Why some CEOs don’t care about MBAs5 min read . Updated: 09 Jan 2020, 10:38 AM IST
- B-school pedigree and MBAs don’t hold much water in a startup as entrepreneurs are now looking for résumés that show proof of taking ownership of projects
- 'MBA doesn’t give licence to lead. In some pockets, there’s a realization that just having an MBA doesn’t make for a good leader'
When Aanan Khurma, 32, co-founder and chief executive of Wellversed Health, looks for someone to fill up a leadership position at his early stage health startup, he tends to avoid candidates with MBAs. “We require people who always have their eye on results, and are not hung up on following a defined process," says the Gurugram-based serial entrepreneur.
What Khurma really looks for in the résumé is conclusive proof of ownership of projects, which is not necessarily leadership, and indicators of things that prove that the person takes complete responsibility and gets a job done. Taking ownership is also the trait that leads to a person becoming a great leader as such an individual is dependable and reliable, he believes.
Mumbai’s Vishal Gondal, 43, founder and chief executive of GOQii, which sells wearable fitness devices, is not a big believer in the business degree either. Gondal has a unique way of shortlisting. Recalling how he hired the person heading the marketing strategy and consumer engagement, who is not an MBA, he says, “To most, I say let’s meet at 6am for a run on a Sunday; most don’t turn up. But one person did when I said let’s meet for a run at Juhu beach. Krishna (Kumar) was there bang on time. We ran for an hour and chatted about health, and fitness. People with the right attitude can think ahead, want to contribute and take positive view of things. And he’s an avid mountaineer."
In fact, in a 2013 Wall Street Journal column, technology entrepreneur and academician Vivek Wadhwa wrote that he had stopped recommending that people hire such degree holders. “I no longer advise startups to hire MBAs and I discourage students who want to become entrepreneurs from doing an MBA. That’s because I have seen a growing mismatch between the skills that business schools teach and what fast-paced startups require…."
Founders across the world often talk about the importance of hiring the right team members. But there are some who are not impressed by the MBA degree on a candidate’s résumé.
A recent report by DDI, the global leadership consulting firm, on first-time leaders highlights how MBAs don’t create better leaders. In fact, front-line managers with an MBA showed only a marginal increase in leadership behaviour over those with a bachelor’s degree in business.
Organizations may wrongly assume that the people they are hiring already have the skills to do the job, just because they have an MBA, the report points out. “An MBA degree doesn’t give licence for one to lead. And in certain pockets there is a realization that just having an MBA doesn’t make for a good leader," says DDI India managing director Amogh Deshmukh.
Despite the understanding that they should hire people who can “get results", K. Vaitheeswaran, co-founder of beverage startup Again Drinks, believes many do tend to get dazzled by a prospective candidate’s MBA degree. On his part, he largely looks for three qualities in a candidate: clarity of thought, clear communication of that thought, and ability to solve a problem.
“My view is no one should do an MBA unless they have spent a few years working. Many MBA graduates are ill-equipped to work," he says. “They often lack practical knowledge."
Lack of work experience after completing B-school is a big negative for some founders.
“Experience is the biggest teacher and most CEOs prefer that over a degree," says Faisal Farooqui, founder of MouthShut.com, a consumer review site, who doesn’t give high weightage to MBAs when hiring managers.
He requires all candidates to make presentations based on real-life business situations.
“Our experience has been that candidates who are too confident about their degree spend less time preparing the presentation and get tongue-tied in the final round. On the other hand, those who don’t have an MBA prepare like their life depends on it and ace the presentation round," he says.
“My experience has been that year after year, the MBA education structure churns out a set of well-groomed people, a majority of whom are never taught how to get out of the mediocrity trap," says Khurma, whose core team of 30 people has just one person with an MBA. “People with MBAs are good at following rules and being presentable but rarely good at taking the end-to-end ownership required in the cut-throat environment today. I would rather have someone join an accelerator than an MBA," says Khurma.
This is an issue Alok Kejriwal, 51, chief executive and co-founder of Games2win, a global casual mobile games company, has faced with his MBA hires. One of the biggest drawbacks has been trying to tackle MBA hires’ “sense of entitlement", he says.
“I am not an MBA but I learn that the course is built on challenging status quo and questioning lots of business processes. While that works for a classroom, in a business that has gone through the learning curve, it’s very difficult to deal with the MBA, who just wants to prove a point instead of understanding that some things don’t need to change. There is also a reluctance to do mundane, mechanical jobs, which are part of any job," says Kejriwal, who doesn’t have a single MBA in his eight-member core leadership team.
One of the biggest complaints he has is that MBAs want to “designate" versus do, which he experienced with one of the former MBA hires. “Whatever responsibilities I would give him, he would parcel away to other people, until they got overburdened and complained to me. When questioned, he said, ‘I’m an MBA, I delegate, others do’," he recalls.
Professor Kaustav Majumdar, head (startups and incubation), SPJIMR, however, believes to tackle today’s workplace, B-school students should get a holistic understanding of how different activities in a business work when put together and how each of those activities fuel each other. “If the learnings from different steams like finance, marketing and supply chain are interconnected, students can get an essence of what is to come," says Majumdar.
While these founders may not put much value to the degree per say while hiring, they may still hire an MBA if she/ he checks others requirements.
For instance, Vaitheeswaran is open to considering hiring MBAs, provided they can solve the constant issues that come up in a startup “at a dizzying speed" in a calm manner.
Gondal’s advice is, “The driving force behind any workplace is always passion and creativity. Instead of spending huge amounts of money doing MBA, you can instead use that money towards travelling the world.