APPLY FOR MBA IN 2021? 5 Reasons why you SHOULD do a MBA and also why you shouldnt (from INSEAD MBA)

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- What is the value of completing an MBA? since I graduated from the INSEAD MBA in 2016, I got asked this question a lot from family and friends on my Instagram channel Firm Learning and the last day I also posted several pieces on my learning journey, my reflection on what I took away from the MBA and there was well I received lots of questions on whether it's actually worth it to complete an MBA in these times. In this video, I'm covering the top five reasons why I believe an MBA might make sense for you. So I hope this helps you to evaluate for yourself whether doing an MBA might be worth your time and your money. Hi there my name is Heinrich and welcome to another coffee break with Firm Learning. If you are already a subscriber, I'm so grateful that you're following me here on this YouTube journey and if you're not a subscriber yet, if you take any value out of this video, please consider subscribing and also hitting the like button for the YouTube algorithm. So what is an MBA program? So for those of you who don't know, just let me give you my brief personal definition of it. The MBA stands for Master in Business Administration. It is an academic degree. But the big difference compared to many other master programs that exist in business, especially in Europe is that it is a post experience program. This means that you're usually only able to get into the program if you have several years of work experience. So typical MBA program would have an average work experience of their class of four years. So the average person who attends an MBA will have four years of work experience and usually the bare minimum that you need to have is two years of work experience. And this is often also only possible if you come from a so called accelerated career environment, which is to pretty considered either consulting or banking. Where you're assumed to just have collected lots of experience in two years so most of the time, if you come from a more regular industry background, you will be expected to have at least the full four years of experience before you can enter the program and the second key difference to the more traditional business oriented master programs. As they exist, especially in Europe, is that why these master programs are usually more focused on preparing you for an academic career. The MBA is more professional degree that is supposed to help you prepare to become a manager in the real world if you wanna to put it this way, right? So really to prepare you to succeed in a business environment, and not in a specialist role, but more in a general management role. And so before I talk about the reasons why I believe it could make sense for you to do an MBA, let me cover the top two reasons why you maybe should not do an MBA. And these two reasons come down to the investment that you need to make when doing an MBA. And this investment consists of both time and money. So if we look at it at the time aspect of things and MBA program usually takes either one or two years, with some programs in the middle and what you would typically see as the US programs are on the longer side of the spectrum, so rather on the two years side of things, whereas the European or International programs are more on the one year side of things. Though of course, there are some deviations from that rule in both directions. And of course, you need to realize that one to two years are a significant time investment. Instead of doing the MBA, you could work on your career in the job that you're currently having, and also advance in this job in this one to two years of time. And you need to be convinced that by doing an MBA, you can actually accelerate your career so much that this loss of time will actually be recovered later down the path. And the second element of the cost. If you currently look into how expensive an INSEAD MBA is, this is the program that I competed. It currently costs about 85,000 euro for the one year MBA experience. So I was lucky that when I completed it, I believe it only was 65,000 euros. So you can see that the cost of these programs rather tend to go up over time and I also had the privilege to get some funding from my employer at that time, but many other didn't needed to pay the full amount. When you pay for such a program you need to consider that not only you lose the money, but you will in this time period of the MBA in these one or two years, you also cannot work. So you're losing the salary, the income for this time period as well. So it's kind of a double cost because you need to pay for it on one side, and then also lose the salary of it on the other side. So doing an MBA can be quite expensive. And again, you need to believe that then later down the road, you recover the cost due to an accelerated career development and a higher salary that you incur, which you wouldn't have got if you wouldn't have done the MBA. So is there any basis to believe that you actually can recover this investment? Well, there are many rankings of MBA programs out there. One of the probably most renowned is the Financial Times MBA ranking. And in the current 2020 edition, you see Harvard Business School on one, Wharton of the University of Pennsylvania on number two, the Graduate School of Business from Stanford on three and the INSEAD program on number four in the global ranking. And in these rankings, you typically see how salaries and other KPIs of the alumni of these programs developed. So if you don't look into the Harvard figures, the program ranked number one, you see that the average salary of the alumni corrected for purchase power parity. So the weighted version lies around 210,000 US dollars. And this is supposed to correspond to an increase compared to the pre MBA salaries of 110%. Just for your information in this financial time ranking this is measured by looking into the salaries of the alumni three years after completing the program. For the INSEAD MBA the numbers are a bit lower, on average alumnus would yield a salary of 181,000 US dollars, three years after graduation, which would correspond to a salary increase of 101% compared to their pre MBA salary. Of course, now the Harvard MBA is two years while the INSEAD MBA is one year so the return on your investment regarding time is even higher now for the INSEAD one. So looking at this, yes, there seem to be some plausibility that after doing these kind of programs, you salary can be boosted to level high enough that it actually justifies the time and the money that you invest upfront. But be aware that this is only a spectrum. So while it might be worthwhile for many people, there will still be a certain group of people doing this MBA for whom it didn't really work out as they hoped. And