THE MBA DEGREE – A PRIME EXAMPLE OF DEFERRED GRATIFICATION

Yesterday, I had two of our current MBA students in my office regaling me with the amount of time their studies were taking away from their jobs and their families. One of them said, “I barely have time to sleep most weekends I have so much schoolwork.” I didn’t tell either of them that back when I was a graduate student, I had once told one of my professors, “After my coursework, about all I have time for are church and sleep.”

The time crunch of a graduate business program reminded me of one of my favorite pieces of research conducted by Walter Mischel at Stanford in the early 1970s who devised a rather ingenious experiment with young children and marshmallows.  Here’s how it worked. Each child was seated at a table and a marshmallow was placed in front of them. The child was told that if they were able to wait 15 minutes before they ate the marshmallow, they would get a second marshmallow to eat as a bonus reward. Approximately two-thirds of the kids failed to wait the 15 minutes for the bonus marshmallow, i.e., they were unable to “defer gratification”. Interestingly, among the many studies of individuals and success vs. failure, one factor has always emerged – those who can’t defer current gratification tend to fail.

If you watch the videotape of the kids with the marshmallows, you see all sorts of behavior. Some kids pop the marshmallow in immediately with no waiting; others struggle a bit before succumbing; a few kids are in obvious agony trying to make the 15 minutes -- even banging their little heads on the table. But the simple results of the experiment were this -- one-third got the extra marshmallow and two-thirds didn’t.

Fast forward a few years and that’s when it really gets interesting. When researchers followed up with the marshmallow kids several years later, here’s what they found: if you were in the group that waited and got the second marshmallow, guess what? You scored about 200 points higher on your SATs, were less likely to drop out of college, made a lot more money, were less likely to go to jail, and had fewer drug and alcohol problems. In short, those who waited for the extra marshmallow not only looked more successful, they were more successful.

As the Mischel story flashed through my mind, I thought briefly about explaining to the two students in my office that getting an MBA, while difficult in the short run, made life a whole lot easier in the long run by opening up opportunities for more challenging jobs in the future – sort of a prime example of deferred gratification. I wanted to leave them with a few choice words that would have a big impact on their thinking down the road.  

Instead, my mind drifted back to when I was the graduate student in my professor’s office and I had just uttered the words, “….all I have time for are church and sleep.” His response was pretty straightforward (and I still remember it like yesterday) – “Well, if you think you need more time, maybe you ought to start sleeping in church…..”

WHY ALL GOOD MBA PROGRAMS HAVE AN “EXPERIENCE” REQUIREMENT RULE

When I was about 10 years old, there was a kid who lived down the street from me named Bill Gardner. I think in modern day parlance, Bill would be called a “geek” or a “nerd”. Back in my day though, he was just “a little strange”. But quite by accident, Bill taught me an important lesson about rules and authority that I still use today. Here’s how it started.

I wanted a new bike and approached my parents to “negotiate” the purchase. I thought I had just the argument that would win them over. So when Roscoe, my father said, “No new bike now and no new bike anytime in the near future – new house rule,” (and by the way, he and Lois, my mother, exchanged satisfied looks of complete agreement while he was saying this), I brought out what I thought would be my ace and said, “Well, almost everybody I know has a new bike.”

Instead of our piling in the car and heading to the bike shop, my father looked at me sternly and said, “Well, you’re not everybody, mister.” I started back to my bedroom with my tail between my legs, completely deflated and I just looked back at the two of them and said, “You know, Bill Gardner has a new bike.” In an instant, I saw my parents exchange a glance of discomfort and hesitation and I realized immediately (as only a 10 year old can) that I had struck a nerve. “Yeah, he rode it to school and parked it right next to my piece of junk bike. You guys probably have never been embarrassed by somebody like Bill Gardner.” I won’t bore you with all the lurid details, but safe to say, I had a new bike later that afternoon and a new arrow in my quiver to question rules. I decided that rules need reasons but those reasons are certainly open to question.

Hardly a day goes by that I don’t receive one or more queries about our MBA experience “rule”. The rule is simply this: entrance to our MBA program requires 3 years of post-baccalaureate business experience. Here are the reasons for the rule. First, it turns out that the most important attribute to students in MBA programs is not the professors, not the perceived quality of the school, not the curriculum but rather the quality of the students in the program. One of the key components of student quality is (you’ll never guess) – business experience. Second (and this goes along with the first reason), the MBA is an applied degree, i.e., while there is a theoretical foundation, maximum benefit accrues to someone with an experience base (i.e., management experience). And lastly, for those who think that the argument “No other MBA programs have experience requirements,” holds water, I would challenge you to find any quality MBA program without an experience requirement.

