By Julia King
January 10, 2011 06:00 AM ET
The CIOs at Procter & Gamble and Microsoft don't have one. Neither does the CIO at Wal-Mart. So, no, technically, you don't need to have a master's degree in business administration to be successful in a top technology position at a world-renowned company.It takes a monumental commitment, both financially and personally, but an MBA could be the fastest ticket to business proficiency.
But realistically, it's an extremely good idea, especially for pure technologists. That goes not just for CIOs, but for project managers, business analysts and virtually any other IT professional aiming to climb to the top of the corporate ladder. One big reason: No one is exclusively a technology chief anymore. Everybody's a business executive, whether they call themselves that or not.
"CIOs are no longer developing technology. Instead, they're finding IT and putting it together in ways that change the top and bottom lines of their companies," says Ralph Szygenda, former global CIO at General Motors, Bell Atlantic and Texas Instruments and now a strategic consultant at iRise, a business applications vendor in El Segundo, Calif.
Szygenda himself doesn't have an MBA, yet like virtually all CIOs -- with MBAs and without -- he says enabling your employer's growth requires a comprehensive knowledge of business, particularly finance, which an MBA certainly affords. But going back to school to earn a two-year MBA can cost $55,000 to $60,000 per year. Meanwhile, a generous uptick in salary -- especially if you stay at your current company -- is by no means guaranteed upon graduation.
"The traditional IT career path doesn't lend itself that well to building a mind-set and a skill set of how the CEO and CFO really think," says Peter Weis, CIO at Matson Navigation Co., an ocean freight carrier based in Oakland, Calif.
"Learning their language deeply by studying [business] cases and spending hours thinking about how other executives think is very hard to pick up in your normal work in the CIO role," adds Weis, who returned to school in his 40s to earn an MBA from the University of Pennsylvania's Wharton School of Business.
Yet going back to school, especially while continuing to work, is no easy feat. "It was maybe the hardest thing I have ever done in my career," Weis says. At the time, he was a single parent whose daughter had just left for college. His employer paid his tuition and expenses, but Weis was required to use one vacation day for every two days he spent in school. He also agreed to remain at Matson for three years after earning his MBA.
For two years straight, Weis worked full time and attended classes every other weekend, all day Saturday and Sunday. "On my off weekends, it was absolutely studying full time Saturday and Sunday, which made it a seven-day commitment."
"You're constantly battling to strike the right balance, performing your job and hitting all of your critical obligations," Weis says. "It was important to me that there be no slip in my performance at the company. That led to a 24/7 feeling all the time."
As for the career benefits, he says, "An MBA doesn't translate into instant financial gratification." Nor did it significantly increase his prestige among executives in Matson's C-suite, many of whom had already earned advanced degrees from top-notch schools.
An MBA doesn't necessarily enhance one's innovation and leadership abilities either, according to Paul Glen, an IT career expert, a Computerworld columnist and the author of the IT management book Leading Geeks. Glen, who holds an MBA from Northwestern University's Kellogg Graduate School of Management and has taught MBA courses at Loyola Marymount University and at the University of Southern California, says that "case methods that are taught in MBA programs can help people to think in different ways, but I've never seen anything that would teach someone to think innovatively."
Leadership skills are similarly glossed over in most MBA programs, Glen says. "Leadership is about understanding the emotions of people. MBA programs don't teach that well. Most MBA programs are far more focused on rational thought. They try to teach you how to think like a rationalistic CEO, but then you go back in the workforce and you're not a CEO. You're a manager, and you know how CEOs are supposed to approach problems, but you don't know more about managing people."
However, you do know more about how others think, says Weis.
"The biggest thing it has done is connect me to the financial, marketing, sales and operations issues. I see the business better through my peers' eyes," he says. Also invaluable, Weis says, is the deep knowledge of finance he acquired in business school. This has served him especially well in managing a large portfolio of competing projects and in negotiating with IT vendors.
"One skill I developed that was a surprise to me was negotiation," Weis says. Fifty percent of IT spending is with IT vendors, but CIOs rarely get training in how to negotiate deals, he says. Prior to earning his MBA, he says he'd squeeze a vendor for maybe 30% and think that he had done a good job. "I'd argue that what I learned about negotiating at Wharton has paid for my MBA degree 20 times over," he says.
John Seral, CIO at GE Infrastructure, returned to school to earn an MBA at DeVry University's Keller Graduate School of Management in Chicago three years after joining GE and six years after earning an undergraduate degree in computer science at the University of Illinois.
"Three years into the job at GE Capital, I realized I had a gap trying to understand cash flow and the language of the business. There were a lot of things I didn't understand. I asked a lot of questions," he recalls. "My background was very typical -- light on business courses, as I had pictured myself in math, technology and computer science."
