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Weigh if an MBA Makes Financial Sense

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com An MBA is a long-term financial investment, so here are three questions to ask when trying to decide whether going to business school …

why MBA

Consider if an MBA will lead to a significant salary bump.

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com

An MBA is a long-term financial investment, so here are three questions to ask when trying to decide whether going to business school makes financial sense: Will the degree result in a significant salary bump? Will the degree help me switch careers? Will the degree help me get to a leadership position faster?

While it can be daunting to pay hundreds of thousands of dollars to earn an MBA, most business school graduates experience a substantial salary increase. The vast majority report having greater job satisfaction and the ability to advance quickly and, therefore, earn more in shorter time.

The Graduate Management Admission Council, which administers the GMAT exam, gathered input from b-school alumni worldwide in late fall 2015 to shed light on the issue of return on investment for its “2016 Alumni Perspectives Survey Report“, released in February.

Among the 14,279 business school alumni who participated in the survey, 75 percent say their graduate management education was financially rewarding, and 93 percent say they would pursue the degree again if given the choice. Although graduates considered three main areas when assessing their return on investment – expansion of knowledge/skills, personal development, salary increase – we’ll stick to just the financial aspect for this post.

Calculating the return on investment requires a simple formula. It’s the return acquired from an investment minus the cost of the investment, divided by the cost of the investment. Students of two-year MBA programs typically have the largest investment expense because they miss two years of employment. They need to recoup the cost of the MBA degree plus the opportunity cost in order to get a positive return on their investment.

Let’s consider the applicant who currently earns $70,000 a year and has landed a seat at the University of Chicago Booth School of Business. Tuition and expenses for the two-year MBA program at Booth will be about $200,000. She earns $15,000 during her summer internship, and her first year post-MBA salary in management consulting is $160,000 plus a signing bonus of $25,000.

This student’s opportunity cost – $143,500 in salary over two years – plus out-of-pocket expenses for tuition, etc. totaling $200,000, minus internship earnings, equals a total investment of $328,500. If she had not gone to business school and earned a typical annual salary increase of 5 percent, five years later she would be bringing home just more than $85,000 annually and would have earned $386,795 during that five years.

If she does the MBA, forgoes salary for two years, and earns at minimum a 5 percent increase over starting salary annually, she will earn $185,000 her first year and at least $529,400 for those same five years. More often, periodic bonuses and larger-than-average salary bumps mean that alumni frequently recoup their business school investment less than four years after graduation, GMAC reports.

GMAC found that more than 20 years after graduation, business school alumni earn a median cumulative base salary of $2.5 million. This is $500,000 more in cumulative base salary than they would earn if they did not go to graduate business school and consistently received 5 percent annual salary increases, and nearly $1 million more than if they did not go to business school and consistently received 3 percent annual salary increases over 20 years, the GMAC report says.

Prospective students should consider payback time with projected cumulative growth, and average growth rate, when looking at return on investment as a motivating factor for pursuing an MBA. But keep in mind, the value of the MBA degree varies widely depending on your post-graduation plans, as well as the brand ?of the business school where you earn the degree.

When it comes to deciding whether business school makes sense for you, remember that the choices you make – ranging from the cost of the city you decide to live in, the field you move into, the school you choose – will all impact your financial return on investment.

Your personal return on investment, however, is something quite different. Having the ability to transition into nonprofit PR marketing or some other lower-paying but more personally rewarding job may be well worth it – and that kind of personal satisfaction cannot be measured in dollars and cents.

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Prepare for Short Answer MBA Application Essays

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com Ten years ago, lengthy MBA essays were a staple of business school applications. Flash forward to today, and admissions departments worldwide have reduced …

MBA essays

Brainstorm before writing to keep business school essays concise.

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com

Ten years ago, lengthy MBA essays were a staple of business school applications. Flash forward to today, and admissions departments worldwide have reduced the word count and number of essays candidates must tackle. Whether the influence is social media, with its condensed communication style, or simply that the admissions committee has grown weary of reading thousand-word essays from thousands of applicants, it seems short and sweet is here to stay.

Many applicants struggle with short-answer essay questions because they feel like they cannot adequately convey everything they want the admissions committee to know in so few words. The challenge of these brief prompts is to give the admissions committee what they ask for while still providing a compelling snapshot of yourself.