of course, these are some of the most renowned some of the flagship MBA programs out there. There are many, many other MBA programs which have KPIs that fall short and of course, you need to be aware that these programs are some of the globally leading ones. And it's not guaranteed that you get admitted to them, you need to show a certain level of professional and academic performance in order to get admitted. So you might be stuck with one of the lower tier programs and the stats of these programs usually are not as good but then on the other hand side of the cost also not as high. So now we talked about two more obvious things, time and money and why this is super relevant, and probably most people already think about if they ask themselves whether they wanted one MBA. In this video, I'd like to cover five reasons five advantages that I got from doing an MBA, which I believe are less obvious or maybe less clear to many of you who think about doing that. So I'd like to cover this in this video now. And of course, now I forgot one of the biggest advantages of doing an MBA. And this is that you're going to get all kinds of great and crazy shirts. I mean, look at this amazing sports shirt off the INSEAD MBA this is what you would get as well. Doesn't matter where you do it. But now jokes aside back to the video. So let's start with number one. And this is looking at the MBA as some kind of Joker card that you have. After the first years of your career, you might find yourself already kind of stuck in a certain box in the corporate world maybe you're an accountant or you're a controller or you did lots of marketing and sales. And you're afraid that if you just continue your career, the way you're currently doing it, you will be just so stuck into this position that it will be really difficult for you at some point to transition into a completely new role. So one of the reasons that people do an MBA for and I found out by looking into my peers in the MBA that this works really well is to make a bold transition into a new role. And if you think about it, conceptually, most people think of doing these kind of conditions in three dimensions, you can either transition to a new geography, or you can transition into a new industry, or you can transition into a new function. So regarding geography, maybe you currently work in Europe, and you'd like to make the transition to work in Asia on the US. So doing an MBA can help you with that, or you would like to change industry, maybe you've worked a lot in automotive, and now you'd like to work for retail or for healthcare. Again, doing an MBA can be helpful to you, or you'd like to change functions. So currently, you worked a managerial accounting or you've worked in production, or you worked in marketing and sales, and you'd like to switch to another function. So it doesn't matter which of these three dimensions you would like to change. The MBA is like a joker card that you can pull out once in your career, and it can help you to make this transition. Because on the MBA, you get exposure to all these new sectors, all these new fields, roads, you can take new courses that are relevant to the new role that you'd like to take. And all of this will help you transition into your new field. The only thing that many people will give you as an advice is to not try to change all these three dimensions at the same time. So do not try to change the geography, the industry and the function at the same time if you're looking to do a transition after the MBA, but try to keep at least one of these three dimensions constant, and try to only change two of them. Because experience shows that otherwise, you will have quite some difficulties and the change is just too much. But of course, if this is what you really want to do, there's always a way to make these things happen if this is what you're really after. So the second reason is regarding the type of content that you learn and what does this thing to have about MBAs is that because they do not have so much in academic focus, they can focus much more on teaching your practical skills that you will not find in typical other university programs. So as I am someone who has already studied business in an undergraduate level, so the business degree from the University of Munich and then I even have a master's degree in finance from the London School of Economics. So even for people who already have business exposure in the university fields, it is true that if you do an MBA, there will be some repetition because the MBA program does not assume that all the people already have a business background. So teaches you foundational courses, which will be some kind of repetition if you already have a business degree, but the truth is then that later on there will be lots and lots of courses, which you will likely not have had in your regular standard University undergrad business degree. So to give you some examples at INSEAD there were courses offered or negotiations. So how do you negotiate and we did lots of role plays with professional negotiation coaches to improve our negotiation skills. We had a course on corporate turnarounds So how would you actually handle a company a situation where the company is in too heavy financial distress, and you will need to turn around? What are the implications of that? How do you behave in this kind of context as a manager, and of course, lots of courses on entrepreneurship on building businesses on identifying new business models, and many other aspects of it. So this is really hands on experience that you will not get in most other more academia focused master or bachelor programs. And this is what is so special about the content that is taught at an MBA. The third reason for doing an MBA is the network that you build. And this is a bit of a cliche point, there are people out there who claim that getting and building a network is one of the main reasons to do an MBA so while I wouldn't necessarily agree with that, I agree that it is one of the key advantages of doing it during your MBA program, you will have the opportunity to build friendships and deep relationships with the so many of your classmates and there will be friendships coming out of it that really last your whole life. And when you choose what program is right for you, I would recommend you that you also have a look what geography your program is focusing on. So if you, for instance, aim to build a career for yourself in the US after your MBA, it would likely make lots of sense to also do an MBA program, which is in the US, because this will help you to build a deeper network in the US if however, you'd like to rather work in Asia, probably doing an MBA somewhere and that geography might make more sense for you. But especially the INSEAD MBA for me is that one of the distinguishing factors of the INSEAD MBA experience is that it