20 3 SEPTEMBER 2009

Special Feature: MBAs and Executive Education

Ignoring the MBA hypeSARAH LANG

Choose wisely: Deloitte’s Matthew Haigh says you have to consider the implications andopportunity cost of doing an MBA.

You’re not going to be sipping champagnein a corner office with the CEO talkingcorporate strategy straight after an MBA.

’’‘It’s like how gangsta rappersuptalk their big-G lifestyle,’’ saysMatthew Haigh, Deloitte’s head of

innovation, about the hypesurrounding MBAs.

‘‘This hype engine goes intooverdrive as far as the MBA gettingyou this almost-unobtainable payoff. . . You’re not going to be sippingchampagne in a corner office with theCEO talking corporate strategystraight after an MBA.’’

Don’t get him wrong: thisUniversity of Auckland MBAgraduate isn’t saying steer clear ofthe degree – just that prospectivestudents should carefully consider theimplications and opportunity cost.Business graduates shouldn’t botherwith an MBA, he says, although it cangive the likes of scientists andengineers a valuable businessgrounding.

‘‘Ignore the hype, boil it down andlook at what the experience isactually going to be like and whatyou’ll gain. Remember, the hours youput into this thing are huge – it putsstrain on your work and your sociallife. View this like any investmentthat has a cost but will appreciatewith time.’’

His did. A Brit who followed hisKiwi partner Down Under in 2005,Haigh did his part-time MBA over2007 and 2008 during the evenings,while working fulltime in technologymanagement at Deloitte’s Aucklandoffice. Although the MBA was aninstinctive choice, he looked carefullyat its merits versus otherqualifications, and decided its holisticoverview, continuity and grouplearning would give him thenecessary grounding in how NewZealand (particularly Auckland)business worked; and balance out hisother (chemistry and computing)masters degrees as he moved furtherinto management.

Following the course – and partlybecause of it – he was promoted to thenewly-created innovation role, whichquestions current practices andinvestigates new business models.

The MBA learning Haigh found ofparticular use in this thinking-outside-the-square role were those on

leadership, authentic leadership,managing complex businessoperations, company expansion,pitching to business leaders, and theinternational business project (hisgroup went to Greece to find a marketfor New Zealand company Arvus’high-end loudspeakers).

Make sure your employers fullyunderstand the impact of doing anMBA on your work performance, saysHaigh, 32. Deloitte increased somediscretionary leave and made sure nolong work trips were scheduled.

‘‘A lot of effort you put in at work,or into building a business, isdiscretionary. But with an MBA youdon’t have the bandwidth any more todo over and beyond what you have to[work-wise]. So your performanceappears to dip in the eyes of yoursuperiors because they’ve becomeaccustomed to you over-delivering.’’And while the salary hike and theabbreviations are nice, that’s not whymost of his cohorts did it. ‘‘It actuallybecomes more of an awakening aboutyourself: put under pressure, you findout what makes you tick, why you’redoing this, how to make compromiseswhere you want to go. One guy wentout and bought a business afterwardsbecause he now understood that’swhat he wanted to do.’’

The competition isMBA:Despite the recession, more New Zealanders are wantingMBA sitting after their names, writes Sarah Lang.

No worries: Shortland Street star Libby Jeffries may be doing a Master of Bugger All,but most Master of Business Administration students take it seriously.

Continued on PAGE 21

Master of Bugger All, somecall it. A bit of expensivepolish on the CV. Whilethat may be true for

fictional Shortland Street personalassistant Libby Jeffries, who seems tobe picking up the degree with next-to-no study, the MBA (Master ofBusiness Administration), whichturned 100 last year, hasn’t shownany sign of old-age decline yet.

In fact, with its prospects ofprestige, pay rise and promotion, theMBA is proving increasingly popularin New Zealand.

Two years ago, economicdevelopment minister at the timeTrevor Mallard warned that NewZealand managers and businessowners did not embark on enoughformalised training. You would behard pressed to say that now.

The number of MBA enrolmentshas increased from 1100 in 2007 tomore than 1300 in 2008, and is rising.With New Zealand’s generally highstandard of MBAs, gone are the daysof having to jet off to a fancy overseasschool to get one. We have sevenmain MBA providers – theuniversities of Auckland, Otago,Canterbury, Massey, Victoria,Waikato and AUT. That climbs to 11if you count private courses, andsatellite programmes run overseas.