I always advise applicants to do two things as they work on their MBA essays: make sure to answer the question asked and spend a lot of time brainstorming up front. You would be amazed at how many applicants start to answer an essay prompt and veer off-subject entirely. With such a limited word count, even answering a “why” question with a “how” response will be a turnoff to the admissions officer reviewing your application.

 The brainstorming phase is the same whether you have a word count of 750 or 200. First, find a theme, or a couple of main points, you want to convey. Consider the essay set for each MBA application as a whole, and make sure your answers do not overlap but rather build upon each other. Then whittle away anything non-essential, and always avoid the passive voice as it eats up valuable space in your allotted word count. Whenever possible, share details that show a glimpse of your personal interests or something amazing that you have done.

The Columbia Business School application, for example, asks this short-answer question: “What is your immediate post-professional MBA goal?” With a maximum of 50 characters, applicants must distill their responses into something that makes a tweet look verbose.

Though a simple question, it requires that you condense your career goals into one clear career vision statement. Rather than submitting a generic phrase like “work in finance,” the aim is specificity. Something like “real estate finance at a private equity firm” tells the admissions committee far more about your interests and goals.

The career goals essay remains ubiquitous at business schools, though the question’s presentation is evolving. At Duke University’s Fuqua School of Business, for example, the essay is broken into three parts, each with a 500-character limit, or about 100 words. First, you need to describe what you plan to do immediately after your MBA. Then you’ll explain the long-term vision for your career. Finally, since many career paths are forged through circumstance, determine what is your Plan B.

Think big picture and focus on the overall story trajectory. What would be the most logical – and interesting – progression from your current skill set and MBA education? How will your next step flow from the combination of those experiences? Ideally, your alternative path is not a massive departure, but simply shows the areas you could see yourself exploring if your primary plan doesn’t materialize.

You’ll have to boil your ideas down to a clear statement of what you plan to do, but if at all possible, the information provided in your resume, recommendation letters and other essays will logically support those plans.

It can be a challenge to show off your personality, accomplishments and aspirations in fewer words, but the short answer essays offer MBA applicants a chance to demonstrate top-notch writing skills. One of the most valuable skills in business is the ability to communicate precisely and concisely, so make sure every word counts.

Image credit: Flickr user Daniel Foster  (CC BY-NC-SA 2.0)

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Sell Yourself With an MBA Resume

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com The MBA resume is a whole other animal from the standard curriculum vitae designed to land you a job. The resume you tailor …

MBA resume

Demonstrate sharp communication and leadership skills when discussing your duties at work.

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com

The MBA resume is a whole other animal from the standard curriculum vitae designed to land you a job. The resume you tailor specifically for business schools should offer a quick snapshot of your significant work experiences and accomplishments in three areas that showcase your MBA-relevant skills.

• Leadership: Business schools want to see applicants who already have strong leadership skills. You’ll further groom your management abilities during your MBA program, but the admissions committee wants to know that the foundation is already there.

Give evidence of when you united people behind a common goal, made use of other’s talents and skills, instilled a vision, challenged the status quo, identified a new problem or prioritized the needs of the organization above personal needs.

If you formally manage one or more people, don’t leave that information out. Even if you supervise and mentor someone informally, that should go on the resume as well. If you have played a role in training peers, subordinates or even those senior to you (perhaps on a new type of software), include that on your resume. Anything that shows how you identified an opportunity and took initiative is a great thing to include.

My client, George, was concerned because he did not have a title change throughout his four years at a defense contracting company. Because he worked in an engineering function, increase in responsibility was marked by a raise instead of a new title. My colleagues and I took a look at what George did outside of work to see where he could highlight a leadership role.

George had participated in an annual charity bike ride for the past five years, and we suggested that he volunteer to coordinate the next ride. The event became this bullet point on his resume: “Led annual bike ride to raise money in support of autistic children. Recruited volunteers, coordinated vendors and managed finances. Resulted in 14% increase in revenue over prior year.”

The brief yet compelling example showed the admissions committee not only his leadership abilities, but also his emotional intelligence and service to the community – a winning trifecta every time.

• Communication: With a tech-native generation of applicants as comfortable texting, tweeting and Snapchatting as they are breathing, recruiters often gripe about mediocre writing and speaking skills of today’s newly minted MBAs.

