MBA vs direct promotion

GenghisKhan's picture
Rank: Gorilla | 565

OK, I said I'd try to explain my thoughts on MBA associates versus analyst promotes, so here goes:

My thinking on this has evolved over the years. As a former analyst with a slightly unconventional career path, my views are colored by my own experiences as well as the analysts I've worked with over the years.

The advantage that A2As tend to have is that they are plug-and-play. They've had three years to get used to what they're doing, and for the most part can execute like a well-oiled machine. When I was a junior associate, I would have argued that our top performing associates across the board were mostly A2A promotes.

Part of that was a strong job market, and we clearly weren't getting as high of quality out of b-school classes as we had traditionally yielded. But part of it was that the analyst promotes just knew what to do, and had had three years to work the kinks out of their system. They also had pre-existing relationships to trade on, and believe me that helps.

However, the record of A2As beyond the first few years is mixed. More than that, if you look at A2As versus the record of former analysts who return after MBAs, the wash-out rate has been significantly higher in my observation. I think this is a resutl of a couple of factors:

  • Burnout. Associate years in a hard core group are almost as bad as analyst years. Stack them up and it's easy to see why some people give up the goose, decide that industry or private equity is an easier way to go. Business school helps analysts recharge the batteries. It may not seem like it when your new title energizes you for the first year, but it's a long trek to VP without a break.
  • Role. Being a junior associate is a lot like being a senior analyst. Making the transition to being a client-facing officer can be difficult, because you're suddenly judged by completely different criteria than you were as an analyst/associate. Many people just don't make that transition well (MBAs included). But A2As sometimes struggle more than MBAs because this is what they've done for the last seven years of their life, and probably all they've ever done professionally. The leap is harder than it looks, and that chasm claims more bankers than you can imagine.
  • Authority. One day you were "one of them". The next they are supposed to report to you. How do you handle that? How do they? It's more difficult than it sounds. More than that, will your bankers ever look at you differently enough? Or will you be stuck doing some analyst things for a lot longer than an MBA associate would? Sometimes, it takes a new setting to fully reset expectations.
  • Perspective. This is the most important reason I support getting an MBA. You'll learn more than you think in business school. You already know what we do and how we do it. You may not understand why. As a former analyst, I can tell you that a lot of what I did by the end of my three years I did by rote. I didn't realize how much I'd pick up in b-school that enhanced the stuff I had learned to do in my sleep. It made me a better banker, frankly. Now when I look at some of the A2As, I can see some of them stumbling because they are partly "idiot-savants" through their experience. They can grind out the work like crazy, but their knowledge base is narrower than it would have been had they spent some time not being analysts or associates, focused solely upon banging out as near-perfect books as they can.

Obviously, some people make the transition and do it well. That's not the point. The point (at least for me) is whether you hurt your chances of going the distance by skipping the MBA. And while it's a different conclusion than I would have given you five years ago, I have to say that I think it does hurt you.