Why Pay to do an MBA - Quora FAQ 1

Since the start of the year I've been pretty active on Quora, mostly doling out advice on the GMAT and MBA prep based on my own experiences. It has been interesting seeing what questions Quora throws me, but most of the questions do end up being pretty similar. Thus I thought it might be useful to whoever stumbles upon my blog to pop some of my answers to these frequently asked questions on this blog.

Question: Why pay to do an MBA?

Some variations:

• What's the point of doing an MBA?
• Is an MBA necessary or can I study the skills on my own?
• Is it worth paying to attend a top MBA school or getting one from a cheaper school?

My thoughts...

The value of an MBA isn't its educational course content. I'm not saying that course content isn't important. It's just that the knowledge from the course material are easily obtained from outside the program itself. There are tons of textbooks and cheaper courses out there on finance, accounting, operations management, marketing, management etc.

So why take on more debt to do an MBA? Why pay top prices for a top school when it would be much cheaper to do one at a much lower ranked school?

For those of us who decide on going down the MBA route and pay top dollar, it's not just the educational business skills we're after. It's usually because we're also after a combination of the following: 

1. Ability to leverage the brand name of the school
   Prospective employers or customers don't really know you as a person, but they know top schools. Since we inherently subconsciously rely on pre-conceptions to interact with new people, their initial perception of you will be based on what they think of your CV. Top MBA programs are notoriously hard to get accepted into and getting admitted is an achievement on its own. As such, having an MBA from a top school on your CV automatically makes potential employers perceive you as a "quality" candidate before they meet you. This in turn has subconscious effects on how they interact with you so you're more likely to start off on a positive foot when meeting them
   It also means you could potentially command a higher paycheck. After all one doesn't expect an MBA grad from a top school to come cheap.
2. Opportunities to interact with recruiters from top organisations who come to you
   Attracting the notice of highly desirable firms like McKinsley, BCG, Goldman Sachs etc. isn't easy. They're also very selective about where and how they do their recruiting. Granted, you could manage to network your way in, but it's certainly easier when they are coming to you at your school and you are presented with opportunities to have coffee chats with them. These firms rely on the rigor of the MBA application process to shortlist the thousands of applications that are coming in
3. Opportunities to interact with top executives from top companiesTop business schools have cultivated relationships with top global companies for years. Plus it's highly likely that their alumni can be found amongst the top execs anyway. This means they are able to help students get an audience with key executives by organising various events e.g. guest speakers and conferences. Let's face it, top executives in huge global companies aren't exactly the easiest people to reach and their time is extremely precious.
4. Career switchingMany senior positions seek "previous experience".This makes changing industries or job functions not easy unless you're willing to start from the bottom. The MBA program is therefore a shortcut for career-switchers to jump to the middle, thanks in part to the ability to leverage on the school name and in part to the rigor of the course.
5. Instant access to a large network of successful people who are more likely to assist you with whatever you needTop MBA programs admit people who have a very high potential of being successful. The alumni network is therefore a goldmine of useful connections. You'd get far better response and assistance cold-calling an alumnus and saying that you're from the same school than an otherwise complete stranger.
6. Other experiences
   There are many other experiences that you get to have with doing an MBA that would be more challenging to obtain on your own. For instance seeing a problem from different perspectives due to the widely varied backgrounds of your classmates; learning to work with multiple Type A personalities on different projects; learning about different cultures through first-hand interactions; career treks....the list goes on

Basically, what you're ultimately paying for is the network, opportunities and experiences that would be difficult to obtain on your own. T

he value of the MBA program really lies in the people and not the content itself. In the end it comes down to what you want out of the MBA. Is it just business knowledge, or more.

Of course, an MBA doesn't automatically make you successful. It merely provides you with the opportunity. What you do with the opportunities, the network and the experiences is then entirely up to you.

It's Decided

After oscillating between INSEAD and London Business School, I've finally decided to accept my offer to LBS.

It was by no means an easy decision given that they're both elite schools, and my post-MBA goals involve the field that INSEAD is strong in (consulting) in the location that LBS is strong in (London). It came down to evaluating which would give me the highest chances of attaining my post-MBA goal: switching to consulting in London. After all, the whole purpose of a MBA is to help you achieve your future career goals.