wants to be an especially international program, so tries to really balance out the class. There's no one dominating culture, no one dominating geography in the class. So we really have contacts from literally all around the world after you complete the program. And this for me means now pretty much doesn't matter which country I want to visit or which country I might work in in the future, there will be some people who I can call up and talk to them afterwards. And this, of course, is a great feeling not only from the professional perspective, but also from my private and personal life. The fourth key reason from my perspective to do an MBA is the cultural awareness that you build. And again, this depends a bit on what program you choose what the profile of this program is, but INSEAD was a highly international program and just meeting all these people from that many cultures really had a big positive impact on my life. During my MBA, I had the opportunity to spend half the time in the French campus, but the other half also in the Singapore campus. So spend roughly half a year in Asia in Singapore, and it would be very typical. And I heard this a lot from people doing other MBA programs as well so this is not only specific to the INSEAD program, but would be very typical that almost every weekend, there would be all kinds of trips being organized by people who are native of different other countries to then visit this country with a bunch of other MBA friends, so in the one year of my MBA program, I was in Israel. I was in Singapore, of course, I was in Vietnam. I was in Indonesia. I was in Thailand. I spent two weeks with friends in India. I was in China, I was in the US. And this is just a selection of all the countries that I was in. And to be honest, before I did the MBA, as somebody who lived in Europe, Asia was a pretty faraway place for me. I was there a couple of times for holidays. But I really didn't have any clue what Asia was all about. But now after I've spent half a year of my life in Singapore, after I've visited so many countries there and I've met so many local people during the MBA program, this really opened up my mind and I have a completely different relationship with the continent and I could very well imagine to live there to work there to spend my time there. This really has helped me a lot to better understand this whole continent. Though of course, it is clear that given the diversity of cultures and countries on the continent, whatever I have learned can only be a brief scratch of the surface. And the last key advantage of doing an MBA that I like to share with you is that it really is a time where it helps you to self reflect on yourself, on your goals and on your ambitions. So while I was working at McKinsey before the MBA, there was really little time to rest. And while I learned an insane amount of things, were working at McKinsey, there was really little downtime, really the time that allowed me to just introspect, to self-reflect, and to ask myself, what the right move for me as now going forward. And the MBA really is a great time for that. Because it's not only that, you will often have a bit more time for yourself than during your regular work. But also given the fact that you have all these inspirations from the courses that you take from the people that study with you from the countries that you visit. All of these inspirations really help you to take a step back and ask yourself what you really want what your objectives are. What you want to do in the future in this, again helps you to make the right decisions for you what you wanna do after the MBA. So guys, I was just out here on the run, where I remember even another reason even another advantage of doing an MBA that I forgot in this is that an MBA, which were just the crazy change of environment. It can really help you reset your habits. And what I mean by that, just as an example, you know, before the MBA when I was working at McKinsey, I really struggled with sports, doing sports regularly, who really, some really struggled with sports, but because of the change of environment, because of all the new impressions that I had during my MBA, this really helped me to pick up a regular running habit. So I literally went from not running at all to running regularly. And then shortly after the MBA, I did a full marathon. So 42 kilometers 26 miles, which I did sub 4 hours which was a great success for me. And surely this would have not had happened. If I wouldn't have done the MBA. And I mean just look at the environment. These are just all the side products. And this is also one of the effects for me for sure. That came out for me for the MBA. So take care all of you and enjoy have a good day. So these are my five reasons that after reflecting on myself is what I think I got out of the MBA most to this is not to say that an MBA makes sense for everyone. So whether an MBA is worthwhile for you depends on, I think lots of factors are outlined a few also in the beginning regarding the time investment and the money investment. But I hope this video helps you make these deliberations for your Senate, and also hope to have added a few more considerations and reasons which maybe were not that obvious for you when you were thinking about doing an MBA. So let me know in the comments below. Do you already hold an MBA? Are you thinking about doing an MBA? What are your pros and cons? Let's have a conversation there. I'm going to answer to every single comment that you write if you took any value out of this video at all. please hit the like button for the YouTube algorithm. And of course, subscribe to this channel to learn even more. I'm going to release at least one new video every Saturday. And if you'd like to see even more content for me, follow me on Instagram under the handle Firm Learning. I'm posting new content pretty much every day at the moment. I hope you like it. Thank you very much for watching. I very much appreciate your time hope you're all having a great weekend. Stay safe and keep learning everybody this is Heinrich from Firm Learning. Bye there.
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Channel: Firm Learning
Views: 46,480
Rating: 4.9476585 out of 5
Keywords: MBA, INSEAD, Harvard, INSEAD MBA, Harvard MBA, apply for MBA, how to choose MBA program, best MBA program for me, differences among MBA programs, differences between MBA programs, best MBA program in the world, reasons to do an MBA, watch before doing an MBA, considerations for doing an MBA, financial times mba ranking, mba rankings, what is best mba program, firm learning, advance career with mba, return on invest of mba, mba admissions, mba degree, business school
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Length: 18min 29sec (1109 seconds)
Published: Sat Apr 11 2020
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