New Zealand’s fastest-growing andbiggest MBA provider, AUT, has 240students alone. The University ofCanterbury is one capped provideraccepting more applications this year.Even the University of Otago, whichprides itself on its elite 25-person

course – the only local MBA listed inThe Economist’s top 100 – is looking todouble this in the next few years byadding a second stream.

The recession has had a reverse orcounter-cyclical effect on MBA uptakein New Zealand. Bucking the trendoverseas, including the MBA-reveringUnited States, numbers are rising, notfalling. Why? Because most MBAstudents in our small-and-medium-enterprise economy are self-fundedrather than company-funded, says theUniversity of Canterbury’s pro-vice-chancellor, Nigel Healey, and slashedcompany training budgets don’t meanfewer enrolments, as they dooverseas. Rather, with dozens orhundreds vying for one position inour depressed job market, applicantswant to stand out from the crowd, andan MBA sounds impressive.

Many of those feeling vulnerable intheir jobs want a transferable quali-fication, newly redundant workersare taking time to study rather thanrush into a tight labour market, andstill others whose jobs are a bit quietthink now is a good time to takeannual leave and upskill.

It’s not just those impressive-sounding letters after your name thatare tempting, says Dr RegenaMitchell, of information and supportorganisation The MBA Agency.

‘‘It’s the odd one out amongmasters’ degrees; you don’t need tohave an undergraduate degree in thefield [business].’’

Not all MBA-ers are white-collarexecutives from a top firm. Othersjoining the MBA ranks are middle

managers crossing the bridge tosenior-executive status.

There are also those with degreesand expertise in non-businessdisciplines (say engineering, scienceor law) who need a businessgrounding and toolkit.

These aren’t kids straight out ofundergraduate school, as you wouldfind in the US. The average age on thecourses is mid-30s to early 40s. It’shard to meet the criteria before 30.

A quick distinction: executiveeducation and the MBA are quite

different, if intertwined, bedfellows.Executive education often refers toshort courses plugging holes inlearning, which don’t normally coughup a formal qualification.

Take your pick: there’s an upsurgein customised courses tailored toindividual companies. For example,there are 300 and rising two-daycourses at the University of Aucklandalone, and a myriad certificates anddiplomas.

But the MBA, while an offshoot ofexecutive education, is a different

beast. ‘‘A post-experiencemanagement-development degree,’’Healey pronounces. ‘‘The practicalapplication of high-value decision-making,’’ says the University ofAuckland’s director of academicprogrammes, Peter Withers.

‘‘The MBA gives individuals thecredibility and confidence to take onboard challenges and risks theynormally wouldn’t have engagedwith,’’ says Massey University’sexecutive education manager, TrishFranklin. ‘‘They understand howbusiness operates and think, ‘I can dothis’.’’ The MBA is still sexy, still topof the pack, even though somerubbish its hype and call it just afeather in the cap, a notch on the belt.Unexpectedly, Withers agrees withthe sceptics, at least in part.

‘‘Full-time MBAs for people in theirlate 20s-early 30s are a waste of time,because those people aren’t at thepersonal or professional level ofmaturity. They’re doing it because it’sgoing to put letters after their name.’’

But for others, isn’t it just a bit ofpolish on the CV?

‘‘That’s simply not true,’’ retortsHealey. ‘‘There’s an awful lot ofevidence – with schools tracking theperformance of their alumni andworking out MBAs’ rate of return –that shows it does make a differenceand they [MBA graduates] do get onfurther and faster.’’

Does it translate into promotionsand pay rises? ‘‘One hundred percent,’’ says Franklin, talking of astudent headhunted by a company soimpressed by the first half of herMBA that it doubled her salary.

Of course, there’s the argument fora sampling bias, in that the brightestand highly motivated do MBAs.

But ‘‘the MBA is no guarantee ofsuccess, says Withers. ‘‘What you dowith it is a different story.’’

Age no barrier to further educationSARAH LANG

Proven wrong:Massey’s TrishFranklin initiallyhad doubts thatan older studenthad sufficienttime to do anMBA, but shewas wrong.