Your MBA resume is prime real estate for showcasing savvy communication skills through crisp writing and well-chosen words. You can make even the most mundane tasks shine as you bullet-point your professional accomplishments.

Here’s a real example of a blah bullet point in a client’s first draft: “Helped with new software implementation.”

Now, a brilliant bullet point: “Spearheaded software upgrade in the San Francisco field office by coordinating with software developer, leading training sessions and facilitating implementation schedule.” The second example offers a much more comprehensive understanding of the scope of the accomplishment.

Getting rid of any technical jargon in your MBA resume also demonstrates effective communication skills. One client originally listed this bullet point on his resume: “Created VA1 Business Acquisition.” Once we translated that into something the MBA admissions audience would understand, the resume said: “Devised and launched outbound communications plan for our premier voice activated product. Product was well received and became cash flow positive within 14 months.” Much better.

• Innovation: You need to make it clear that over the course of your career, you have picked up new skills, assumed new responsibilities, developed as an individual and that all of this growth has been recognized by others.

You can convince the admissions committee that you have a track record of moving the needle by showing continual progression on the job, and by giving examples of when you went above and beyond your expected duties and delivered quantifiable results.

Some applicants have very traditional pre-MBA jobs. If you have been working as a staff consultant at Bain & Company, or as an analyst at Goldman Sachs, chances are the admissions committee will have a pretty good feel for your overall job description.

But this is also an opportunity to illustrate the things that you have done that may set you apart from the typical analyst. In addition to outlining some of your standard activities, you may want to include that you trained a newly hired analyst, led college recruiting efforts or organized an office-wide volunteer initiative. These activities may have taken less of your time, but they are a bit outside of traditional responsibilities and give great insight into how you have made a difference for your firm.

The resume is an important first step in the MBA application process because it forces applicants to take stock of their progression and think about how to articulate that in a succinct way. By focusing on these three goals, you’ll show the admissions committee exactly how you will add something new, exciting and different to their community.

Image credit: Don Higgins (CC BY-NC-SA 2.0)

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Avoid These 10 Pitfalls in MBA Application Essays

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com The essay component of the MBA application is a chance to really wow the admissions committee and stand out from potentially thousands of …

taking notes2

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com

The essay component of the MBA application is a chance to really wow the admissions committee and stand out from potentially thousands of other candidates with similar GMAT scores or GPAs.

There are many ways to craft a stellar essay that will give the reader a better sense of who you are, but there are also several mistakes to avoid as you’re answering these required prompts. Make sure you sidestep the following pitfalls at all costs.

1. Neglecting to answer the question: Applicants often become so determined to drive home a particular point, or worse, drift off into a tangent, that they fail to succinctly answer the question. Don’t answer with “what” when the question asks “how?” or “why?” Business schools create their essays with the goal of finding out how you fit their program, and not answering the question immediately indicates poor fit.

2. Using industry jargon or pretentious language: Never assume the admissions committee member reviewing your application is intimately familiar with your particular industry. Write for a lay audience, and avoid flowery or stuffy language – use familiar words instead.

With hundreds of applications on their desks, the admissions staff has only a few minutes to review each essay. It should be immediately digestible.

3. Basing essays on what you think the admissions committee is looking for: Even if you have a pretty good idea of what a particular business school looks for in MBA candidates, this isn’t the time to remake yourself into what you think their ideal student would be.

This is a major pet peeve of the admissions committee, which is why they have gone to great lengths recently to come up with creative essay prompts. Stay true to yourself and your professional goals.

4. Using a negative tone, or sounding whiny or complaining: As you come up with those great anecdotes to illustrate your leadership, problem-solving or team-building skills, make sure the examples in your essay don’t include criticizing a co-worker or complaints about your supervisor, even in a subtle way. Always keep the tone positive, or it will end up reflecting poorly on you.

5. Lying or exaggerating about your experience: For some applicants, it can be tempting to fudge a few details or embellish a bit in the hopes of making a memorable impression. Just ask news anchor Brian Williams.

But aside from being bad form, the admissions committee has various ways to fact-check a candidate’s claims, and discovering fabricated information would trigger an automatic rejection, even if the mistake was innocent. Be accurate in how you represent yourself.

6. Failing to demonstrate passion: Most MBA applicants aren’t professional writers, and sometimes make the mistake of writing essays that are informative, logical, well-organized and, inadvertently, a snooze fest. This is not the time to repeat your resume in prose form.

