To MBA or Not To MBA ? - Uddalak Banerjee, XLRI
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Uddalak Banerjee did his PGDHRM from XLRI Jamshedpur and BTech in Computer Science and Engineering from NIT Raipur. He cracked CAT (99.12 percentile), XAT , SNAP and secured final offers from MDI, NITIE, IIT B, IIT D, 6 IIM s, IMT G, SCHMRD, XIMB, GIM and TAPMI. He has written articles related to HRM and MBA in general.
I distinctly remember my pre MBA days, days when I used to nourish countless dreams which got gradually built by hearing and reading stories about people who have ushered in success after doing their MBA from reputed B-Schools. I was also influenced by various advertisements and lectures that featured MBA toppers and their success. My B-tech college mates started preparing for MBA since 3rd year. They believed MBA was their future and that engineering alone won’t lead to great ends. My own team mates in Job once said, “You have good technical skills but if you do MBA from reputed institutes like XLRI or IIMs then you can have a better career and a better life”. I contemplated multiple angles during this decision making phase of whether to go for an MBA or to continue in technical domain. But then, I did not have the understanding that I have now, 2 years into my career post MBA. Yes it is true that MBA teach you fine aspects of business and expose you to cruel world of competition. It supports you in establishing a network of highly competent and intellectually gifted peers from reputed institutes, who will aid your thought process to strategise from a generalised angle during case studies and discussions. But then whether an MBA is mandatory to be a manager is highly debatable.
About 2 years back, in one of the HR conferences held in Mumbai, I had a chance to speak with one of the very senior HR person from an elite multinational company. He asked me some questions which I feel are very important at every place of work. The excerpts of the conversation are as follows:
HR head: So you passed out of XLRI?
I : Yes Sir before that I did B-tech from NIT R in CS.
HR head : Great! So must have got a big booty in placements at XL? 20 lakhs above package?
I : Yes Sir.
HR head : Great! So where now? You have a MBA degree from a great institute perhaps Asia’s Best in HR.
I : Thanks. I would want to be a CEO someday .If not a CEO then a CXO position at least before I retire. “
HR head (with a smile) : OK so how many years as per you it takes to be a CEO?”
I : From the news shared in alumni blogs, mostly people become CEOs after about 20 -25 years of work. But I think on job performance, innovation, ability to lead etc. can make a CEO even faster specially so in case of start-ups. There are some batch mates and seniors who are already CEOs as they have started some start-ups on their own.
HR head : Are you sure you passed out from XLRI? Have you seen any performance management form which has college name in it? If the promotions are not linked to college name and purely on dexterity of individuals to meet target actuals then how come this be linked to colleges? If there is no VP position vacant in an organisation how will the GM inspite of performance be promoted to VP? Is it possible to have a timeline for vacancy or predict that who will leave the organisation at what time?
I smiled and said nothing.
HR head : Well let me tell you frankly, I am just a BCOM grad from a not so known university. I never wanted to invest 20 lakhs doing the worthless MBA degree. I have been working as HR for last 20 years I have never seen any MBA become CEO in 5 organisations I have worked in!!
I : Well sir it depends from company to company. I know of many companies which have CEOs from XLRI, IIM C, IIM A, Harvard etc.
HR head : As per how many students are there in circulation from XLRI, IIM A, IIM C and Harvard. Please add all batches till date and tell me?
I : Exact figure I don’t know but mostly it will be around 15000 each for XLRI , IIM A , IIM C spanning 60 years nearly.
HR head laughed out loud and said,” OK so how many CEOs you know from these colleges?”
I : I don’t know all but all combined would be around 30 for companies which have revenue above 5000 crore. But figure can be more if considered for all start-ups with no fix revenue slabs. I am not sure. There are some from IMI Delhi, FMS, JBIMS etc. also which may be about 20 more
HR head : Ok so let’s round off at 100. So that means 100 out of 60000+ ? Or say 100 out of 2 lakh? And you are saying after 20 years you will be CEO? Is this what they taught you at XLRI?
