Is it Worth the Investment on a Full Time MBA?

(Link to version in Portuguese)

It is worth quitting a good job and investing 1-2 years of your life, plus all the financial cost, on a full time MBA?

Even for those that pursue a top management position in an organization, the answer is no longer automatic as it used to be 10 or 20 years ago. However, if meeting certain conditions, I am confident that the answer is still an imperative Yes!

The decision should take into consideration several elements, some relatively recent, such as the large number and the relative commoditization of the MBA programs, the competition from Executive and Fully Employed MBAs and the high tuition costs, now at levels similar to the average annual salary of an MBA graduate.

Adding to the tuition expense the opportunity cost of a 1-2 year “no pay” period, the equivalent disbursement reaches 3 years of the graduate future compensation!

Given the risk of not getting a good and well paid job afterwards and of losing your space at your present employer, why not just attending an Executive or Fully Employed MBA (often financed by such employer), thus avoiding most of that cost?

And for a future Entrepreneur, does it make sense to get a full time MBA or is this degree more appropriate for those who want to pursue a career in a large corporation?

Obviously, if you cannot get access to financing, or are in a more advanced stage of life, career or family, putting everything on hold for a full-time MBA, specially if in another country, may not be the best decision. However, for the generation around 30 years of age, some elements can turn this project into a unique opportunity for personal and professional development!

The most critical factor is the selection of (and getting accepted by) one of the best 20-30 full time MBA programs in the world, where you will have access to, among other things, a top quality structure and intense academic program.

At such Business Schools, given the attendees’ relative work experience and maturity, they are able to learn in more depth and achieve mastery in Marketing, Finance, Accounting, Operations, Micro / Macroeconomics, Entrepreneurship and other subjects.

Frankly, how to read and study all the books, prepare the various cases required each quarter and necessary to learn well about such themes, when you have to reconcile that effort with a full time job?

The MBA program complements and enriches the education of BS or BA degree holders (on a lower scale for Business undergraduates), and the analytical background of engineers, for instance, permits an easier and deeper absorption of those subjects.

For entrepreneurs, such knowledge will bring significant benefits for the management of their company and of the different functional areas, as they will be able to “speak in the language” of CFOs, accountants, bankers and lawyers.

Financially, MBA graduates from the top Schools obtain initial compensation levels 60 to 80% higher than before the MBA, much better off than those graduating from programs placed at other layers in the ranking.

The network and friendships that can be developed during this period is a relevant factor. When you commit to a project with so much interpersonal interaction, such as a full time MBA, chances are that you will develop longer-lasting and deeper relationships. From a personal or professional perspective, the value of these friendships and network is high and that return is likely to be leveraged in the relationships developed at the top Business Schools.

And there is the life experience and international exposure, should you decide to study abroad. This is hard to quantify, even to describe. Only living! It is a period to reflect about what you want for your future, about your career, or projects for your possible start-up. To explore ideas and get advice from the faculty, peers, entrepreneurs and successful professionals. Time to make changes, or to meet your future partners.

For all those reasons, I strongly recommend the effort of applying and attending a top School full time MBA program, in a foreign country. It is an opportunity for a valuable, “once in a lifetime” experience!

Facebook on the Streets

(Link to the Portuguese version)

The movement Occupy Wall Street, which spans throughout several American cities (it is happening in more than 20 cities as I write), although with some similarities with recent protests in other countries, is a new type of manifestation that I think may be here to stay.

Despite the publicity in the American media, it is being underestimated by a few TV channels and major newspapers, for its lack of leadership, of a unified speech or a specific proposal from the protesters (such as the goal for democracy of the Arab Spring movement, or for free education in recent Chilean manifestations).

I think this is a misunderstanding. It is true that, such as in Facebook posts, the speeches on the streets express different opinions on various topics, sometimes seeming unrelated, with no expected outcome from such comments.

But they all share one important element. The communication that people are not happy, that they are feeling imprisoned, within this "Oppressing Wall” – a system, where others make mistakes and they suffer the consequences. The speeches do not say what they want to reach. But they are crying out loud that things have to change.

Be it the worsening income distribution and the growing poverty in the US. Or the financial system and its lack of effective regulation to prevent bankers, in pursuit of their bonuses and interests, from helping governments to lie, concealing relevant information, selling junk bonds, etc., causing a credit crunch that disrupted the economy.

A Congress, heavily influenced by these same bankers, with several of its members preferring chaos to a serious negotiation with the government.

The perspective of a long recession. An environment where every American is born with a $50 000 public debt and growing, with no relevant measure to reverse the trend. Add to that the large number of young people leaving college unemployed and already with a bank debt of $ 50-100 thousand.

Perhaps Occupy Wall Street will have no serious consequence. But it is the dawn of a new type of manifestation, which I count will remain pacific and within the limits of law. The protesters just want to generate resonance. But this, in the right frequency and intensity, can put down any Wall.

I wish our leaders cared and changed a few things to start. But they seem too old to understand Facebook.

Renewal for Survival

(clique aqui para versão em Português)

When starting to prepare a presentation on "management of start-ups applied to large enterprises", I decided to support my view about the importance of them reinventing themselves, analyzing the recent evolution of some NYSE corporations.

To this end, I selected Apple, HP, IBM, Kodak and Microsoft - all well known, frequently mentioned in news and over 30 year old companies.

Through Yahoo Finance, I generated a chart displaying their stock price variation, as well as of the Nasdaq Composite Index, from September 30, 2009 until yesterday, September 30, 2011.

Obviously I expected some trend that could be used to support my thesis of their need to reinvent themselves to survive. But I was astonished by how direct and precise was the correlation between the stock price evolution and the market perception on such matter! See the chart below:

In the last two years, the Nasdaq appreciated approximately 20%. Apple, which revived after Steve Jobs' return, and kept evolving with its Ipod, Iphone and the new Ipad, has been the current big star and appreciated over 100% in the period.

At the other end of the chart is Kodak, which has just announced the hiring of restructuring attorneys. Who did not use Kodak's cameras and films? But despite a few attempts, it was unable to introduce new products that could invigorate the company, while demand for their products was smashed by digital media and smart phones.

Surprisingly close to Kodak in the chart, with 50% of depreciation (58% compared with the index), is the respected HP! In this case, the pain of its attempts to reinvent itself has been exposed in the media: the indecision about the future of its PC division, the $10 billion acquisition of Autonomy, the tablet business failure and its several CEO replacements. HP seems to be lost and the market is not complacent.

Placed in the the middle of the chart is Microsoft, with no stock price change in the last two years (negative return compared to the index). The message from the Market seems clear: despite high profits, the company needs to position itself in relation to the future - without a growth strategy, there may be negative surprises ahead. I think Microsoft knows this and the decision to pay US$ 8.5 billion for Skype, still an unprofitable business, may be related to such consideration.

Finally, with a relevant 50% valuation, there is IBM, a company that seems to really have reinvented itself. Known for its mainframes and portables (they were not called notebooks in the 80s), IBM sold its PC division to Lenovo a few years ago and decided it would become mainly a solutions company. Apparently, the strategy is working: IBM has just overtaken Microsoft to become the second largest technology company in the world, after Apple!

But the game never ends for those who are alive. Apple and its new leader have a challenge to continue innovating its product line, because commoditization is fast. IBM can not be complacent with its own success. HP must believe in its brand and culture and go all the way in the efforts to renew itself. Microsoft needs to position itself on the subject and act. And to Kodak I wish good luck and hope it's not a goodbye.

Let's see where we will stand in 2013!