Today, what he learned as an MBA student directly impacts how he finances and manages technology at GE Infrastructure. "Going deeper into accounting and understanding how costs are managed gives you different ideas about how to finance your projects and sell them internally," he says. "You earn credibility, and you have a lot more confidence selling your ideas."
Jim Marascio, chief technology officer at 11Giraffes in Charlotte, N.C., admits to being somewhat myopic in his approach to decision-making before earning an MBA at the University of Maine. He returned to school to earn an MBA after working a few years in a more engineering-oriented role as a technical liaison, which he landed after earning an undergraduate degree in computer science.
"One reason I went back for an MBA is that I wanted to be in a business leadership role rather than in the trenches in a development role," he says.
He says that having earned an MBA, he has a much better understanding of the views and opinions of everyone on the management team, which is invaluable because "if I can't understand why the CFO is positioning something a certain way, I'm not going to be successful working with the CFO."
Marascio says that in his role as an officer at a small digital media and products company, "an MBA is pretty close to mandatory. On a day-to-day basis, I'm working with operations people and marketing people and creative people and technology people. The ability to bridge all of those silos and to be successful really takes someone who is much more strategically than technically focused. I find that since I went through the program, I spend much more time viewing things from alternate perspectives and much more holistically."
Prior to earning an MBA from Emory University's Goizueta Business School in 1994, "I knew technologies and I knew how to execute on projects," Dallas says. He had graduated from college more than 10 years earlier, and in the intervening years he had supported a wide array of functions at his then-employer, Georgia-Pacific. "I started out supporting transportation and logistics, and I ended up becoming the general manager of that function. I supported our distribution and operations, and I ended up running the Mid-Atlantic and Southeast regions of that business," he recalls.
But it was as an MBA student that Dallas says he learned "how to look at business models and the key questions to ask at an enterprise level. The MBA allowed me to get better at deciding which projects to do and when to do them based on the phase and evolution of the business model in the overall competitive environment."
Dallas says it was after earning his MBA that he started being asked to go on sales calls to some of Georgia-Pacific's largest customers "to talk about IT from a business standpoint, addressing technology from the point of view of the customer."
"I was also in strategy meetings to talk about overall business strategy, not just waiting for the IT part of the meeting to come up," he recalls. Now, if a business unit executive has a question about why his or her IT project isn't higher up on a list, Dallas simply traces how that particular project maps to the overall business strategy, and "if it isn't pulling on one of the specified business levers, it's not at the top."
The bottom line: "A CEO is looking for a CIO who will transform the business, not just implement technology. CIOs are being held accountable for their contributions to the bottom line, not just what they did to make things go faster," Dallas notes. "An MBA has allowed me to generate greater value."
"CIOs are no longer developing technology. Instead, they're finding IT and putting it together in ways that change the top and bottom lines of their companies," says Ralph Szygenda, former global CIO at General Motors, Bell Atlantic and Texas Instruments and now a strategic consultant at iRise, a business applications vendor in El Segundo, Calif.
"In the last 10 years, you could get away with [mainly] technology knowledge because a lot of the things a CIO did were efficiency moves, such as consolidating data centers. It was a great period for the technology CIO," says Szygenda. "But now, everybody has done the efficiencies. Growth is the big thing."
Szygenda himself doesn't have an MBA, yet like virtually all CIOs -- with MBAs and without -- he says enabling your employer's growth requires a comprehensive knowledge of business, particularly finance, which an MBA certainly affords. But going back to school to earn a two-year MBA can cost $55,000 to $60,000 per year. Meanwhile, a generous uptick in salary -- especially if you stay at your current company -- is by no means guaranteed upon graduation.
Fast-tracking
But an MBA isn't the only way to acquire critical business knowledge. One alternative is rotating through various job assignments across business units to gain a first-hand understanding of processes associated with everything from sales and marketing to logistics, manufacturing and supply chain operations. The downside to that approach is that it can take years. Indeed, one measure of an MBA degree's worth, CIOs say, is that it is frequently the fastest way to acquire mandatory business knowledge."The traditional IT career path doesn't lend itself that well to building a mind-set and a skill set of how the CEO and CFO really think," says Peter Weis, CIO at Matson Navigation Co., an ocean freight carrier based in Oakland, Calif.
"Learning their language deeply by studying [business] cases and spending hours thinking about how other executives think is very hard to pick up in your normal work in the CIO role," adds Weis, who returned to school in his 40s to earn an MBA from the University of Pennsylvania's Wharton School of Business.
Yet going back to school, especially while continuing to work, is no easy feat. "It was maybe the hardest thing I have ever done in my career," Weis says. At the time, he was a single parent whose daughter had just left for college. His employer paid his tuition and expenses, but Weis was required to use one vacation day for every two days he spent in school. He also agreed to remain at Matson for three years after earning his MBA.