For those in the tough position of having been accepted to both LBS and INSEAD like me (now and in future), I found that hearing why people made the school decisions they did helps. So here's why I ended up deciding on LBS:

1. I'm planning on switching job function, location and industry, which is said to be doable in 10 months for consulting, but is definitely a stretch. Hence, it seemed less risky to give myself more time for job hunting with LBS's longer program and there's the added benefit of being able to better absorb the information that I'm sure to be overloaded with.
2. Networking is very important in business, and is certainly far more effective when you're actually living in the same city and can meet face-to-face. Plus, based on my experience, there's nothing like local immersion to actually understand the local culture and markets, which would allow me to gel more quickly with my future colleagues in London. Hence, I felt I had to be in London itself.
3. Looking at INSEAD's placements in consulting, in particular Bain, their students are distributed over various offices around the world, whereas for LBS most went to the London office. This information was gathered from the Bain careers site which showed how many interns Bain took from each school and which office the intern went to. Sample sizes are small but it did give a bit of an idea how each school differed.
4. mfprado1073 did a rough calculation for me here which showed that my chances of getting into consulting in London were higher with LBS than INSEAD.
5. I like the internship "try before you buy" concept. I've been researching quite a bit about consulting and while I think I know what to expect, I might wind up really not liking the lifestyle. No better way to find out than actually doing it, which I'd be able to do at LBS.
6. I like the people from INSEAD whom I've met and the INSEAD network is certainly outstanding, but that just means finding a way to tap into that network by making sure I keep in contact with all these INSEAD alumni :)

I'd like to credit the people I've met through the GMAT Club forums as their views definitely helped make my decision.

Anyway what this means going forward is that this blog is going to revolve around life as an MBA student at LBS :) Class of 2018 here I come!

The Ultimate First World Problem - INSEAD vs LBS

Yes I know. I'm in the lucky position of having the option of attending the top two MBA programs in Europe. That does however present the dilemma of where to go, and there isn't much time to decide as the acceptance forms need to be back with London Business School by early January.

So I thought I'd list here what I like and don't about each program, which along with sourcing input from other sources, might help me decide.

INSEAD
I like that....

• It is definitely by far much cheaper for both tuition, opportunity and living costs. Tuition for 2016 has been set at €71,000. Living costs are an estimated €22,000.
• It is well known for being a strong consulting school alongside Harvard. Given that I wish to move into consulting post-MBA, the INSEAD brand would be very useful. Some say for consulting in Europe, it must be either Harvard or INSEAD.
• The firm I'd like to work in post-MBA, Bain, recruits the most number of MBAs from INSEAD.
• INSEAD attracts many consultants who I would be able to network with and learn from.
• INSEAD has a strong network in Asia given it has a campus in Singapore. This would be useful because Asia is the next economic centre.
• INSEAD has produced more Fortune 500 CEOs than LBS, being second after Harvard. I would rate INSEAD's alumni network as being slightly stronger compared to that of LBS.
• I got along very well with all the INSEAD alumni I've met so far. They feel like my "kind" of people.
• The electives for INSEAD are really interesting. There are so many I'm keen on taking. By contrast, the LBS electives don't sounds as exciting in the course descriptions so I'm not sure which to go for.
• INSEAD seems to be stronger in entrepreneurship compared to LBS, which is important to me as I have long term entrepreneurial goals.
• With family in Singapore, not only would I be able to see them more often while I'm on the Singapore campus, but also I would be able to save plenty on accommodation costs by moving back in with my parents.

I don't like that....

• The program is only 10 months long which gives you very very little time to absorb all the new knowledge as well as job hunt.
• At INSEAD I won't have a chance to do an internship so indeed to be very sure I want to become a consultant.
• I'll need to re-learn French to get it up to the level required by INSEAD for a third language prior to the start of the program, as I won't have time during the program.
• The Europe campus for INSEAD is located in France, which means I'll need to do extra travel to London where I want to work for interviews. This also means extra travelling costs. Plus, even if it's not located in Paris, France isn't exactly the safest of places to be right now.
• Given the program length, the cost of attending INSEAD per year actually works out to be more expensive compared to LBS.

