Good things come in small packages: Savvy MBA students are shifting their sights to smaller companies
Thursday 20 January 2011
Given the cost of an MBA programme at a top school, it is no surprise that most MBA students have their minds sharply focused, not just on the lessons they will learn from the experience, but where they will be applying them after they have graduated.
For many years, the traditional perception of the MBA has been that it is a stepping stone to a well-paid job with a large organisation – a major bank, an international management consultancy or a corporate multinational. However, in practice, a sizeable proportion of graduates end up working in a small or medium-sized enterprise (SME), like the bulk of the world's population. According to Valerie Claude-Gaudillat, MBA director at the Audencia Nantes School of Management in France, it is about time that students realised this may be the sector where their skills and abilities have the most logical fit.
"The MBA is not like specialist qualifications that focus on one discipline, but is designed to provide an overview of how all the elements of a business come together," she says. "And because of this it's arguably better suited to the sort of wide-ranging managerial position you find in a small or medium-sized company than to the rigid departments that make up many large organisations. In the past, students often shied away from smaller businesses because they thought them too restricting, but the message seems to be getting across now that they often provide more fertile environments for new ideas and new ways of operating than their bigger, more bureaucratic counterparts."
"The course is about getting a general management perspective on an enterprise: building an innovative strategy; handling financial management requirements; mapping this onto effective human resources policies; finding an effective route to market and so on," says Nigel Piercy, associate dean at Warwick Business School. "Where people have become disillusioned in the past is when, having gained these insights and capabilities, they are put right back into the functional box they came from: marketing, operations or whatever. The attraction of finance and consultancy for graduates has been that these careers often give the opportunity to deploy a larger proportion of the skills acquired in an MBA. However, exactly the same attraction applies to SMEs – you get to address real issues in managing a business strategically, not just go back to being a functional specialist in an organisational silo in a large corporation. I think this logic is increasingly attractive to the type of people now undertaking MBA study."
One reason why more MBA graduates are embracing the SME option now is the work done by business school careers officers in the downturns following the bursting of the dotcom bubble and 9/11. As the usual supply of jobs in banking and consultancy dried up, more imaginative schools strove to find opportunities for students with smaller organisations, often in sectors with no history of MBA recruitment. This first generation of placements has provided a range of inspirational examples of what can be achieved outside of the "usual suspect" career options.
The greater awareness of what SMEs can offer has also come about because of a shift in the way MBA programmes are delivered. "Many schools, particularly across Europe, have adapted their programmes to increase the time spent working inside businesses, either through traditional internships or on consultancy projects," says Paul Healy of the Vlerick Leuven Gent Management School in Belgium. "In tough economic times schools have had to find opportunities for this sort of commercial exposure outside the obvious targets of the big banks and multi-nationals. It's shown many students, particularly those from large company backgrounds, that the SME route is most definitely not a career dead-end."
One of the key attractions of large companies in the past was the large pay packets that they offered. However, Nigel Piercy says this emphasis on immediate financial gain may not be as common among MBA students as it once was. He explains: "Today's students show a high degree of concern for issues that would probably have been anathema to those of 20 years ago: concern for the values and social impact of potential employers; care about work/life balance; worries about the culture of prospective employer organisations and so on. It is strange, but true that at a time of economic problems, MBA students are talking about what attracts them to prospective employers in much broader terms than just big salary and stock options."
At the same time, SMEs are showing themselves much more willing to pay for the skills and experience that an MBA graduate can offer. "The revolution in communications brought about by the internet means even the smallest company can have global ambitions these days, and to achieve them they increasingly realise they need people who understand how to operate on a global stage." says Claude-Gaudillat. "Graduates of an MBA class made up of dozens of nationalities are the obvious choice and we're seeing more and more SMEs willing to make the investment to hire them. For example, one of our recent graduates who has extensive experience of working in China has gone to an automotive company here in Brittany that wants to break into markets in the Far East. It's the sort of opportunity that could only have existed in a very large organisation before, but now it's cropped up at a small, local company on our doorstep."
Some smaller businesses still shy away from hiring MBAs, because of the common perception that their faith in themselves can sometimes exceed their abilities, but those who do make the leap of faith are often pleasantly surprised. Francois Gougeon, the human resources director at AES Laboratories, a microbiology SME, admits to being sceptical of the qualification's value to the company when one of his fellow directors raised the idea of undertaking an MBA at Audencia Nantes. "I was concerned that he would come back to the company and start lecturing people about how to do their jobs because he now had an MBA," he admits. "But that simply didn't happen. Instead, he returned with a wealth of valuable ideas, which have had a marked effect on the way we do business. It's convinced me that small and medium-sized companies can really benefit from this sort of general management training."
"There seems to be much more realism about the MBA these days," says Kira Owen of the professional and managerial recruiter, Twenty. "While there are still some graduates of the very top schools who fit the traditional 'masters of the universe' picture, the majority are much more sanguine about what the qualification can and cannot achieve. These are the people who are breaking down the barriers of acceptance and opening up a whole new range of career opportunities to the benefit of individuals and employers alike."
It seems as though the day when the MBA is the small company managers' qualification of choice is not so far away.
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