Another week has gone by and today we want to try and evaluate the value of an MBA in business success.
There have been quite some arguments recently on the relevance of an MBA, and I thought I should share my viewpoints in this blog.
I will attempt to do this with the focus on the reasons why in my opinion an MBA is not necessary for one to be successful in business. I’m not downgrading an MBA or the various universities and other institutions globally – including the professors – that deliver MBAs.
By the way, I know that some folks would simply call these arguments against an MBA sheer stupidity – but we can reason together.
We can assume that being successful in business means the entire process from idea creation, starting, growing and successfully running a sustainable business.
When we simply focus on running an already successful and stable business then we lose the entire perspective.
Maintaining the status quo and doing some little tweaking to improve a business to me is much easier than starting from scratch – and this is why we need to look at the entire process.
Let’s now consider my arguments below. Ok?
THE KEY POINTS AS TO WHY YOU DON’T NEED AN MBA TO BE SUCCCESSFUL IN BUSINESS
1. The most successful entrepreneurs globally did not have an MBA. This is an interesting one. The majority of the most successful entrepreneurs or businessmen and women (for equality purposes) did not have an MBA.
An article by Utkarsh an Inc42 staff, documents powerful names such as Sr. Richard Branson, Henry Ford, Michael Dell, Steve Jobs, Bill Gates, Walt Disney etc. Now, these are not kids in the global entrepreneurship world.
If we moved to the east of the globe, Jack Ma had only a first degree in English and was rejected 10 times by Harvard University. Despite this he went ahead to create Alibaba with a reported market capitalization of $ 614.69bn as at March 2021.
In Africa, Aliko Dangote of Nigeria with net worth of $11.9bn as of 2021 only got a bachelor’s degree in business administration from Al-Azhar University in Cairo, before starting his business empire.
So, is an MBA really very necessary for success in business? What do you think?
You can let me know your view points in the comments section below this blog.
2. While an MBA adds a lot of value to business success, the interest and characteristics to succeed in business are far more diverse and having an MBA does not guarantee this.
I’m not going to argue against the fact that MBAs add value to businesses – but when we talk about the critical things to business or enterprise success generally then we might have arguments.
Certainly an MBA provides value such as developing general business and leadership skills. Additionally, due to the focus on developing business leaders, the wide exposure to disciplines such as finance and accounting, management, marketing, operations, law and ethics etc. come with lots of value.
Don’t you agree with this? This means that there are benefits of an MBA for business people.
At least we can say that an MBA delivers the basic ingredients.
We all know that businesses globally hire and will always continue to hire MBAs.
However, when you look at MBA graduates’ readiness, willingness and additional required characteristics to embark on purely entrepreneurial journeys, the story is a bit different.
A 2013 research done by Graduate Management Admission Council (GMAC), a global, nonprofit association of 223 leading graduate business schools, shows that only 25% of the students were contemplating the entrepreneurial path after college.
This situation however is changing. A new study done by Illuminate Ventures (a seed-stage venture firm) in 2020 confirms this shift in interest.
The study published in January 2021 shows that up to 85% were interested in entrepreneurship as a career.
The study by Illuminate covered about 20 top business schools in the US.
Are you still following me?
I mentioned the above statistics to show the level of interest in starting, running and growing a business in the first place.
Then – we talk about the characteristics or personality traits required for entrepreneurial success. The reality is that personality traits cannot be taught.
In my earlier article entitled 7 Essential entrepreneurship characteristics to develop – to avoid failure I argued – with examples – about these.
Characteristics or attributes such as passion, discipline and focus, risk taking, salesmanship, managing people etc. are vital for business success.
By the way you don’t need to brush these off! Ok? You can brag that you could always hire people to do this.
However, if you the vision bearer fails to get some of these right then you are in for trouble. Do you remember how Steve Job was evicted from his own business for a while?
You need to be smart my dear!
Financial times also argues that MBAs encourage risk aversion which is against the fail-fast-fail-often slogan for entrepreneurs.
Peter Thiel of Paypal even advises people against hiring MBAs saying that they ruin the company.
Elon Musk says MBAs don’t equip people to create companies.
In summary, an MBA without the willingness and additional required characteristics for success in business – could be less valuable to humanity.
3. Business success and failure appear to be hinged on factors that are only indirectly related to common business knowledge which MBA provides.
Start-up failure statistics indicate that the first two reasons for up to 90% business failure include no market need (42%) and cash running out (29%).
Not having the right team comes third with 23%. We could argue over the right team here. Possibly lack of MBAs in the team or something else.
My question here is this. Does one need an MBA to get or identify the right market need?
Regarding the need for cash, can basic reasoned thinking or simple advice from an accountant give adequate hints? Must one pay for an MBA graduate?
Come on – help me think here!
This is why some time back I asked whether entrepreneurship can be taught.
This is another odd reason why I think an MBA is not necessary to be successful in business.
4. There are various ways of learning entrepreneurship or business other than an MBA. Again, learning entrepreneurship and business generally can be done through various ways.
Just take a look at the Indian business community globally. These folks don’t focus on the MBAs and other qualifications.
They simply train their children in various business disciplines on the job. By the time a child is a teenager he or she can successfully run a business. Splendid!
The Igbo tribe in Nigeria has similar practices. The apprenticeship practice among the Igbo where a young man from the village spends seven years in practical business training is worth mentioning. This training is done under a successful business mentor in the city.
After the seven years the successful elderly businessman then ‘settles’ the trainee and sets him free to go and start his business.
The term settlement in Nigeria refers to rewarding the trainee with capital. It also refers to compensation generally.
Of course, you will find some bad-hearted bosses who refuse to ‘settle’ due to greed. These are the type that never get satisfied yet they carry nothing beyond.