London Business School 

I like that....

• I get to do at least one and possibly two paid internships. According to the current student who called me, if you want to do an internship, you should be able to find one.
• Using the money earned from the paid internship, I would be able to cover most if not all of my living costs for the second year, as the average internship pay is about £1054 per week.
• It is located in London, right where I want to work post-MBA. This makes networking and arranging job interviews easier. Plus there will be London based businesses that come to LBS to recruit but don't travel to INSEAD to recruit.
• Extra opportunity available for networking with London businesses and potential recruiters through the London Business Experience core course.
• LBS offers specialisations unlike INSEAD so I could major in strategy or entrepreneurship depending on what electives I take.
• It is a 15, 18 or 21 month program depending on what you want to do. This gives me more time to absorb all the new knowledge and the workload won't be as intense.
• I can potentially do an exchange to one of the Asian business schools like CEIBS which will provide a direct Chinese network. As many are well aware, the Chinese are all about relationships first.
• The tuition for LBS covers all expenses for a week long trip to another country for the compulsory Global Business Experience. This means that even if you can't afford to go on job treks, you can still get the global business exposure.
• LBS actually has a specific Turnaround and Restructuring Management consulting club which is slightly different to consulting, and something I'm really interested in.
• LBS only requires two languages, which I've got so not extra studying needed and instead I've got more time to spend studying Finance.
• LBS is probably more well-known in NZ and Australia compared to INSEAD although the alumni chapter in INSEAD seems larger.
• LBS has a reasonable commitment fee of £2000 and provides sufficient time to make the reservation payment, unlike INSEAD's commitment fee.

I don't like that....

• The cost of attending LBS is much higher than INSEAD. ROI for LBS is lower than INSEAD.
• Living in London is frightfully expensive, accomodation costs are more than my current mortgage! There's that tricky matter of needing to demonstrate financial means to obtain a student visa. This does mean you can't just go with half the cash and plan to earn the rest for living on after.
• LBS is not as strong in Asia as INSEAD which means if I did want a job in Asia it would probably be tougher.
• LBS isn't as well known for consulting so I'm not sure if that affects chances of landing that job at Bain that I'm aiming for.

In any case, I thought it would be a great idea to find out directly from Bain in London if they had a particular preference. Maybe the people hiring generally find MBA grads of one school or the other better. No harm asking in the name of research right? So I've emailed them and hopefully I'll get a reply this side of Christmas!

And the INSEAD Results Are...

INSEAD Round 1 announcements started coming out a day before the deadline. During this time I kept willing my phone to ring. Unfortunately, that never happened. Instead, I received an email in the evening informing me that I had been waitlisted. Bummer! Ok I was really really gutted.

Yes, being waitlisted means that I wasn't rejected so there's still hope. But it also means that you're left in limbo. According to the email from INSEAD, the offer could come anytime between "now and right before the program starts in August 2016". That's an 8 month window! For someone like me who is a hardcore "planner", this is pure torture. Plus, those who have researched INSEAD would know that INSEAD generally discourages reapplying if you are rejected unless your situation changes dramatically, which is rather unlikely in my case.

After receiving the announcement email, I had a minor panic that if LBS waitlisted or rejected me, I would end up in the horrible position of having nowhere to go. Luckily, because I'd applied in Round 1 it meant that I still had the chance to do another round of applications for Round 2 in January to other schools. I dreaded this though because applications take so much time and energy and not just on my part, but on the part of my recommenders as well. On hindsight, it probably would have been more prudent to have prepared my Round 2 applications when I was doing Round 1 while I was in the "application zone".

I accepted my place on the waitlist and proceeded to then spend a few hours calculating the likelihood of getting accepted from the waitlist based on the previous year's intake (ok yes it was a pointless exercise, but I really couldn't help myself). I also looked up advice for being waitlisted, of which there's plenty online. The most useful ones I've found are from Accepted.com and Poets and Quants.

One thing I've been actively checking myself on is to resist the impulse to dash off an update letter immediately. As mentioned in Poets and Quants, it's best to wait till a bit closer to the Round 2 announcement deadline, which isn't actually all that far away. Fingers crossed I'll get an acceptance notification really soon!

