0: - What I can say is that my MBA gave me the confidence

2: to walk into any room,

3: even when we have talked to people about raising money.

6: So I've walked into rooms with VCs.

10: Complete confidence.

11: And I think that only comes to the top MBA.

14: (upbeat music)

16: - What's the value of an MBA?

19: At Menlo Coaching, we're very cynical.

21: And we think that the value of an MBA should be majored

24: in terms of the financial return that you get,

27: what it costs you and your future career success.

31: It's just much too expensive as an experience to do

35: for personal enrichment.

43: But having said that,

44: many MBA students dramatically underestimate

48: the financial value of the MBA degree

51: because they look only at the first job after they graduate.

56: So the first thing, when looking at the value of an MBA

59: is to look at the cost.

61: Almost all top two year programs,

64: the hard costs of the program,

67: tuition is often around $150,000 for the two years.

71: Living expenses vary a bit, depending on the location,

75: call it another 50, $60,000.

79: There's always extras on top of this.

81: You don't want to be the one student

84: who skips the skiing trip.

86: You don't want to be the one student

87: who does no international exchange programs.

89: So it's going to add up a little bit more.

91: Yeah, call it 250,000, give or take.

97: Then of course, you're giving up a lot of compensation

100: during the not quite two years

102: that you'll be out of the workforce,

104: and this costs more for some of you than others.

107: So depending on how much you made,

110: the cost could be a little bit below

113: or a little bit above half a million dollars,

116: depends on whether you're one of these high paid

117: finance professionals or not.

120: So you need a very high return on that.

123: The first kind of line of defence,

124: looking at the financial return.

126: For some of you, this will make it an easy decision.

129: Look at your current compensation

132: and then read the post MBA placements

135: in the employment reports and compare the two.

139: There are some people where you will make such a big jump

142: in your compensation pre and post MBA.

146: It's going to pay for itself very rapidly.

149: For example, one person who I worked with last year,

152: he was in a tech product management job,

156: working for a bit of a smaller company,

158: was making $90,000 per year.

162: Plus some stock options

163: that honestly we both knew were going to be worthless.

166: The company was not on track for a big exit.

170: And then when we looked at the top 10 programs,

172: even between just the salary and then the signing bonus,

178: he was already looking at $180,000 per year

182: at some of the schools he was looking at

184: and no big secret that a lot of tech companies,

187: those are not the only components of your compensation.

190: He might also be getting stock compensation like RSU,

194: so he could easily reach more than $200,000

197: versus his $90,000 a year compensation.

200: And these cases are the easy ones.

202: That's a slam dunk.

204: He's going to make a lot of money by doing the MBA.

209: Sticking to just that calculation

210: is where people make a big mistake.

212: That even if the MBA is not going to be a big step up

217: for you right away,

219: even if the MBA may be a small step down

221: for you in the first job out,

224: there can be many reasons that the MBA will make you money

227: over the rest of your career.

228: And we work routinely with people

231: who have pre MBA compensation up to around $350,000.

236: And on the outliers,

238: is there's a little tail up to about 450

240: and the highest that I can remember,

243: we worked with someone

244: who was making $650,000 a year before the MBA,

247: but he was successful in sales and trading

251: in the finance industry.

252: Very successful, you might say.

254: But he knew that in order to move from sales and trading

258: into portfolio management,

260: and to be able to raise his own fund in the future,

264: he needed the credential of a top MBA, period.

268: The limited partners who would contribute the funds simply

271: would not back someone without that kind of education

274: and the compensation ceiling

277: for a successful portfolio manager at a hedge fund,

281: much higher again than the $650,000.

284: So don't make a kind of mechanical assumption

286: that just because you don't see a big step up

289: on the first job,

290: you won't get financial value.

292: So if we look at some of the ways,

294: one of the ways you can get value out of the MBA

296: is that it's a great chance

298: to find the right career path for you.

306: - It was my MBA that allowed me

308: to shift those pieces around, as opposed to,

311: I think someone who doesn't have an MBA

313: and selects a single path.

316: I'm going to be very senior at an investment bank.

320: If for any reason they're subject to some of the same

323: needing to shift around,

326: they don't have the tools or the network in place

328: to be anything different than that exact path

331: they laid out for themselves early on.

333: - I do believe that if you pick a job that you are good at,

337: you are more likely to enjoy your work,

339: to put in the time to become excellent at your work,

343: be promoted and have a financially successful career.

347: And when's the next time that you will have the chance

349: to be surrounded by hundreds of friendly people

353: from every kind of branch of industry

356: that are happy to tell you all about their career.

359: - That's where I'm going into a client meeting

361: in an industry that I've never touched before,

362: I pick up the phone and I call a section mate.

365: And I say, I know nothing about healthcare devices, Joe,

368: can you explain everything to me about them

370: in this 30-minute call?

371: And I have section mates who will take that call in a second

374: and tell me everything I need to know,

375: and they're happy to do that.

379: And then the last piece is the reality is

384: when you look at the world

386: of how business is developing today,

387: if you go to a top business school,

389: there's someone from that school positioned to help you

392: in almost every industry or vertical.

394: - The MBA genuinely will build useful skills for you.

403: So I downplay the value of some of the hard curriculum

407: in the MBA.

