Tech Firms on the Lookout for Leadership Talent

The MBA emerges as a bridge between businesses depending increasingly on technology and tech firms needing more leadership talent.

Have you ever asked yourself why the road from a good idea to its realisation sometimes feels so bumpy, long and exhausting? The fact is that these are two completely separate parts of a very important process: neglect either and the entire project may well fall apart.

Facebook was not the world's first social network, but it is arguably the most successful. Mark Zuckerberg did not invent the idea itself; it had already been out there for years. Classmates.com had started almost 10 years earlier in 1995, then sixdegrees.com appeared, then Friendster, and the list goes on. Zuckerberg and his team, however, seem to have developed the concept the most thoroughly and effectively. Likewise, Bill Gates did not pioneer software, nor Steve Jobs the tablet. All they and their teams ever did was to perfect them and make them indispensable for millions of people.

The road to success is travelled in many separate steps, some of them small. Taking one or even a few correct steps is no guarantee of ever getting anywhere at all. It takes talent, inspiration and original thinking to give birth to a business concept with real potential, and the skills required are indeed very valuable. An idea might be fascinating, people may get to love it one day, its potential may be truly outstanding – but if the implementation phase lacks courage, perseverance or knowledge of how to manage all the different business processes, that idea may never come to fruition

Coming up with an idea is one thing, but the business plan itself might be quite different, and a world away from the actual financing (IPO, loan, etc.), which is a separate area from marketing and advertising. And they are all totally different from the day-to-day running of a company. This is where an MBA comes in: as a nexus.

Business education can help develop an entrepreneur in many spheres, one of which is the booming innovative technology sector. Many players in the tech industry have become interested in the degree recently, with the development of Internet economics.

When technology meets business education

The 2015 GMAC Global Management Education Graduate Survey places technology as the fourth most significant industry (12%) in terms of job offers for the Class of 2015. The top three are finance & accounting, consulting, and products & services. Technology is also the third sphere of preference of that valuable 5% of business school students who have started or are about to start their own businesses. More concretely, 13% of b-school students who identify themselves as entrepreneurs recognise technology to be their current or prospective area of choice.

The available GMAC survey data suggests excellent prospects for students with a tech profile. The average salary boost in 2014 for graduates with a job offer in technology was 98%. This was second only to healthcare by 12 points. Then, in 2015, the tech industry took over the lead, with an impressive 103% increase in remuneration.

The rapid expansion of the high-tech sector makes the business education of technology leaders a topical subject. Combining computing and hi-tech competencies with good management abilities can make a difference both for start-ups and more established companies. Employers recognise this – for example, 30% of UCLA Anderson School of Management’s Class of 2015 were hired by technology companies, as reported by the Financial Times (FT) in February 2016. This proportion equals that of graduates taking consultancy jobs – perhaps the all-time favourite sector for MBAs, along with finance. In that same year, around 20% of MBA alumni from the London Business School also took technology jobs.

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The benefits of MBA leadership talent

“Even five or six years ago, newer tech firms felt that MBAs weren’t needed as much in the technology industry, because they felt they needed engineers”, Anderson’s director of recruiting operations, Phil Han, explained to the FT. “Many of these companies are now growing so fast that they need the strategic thinking and leadership skills provided by an MBA. As a result they are coming to us more often”.

There is yet one more very strong historic argument for attracting technology and start-up leaders into good business schools: a deeper understanding of how the economy and business cycles work can be important to the well-being of the tech industry in the longer run. Just like every other booming economic sphere, technology is not immune to overheating. In a world of volatile markets, these high added-value areas – which seem to be safe havens – need to pay attention to risk management. And education can be an excellent way of doing so.

Other industries may not have such a fresh memory of how the tide can turn, but technology certainly does. It was little more than 15 years ago when the so-called "dot-com bubble" burst, and the NASDAQ tech index peaked in March 2000. Despite all the great technological developments over the following years, the index took until April 2015 to get back to the same level. The recent tech boom may or may not be sustainable. But cultivating and refining management skills in a quality business school is a good way of learning how to switch strategies when the economy changes, or when it is about to change.

Business education can also provide some personal hedging. Some experts are cautionary about the start-up fever in recent years and suggest graduates should aim to find jobs in stable companies. In December 2015, the Wall Street Journal reported that the Harvard Business School had found an interesting use of statistics – it tracks the percentage of students who founded start-ups after graduation and uses it as an indicator of overheating. Prof. Thomas Eisenmann, co-chair of the Rock Centre for Entrepreneurship at HBS, calls this the “canary in the coal mine” number. He suggests that if new companies start mushrooming – as happened just before the dotcom bubble burst, from roughly 5% in 1999 to 11% in 2000 – this may be a signal of “herd behaviour”. He adds, however, that with around 9% of the school’s graduates starting their new ventures, there is no immediate cause for concern.

The need for leadership talent
As tech start-ups professionalise and become more pervasive in spheres they have only recently penetrated, their structure becomes more sophisticated. The need for schooled and seasoned managers comes as no surprise. What is relatively new is the requirement for people with a dual profile, combining tech skills and leadership acumen. “The combination of technology and strategy will be key to how the deal landscape evolves in the next 10 years”, predicted John Dwyer, PwC’s global head of deals for businessbecause.com. “Buyers now expect to understand risks and opportunities in far greater detail before making significant investment decisions”, he added.

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With businesses becoming more technological, and technology needing more leadership talent in the classic sense of the word, MBAs seem to fill a valuable niche. This is especially interesting given that nowadays there are exceptionally high hopes being vested in the tech industry, almost to the point of being unrealistic. Technology has turned out to be something of a mantra – the hub of all known human activities and achievements so far; the link between automation, creativity, entertainment and the media. Building a sustainable future is what seems to be the challenge. And here, perhaps, quality business education has something to offer.

This article is original content produced by Advent Group and included in the 2016-2017 annual Access MBA, EMBA and Masters Guide under the title “Start Your Engines”. The digital guide file will soon be available for download.



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