MBA needs to be combined with on the job experience- it worked in the past, why not now?

The April 7,2008 Financial Times' article " Masters and Misgivings" celebrated the 100th anniversary of the Harvard Business School and raised several critical issues about the worth and need for MBA degrees. It was amazing to learn that over 500,000 students will receive MBA degrees globally in 2008.

The MBA degree has become almost a must for those who want to become senior managements in many organizations. It is like the bachelors degree became a must for my generation. But the real issue, is it worth the time and effort and would organizations be better off taking undergraduate degree holders and train them.

GE's Talent was homegrown.
In my recent book: "The Secret to GE's Success", I stressed that one of the reasons that GE has been successful for over 127 years, is that it has developed its own talent and created a strong and deep bench. Training programs began with the founding of the company in the 1897 and has continued today. The first programs were technical programs, but the company recognized the need to train financial and business leaders and in the early 1900's added its renowned Business Training Course. The programs were further enhanced in the 1950's when all of business functions, (sales, marketing, human resources, manufacturing) added their own unique three year programs, that combined on the job training and after work educational programs.

It was at this time that the company opened its famous Crotonville executive management center. The Crotonville courses were taught by a team of both academics and GE staff to assure that the concepts were translated into practical applications and built on real problems and situations and not just case studies. The GE programs built a strong, deep bench of skilled and committed professionals and managers. However, there were no degrees given by the Crotonville or GE training programs so they were not a marketable as an MBA or Masters degree. This was intentional to avoid GE being raided by others.

Today's Graduates want a marketable degree.
Over the last few decades, many companies have stopped their own training and relied almost exclusive on hiring MBA graduates. This was result of the unwillingness of MBA graduates to want to do entry level work and spend more time in the classroom. The company's found this less expensive and so they have relied more and more on hiring the graduates, either directly from the Universities or from the consulting and accounting firms who are still the largest employers of MBA grads.

Need Combination of Academics and Real, Hands On Experience.
Unfortunately, this approach has left some gaps in the experience and skills development of the new recruits. Since most MBA grads start working in middle management or in consulting firms positions, they lack the practical hands-on experience that they can only gain by being in the trenches and learning from the bottom up.

I started my career on GE's Business Training Course and then moved to the Employee Relations Program. On these programs I had assignments as a factory foreman, in the "apprentice shop", in the bookkeeping organizations, in short, in the less desirable but important parts of the business. It is the old story, if you haven't lived it you really can't appreciate what it takes to do some of these routine, sometimes boring, manual jobs. No MBA program can provide this first hand experience and it shows when their graduates enter the workforce. Most lack the sensitivity to the workforce and many consider themselves anointed.

One of the criticisms about the current MBA programs is that they are focused on techniques and not the real applications. Case studies are still academic and not real and you really can't solve real problems unless you face them and must solve them under pressure and with time constraints.

Combinations work...
I believe that MBA programs do have value, but maybe they need to be combined with "on the job, entry level training programs. Maybe the solution is to have students serve an apprentice ship and then go to MBA programs, designed by their employers and paid by them. This is not a new concept. In the 1960's I developed and managed two key technical programs for the GE Missile and Space Division. One was an entry level program, called the Space Technology Engineering Program (STEP)and this enabled the participates to get a Masters at the University of Pennsylvania. The other was a more advanced program called the Systems Engineering Program and it allowed participants to get a doctorate at U of Penn. Both were highly successful in combining academics and practical experience.

Business is not a science... it is an art and this requires learning to apply common sense in a more efficient and organized way...I call it Organized Common Sense. This can only be done with a combination of real life and some academic training and no MBA program can do this on its own.

Bill Rothschild, author of "The Secret Tot GE's Success" and "How to Gain and Maintain the Competitive Advantage in business". Both are available on Amazon.