When Gail Smith was firstinterviewed for an MBA,Massey University’s Trish

Franklin (now executive educationmanager) wasn’t so sure about her.HoweverSmith, a 51-year-old fromLower Hutt, only found that outwhen she and cohort members gottogether to reflect on their 25-monthjourney. ‘‘Trish turned around andsaid ‘Gail, I admit that at first, withyou being so busy, I didn’t think youcould make it. But you have. Howwonderful is that?’ ’’

When we speak, the longtime nurse-turned-manager has literally just got hermarks back: ‘‘It still hasn’t sunk in!’’

In 2007, Smith was working for age-careprovider Bupa Care Services in a fulltimefacility-manager job. As she moved furtherinto management, she felt the urge toupskill, get some letters behind her name,and open up management opportunities.

‘‘I thought ‘Now that I’m heading past50, if I were to move companies a youngperson could get the job that I’m actuallyquite capable of doing.’ So it was aboutsecurity for the future, but also I reallywanted to do something for me.’’

Coming from a poor family where she’dbecome a nurse to help a sick mother,Smith had always yearned to go touniversity. When Smith called Massey,

she was mulling over a diploma ofbusiness but was urged to consider theMBA – and the programme’s flexibilityappealed. Her two children, who’d gotdegrees first, egged her on and herhusband accepted there’d be limitedcouple time.

Starting the Executive MBA part-timein April 2007, Smith met with cohortmembers and regional facilitator Franklinevery third weekend, for two intensive10-hour days at Massey’s Wellingtoncampus. A month into the MBA, she got anunexpected promotion to operationsmanager, which meant even more travel-heavy hours overseeing 11 age-carefacilities. Study had to be squeezed into aneven smaller non-work window. ‘‘I had toturn down weddings, birthdays, and Ibecame disconnected from my family and

friends.’’ Without employer support,she couldn’t have done it, says Smith –and not just because they helped withfees. ‘‘My CEO said ‘anything you needto do, you do it’. Everybody was reallybehind me.’’ She did some assignmentson Bupa; workmates gave advice.

With the exhaustion just a blurrymemory now, was it worth it? ‘‘Mostdefinitely. The MBA has changed theway I think, the way I react tosituations, and it’s driven me tocontinue to self-learn and question.Nurses tend to be task-focused but I’velearned to think outside the square.’’Another boon is that course mates,alumni and industry leaders havehugely expanded her networks.

‘‘I deal with a lot of strangers. Onceupon a time they’d say: ‘Hello, what doyou do’, and that’d be the end of theconversation. Once I would’ve neverasked a question, and I went quietwhen people talked about business.Now I feel confident enough to makecomments, even answer questions, andI become part of those conversations.’’

Now an unofficial mentor to a newMBA student, Smith’s been headhuntedby another company, but wasn’t readyfor another new challenge so soon afterstudy. Yet her earning potential hasgone up by $30,000. ‘‘But I’m not drivenby money, I’m driven by achievement,and it feels damn good.’’

3 SEPTEMBER 2009 21

MBAs and Executive Education

growing along with entrantsFrom PAGE 20

There’s an awful lot ofevidence – with schoolstracking the performance oftheir alumni and working outMBAs’ rate of return – thatshows it does make adifference and they [MBAgraduates] do get on furtherand faster.

Nigel HealeyUniversity of Canterbury’spro vice-chancellor

’’You should only take on an MBA,says Auckland MBA alumnus andDeloitte Innovation head MatthewHaigh, if you think it’s right for yourcareer and worth the time and effort.

Think opportunity cost, includingshelling out some serious dosh. NewZealand MBAs don’t cost the bank-breaking sums common overseas, butfees are still $20,000 to $30,000 a year,and can double in the second year.

Here’s where organisational buy-incomes in. MBA providers put thenumber of students fully or partiallyfunded by their employers in NewZealand at 10 per cent to 33 per cent.

‘‘Up to a third will get a large de-gree of input, if not total input, fromtheir company,’’ says Withers. ‘‘Athird will get some input, even if it’sonly time off to go to class and tostudy. A third are completely on theirown.’’ Organisational support, gener-ally for those fitting part-time studyaround full-time jobs, is key.

‘‘Getting your company on board isa psychological as well as a practicallifter,’’ says Franklin, ‘‘not just be-cause of funding, but also makingtime available, and the nature andextent of the expectations they placeon people.’’

Employer support was certainlycritical to British immigrant MatthewHaigh, who doesn’t think peopleshould fuss too much over choosing aprovider nor disrupt their lives to at-tend a swanky overseas school.

