Wednesday, June 16, 2010

Deconstructing the 2 biggest MBA mistakes

Deconstructing the 2 biggest MBA mistakes
 -- Manish Sabharwal

THE biggest mistake an employer can make in hiring a fresh masters of business administration graduate is selecting a candidate who has no work experience. And the biggest mistake a student can make in getting an MBA is joining the course straight after college, without spending at least two years at the workplace. Why? Because an MBA is not an academic degree but a professional one. Unfortunately, the management profession — unlike other professions where you can’t become a CA, doctor, policeman or pilot without doing a structured, formal apprenticeship or probation — has chosen to hand out designations without making field experience a prerequisite. Obviously where you stand on this issue depends on where you sit, and I’d like to make the case for both sides.

The case for employers is simple. Only being in a workplace can give a candidate an appreciation for the important and difficult issues, people face in organisations. Experience teaches us that humans are irrational and illogical, and therefore the shortest distance between two points is not a straight line. Humans worry more about relative than absolute recognition and compensation. How can an MBA explain these points?

The case for candidates — and parents — is more complicated. As a parent, I only now understand the parental instinct for stability, predictability and safety. Most MBA students sign up for the course without any work experience at altars of stability (“finish your studies and then settle down”), misconception (“you will forget how to study if you start working”), misinformation (“the only jobs worth having need an MBA”) or miscalculation (“no experience is better than poor quality experience”). But getting an MBA without work experience ensures you get less out of it because you don’t have the context for learning. The experience could be of any kind; breadth (staff or line function), depth (big job in small company or small job in big company) and context (family, private, public or NGO) are irrelevant.

An MBA creates an understanding of how different functions in an organisation interlock. It gives a theoretical grounding in subjects like finance, accounting and statistics, while building a network of friends who will morph into potential clients, investors and colleagues. It has important signalling value; most good MBA schools are great places to be at — but better places to be from.

Experience never does not give us definite answers, but it gives you more data, information and wisdom in figuring out what you want to do and where you want to go. The slowdown sparked a huge soul-searching about ethics and purpose in MBA programmes because the crisis was largely created by institutions run by MBAs. I hope Indian business schools use this opportunity to reflect on their admissions criteria that is biased in favour of engineers — the MBA experience at IIM-A is first class but poorer this year because of a student body that is 96% engineers. Employers and students beware.

(The author is chairman, TeamLease Services and IIJT Education)

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