The Executive MBA: A Solid Investment in Yourself
Let's face it: the economy has not been in its most stable condition for the last year or so. Although that is a given, it is certainly not stopping ambitious executives from seeking the education they need to take their careers to the next level. The executive MBA (EMBA) degree remains one of the most solid investments you can make in yourself: intense leadership development, greater strategic vision and immediately applicable skills are all benefits for an EMBA graduate. But perhaps the most commonly quoted and highly anticipated benefit is that of a greater salary.
The good news is that a salary increase upon completion of an EMBA is nearly guaranteed. In fact, the most recent Executive MBA Council report shows students quoting an average salary increase of 23 percent after graduation. Equally interesting is the fact that the report shows that the actual payback period for an executive MBA has been reduced from 23 to 17 months over the past year despite average program costs rising from $53,180 in 2005 to $63,420 in 2009.
Company Sponsorship – a Waning Trend
In the past, most employers understood the major benefits that they could receive from having an employee with improved managerial and leadership skills, not to mention the reinforced loyalty of sponsored EMBA participants. The current economic climate has had an impact on this kind of thinking, however, and company sponsorship is on the wane. Rachel Killian, Warwick University's MBA Marketing and Recruitment Manager said, "We have seen a significant fall in the percentage of participants with employer sponsorship in 2009. However, our overall student numbers haven't fallen, suggesting that self-funding applicants still very much value the EMBA experience and are willing to fund themselves if their employers can not."
According to the Executive MBA Council, there are, indeed, an increasing number of students self-financing their studies with the proportion of students paying their own way increasing from 25 percent in 2003 to 34 percent in 2009. Meanwhile, the number of companies offering students full reimbursement in 2009 was 32 percent, down from 37 percent in 2005. Business schools still expect, at the very least, to see organizations supporting their employees by allowing them to take time out for study and recognizing the additional workload they face during their EMBA.
When a company does decide to invest in a valued employee, it benefits not only from a direct return on investment from the rich course content, but it also sees the increased confidence and broader communication skills the employee brings back after each module. This lays the foundation for new responsibilities, not only for the EMBA participant preparing for the next level, but for the organization developing healthy succession planning within as well.
Interestingly, executive MBA students foresee these benefits, but underestimate their power. The Executive MBA Council reports 37 percent of students exiting an executive MBA program expected a promotion – 43 percent were actually promoted. Not only that, but once promoted they are more likely than graduates who received promotions from other programs to report an increase in their budgetary authority, according to a GMAC Global Graduate Survey.
Everyone Comes out Winning
Joan C. Coonrod, assistant dean of EMBA admissions and marketing at Emory University's Goizueta Business School stresses that EMBA programs can play a powerful role for companies by helping them step up their retention efforts. She tells EMBA candidates to reflect on their career path and get their company involved.
"Applicants should talk to their companies about support and make their case for this type of development and the capability they will bring back to the organization, she said. "It's interesting that executive recruiters tell us that companies that do invest in this way to build their leadership are well-known and are consistently more successful in attracting top talent." In essence, the EMBA program can become a tripartite partnership between the school, the EMBA participant and the sponsoring organization.
According to Ashridge EMBA graduate Chris Parker, there are strong arguments in favor of a company spending a figure of around $47,000 on sending a senior manager to an executive MBA program. "This is the sort of money that might be spent on getting consultants in for [two weeks], but the short term benefits from something like that are far outweighed by the long term benefits that a manager with an EMBA can deliver to a company in terms of enhanced management knowledge and experience from practical assignments," he said.
Many schools such as IESE and INSEAD provide assistance to strong applicants on how best to present their case to their employers and enumerate the advantages of the program to the organization to turn the project from cost to investment. Yet Janine Golden, an alumnus of the University of Chicago's Booth School of Business recently told Pink Magazine, "I would do it all over again even if my company hadn't paid for a portion of my education. I was willing to resign if they didn't support the time commitment. I felt the contribution to my future success was invaluable."
The Future Looks Bright
Promotions and increased earnings are just one side of the coin. An EMBA also allows students to start "looking around with a new set of eyes," according to Gabriel Mesquida Masana, an EMBA alumnus of the Henley Business School [at the University of Reading]. "You start seeing things that weren't there before and thinking of new solutions to old problems from operations to strategic management. In my case there was a star subject: managing people. I've been given more responsibility and more complex situations to manage. I've seen my self assurance grow, along with skills and abilities. I've grown professionally," he said.
Fordham's Director of Executive Programs, Francis Petit, said he strongly believes the EMBA is a sound investment regardless of the economic climate and financial environment. "The goal of each program should allow candidates to think in an entirely new way in regard to business opportunities, markets, value, strategy and innovation. This ‘personal discovery' can be applied to a student's career well beyond graduation," Petit said.
The decision to make a serious, 18-24 month commitment – from the admissions process to managing an overbooked agenda, bosses' expectations as well as respecting family commitments – goes far beyond rising compensation packages. There is much, much more to the EMBA adventure. There is also an incredible learning experience, a stimulating environment and the chance to meet people from all corners of the globe with rich, diverse backgrounds; people who form a network graduates can keep in touch for years after completing their programs.
Perhaps Rachel Killian of Warwick Business School sums it up best: "When the economic climate is tough and unemployment is high, the best investment people can make is to invest in themselves."
This editorial was written by Dawn Bournand, Editor, QS TopExecutive, and produced by The Washington Post special sections and did not involve the news and editorial departments of this newspaper