INSEAD Interview #2

After the relaxing atmosphere of my first INSEAD interview, I was not too nervous about the second, since it would make the third MBA interview I was doing. This interview however was unexpectedly far more intense than even the LBS one.

In fact, my interviewer, a partner at an investment banking firm, covered so much we had to do it in two parts because we ran out of time the first round. So I wound up having a one hour face-to-face and then a follow up 45 min phone interview with him and never got to ask my prepared questions!

He was very very thorough and covered practically everything that you expect from an MBA/job interview and then some. Aside from the usual walk through CV, why MBA, why INSEAD, he also questioned almost all the steps I took in my CV. Many of the questions he asked was around thought processes and what I was feeling when I made various decisions which was a bit different. A few curve balls he threw me were questions about what I was feeling towards getting an MBA, any reservations I had, and what my greatest fears in doing the MBA would be.

Interestingly he asked specifically for me to describe an entrepreneurial situation and clarified that it could be within the workplace. Thankfully I actually have a hobby side business, but I think I would have struggled if I didn't have an "obvious" experience. He also asked for specific examples of when I made a good judgement and when I made a bad judgement, which was a bit different from strengths and weaknesses (he asked about those too). I basically used up every single story I had pre-prepared in this interview and had to come up with some on the spot.

The good thing about the intensity and all-rounded questioning was that it did give him a good sense of who I was. In spite of the intense and detailed questioning, I never felt like he was asking the challenging questions to "catch me out", but rather because he genuinely wanted to get to know me.
So I'm positive he'd have given me a good recommendation because at the end he summed up all my strengths and said that he thought I'd fit very well at INSEAD. Plus he mentioned that he hoped I would pick INSEAD over LBS if I got accepted to both.

My advice to INSEAD applicants is to be "real" and show your interviewers who you are as a person. Understanding your thoughts and feelings helps them connect with you and become one of your "supporters". Also, even if you don't end up going to INSEAD, if they like you and connect with you then that's another person you can add to your network.

London Business School Interview

LBS only required one interview. The adcom however sends specific instructions to interviewers on what areas to focus on and questions to ask. As such, I was prepared for an intense "grilling" from my interviewer - an alumni who was a partner at a PE firm who had a very different background to mine.

The interview went for 1.5 hours instead of the 2 hours or so I expected. He was very nice, but like what I found with most of the LBS people I interacted with, there is a certain air of formality and conservativeness. LBS people are also a bit harder to read it seems so I wasn't too sure how I did.

The interview started off with the usual walk through CV/why an MBA/why LBS and also some questions about the career choices I made. He then focused quite a bit on leadership and teamwork experiences. He also asked what my leadership development goals were. I was asked quite a few questions on what international business experience I had as he said that this didn't come through very clearly on my CV since my career consisted of working only in NZ. LBS definitely wanted him to ask about it. The hint I got was that I needed to rewrite my CV.

LBS interviews require an impromptu presentation on a topic chosen by your interviewer - 5 mins to think and 5 mins to present. I found the presentation part a bit of a challenge because there were two parts to it. It was a case about leading change management - managing restructuring and the fact that people were not happy about it. I was asked to present a) how I would approach this with my team and how much I would share my personal feelings b) Pick one of 3 questions and also talk about that - I picked one that said to describe how to overcome resistance to change. I didn't feel like I had a good conclusion to round off the presentation because the presentation was in 2 parts though I tried to relate them. Did I mention, on-the-spot presentations are really not my strong suit?

The third part of the interview was where I got to ask questions and he gave me a lot of advice on what I should do to prep and what electives I should take. Interestingly, he suggested that I major in finance given my long term goal, although I have zero knowledge of finance. It definitely gave me something to think about post-interview.

He also advised that to get the most out of LBS's career services, you needed to try and fit within the mould and that you would struggle if they couldn't put you in a box, which happened with him. Fortunately for me, since I want to move into consulting, I'm easy for career services to put into a box.

He also said that if I got admitted, to get in touch with him and he would provide me with prep resources for finance given my lack of finance knowledge, and resources for consulting since that was what I wanted to move into. I was definitely wowed by his helpful offer and left the interview with more pre-MBA tasks to add to my to-do list.

