Why MBA After Engineering ? - Balaji Viswanathan
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Balaji Viswanathan, CEO of Invento Robotics, has a Bachelors in Engineering, MS in Computer Science and an MBA specializing on Entrepreneuership/Finance from Babson college. He founded multiple startups that were funded by top accelerators. He is a very popular author in Quora with more than 4 Lakh followers.
Let us see the leaders of 5 top technology companies.
1) Satya Nadella (CEO of Microsoft) - BE, MS, MBA
2) Sundar Pichai (defacto CEO of Google) - B.Tech, MS, MBA
3) Shantanu Narayan (CEO of Adobe) - BS, MS, MBA
4) Tim Cook (CEO of Apple) - BS, MBA
5) Sheryl Sandberg (COO of Facebook) - BA, MBASee a common thread? This dream is the reason why many of us do our MBA after engineering. As my professor on innovation used to say, MBA will not help you a lot in founding a successful company, but it does help in taking over & scaling a company someone else founded ;-)
There is a fundamental misunderstanding among many people on what MBAs and business schools do. The dominant assumption among many Indians seems to be that MBA and B.Tech are completely unrelated degrees. On the contrary, engineering degrees and MBAs are much more related and form quite a combo. Many great economists did this [including our former RBI governor Raghuram Rajan]. It is like adding ketchup to the french fries.
First, understand the key career paths after MBA from a top school:- Investment Banking: Use all your math, logic and Excel knowledge to help companies buy other companies or buy other assets. Engineers have a strong advantage here as they are trained in quantitative methods and great at hard-nosed logic. Added bonus if they have a good knowledge of particular industries [say a Mechnical engineer who had worked in auto sector].
- Product Management: Be the bridge between the engineering and marketing in technology companies. The engineering background would help you understand & work with the engineers, while the MBA background would help you plan and sell.
- Management Consulting: Help companies make changes in their business to improve profit margins. You need to be really good at data and have a very sharp, analytical brain. The engineering background would help you do your work, while the MBA would help you sell your work. Both are equally important.
Other less sexy career paths like operations management also involve a heavy dose of engineering. There are a few other paths sales roles in technical companies where MBA+Engineering combo would help. Think of the two-stage rockets we studied in Physics. MBA forms the stage two propulsion for many engineers.
Why MBA completes an engineer?
1) In Engineering degrees, we are not taught key things like strategy. But, if you are scaling a business or managing a business, this is very important. Many engineers eventually go on to become managers/entrepreneurs and are handicapped without this knowledge.
2) Engineers often find it hard to respect and appreciate the business side of things. They often underestimate things like sales and marketing. This leads them to perpetually low-paid careers. MBA degree can often fix this.
3) Engineers are good at the details, but often lose the big picture. They often miss the forest for the trees. MBAs are the complete opposite - they create castles in the air. Engineering+MBA let you be at the right level of detail.
4) MBA frees up the engineer to work in a variety of industries. Management roles in many industries are quite sexy. On the other hand, engineers are often restricted to certain industries [like software] if they want to earn well.
5) Engineers often don't know the value of their work. Engineers with MBAs are a little more smart selling themselves ;-)
For me personally, I work with developers [and sometimes even code myself] and I have a Computer Engineering background. At the same time, I also spend a lot of time with my Marketing and management teams in doing things like strategy and budgeting. This is where the MBA helps.
Are there some more statistics & research on this?
...roughly 40 percent of the S&P 500 chief executives have MBAs in any given year..Among the top 10, half had MBAs...
CEOs who had an MBA on average ranked 40 places higher than CEOs who didn’t have an MBA (a statistically significant effect).
And if you look at Indian-origin CEOs in the US, the difference is even more stark - practically everyone has an MBA, as our non-MBA networks are relatively shallow [given that we are immigrants]. Indira Nooyi [Pepsi], Vinod Khosla [one of the star investors in the valley], Ajay Banga [Mastercard], Ram Shriram [an initial investor at Google] besides Nadella, Pichai and Narayan mentioned at the top.
Don't follow the herd mentality though. Leaders never follow the herd and also all the people mentioned above went to the top MBA schools. Pursue an MBA only after you have worked a few years and pursue it from the best.
Summary: MBA is a degree that is designed to be at the sweetspot of engineers. Engineers can both use their core skillsets and also learn things they really suck the most - presenting and organizing themselves better. Also, 90% of the top Indian engineers don't end up in the IIMs and help the nation build its engineering power. The rest 10% (the MBAs) make sure that the work of other 90% gets its due value.