409: You want to know accounting, you want to know finance,

412: you want to know the basics of operations and marketing,

415: I'll save you a lot of money.

416: You can go to Barnes & Noble,

418: you can go to Amazon,

419: you can buy a book and read it at home.

422: It is just not that complicated.

424: Or even take a course at HBS Online.

428: But where the MBA is excellent

431: is for the soft skill development.

434: Some of the things

434: where you might do mock negotiations with your classmates,

438: group projects where a team of you pretends

440: to be the management team of a company,

443: these are going to be a low risk way

445: to develop some of these skills.

448: You might not want to try that new negotiation approach

450: with a real client or with your boss.

453: Whereas you may feel very safe to do it

455: in the kind of MBA environment

457: and getting these skills right,

461: getting these skills right before you are in your next job

465: can have a huge value.

467: - HBS teaches you to read a case

470: and be able to comment intelligently on it within,

474: I don't know, I probably read some of my cases in 10 minutes

476: when I was moving quickly.

479: And then I went to class and I had to comment intelligently.

481: That's what I need to do in every meeting every day.

483: So I think that part of the reason I haven't felt that

487: is because I had that confidence.

494: - Building your network.

496: So this can come in handy

498: for all kinds of different reasons.

501: First of all, having a big network reduces your career risk

506: because it's likely that you will come to a time

509: where you need to find a new job,

511: and it's not for any action that you took or failed to take.

516: So for example, in my own career,

519: I joined the company Yahoo at a very interesting time.

524: On my first day, showing up to the office,

527: the first email in my inbox that morning

530: was a very short email, was from the CEO, Carol Bartz.

534: And it said, well, it was sent to the all@yahoo.com.

541: Hey guys, I've just been fired by telephone

544: by the board of directors.

546: Best of luck to you all, Carol.

549: Sent from my iPad.

550: And the company descended into utter chaos from that point.

556: So it went through.

557: By the time we got to Marissa Meyer as the full time CEO,

561: we'd gone through five different CEOs.

564: My boss was laid off.

567: His boss, the guy in charge of American sales

572: was laid off.

573: His boss, the guy in charge of North

575: and South American sales was laid off.

577: The CFO who was the interim CEO was laid off.

581: Absolutely everyone between me

583: and the board of directors was gone, blown away.

586: No one above me knew who I was,

588: and it was just a terrible mess.

591: It was a hard place to make any kind of career progress.

594: How did I get out of it?

596: Well, one of my former clients called me

600: and offered me a great job as SVP

602: at a publicly traded travel company,

605: running one of their business units.

606: And I was pretty happy

609: that I had a good relationship with that guy.

612: Business school is a great way to increase your odds,

615: that when you need that kind of a lifeline,

618: someone in your network is going to be there for you.

621: - Not only should you go get an MBA,

622: but you should use your MBA network

625: and maintain it as much as possible.

627: So I didn't mean to be an entrepreneur.

631: As I mentioned, the reason I'm able to be an entrepreneur

634: is two reasons.

635: A, I have an MBA,

637: I can walk into any room

638: and talk to the head of any company about anything.

641: I have a context for the financial markets

643: in virtually any industry,

644: or I know how to read a few things in order to go

648: into that conversation and feel informed.

650: The other reason I was able

651: to fairly successfully launch a company

653: in a short amount of time was the HBS network.

656: I'm someone I'm fairly social.

659: I definitely built an active network at HBS

661: and I pretty intuitively maintained that network.

665: So what that meant

666: is that when I went to build a small business,

669: I wasn't building a network to grow my business.

671: I was turning on a network I already had,

674: and it happened to be a network of people

675: who were seven to 10 years out of business school

678: and already in high,

679: and therefore going into hiring roles

682: and or starting their own companies,

684: which if you're in my business is a great network to have.

686: - On the little bit happier side,

688: even suppose your job is going really well.

691: Having a broad network from the MBA,

694: if you're a consultant,

695: it can help you to sell deals to other companies.

698: You may be selling to some of your classmates

701: or alumni from your school.

702: - Everyone says as a consultant,

704: they're able to be a consultant

705: because they work primarily with,

708: or their referral network begins primarily

711: with their HBS classmates.

713: They say, I was the head of strategy

717: at a very prominent CPG company,

720: and that was not working once I had young children.

724: My classmates already thought of me as a CPG expert.

727: A lot of them are private equity investors.

728: They use me to evaluate their CPG investments.

731: That's a great example of someone who was able to do that

734: because of the skillset and the network

736: that came from her MBA.

738: - If you're a private equity investor,

740: you may be sourcing deal flow from your network.

742: You may be hiring executives for your portfolio companies

745: from that network.

747: There are just all kinds of ways

748: that the people in the network can make you more successful

751: in your job.

752: Last of all,

754: I will say the MBA is not a magic pill

757: that can do absolutely anything for you.

760: So for example, if you've never had any experience

765: as a private equity investor,

767: it's extremely unlikely that you're going to just take the MBA

770: and jump into a great role at Blackstone or Carlisle

773: as an investor.

775: It simply doesn't happen

776: because there are people getting that great MBA

778: who also had amazing investing experience

781: that are going to get that job ahead of you.

783: But the MBA can be a massive financial value to you

787: through helping you be successful in your job,

790: helping you find the right job,

792: helping find new jobs and just the value of the networking,

795: executing your job.