduates, an MBA simply gives them better skills. It can add right-brain creativity and warmth to left-brain logic and financial acumen. Or vice versa. It can even help get the hard and soft skills working together. For others, an MBA is a badge of excellence. After all, top schools only accept a chosen few. And most top companies look among the elite for their leaders.

An MBA may also provide a network of other rising stars. This network offers business contacts, opportunities, and priceless advice. And it lasts for an entire career.

Those who choose to do an MBA, are opting to improve themselves. Their openness to ideas and willingness to learn is going to benefit them all the way to the top—and long after they arrive in the executive suite.

An MBA program, or at least a good one, gives just such a perspective, especially if it recruits a globally diverse student body. And here the speculation is backed up by research. An INSEAD colleague, Professor Will Maddux, has carried out experiments demonstrating conclusively that the simple fact of having lived abroad makes people more creative.

The most successful MBA graduates are probably those who manage to mix all of the above ingredients into a potent cocktail of excellence. Perhaps they're the ones who made it into the top 200. Today's MBA students should take note.

*Some of above quoted from Herminia Ibarra, professor of organizational behavior and the Cora Chaired Professor of Leadership and Learning at INSEAD

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