INSEAD Interview #1

Following the email invitation to interview from INSEAD, I was sent the contact details of the two INSEAD alumni and instructed to arrange interviews with them.

My first interview was an alumni working as a Relationship Manager at a bank. Surprisingly, I was invited to his home for the interview as he lived not too far from me. Most of the reports I read about INSEAD interviews was that it was conversational. This was true of my first interview. It was really casual - so much so my interviewer told me he was just about to vacuum when I arrived! 

Contrary to what I expected, there weren't a whole lot of questions asked. He started of telling a bit about himself as his background was entirely different to mine and then got me to talk through my CV, why I wanted to do an MBA and why INSEAD - questions that were entirely expected. Then he asked about my goals and about team work and what my leadership style was. There was also some discussion about whether I'd dealt with conflict and what sort of cultural diversity was in my workplace. 

All the questions were easy to answer and we got along well. He also asked me at the end if there was anything he hadn't asked about that I really wanted to talk about which gave me the chance to throw in a few things about my charity work. The last part of the interview was him answering my questions for him and giving me advice on how to get the most out of the programme.

Unfortunately as he had graduated quite some time ago, there was not a whole lot of specifics he could provide that were still very relevant. Quite a few of the questions I had pre-prepared thus had to be thrown out. However, I felt I still got quite a bit of useful advice and insight into the MBA program at INSEAD in general.  Out of all the business schools, I would say I've had the most positive interactions with INSEADers and my interview with him definitely reinforced this perception.

Read how my second INSEAD interview went on here.

School Applications Part 1: Picking Schools

MBA applications take a lot of work and each application carries a cost (especially with the exchange rates) so to work out which ones are worth investing in, I found you really needed to have a clear idea of the following:

• Your short term and long term goals
• Why you are really doing an MBA and what you want out of it
• Where you want to work post-MBA
• Your strengths and your weaknesses
• Your personality and learning style
• Your priorities
• How you'd like people to perceive you 

By understanding yourself and what you want, selecting which schools to apply to becomes much easier too.

I started off my journey thinking an MBA would be a great way to get a boost into the next career level. Tons of research, discussion and reflection later, I finally came to the conclusion that

• I wanted to move into consulting and somewhere in future I wanted to start my own company
• I wanted to work in a new country - New Zealand was starting to feel too small, but not work in the US
• I wanted a really international business school that was good at developing soft skills not just hard skills

From there I found myself leaning towards the European schools - INSEAD and London Business School in particular. INSEAD because it was a 10-month program; is a well-known top school in both Europe and Asia; and is famous for placing graduates in consulting. Plus, as an added bonus, since I have family in Singapore, I could save on accommodation costs for the time that I spend on INSEAD's Singapore campus. LBS was attractive because it offered Global Business Experiences; is a well-known top school in Europe; and is located in London where I do eventually think I'll end up working.

I also considered HEC Paris and IMD but ended up planning to apply to HEC Paris as an option if I didn't get into INSEAD or LBS. IE was attractive, but the Jan 2016 intake would've been too soon for me and the Jan 2017 intake was later than I wanted to start. Thus IMD, like HEC Paris wound up as an alternative for if I didn't get into INSEAD or LBS in Round 1.

As for US schools, I did consider applying to Harvard initially just because it is the top business school in the world. I didn't in the end though because Harvard uses predominantly the case study method of teaching, which makes it more challenging for my less outspoken personality. Also, other than its name, there wasn't really anything in particular that jumped out at me. The only US school that caught my attention was Yale and that was due to its integrated curriculum. I liked that its thinking was quite different from other business schools. So I applied to Yale even though it is known as a predominantly NGO school, whereas I have a preference for working in for-profit organisations.

Perhaps I would have chosen schools differently if I had the opportunity to visit various business schools. However, being located in NZ made travelling a major challenge. On hindsight, if I started looking into doing the MBA 2-3 years ago I would have had the luxury of time to plan a visit to 1-2 schools each year. As it is I ended up basing my decisions on school sites, videos, webminars (mostly middle of the night/extremely early mornings in NZ), MBA student blogs and speaking to current students and alumni where I could.