Heading to business school brings up a lot of questions, including the biggest one, “What type of graduate degree should I earn?” Should you go back to school for two years to earn a generic MBA, or should you pursue a specialized MBA or a Master’s in Finance?
While in the past, the answer has always depended on the career you want, that might not be the case anymore. A recent study found that students with broader backgrounds and experiences were more likely to receive multiple job offers and higher compensation packages compared to students with specialized backgrounds
Inside the Study
To get an idea of what this means, first, we have to take a look at the research. Jennifer Merluzzi, an assistant professor at Tulane, and Damon Phillips, a professor at Columbia Business School, conducted the study. Together, they looked at the records of approximately 400 MBA students who graduated from top U.S. MBA programs between 2008 and 2009. They specifically looked at those students who went into investment banking, creating detailed profiles for each individual including their grades and work history.
The professors then tested to see whether MBAs who established a particular focus were penalized or rewarded for their experiences related to investment banking. They found that MBA candidates with no exposure or less-focused exposure to investment banking were more likely to receive multiple job offers and higher starting-bonus compensation than their focused counterparts. In fact, according to the Harvard Business Review, “In some cases specialists earned up to $48,000 less than their generalist peers.”
What Is a Specialist Versus a Generalist
So, what does it mean to be a specialist or a generalist?
MBA Specialist
“A specialist in our study was someone with a singular functional focus across activities,” Merluzzi told the A.B. Freeman School of Business at Tulane University in an interview. “For instance, they worked in banking before the MBA program, concentrated in finance and joined banking clubs in school before taking a job in investment banking.” A specialized MBA candidate is one who consistently focused his or her activities and experiences before and during the program and internship.
MBA Generalist
“Someone who’d worked in a different industry—say, advertising—before the program, concentrated in finance, interned at a consulting firm and then went into investment banking after graduation would be a generalist,” said Merluzzi. An MBA generalist is someone who has experience in a wide variety of industries and jobs.
What’s the Drawback to Specializing?
So, why do specialists receive fewer opportunities? In many cases, they’re actually more qualified than their counterparts and so, in the past, career advice has always told professionals to find a niche and to excel in it. Now, it seems like the opposite is true. There are a few reasons that specialists don’t perform as well:
- Over Saturation: Specialization can quickly become commoditized among graduating MBAs. Most MBAs place a strong emphasis on building a consistent and targeted profile. So, if you become a focused MBA you become one of the crowd, which means you’re easy to substitute.
- Too Easily Valued: When you specialize in a single career path, it’s easier for companies to determine your value based on people similar to you. However, if you’re diversified, it’s harder to determine what your variety of skills are worth.
- Incremental Improvement: After a while, your experiences and learning in a particular career field are incremental and even negligible. By focusing on a single specialization, you only demonstrate small improvements instead of large diversification.
- MBA Value: The truth is that an MBA from a top institution is already a reliable indicator of skill and qualification. That, on top of the company’s own screening process, means that detailed and selective MBA focus isn’t as advantageous as it could be.
In the end, employers tend to hire individuals with more diverse portfolios, Merluzzi explained to HBR.
“Experienced hiring managers said they preferred people who had a diverse range of skills,” she said. “They said things like ‘Someone who has accomplished a lot of things is better than a one-trick pony who just keeps doing the same thing and isn’t taking advantage of what the MBA has to offer.’ People who’ve demonstrated talent across different areas seem to have an edge.”
Should You Avoid Specializing Your MBA?
“It’s not that specialization is going to be penalized in every market but will when certain characteristics are in place,” Merluzzi said. The things you have to watch out for as an MBA candidate are:
- Specializing when you attend a top-notch MBA program
- Crafting a resume that is too closely focused on a single job or industry
- Competing for a job against many similar specialists.
Now, that’s not to say that there aren’t some career fields where specializing isn’t valuable, but the MBA was created as a general business training degree, and the market still recognizes that. The reality is that generalists are more unusual, have diverse skills and are redeployable, so they’re more valuable to employers and more likely to be chosen as leaders.