About a month ago I was talking to my mother (my father passed away about one year ago) about her staying with me in Houston this winter where it’s a little milder than in Illinois where she lives. She politely declined this year saying the trip was too difficult for her. “But, mom, almost all of my friends in Houston have their parents visit them in the winter. You want me to be the only one without parental visitation?” My mother didn’t miss a beat and replied, “Well let me know if Bill Gardner’s parents visit him this winter.”

And here I thought all these years that I was the only one who had learned something from the Bill Gardner angle…..

HOW DO YOU GET THE NON-BUSINESS UNDERGRADUATE READY FOR THE MBA?

Context is a funny thing. I remember a teacher I had who once explained context like this: she said, “If two people are talking, and one casually points to a tree outside commenting, on say, its size or height and the other person, as they look at that same tree, recalls when they were 10 years old and fell out of a tree and broke their arm, that tree has a totally different context for those two individuals. One is simply pointing the object out; the other is vividly associating the object with a personal experience. I had another teacher with a little more direct definition – context is two or more sets of eyes looking at the same thing and drawing different conclusions.

I provide those examples as a backdrop to the discussion that we had regarding a key element of our MBA program. Many graduate programs only attract students who already have a base level of knowledge in the graduate subject area. The MBA degree, as its name suggests, is a graduate program in Business Administration. The difference in the MBA and many other graduate degrees is that the MBA attracts a widely divergent body of undergraduate degrees. The reason for this is fairly simple. Chemists, engineers, physicists, physicians, designers and so forth, while professionals in their own right, typically have to function as part of a profitable business. The MBA is typically designed to produce leaders/general managers who can guide a business both strategically and profitably. Many professionals want the value of an MBA but don’t have the undergraduate background that a business major would have.

How does one insure that all these divergent backgrounds mesh in the classroom without placing non-business undergraduates at a distinct disadvantage?  Everyone agrees that non-business undergraduates need to be brought up to speed but the issue arises as to what this “up to speed” training should be called. Here’s where context comes in. I had one group who suggested we call these classes “BRIDGE” classes (because they bridged the gap between undergraduate and graduate knowledge). I had another group who liked “COURSE IN A BOX” because it sounded like something that stood alone. A third group just liked “PREREQUISITES” or “MBA PREREQUISITES” because that sounded like something that needed no further explanation. There was considerable debate about which of these three names had the proper context for what we were trying to convey.

Midway through this debate, my youngest son and I were discussing why he needed to mow our lawn on a regular basis. This task seemed to highly interfere with his pursuit of video game technology. “You never made my brother mow the lawn,” he reasoned, “So why start with me?” I was about to vigorously explain labor economic theory to him when he interrupted me with “That’s not a fair leveling of the playing field if I have to do things my brother didn’t.”

The next day I suggested LEVELING classes as the name for our MBA classes required of non-business undergraduates and everyone immediately liked the name. It contextually fit.

By the way, I’m sure you’ve probably already figured this out, but my son doesn’t mow the lawn. After all, a good idea has to be worth something….

INNOVATION AND THE MBA

Steve Jobs’ death recently from pancreatic cancer reminded me of a favorite quote of his that has always resonated with me. The quote is, “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

Focus groups are highly popular marketing tools. Many are done completely online now. But the whole point of innovation is somehow understanding what a consumer needs out in the future – not what they need now. Wayne Gretsky, the hockey great, had his own unique sports take on the concept of innovation in describing how he thought about the game of hockey and how he played. He always said, “I skate to where the puck is going to be, not where it is now.”

I was talking with a group of prospective MBA students last week when the question arose, “What, if anything, makes the UHD MBA program innovative?”

“Hybrid classes and 8 week terms,” I quickly responded and then saw a look of puzzlement on most students’ faces. It turned out that none of them had ever taken a “hybrid” class before or even knew what it was. The discussion that followed focused on the difficulty in balancing a career, a family, and the desire for more education. Traditional MBA programs create significant stress for students and their careers/families because of the “time element” involved in preparing for and attending 4-5 classes during a semester. Hybrid classes at UHD only meet one night per week from 7-8:50PM with the remainder of the classwork completed in an online format. The 8 week concept allows students to focus in-depth on just a couple of classes at a time rather than the larger block of 4 or 5. The group of students quickly understood the flexibility of this format in managing their careers and family lives.

Hybrid classes and 8 week terms are innovations for MBA programs – “career friendly for working professionals” – UHD’s equivalent to “skating to where the puck is going to be”. Funny thing, though, none of the faculty has started calling me Dean Gretsky....

WHO REALLY NEEDS AN MBA?

If you will recall, my last blog recounted a conversation I had over dinner with a couple of professionals and their wives about the merits of an MBA for one of their sons. What follows is a slightly different angle and exchange on the same subject.

I was at lunch the other day (I try not to miss too many meals) with three graduates from our undergraduate business program, all of whom were successful 30-35 year olds. One of the three was contemplating an MBA degree to “further her education” and was asking some general questions about our new program.