You must connect with the person evaluating your application on an emotional level if you hope to stand out. As the University of Texas—Austin McCombs School of Business‘ MBA program recently noted on its admissions blog, “Convince us that you are not only capable, but that you are special and that we will be lacking something without your presence.”

7. Discussing inappropriate topics: While you do want to open up and allow the admissions committee to get to know the person behind the paper, certain subjects do not belong in an essay for business school.

Leave out any mention of religious or political views; avoid the subject of money and how you want to make loads of it after you get your MBA; and steer clear of overt humor in general, unless you are a comedian by profession.

8. Disregarding word count: In almost all instances, the admissions committee has specified a word limit to the essays. With thousands of applications to read each round, they don’t have time to review essays that read like epic tomes.

You can sometimes go over the limit a smidge, but flagrant disregard for the prescribed word count is a red flag that you either have trouble following directions or cannot express yourself concisely.

9. Referencing high school experiences: Unless you did something amazing in your teenage years – started a business, raised an insane amount of money for a fundraiser, built houses for Habitat for Humanity in Kyrgyzstan – stick to anecdotes from your career from the past three years.

Candidates applying straight out of college or with only one year of work experience can mention university accomplishments. But for those with more than two years in the workforce, focus on current career developments instead. Recent examples give the admissions committee a better sense of where you are today, both personally and professionally.

10. Making apologies or excuses: Whether the issue is poor academic performance in the past, being fired from a job or even having a criminal record, applicants feel terrified they will be rejected out of hand if they admit to these kinds of mistakes.

Address the matter directly, take ownership and explain what you learned or how you improved. No excuses or apologies needed – or desired.

MBA essays are a wonderful opportunity to share what makes you a dynamic, multidimensional person. If you can avoid inadvertently committing these mistakes, you’ll stand an excellent chance of creating a positive impression on the admissions committee.

Image credit: Daniel Foster (CC BY-NC-SA 2.0)

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Considering a Second MBA Degree?

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com The idea of pursuing a second MBA degree may sound strange, but it happens with a small number of applicants during every admissions …

get a second MBA

Applicants who received an MBA abroad can use a second MBA to strengthen job prospects.

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com

The idea of pursuing a second MBA degree may sound strange, but it happens with a small number of applicants during every admissions season and can make sense under the right, very specific, circumstances.

Some applicants consider a second degree after earning an MBA from a for-profit university or an unaccredited program. They may find they have hit a ceiling with their employment prospects as they vie for positions against candidates from better-known schools.

More often, people who seek a second degree are international candidates who have discovered that their professional dreams cannot be fulfilled with their current degree alone.

In India, for example, it’s common for a student to jump into an MBA program straight out of university, which makes for a very theoretical learning experience rather than a practical one in which to contextualize management problems. Once these MBA grads get into the workforce, they discover they must further develop various skills to become strong business leaders.

For professionals working in international firms who aspire to relocate abroad, a degree earned in-country will not open doors the way a highly ranked MBA from a name-brand university will. A second MBA is seen as an efficient way to move out of a stagnant career and enhance their competitiveness, allowing the degree holder to shift into a new function, industry or geography after completing their studies.

Creating a rich classroom experience through diversity is a huge focus of the top business schools, offering students the opportunity to interact with peers from an array of countries and professional backgrounds. While the educational component of the degree in South Asian business schools, for example, may sometimes rival their international counterparts, the ability to create networking ties across the globe is nowhere near as strong. For career switchers looking to break into competitive industries such as finance or consulting, earning an MBA from a globally recognized brand becomes paramount.

As with any blip or oddity in candidates’ background, they need to think through their story as they prepare application essays.

What did you not get from a prior MBA that you can get this time around? How is the target program different, or a better fit? Or maybe it’s a matter of timing, and the first one was a mistake you need to acknowledge. What skills are you looking to gain, and why couldn’t you acquire them with your first degree? An applicant needs to show why it would make sense to repeat the same degree from a different school. It can be a hard narrative to flesh out and tell in a compelling way, but it’s not impossible.

When I first read through the profile for our client Vijay, I saw strong academic numbers, volunteer involvement, an interesting entrepreneurial venture – and that he already had an MBA from one of the Indian Institutes of Management. My first question was the same any admissions committee member would ask him: “Why do you need a second MBA?”