‘‘One guy I mentor [at Deloitte] isthinking about doing an MBA and Iprinted off the actual course curri-culum at MIT, the Said [Business]School in Oxford and the Universityof Auckland, and you’d be amazedhow similar they are.’’ Still, shoparound. There has been fierce compe-tition recently, with new providerslooking to elbow out the established.

Four-campus Massey is breathing

down the necks of Victoria, Canter-bury and Auckland universities, andAUT is treading on the University ofAuckland’s patch.

The points of difference betweenproviders aren’t so much in contentand curriculum as in flexibility anddelivery (see side story Decisions, de-cisions).

For instance, Auckland andMassey universities have found aniche in part-time programmes tail-ored to full-time workers, and onereason AUT’s MBA is so popular is itsflexibility: you can take a fast-tracked15-month degree or stagger it over 48months; you can take off one of thesix terms per year; you can vary thenumber of papers each term; andclasses are offered twice a day, so youcan pick your timeslot.

‘‘This provides a lot of flexibility tothe student who is balancing studywith work and family commitments,’’says AUT’s director MBA, Ken Lee.

Across the road, Withers talks ofthe difference between the Universityof Auckland’s ‘‘one-size-does-not-fit-all approach’’, with two tailoredstreams: mid-career stream AucklandMBA (average age 32 to 34) and amore participatory senior executivelevel New Zealand Executive MBA(average age nudging 41).

‘‘A number of MBA schools aredeliverers of a commodity,’’ saysWithers of his competition. ‘‘So it’sabout certification: the students showup, take notes and do exams, andsquirt out the other end with a quali-fication. ‘‘It’s debatable whether that’sa management education.’’

Tit for tat aside, the MBA trendsare tailored streams, faster delivery,greater flexibility, strong networks,emphases on adaptability, ethics andsustainability, and a global focus.Given how far it has come and howmuch it is changing, the odds are thatthe MBA has another century in it.

Decisions,decisions

Not sure whether aMaster of BusinessAdministration

(MBA) is for you, or whatmakes one provider standout from the crowd?1. Check the MBA Asso-ciation’s website, mba.org.nz,which has information aboutwhat an MBA is, what it cando for you, how you can getone, the commitment in-volved, career perspectives,course content, programmedesign, admission, prepar-ation, cost, and resources(articles, books, advice),including whether onlineschools make the grade.2. At thembaagency.com,virtual home of New Zealandinformation-and-supportorganisation The MBAAgency, the Decision Matrixhas answers to the top 30frequently asked questionsabout MBAs. Its NewZealand MBA Guide 2009reviews and compares MBAprogrammes offered here.3. Talk to providers aboutwhether you are the right fit,and vice versa. Moststaggered, multi-layeredapplication processes forceyou to reflect on why youwant to do an MBA.4. Check entry requirementsand intake numbers. Forinstance, Massey Universityrequires seven years’management experience,while the University of Otagorequires a top score in theGraduate ManagementAdmission Test.

The high-end Universityof Otago MBA takes only 25students, with 40 per centKiwi and 60 per cent inter-national. A small class sizeensures a larger degree ofengagement, personal men-

toring and guidance, saysexecutive programmedirector Ian Lafferty.

Targeted at oldermanagers studying part time,Massey University’s Execu-tive MBA has a nationalfootprint, with students ableto transfer between centresin Auckland, PalmerstonNorth, Wellington andChristchurch. While nationalget-togethers are regular, theprogramme offers flexibilityto full-time workers, withmany students meetingevery third weekend.

Auckland University ofTechnology’s biggest MBAprogramme offers flexibility,practicality, variety, con-textualisation, electives andextensive industry presence,says MBA director Ken Lee.

The University ofAuckland’s mid-career-stream Auckland MBA andmore participatory senior-executive-level NZ ExecutiveMBA are both part time andaimed at full-time workers. Itis the only provider to offernot only a study tour, but atrip where students have tofind a New Zealandcompany, negotiate a marketbrief with it, then go to aforeign country to find amarket for it.

With 40 to 50 newstudents each year, studyingboth part time and full time,Victoria University’s MBA isall about integration, parti-cularly of public and privatemanagement approaches,says MBA director ArunAbraham Elias.

Waikato University’s two-year MBA programmefocuses on entrepreneurship,international connectednessand sustainability.