It is a bit unfortunate that this apprenticeship practice is not well documented – but I can confirm the practice from my six years’ expatriate experience in Nigeria.
I recently documented 9 Incredibly Good (Never Miss) Ways to Learn Entrepreneurship.
You can read it if you like. Don’t complain why I’m referring you to my articles to back up my points. Ok?
They are well researched articles but you could still ignore them. Your choice!
What I’m simply saying is that you have various options to learn and practice successful entrepreneurship – without an MBA. Period!
5. Salesmanship, relationship building, networking etc. are vital for entrepreneurial success. You can only succeed in business when you work with people.
You need to be able to sell to people. I guess you know that oftentimes it’s not easy to extract money from people’s pockets.
It doesn’t matter how good the product or service you are promoting is.
People buy relationships and not principally products or services.
Beyond selling you need to build relationships with various stakeholders to be successful in business.
You need the employees, the market and society, investors, mentors and coaches etc. to be successful in business.
Sure, an MBA guides you on this but cannot guarantee your success in implementing them. We would be having more MBA’s heading governments and companies.
Don’t you agree with me.
In my 7 Essential entrepreneurship characteristics to develop mentioned above I also wrote about the people element.
The interesting thing is that you can get this knowledge and skills without an MBA.
Zach Ferres, an entrepreneur leadership network writer argues that people are the most important resource in a business.
I have emphasized this human capital element over and over again.
This point again makes me conclude that you don’t need an MBA to be successful in business.
6. Being successful in business requires developing an entrepreneurial mindset, spirit, habits and lifestyle. These are other cornerstones of successfully running a business.
Entrepreneurship is a mindset and a lifestyle.
To be successful in business generally you need creativity, passion, motivation, positivity, courage and self believe etc.
An articles in Forbes on how to foster an entrepreneurial spirit is also useful. Forbes additionally writes about 10 proven habits of successful entrepreneurs.
Will an MBA give you these vital mindset, habits and lifestyle attributes?
You should know the answer – though you don’t even need to share this with me.
Honesty – I’ve met so many MBAs that are very far away from these fundamental requirements. So, these MBAs will rather settle on a routine job than take the stressful and uncertain path of business.
7. The focus, approach and choice of an MBA. Some business training schools apparently recognized the folly in general MBAs way back and started adjusting their approaches to training.
According to Harvard Business Review some top business training schools in the US had already developed their own new approaches to training, instead of mimicking the old approach.
The objective here is to make the MBAs more useful to entrepreneurs.
It is also vital to note that the nature and focus of an MBA has a great bearing on its usefulness to business success.
Following on the viewpoints expressed in Financial Times, most MBA programs focus on predictability and taking risks away from business. They focus on optimization.
This is an area where you find the hundreds of MBAs globally handling, in companies today.
There are even arguments that some MBA programs discourage entrepreneurs.
MBA programs with entrepreneurial content seem to add more value to business success. Moreover, programs that convene heterogeneous teams are even more useful.
Now – below is another interesting one.
Some folks today look at investing circa $100k to $200k on an excellent global MBA program and chose to use that cash as seed capital.
Some will opt to develop a Minimum Viable Product (MVP) with that.
This could be controversial – and there are pros and cons. You might need to look for career guidance here.
Don’t blame me if you burn the $100k and fail dramatically in business.
You might not get funding again even for a cheap MBA, as people might think you are simply a dumb cow.
The point is this. A general MBA might not be necessary for your entrepreneurial success. If you must do it – and you indeed want to be a successful businessman – then try and chose a relevant MBA.
8. Successful business is principally about identifying a problem and solving it in the best possible way and in an affordable way.
This is the crux of the matter. You can make many mistakes along the way but when you get it right once then you can proceed.
This is about chasing the right idea and vision – and the money will follow continuously.
This is why you will find successful entrepreneurs in literally all parts of the world, even in very remote places where people don’t know what an MBA is.
Some of these people don’t even go to school, but they simply know how to identify a market need and fill it at some gain.
Whether with calculators or some raw form of calculation they know they are making profit. They know how to retain part of that profit, reinvest it and keep on multiplying it.
They may coopt in some people (the team) and capital into the agenda.
This is entrepreneurship. It is business. I don’t know what other definitions you need.
If you want to pick up an argument about the fact that entrepreneurship is not exactly the same as business we can proceed and argue.
What I know is that they all aim at making profit or gain. This is the pivotal point.
Once you have a good product or service and the means and structure (capital, staff, organization etc.) to produce and deliver it to the customers at a profit then you are in business.
American National University documents some of these fundamentals.
As your customers smile due to a need you have met, you also smile with profits to the bank.
Now – to my last point for today.
9. A business owner can always employ an MBA anyway. Now this is pretty simple and a bit stupid but smart at the same time. What a paradox?
Instead of cracking your head for an MBA, why not simple hire one?
Of course, despite our various arguments above, MBA graduates form very useful resources in various businesses globally.
They certainly contribute a great deal to business success – but left on their own to face the music of starting and successful running a business, most would dash for cover.
As an entrepreneur, you can simply hire an MBA and pay him or her from either your capital or your revenues. Simple.
This is another strong reason why you don’t need to hold an MBA to be successful in business.
You just need to be smart enough so that you are not taken for a ride.
Some graduates could be a mess.
I think we should leave it here for today. At least we have elaborated on up to nine reasons why an MBA is not necessary for one to be successful in business.
This does not mean that you should not go ahead and get an MBA if you like. It also does not mean that you should not hire MBAs.
I hope you understand.
Let’s keep sharing this blog as much as we can – as we aim to develop entrepreneurs globally.
With every good wish
The Wise Entrepreneur
NB. Images Courtesy of:
- Stephanie Hau on Unsplash
- JESHOOTS.COM on Unsplash
- Antenna on Unsplash