I : No sir it is just that MBA teaches you management through lectures, case studies, role plays , class tests ,grades, competitions . Obviously individual merit matters. How you use it in real life will lead to different results for different individuals irrespective of college logo
HR head : Tell me if MBA teaches management then why are Politicians not all MBAs? Should not MBAs be smart enough to manage everything? Why did Lehman Brothers fail inspite of MBAs from XLRI, IIMs in all key positions? Why all organisations don’t hire MBA for each and every role? Why Indian Cricket Team doesn’t have MBAs? Why there is a separate Civil Service exam which does not give preference as such to MBAs?
I : Sir technical roles can only be handled by technical people. Besides MBA would need higher salaries there would be personnel cost limitations also. MBA can at max guide and help in strategies. Besides MBAs from XLRI are into politics also and have become MPs and MLAs.
HR head (cutting me short) : So you are saying a technical person would need a MBA person to tell him what strategy he should follow inspite of being a master in his trade? How much does a MBA marketing know about Paper, Tobacco production? Are they ever taught these things or can case studies ever teach this ever? Or a HR Manager know about how to produce paper and skills required for the same? Then how will he be able to set time required for job? Is not he the person who prepares roster or is liable to pay for performance? Besides, if all are MBas wont they fight among themselves for power? Won’t they appear knowledgeable fools to other people down lower in the value chain as they don’t know technical aspects? Why do so many IIM/XLRI people fail and so many people from not so good backgrounds become heads? How did I become head? I have had many IIM /XLRI grads reporting to me over last 15 years. So?
I was silent then and did not say anything, passing the conversation off for the time being. But now, 2 years down the line when I look back I feel how immature I have been. I feel that most of the things he said that night was right. I feel that most of the people doing MBA have unrealistic career expectations which is reflected in answers of questions like where do you see yourself 5 years down the line? Or why MBA? etc. etc. And that aspirants often link career success to B-School brand, which is not wise. If one decide to pursue MBA, he or she should have a calling for managerial roles than technical/core ones. Just doing MBA with the crowd for a brand name does not help beyond a limit and one tends to often get lost. There are hundreds of candidates in the job market from all the elite institutes. Getting a preferential treatment (even for IIM A) is hard to come after a certain point. I feel that a good B-School brand can help one to get an opportunity to be interviewed for a high paid job but has nothing to do further as selection / career progression is exclusively on the merit of the candidate.
Management as a stream does not add core value as much as Technical skills, which may be reflected in the fact that there are higher number of Start-ups by B-tech graduates than MBA graduates. The preference of B-Schools for work ex candidates may also be because of the importance provided to the learnings that can be derived from work as tech grad over and above the fact that they are easier to place .Although knowing of strategies and different jargons of MBA world does give one options to choose from or help in understanding certain aspects of business but then perhaps experience of doing the business always forms the upper hand over any degree. A successful marketer with no degree but good understanding of language and work process of target market is always a better option than a IIM grad who might not have a grip of target market language or local customs. No education degree can give equalisation with the meaning of word Merit. Perhaps that is what is reflected in the fact that for doing job profiling we use knowledge, skill and ability separately as knowledge does not indirectly mean skill or ability and vice versa.
Cases of CEOs being drop outs do also support this hypothesis. As regarding job growth well yes mostly it depends on the person and his ability to convince and take care of his targets and has nothing much to do with college brand. It depends on supervisor perception, your ability to meet targets, your ability to convince your team, availability of a vacancy in senior management, company’s performance in last quarter and so on. PNB Loan calculator for EMI for doing MBA of 20 lakh value (currently most top 4 colleges have fees of 20 lakhs). If one takes 5 years as the period in which loan is to be paid.
Mostly individuals seek to marry after MBA as most age of students are 25-30 while doing MBA from an elite B-School. So they try to get rid of the loan as early as possible. Packages in premiere B-Schools vary from 16 lakh to 22 lakhs for average students and majority of the batch. If one prefers to buy a car or house after MBA the EMIs would further add on. However, if one buys nothing mostly in hand pay guaranteed after such a high loan would be around 30 k for next 5 years. So yes think twice before you opt for MBA. IF you opt for it, Study really hard and try to align yourself to the market as much as possible though live case studies and hope to really fall by luck in the right side of fortune in years to come.