To MBA or Not To MBA – The ROI Question

This week a new client asked me why I had decided to pursue an MBA.  Specifically, what was the ROI for me? What an interesting question!  I’ve been so wrapped up for the past few years in work / school and just plain being in “busy” mode that I didn’t have a quick response … and that got me thinking …

Three years ago I decided to return to academia via graduate school and pursue an MBA.  I had been kicking around the idea of returning to school for several years and quite simply could not decide on whether or not an advanced degree would be beneficial.  Would the considerable investment of money and time have a return?

And therein was the faulty logic.

Earning an MBA has zero ROI.  There is no immediate return on the investment of time and money from a graduate degree. Sure, there is intangible achievement or return as your knowledge base and day to day application of Finance, Marketing, Operations, and Strategy increases.  But, intangibles are difficult to quantify and thus the difficulty in answering the ROI question and quite frankly, the lack thereof, of a firm Return On Investment to respond to the question at hand.

I learned about a financial return quantification method called EVA in Finance that may provide the best response.  EVA or Economic Value Added is a robust financial measurement approach that companies use to evaluate their economic profit – the value created in excess of the required return of the company’s shareholders.  The concept hinges on the fact that a company’s shareholders gain when the return from the capital (or investment) employed is greater than the cost of that capital.  In essence, EVA is the profit that is earned minus the cost of financing the firm’s capital.  Capital (or YOUR money) doesn’t just sit around doing nothing.  Companies spend or invest just as you and I do … although they may invest in R&D while you or I choose to go on a vacation, buy a pair of sunglasses, etc. An EVA analysis of pursuing an MBA is a better quantification as it accounts for the value of the investment rather than the return.

For me, the decision to invest time and money in an MBA hinged on the fact that the opportunity cost of NOT pursuing an MBA far exceeded the initial time and money outlay.  The economic value add of an advanced degree lays within the opportunities that become available – whether a new career path, skills to start a business, etc.   The EVA will continue to multiply throughout my life as I put the new skill set to work … the impact or intensity of the returns (whether financial or not) on my life is dependent on me taking actions based on the investment of time and money.

So, when asked about ROI … while the path to an MBA has been completed the journey has just begun … and the EVA will continue to exceed the opportunity cost for not investing in myself or my future.

P.S. Thank You to the University of St. Thomas  in Minneapolis, MN for a rewarding and AACSB Accredited learning experience.  Make sure to check out the UST MBA Program here: http://www.stthomas.edu/business/degrees/ustmba/eveningmba/

Real World Social Media – The Power of Networking

Image via CrunchBase

I’ve spent the past 2 years and 9 months working diligently on an AACSB accredited MBA at the University of St. Thomas in Minneapolis, MN.  The university requires successful completion of 17 classes, 2,200 hours of class time and a LOT of group projects of their MBA candidates – whether you attend full or part-time.  My decision to attend St. Thomas was made for a variety of reasons (including their AACSB accreditation) but as I look back on the past 3 years or so – one criterion stands above the rest … the people.

The power of social media has enamored both marketing and sales organizations over the past few years.  In fact, when I began my MBA coursework, Facebook was still a “college” thing rather than the behemoth it is today.  Twitter was called Twttr. And the iPad didn’t exist.

Social media’s influence and impact continues to grow and to be debated but will surely be with us in the near term.  However, we must not forget the power of being social in the real world.

The true power of social networking exists in real life as it has for generations.  The ability to hold a conversation, to emote, to share and to laugh (without the use of LOL or emoticons) will quickly become a lost art form if we forget the most important aspect of our day-to-day the lives … the people we interact with, cherish, work with, or even dislike. No amount of Facebook likes or posts, Twitter Feeds, Apps, Texts, etc. can replace real world communication and networking.  They can enhance or compliment the experience as any technological innovation should do.