For two years straight, Weis worked full time and attended classes every other weekend, all day Saturday and Sunday. "On my off weekends, it was absolutely studying full time Saturday and Sunday, which made it a seven-day commitment."
"You're constantly battling to strike the right balance, performing your job and hitting all of your critical obligations," Weis says. "It was important to me that there be no slip in my performance at the company. That led to a 24/7 feeling all the time."
As for the career benefits, he says, "An MBA doesn't translate into instant financial gratification." Nor did it significantly increase his prestige among executives in Matson's C-suite, many of whom had already earned advanced degrees from top-notch schools.
An MBA doesn't necessarily enhance one's innovation and leadership abilities either, according to Paul Glen, an IT career expert, a Computerworld columnist and the author of the IT management book Leading Geeks. Glen, who holds an MBA from Northwestern University's Kellogg Graduate School of Management and has taught MBA courses at Loyola Marymount University and at the University of Southern California, says that "case methods that are taught in MBA programs can help people to think in different ways, but I've never seen anything that would teach someone to think innovatively."
Timing is everything when earning an MBA
The ideal time to earn an MBA is after you've had three to five years of experience in the business world, according to CIOs, academics and career experts.
"An MBA degree is meant to be very concrete and very practical," says IT management consultant Paul Glen, who at 27 was the youngest member of his class when he earned his MBA in 1991. "To go for an MBA when you haven't had enough work experience is pretty useless, because you have no reality to connect it to." In fact, Glen notes that the top business schools won't even accept MBA applications from students directly out of college anymore.
Sun National Bank CIO Angelo Valletta says if he had it to do again, "I'd have waited a little bit" before enrolling in an MBA program. He enrolled at the age of 22 immediately after earning his undergraduate degree, which he had pursued while working full time at another bank. That was more than 20 years ago.
"But I went straight through because the company was paying for it and I thought I might as well just keep on going," he says. But again, Valletta continued to work full time, supplementing his classroom and case-study learning with on-the-job training in virtually all business processes associated with the financial services industry.
Throughout his years in school, "I worked in back-office operations, I sold IRAs, I supported the credit card business, and I supported the retail business from a customer service standpoint. I don't think I would be successful without having both an MBA and the formative years in operations at the bank," he says.
Matson Navigation CIO Peter Weis had been in a management role for several years after climbing the corporate ladder in IT when he started to pursue an MBA. He says one huge benefit of earning the degree while simultaneously working as a CIO is that he was able to apply what he learned immediately.
For example, armed with a deeper knowledge of finance, Weis overhauled how Matson's project management office works. "We set up a business office, which runs all of our budgeting, project costing, administrative processes and all nontechnology processes," he explains.
IT budget requests also changed dramatically. "Now we don't issue a capital request without a net present value, payback period and a sensitivity analysis," Weis says. "All of that is standard fare for us now. That wasn't the case before an MBA."
— Julia King
Leadership skills are similarly glossed over in most MBA programs, Glen says. "Leadership is about understanding the emotions of people. MBA programs don't teach that well. Most MBA programs are far more focused on rational thought. They try to teach you how to think like a rationalistic CEO, but then you go back in the workforce and you're not a CEO. You're a manager, and you know how CEOs are supposed to approach problems, but you don't know more about managing people."
However, you do know more about how others think, says Weis.
"The biggest thing it has done is connect me to the financial, marketing, sales and operations issues. I see the business better through my peers' eyes," he says. Also invaluable, Weis says, is the deep knowledge of finance he acquired in business school. This has served him especially well in managing a large portfolio of competing projects and in negotiating with IT vendors.
"One skill I developed that was a surprise to me was negotiation," Weis says. Fifty percent of IT spending is with IT vendors, but CIOs rarely get training in how to negotiate deals, he says. Prior to earning his MBA, he says he'd squeeze a vendor for maybe 30% and think that he had done a good job. "I'd argue that what I learned about negotiating at Wharton has paid for my MBA degree 20 times over," he says.
John Seral, CIO at GE Infrastructure, returned to school to earn an MBA at DeVry University's Keller Graduate School of Management in Chicago three years after joining GE and six years after earning an undergraduate degree in computer science at the University of Illinois.
"Three years into the job at GE Capital, I realized I had a gap trying to understand cash flow and the language of the business. There were a lot of things I didn't understand. I asked a lot of questions," he recalls. "My background was very typical -- light on business courses, as I had pictured myself in math, technology and computer science."
Today, what he learned as an MBA student directly impacts how he finances and manages technology at GE Infrastructure. "Going deeper into accounting and understanding how costs are managed gives you different ideas about how to finance your projects and sell them internally," he says. "You earn credibility, and you have a lot more confidence selling your ideas."
Jim Marascio, chief technology officer at 11Giraffes in Charlotte, N.C., admits to being somewhat myopic in his approach to decision-making before earning an MBA at the University of Maine. He returned to school to earn an MBA after working a few years in a more engineering-oriented role as a technical liaison, which he landed after earning an undergraduate degree in computer science.