Vijay entered an IIM program when he was a university student to supplement his engineering coursework. While he had received an MBA credential, he considered the degree as an addendum to his undergraduate diploma. Also, his degree did not provide the same career advantages he would get from one of his target schools in the U.S., which were the MIT Sloan School of Management, the Wharton School at University of Pennsylvania and University of Michigan’s Ross School of Business.

For his career goals essay, we discussed exactly what this second MBA degree would do for Vijay’s career. We also used the optional essay to clearly outline how specific coursework in entrepreneurship, international experience and networking opportunities at each program made a second MBA absolutely necessary. His hard work and compelling argument paid off, and Vijay pursued his second MBA at Sloan, where he made some great contacts for future entrepreneurial ventures.

Many top business schools in the U.S. and Europe welcome applicants who already hold an MBA degree. If your first MBA is from a smaller international school, the elite programs are well aware of their advantages over the initial degree. Fortunately, your prior MBA degree won’t be a problem for on-campus recruiting, though you should be able to explain why you needed the two degrees. Assuming you have a solid story, the emphasis will be on your work experience and skills. If you are admitted to a strong program, the degree — combined with your skills — will enable you to land a great job come graduation.

Contact the admissions department at the programs you are interested in to find out the specifics for each school, and be ready to make a rock-solid case for why a second MBA is the next logical step for you.

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Tips to Maximize Your MBA Application Feedback Session

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com All MBA hopefuls fear getting denied, but if there’s any silver lining to rejection, it’s that many business schools now offer feedback sessions …

feedback

These brief sessions with schools can provide valuable insight into why you were rejected.

This post originally appeared on Stacy’s “Strictly Business” MBA Blog on U.S.News.com

All MBA hopefuls fear getting denied, but if there’s any silver lining to rejection, it’s that many business schools now offer feedback sessions to help unsuccessful candidates figure out where they might have gone wrong.

This availability of application feedback confirms that the schools really do welcome and encourage re-applicants, who often find success the second time around. In fact, in the past, the University of Pennsylvania’s Wharton School has shared with us anecdotally that applicants who reapplied often have a slight edge in the applicant pool.

Find out the policy of your school of choice and get in touch with the admissions office right away, making it clear that you will use the feedback to reapply next year, if that’s the case. These meetings usually take place on a first-come, first-served basis in the spring, at the end of the admissions season.

Due to the brevity of these sessions, it’s important to prepare in advance. Write down a few pointed questions that will help you make the most of your meeting. If you questioned anything during the application process, you now have the opportunity to clear things up. In order to gather actionable information, your questions should sound something like this:

• Was there any concern about my quantitative abilities? If so, what can I do to demonstrate my capabilities?
• Were my career goals clear?
• Are my reasons for wanting an MBA sound?
• What were some of the biggest weaknesses in my application? Do you have any suggestions for how I can ease your concerns in those areas?

Have a plan to make sure the session stays on pace, because you’ll usually have a maximum of 15 minutes. Keep track of the time and strive to end the conversation gracefully.

It’s unlikely that members of the admissions committee will tell you flat out that you don’t have the stats, background or qualifications to attend their MBA program, even if that is the case. Nor will they tell you to change your life plans just for the sake of the application. There’s an art to extracting information, but don’t expect to receive the secret key to success during this brief conversation. Take what you can get.

Ultimately, the feedback session may or may not provide helpful insight. You might receive a very actionable comment, such as “you need more work experience” or “you should raise your GMAT score at least 30 points.” But with more qualified applicants than available seats in the program, the advice is often quite general and you’ll have to work hard to pin down specific takeaways.

Think of this as one additional opportunity to build upon your relationship with the school, so maintain a pleasant, engaging and polite tone. The admissions committee also takes notes during the exchange that will go into your file and form a part of the evaluation you when you reapply next year, so make sure you don’t get defensive about their feedback.

Treat this as an extension of your interview: Jot down the name and email address of the person you speak with, and remember to follow up with a thank-you note.

Finally, don’t spend a lot of time or energy fretting about elements of your application that you cannot change in less than 12 months. Instead, use the feedback from the admissions committee and your own honest self-analysis to determine where you can improve in order to better position your application for the next admissions cycle.

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