While I’ve learned a great deal about marketing, statistics, decision-making, strategy, and yes, even social media during my pursuit of an MBA … as I reflect on my experiences it becomes readily apparent that no amount of technology or innovation replaces the fundamental power of being social – IRL.

(that’s Twitspeak or SMS for In Real Life)

Sales vs. Marketing – An MBA Opinion (Part 1)

The old adage still rings true at most organizations – sales and marketing do not get along.  In fact, most organizations fail to acknowledge (outside of quotas) that the sales team is ultimately responsible for revenue and unknowingly pit Marketing against Sales and vice versa.  In my opinion, ALL functions of the organization should be aligned to enable revenue growth. Too often, leadership fails the sales organization in properly aligning corporate resources and departments to enable the best performance of the sales organization.  Simply purchasing email lists, attending trade shows, etc. is NOT properly aligning marketing with sales.  Both departments should work in tandem towards revenue attainment.  If marketing, customer support, development, etc. do not have “skin in the game” then leadership has failed to enable a sales team that can deliver revenue.

The root cause of this, in my opinion, is the failure of business schools to provide sales theory and practice to MBA students (heck, even Business Undergrads).  All the marketing theory, product management, business analysis, financial modeling, etc. you learn in B-School means absolutely nothing if revenue isn’t ultimately generated.  There is definitely an innate skill set component to sales that cannot be taught – but, without a proper introduction or understanding of basic sales methodologies in an MBA program there is never an opportunity to understand the importance (and mechanics) of properly aligning an organization for revenue growth or attainment.  And the net result is almost daily conversations like this:

Related Articles

• Does Sales Care About Alignment with Martketing? (customerthink.com)
• Sales and Marketing Alignment (demandmetric.com)
• Aberdeen proves that Sales and Marketing Alignment pays off… (customerthink.com)
• Six Best-Practices to Improve Sales and Marketing Alignment (marketingprofs.com)

Recruiting Is Marketing

Image via Wikipedia

On November 17th I’ll be facilitating a roundtable discussion for work at HealthPartners in Minneapolis.  “Recruiting IS Marketing” is the theme for the event and I’m excited to bring the best of marketing and recruiting practices together as well as learn what other major employers in the Twin Cities are up to with their Talent Marketing efforts.

I’m planning on introducing basic concepts like consumer behavior, marketing management, etc. courtesy of my MBA coursework at St. Thomas and how each of them is vital for organizations to leverage moving into 2011 and 2012.  We are fast approaching (believe it or not) a very significant shortage of skilled talent as our economy continues a shift from an industrial base to a knowledge base. The battle lines are being drawn …

Any major marketing organization, like a big box retailer, is in the midst of final preparations for Q4 business (their version of the battle line).  They’ve spent the past 12 months (since the end of the prior Holiday season) leveraging marketing practices to understand, engage, influence, and drive consumer purchasing behaviors.  They’ve built loyal followings and preliminary engagements via social media, have a presence on search engines, have optimized their advertising channels, invigorated their websites, and prepped their operations and processes as part of their execution strategy.  So, why am I talking about retailers and marketing?

Because, recruiting IS marketing!

Talent Acquisition / Retention should be in the business of executing an organizations overall business level strategy.  It is the Human Capital of an organization in an ever increasing global knowledge based economy that enables success or leads to failure.  Recruiting organizations are far too often leveraging antiquated methodologies when it comes to acquiring talent for their companies.  Bridging the gap between their B2C or B2B marketing efforts with their recruiting efforts should be a primary goal for Talent Acquisition in preparation for the impending shortage of skilled talent. A synergy between corporate marketing and human resources creates organizational efficiencies and drives additional value (and results) for both departments.  After all, job candidates are customers and customers are job candidates.

The battle lines are being drawn and plans are being made … the decisions that are made in the coming months will determine who gets the sale (or candidate) and who doesn’t in 2011 and 2012.

Related Articles

• Why Don’t More MBAs Go Into Sales? (willprice.blogspot.com)