This is an interesting research by Herminia Ibarra and Morten Hansen published in HBR on 20th Jan 2010. The insights Ibarra and Hansen provided are pretty much related to the age factor and entry to the executiveship. The research had concluded that CEO’s with MBAs are stronger, if they become CEO’s before year 2000 and were younger than 50 yrs old. Amazing, isn’t it? The study also concluded that CEO’s with MBAs were 40% better in performance compared to the other 2000 CEO’s scanned by Ibarra and Hansen. I remembered that around 28% of the best performing CEO’s in HBR list in 2009 had MBA’s. This is of course from reviewing the free HBR copy which showed the meta information for only 50 CEOs!.
If we move beyond the numbers, and try to answer this question: What is it in an MBA that makes such difference? Basically, today’s business environment requires talent that goes beyond the old school type of management; the bureaucratic, lengthy and rigid process in decision making, designing organizations and conducting business. The type of challenge, fierce competition and globalization requires agile organizations, dynamic management and visionary leaders; all performing within a context of disciplined velocity. Nowadays, managers can not work in a standstill mode. New products, new services, new players penetrate our markets everyday and from all directions and geographies. Just 10 to 12 years back, we used to have the original US-made NBA basketball in any local store in the middle east, now, we have duplicates at one third of the price and made in China, if you tried looking, you will barely find the original NBA ball, it’s gone for ever! The rules of the game are changing.
The traditional working conditions are changing, talented resources are scarce, and managers have to work hard to keep them motivated and ignited to out-perform their competitors. Looking into numbers as the only mean to ensure corporate sustainability is not anymore sufficient. Businesses embarked into Balanced Scorecards, and implementing Business Processes Management ‘BPM’ tools to ensure continuous changes and improvements. As of a matter of fact, I tend to believe that the whole way of doing businesses is changing and hence, Today’s CEO’s require specific tailor-made education or training to cope with these challenges.
If we examine a typical MBA program in universities like Harvard, Oxford or Liverpool. We will see modules to discuss modern topics in Entrepreneurship, Organizational Behavoir, Strategic Marketing, eBusiness, Change Management and other evolving academic subjects. These are all inevitable for today’s leaders to lead and excel in marketplaces.
I recommend reading Ibarra and Hansen article here and maybe get HBR report on the 100 Best Performing CEO’s for more insights on the value of MBA education.