For my parents’ generation, the default option for career development was getting an MBA. At one point in the late 2010s, I considered the degree, too. But as much as the brand glittered, a price tag of $200,000 plus two years of lost wages just didn’t seem worth it. And now?
Is an MBA worth it in 2021?
Let’s step back: The value of college and especially business school has been diminishing for a while. (Just ask Elon Musk, Sheryl Sandberg, or Mark Cuban for their opinion of the MBA or take a look at the declining application rates, even at the top schools.) The model of taking students out of the workforce to study decades-old cases was designed for a different era, when technology didn’t shift entire industries at such a breakneck speed.
Covid-19 has shone a glaring spotlight on just how archaic this type of education is. Almost overnight, business plans have been torn up, the rules we’ve played by scrapped. Executives can’t lean on the tactics they learned from outdated case studies—all of us are learning about our new world in real time.
MBA programs and business degrees have historically promised a few things: an education on core business topics, a higher caliber of job opportunities, and a prestigious network. But in the foreseeable future, they can’t guarantee any of those outcomes.
The education? MBA students will be watching their business courses online, just like you can, thanks to widely accessible MOOCs—massive open online courses like Udemy and Coursera. The job opportunities? Many companies that hire MBAs have frozen hiring and cancelled summer internships. MBA graduates will be competing for jobs with candidates who’ve been working, not swishing drinks around at mixers for the past two years. Speaking of drinks, that business networking becomes a bit more difficult to build when socials and spring break trips are replaced with… Zoom.
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Most importantly, I’ve also witnessed first hand that a two-year business school education simply isn’t sufficient for today’s careers. As CEO of an education startup, I work with thousands of Millennials each year, both MBAs and non-MBAs, on their career needs. My students are not looking for one-and-done education. They know that the constant industry disruption we’ve faced over our lifetime—now accelerated by Covid-19—means they must continually learn about the latest trends, broaden their networks, and keep up with the ever-changing skills required for success. Increasingly, they’re not asking, “Should I get an MBA?,” they’re asking “How do I get the skills and insights I need for work, now?”
In fact, management skills have never been more important to long-term career success. In a post Covid-19 world, the only jobs that are truly future-proof are those that can’t easily be automated or outsourced. One key category is management roles that require a high level of interpersonal skills, emotional intelligence and experience. It’s a harsh reality that many of us first fully grasped via Andrew Yang’s 2020 Presidential platform and his book The War on Normal People.
When I left JP Morgan to start brunchwork in 2018, pay and opportunity were a shadow of what they were pre-financial crisis, prestigious jobs were being automated, and a growing number of colleagues sat offshore. One particularly illustrative example: Equity trading at JP Morgan used to take up two floors at 270 Park—it’s since been replaced by algorithms and a tiny room of perhaps a dozen people. My colleagues knew that fixed income was next, and that more and more roles across finance would be taken over by robots or cheaper talent abroad.
That was two years ago. Fast forward to now: Covid-19 has exponentially accelerated these trends of automation and outsourcing far beyond finance. Automation is set to scale up and eliminate 20% to 25% of current jobs by the end of the decade, according to Bain.
Outsourcing is rising too, as businesses are being forced to cut costs at the same time they’re getting more comfortable with a distributed workforce. Even tech jobs are no longer safe: Uber CEO Dana Khosrowshahi, in a plan to “fundamentally realign the company,” says he’ll ship many of its engineering jobs overseas. Nearly three-quarters of tech workers are increasingly worried about their jobs.
Despite these trends and the importance of management training, business schools are struggling to attract top tier talent. Many elite MBA programs have needed to relax their exam requirements, with some dropping the GMAT altogether. And it makes sense: They haven’t rolled out major innovation in years, and they’re not making the changes that might appeal to prospective students now.
I haven’t seen any announcements of tuition adjustments or refunds for the disrupted semesters—despite vocal protests—nor any news of enhanced career support for struggling students. Instead, many programs are clamoring to reopen, making the call to do so earlier than other businesses. Like Blockbuster in the early ‘00s, they’re clinging to the strong brand and high margins that worked for them for decades rather than leaning into new models that make sense for the future.
But change is coming. Students expect more, and they deserve more.
Alternative MBA programs, like mini MBAs, are still experimental and in their infancy. There are many considerations that come with any online business class or alternative program. But I anticipate one of these programs will be the equivalent of Netflix: The model of the future that puts the brands we’ve known for years out of business. Either way, given that many of these programs are free or cheap, they’re a much easier risk to take.
The MBA and business degrees are obvious targets, but all of higher education should pay attention to this case study.
It’s time for many of these outdated institutions—which lure students with prestige, saddle them with debt, and rob them of their most formative years—to go the way of Blockbuster.
This piece was first published on Forbes on June 25, 2020.