She was interrupted by one of the other two who laid the following egg/statement on the table: “An MBA is for someone who doesn’t know what they want to do, hasn’t made it yet, and/or has money/time to burn. Bill Gates (Microsoft) and Larry Ellison (Oracle) didn’t need business school, Zuckerberg (Facebook) and Jobs (Apple, Pixar) dropped out of college, and Brin and Page (Google) dropped out of their Ph.D. programs in computer science at Stanford (they didn’t have MBAs) – all to start successful companies. So, therefore, why does anyone need an MBA?”

As I looked around the table, all eyes were on me wondering, I suppose, how I would respond.

“Well, there are two important dimensions to your question,” I began, “And they both need to be addressed. First, you are absolutely right. There are several high profile CEOs who don’t have MBAs and you’ve named most of them. These are the Kobe Bryants and LeBron Jameses of the business world. Most NBA players go from high school to college and play at least a year or more before going to the NBA. Less than 10% of all NBA players come directly from high school to the NBA. Kobe and LeBron, however, did just that and have been pretty successful.”

“The other side of the equation is this: of the 100 largest, most successful companies in the U.S., 42 are run by CEOs with MBAs. In fact, the MBA is 5x more prevalent than the next closest degree (JD [law]). CEOs with MBAs include Jeff Immelt at GE, Phil Knight at Nike, Warren Buffet at Berkshire Hathaway, and Indra Nooyi at PepsiCo, just to name a few. So if your goal is to ever run a successful company, an MBA is one of the best investments you can possibly make.”

The woman who had been asking the original questions sort of laughed and said, “Well, I’m not Kobe or LeBron, so I’ll be applying.” Two days later, I had a follow-up email from the graduate who had asked “Why anyone needed an MBA”, thanking me for my time at lunch and asking if I could talk to the MBA Admissions Committee on his behalf. He had also decided to pursue an MBA.

So, contrary to what my wife likes to tell me, conversations over lunch sometimes do make a lasting point…..

WHY PEOPLE GO INTO AN MBA PROGRAM

I had dinner the other night with two of my wife’s close friends and their husbands whom I’ve met a couple of times but hadn’t seen in several months. One husband is a plastic surgeon who seems like he’s always in the operating room and the other practices law. I think the last time we got together, the lawyer told me he was involved in six separate ongoing litigations. He said he barely had time to sleep.  Both husbands knew I was Dean of the College of Business at UHD but in our previous encounters, most of the conversation had centered around their busy practices and lives.

Well imagine my surprise when the surgeon announced that his son was starting an MBA in the Fall and how disappointed he, the father, was that his son was taking this educational route and who in their right mind would sign-up to take a bunch of on-line “how to manage” courses from a group of college professors far removed from the real world?

The lawyer looked directly at me and quickly asked, “Aren’t you guys starting an MBA program?” and when I stated that, “Yes, we were about to launch our MBA,” he asked, “Do you think Ross’s (the surgeon) son is making a mistake?”

I was about to jokingly say that Ross’s son’s MBA was probably just a precursor to medical school but I noticed that all the side conversations had stopped abruptly and, in particular, Ross’s wife Jeanine looked troubled by what her husband had said and it was suddenly obvious to me that they had had a serious argument about their son’s career direction.

“I’ve been involved in four different MBA programs,” I started, “And there are just a few reasons people want this advanced business degree. MBA programs are the incubators and proving grounds for best future business practices and being a part of this ensures the participant an opportunity to be at the forefront of a better world, society and economy. At the same time (and I looked directly at both the surgeon and lawyer), many fields are becoming more restrictive and there is considerably less opportunity to be your own boss and/or run your own company (I learned later that the surgeon had just joined a large hospital group while the attorney’s firm had been purchased by a large national firm and he had gone from being 1 of 45 to 1 of 375 litigators). MBAs are heavily indoctrinated in entrepreneurship and many graduate and start their own businesses. Today’s youth is a lot more interested than their parents were in having control of their future and their time by being their own boss and being able to spend time with their families.”

Everyone was listening now. “And regardless of what you think,” I continued, “Our free market system is the best in the world and there are few barriers to prevent good people from moving around with relative ease. An MBA might also fit for the “do-gooder”, the person who wants the world to be a better place and wants to make a difference. Business Schools are doing research and leading the way toward best practices in areas such as the environment and diversity. But above all, an MBA prepares a person to think critically, assess and take risks, make decisions, evaluate uncertainty, and work closely with other people.”

Jeanine had a little smile on her face and I could see that Ross was thinking about what I had said so I added, “Oh, yes, and I forgot to mention, all that time they spend on Facebook --- we teach them how that translates into valuable customer relationships!!”

Ross seemed to be at a loss for words so I just asked for the check….