Is An MBA Worth It? - InformationWeek

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10/29/2004
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Is An MBA Worth It?

A business degree is the best investment when it comes to an IT executive's salary

Another finding from the Ross study indicates that while total compensation between 1999 and 2002 was greater for business-technology professionals who worked in the IT industry, that scenario doesn't necessarily hold true today. Krishnan credits a 9.4% salary premium during those years for MBA holders at IT vendors, compared with companies in other industries. The Internet explosion during those years led to extreme demand for business-savvy IT executives and a willingness of technology vendors to pay a premium, Krishnan says. Also, conditions are different at IT vendors, where everyone can be an IT expert, Krishnan says. "The value of IT skills isn't so high at Cisco and IBM," he says. "That's why the MBA skill and business knowledge are more valued in the IT industry."

''I use my MBA in everything I do, and I [can] figure out how to do anything,'' says Becky Blalock, CIO at Southern Co. She was one of four women in her class in the '70s.

"I use my MBA in everything I do, and I [can] figure out how to do anything," says Becky Blalock, CIO at Southern Co. She was one of four women in her class in the '70s.
The Ross study also examined the impact that gender has on an MBA-clad business-technology executive's salary. Women with MBAs make 7.5% less than a man in the same position, the study found. "We can be very timid about asking for a raise," says Becky Blalock, CIO at electric utility Southern Co. "We're so grateful for a job, we don't question what we get paid." She recalls going to business school in the late '70s with three other women--and 997 men. On the flip side, "It can be an advantage because we really stand out," Blalock says.

Blalock started at Southern in marketing, and she went after her MBA because she wanted to move into finance. Rick Pershing, then-VP and treasurer at Georgia Power, a Southern utility, was her mentor, helping her come up with new business opportunities. In any competitive market, an MBA can set an executive apart, Blalock says. "I use my MBA in everything I do, and I [can] figure out how to do anything," she says.

It was the business acumen from her MBA that eventually landed Blalock the CIO job. Under Blalock, Southern's technology is for the first time well-integrated with the business, says Julia Segars, one of Southern's regional CIOs.

Blalock herself looks for people with MBAs when she's hiring. "An MBA makes the difference," she says. "It says something about the individual's willingness to learn and get more education." In the final analysis, Blalock says, she weighs the MBA along with a candidate's experience.

Still, professionals without MBAs measure success in other ways. "Call it old school," says Wally Beddoe, VP of operations at Telekurs Financial, part of the Telekurs Group, an international investment firm, "but I got here based on experience." Beddoe went directly from high school to an eight-year stint in the U.S. Marine Corps where he worked in IT. He entered the commercial sector in the '80s. Before joining Telekurs in 1993, he worked at Ford Aerospace, McDonnell Douglas, and American Medical International. "None of my managers or mentors ever said I should get an MBA," Beddoe says. "I had years of experience, and a lot of companies put more emphasis on experience than on a degree."

Business-technology professionals who attend college but never receive a bachelor's degree make about 20% less than comparable executives with an MBA, the Ross study shows. Still, Beddoe at Telekurs is happy with his status. He's earned 60 college credits on his own, to better understand executive issues; has had five promotions since starting at the company and already reports directly to the CEO; and is being considered for a promotion to a C-level position.

"That 20% difference doesn't change my position," Beddoe says. "My boss says you either have it or you don't, and he never promotes somebody based on where they went to school."

Beddoe may well be the exception, with his experience out of high school in the aviation and computing corps for the Marines. "I'm the only senior officer in the company without a degree," he says.

For most business-technology execs, an MBA is a worthy investment.

Illustration by Brian Raszka

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