"One reason I went back for an MBA is that I wanted to be in a business leadership role rather than in the trenches in a development role," he says.
He says that having earned an MBA, he has a much better understanding of the views and opinions of everyone on the management team, which is invaluable because "if I can't understand why the CFO is positioning something a certain way, I'm not going to be successful working with the CFO."
Marascio says that in his role as an officer at a small digital media and products company, "an MBA is pretty close to mandatory. On a day-to-day basis, I'm working with operations people and marketing people and creative people and technology people. The ability to bridge all of those silos and to be successful really takes someone who is much more strategically than technically focused. I find that since I went through the program, I spend much more time viewing things from alternate perspectives and much more holistically."
Pulling the Right Levers
James Dallas, senior vice president of quality and operations at Minneapolis-based Medtronic Inc., agrees with Szygenda that growth is today's No. 1 business priority. Growing the business, he says, comes down to "knowing what the [business] levers are and which ones to pull to have the maximum impact." In short, it comes down to strategy.Prior to earning an MBA from Emory University's Goizueta Business School in 1994, "I knew technologies and I knew how to execute on projects," Dallas says. He had graduated from college more than 10 years earlier, and in the intervening years he had supported a wide array of functions at his then-employer, Georgia-Pacific. "I started out supporting transportation and logistics, and I ended up becoming the general manager of that function. I supported our distribution and operations, and I ended up running the Mid-Atlantic and Southeast regions of that business," he recalls.
But it was as an MBA student that Dallas says he learned "how to look at business models and the key questions to ask at an enterprise level. The MBA allowed me to get better at deciding which projects to do and when to do them based on the phase and evolution of the business model in the overall competitive environment."
Dallas says it was after earning his MBA that he started being asked to go on sales calls to some of Georgia-Pacific's largest customers "to talk about IT from a business standpoint, addressing technology from the point of view of the customer."
"I was also in strategy meetings to talk about overall business strategy, not just waiting for the IT part of the meeting to come up," he recalls. Now, if a business unit executive has a question about why his or her IT project isn't higher up on a list, Dallas simply traces how that particular project maps to the overall business strategy, and "if it isn't pulling on one of the specified business levers, it's not at the top."
The bottom line: "A CEO is looking for a CIO who will transform the business, not just implement technology. CIOs are being held accountable for their contributions to the bottom line, not just what they did to make things go faster," Dallas notes. "An MBA has allowed me to generate greater value."
MBAs lead to leadership roles
Make no mistake: An MBA might not be listed as mandatory in many IT job descriptions, but graduate-level management degrees are without a doubt preferred by companies seeking to fill business/technology leadership roles.
"All other things being equal, I'd give preference to the candidate with the MBA," says Jim Marascio, CTO at 11Giraffes.
At Matson Navigation, CIO Peter Weis notes that he just promoted an applications architect to a management role in software development, and "one of the primary reasons I promoted him is because he has an MBA," he says. Overall, about 5% of the professionals in Matson's IT organization hold MBAs. "I'd love for my entire project management office to have MBAs," Weis says.
"Absolutely you have to have an MBA if you want to be viewed as a strategic business partner," says Whirlpool Corp. CIO Kevin Summers. "In today's environment and in the future, there will be very few people at the VP-and-above levels without an MBA," he predicts.
James Dallas, senior vice president of quality and operations at Medtronic, says an MBA surely gives candidates who are up for leadership positions an edge. But what he's even more interested in is how and when the potential leader earned his MBA.
"If someone tells me they went to school at night while having a family and got their MBA, that tells me they can manage multiple priorities at one time, which is a key trait for an effective leader," Dallas says.
Moreover, Dallas advises his executive peers to be prepared with an advancement plan for employees with newly minted MBAs.
"Companies have to seriously think about what is next for the person" who is pursuing their MBA, Dallas says.
"Once you get your MBA, you want to apply your learning. I tell companies to be prepared once that person graduates. If you don't have a bigger role waiting for them, they will try to find one outside," he warns.
But a bigger role, additional responsibilities and a new title after earning an MBA don't necessarily mean more money, at least not initially. In fact, most recent graduates shouldn't expect to offset the tens of thousands of dollars they spent on tuition and expenses with a big salary increase in their first few years after completing school.
"I never did the calculation. In fact, I encourage people not to," says IT management consultant Paul Glen. "If people look at education only through the lens of investment, they are missing the point. It's about expanding your mind. If someone asks me about an MBA primarily as an investment, I tell them not to do it. If they want the credential more than the knowledge, they probably won't get the value from it."
That said, Glen estimates that he recouped the cost of his MBA within a few years. "But as they say," he cautions, "past performance is no indication of future performance."
— Julia King
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