Like any business deal, investment in higher education is about the delicate balance between risk and potential. This is especially true when it comes to postgraduate education, and even more so with regards to the EMBA degree.
But why is the EMBA such a tough deal to strike?
Risk-wise, an EMBA course could draw upon a somewhat specific, and therefore confined, pool of candidates; provide broad skills and knowledge, and last but certainly not least, because it costs a small fortune to complete. However, looking at the numbers alone, the EMBA degree will provide a graduate with the highest achievable salary out of all possible postgraduate education programmes.
Let us take the top 10 business schools in the world by factor of salary after graduation and compare the EMBA to its closest contender – the MBA. According to Financial Times 2014 Business Education Rankings, the number one executive business school partnership under this criterion – the Kellogg/HKUST EMBA programme – would net a salary of USD 403,560. Harvard Business School – the MBA equivalent, according to the same study in 2015 – will offer its alumni an average salary of USD 180,183. That is a difference of more than 120%. What is more, graduates of the ranked number ten EMBA school – IMD in Switzerland – can expect to receive as much as USD 66,000 more than the world-renowned Harvard alumni.
So how about the “before-and-after” comparison?
The average salary growth for MBA graduates from the top 100 business schools in 2015, calculated over a period of three years after graduation, is 92%. The equivalent percentage for EMBA graduates in 2014 is 52% – not a great surprise considering the immense differences in absolute values.
The statistics are simple and definite, although not unexpected. An EMBA student will usually have at least 5, mostly up to 10, years of work experience; will be above 35, and would often hold some kind of management position upon entry into the programme. Conversely, most MBA students are in their late-20s and have around 5 years of work experience, in mainly sub-management positions. Comparatively speaking, EMBA graduates are simply more senior to begin with, and thus better paid.
But do the numbers add up? What is the actual return on investment?
EMBA programmes charge as much as 50% more than MBA courses, bringing the approximate cost to about USD 75,000. EMBA graduates from Financial Times’ top 100 schools in the world end up earning an average of USD 175,000, compared to USD 121,000 for MBA graduates.
Strictly speaking, the ROI of the EMBA degree is 1.33 or 133%.
In terms of raw numbers, the EMBA degree remains unmatched in post-education remuneration. Quantitatively speaking, there is simply no better education that money can buy.
EMBA programmes are in stark contrast to other postgraduate education programmes, such as the Master’s degree, in that they put equal emphasis on soft and hard skills. The premise is that an EMBA degree would teach communication and people management skills which are essential to the C-level job that a graduate is expected to undertake upon graduation.
However, what many underestimate are the hard skills that higher education, even at the EMBA level, is able to provide to graduates.
Classic MBA fields such as accounting, financial management, and corporate governance follow their own rules and models much like architecture or particle physics would follow theirs. These are sciences in their own right and an EMBA programme approaches them as such. The “MBA” in “EMBA” is dedicated as much to the governance of people as it is to knowing and being able to execute the processes under which those same people are expected to operate.
The value of EMBA education is that of learning about the business interrelationships both within the organisation and in the market where that organisation positions itself. This is expertise.
However, the added value of an EMBA degree can be found in the fusion between the hard science of, say, operations management and the soft skill of managing the employees and contractors in the supply chain. This is management.
In other words, EMBA is as much about “Administration”, as it is about “Business” itself.
This means that when it comes to business education, along with all the theories, models and rules that education is about, the choice of MBA or EMBA degree is almost predetermined.
But how is this return on investment? The simple answer is that it is not, at least not in the fiscal sense of the term. The simple argument against that is that knowledge is invaluable. And indeed it is. But simplicity aside, if EMBA’s ROI is currently 133%, could it be said that someone with an EMBA degree would be 133% better at doing their job?
That depends on the student’s personal commitment to the programme, its core subjects and its intangible advantages. It could be that, and it could be catastrophically less or shockingly more.
The EMBA’s greatest advantage lies in its soft power. Management, leadership and networking remain the linchpins of MBA education, and the EMBA programme puts an even heavier emphasis on achieving these rather intangible effects. Although all three will be taught scientifically during the programme, their implementation is a matter of personal goals and individual aptitude, which is hard to measure.
The more senior profile of EMBA students means that a large portion of their motivation to follow such a programme comes not from the desire to learn how to network and lead, but the premise to actually network and meet leaders.
Network expansion in itself is among the top three motivations for people to study MBA and EMBA. The UK’s Independent even argues that it is “half the reason many of them are there.”
But consider this: another major reason to follow an EMBA programme is the ability to comprehend the world in complex terms, so as to be able to lead from the front, rather than the back.
In a popular article by Michael Simmons in Forbes Magazine, the author argues that “The No. 1 Predictor of Career Success According to Network Science” is being part of open networks as opposed to closed networks. To sum up, a closed network is comprised of individuals who share the same acquaintances, interests and professional fields. An open network brings together people with widely different areas of interest and expertise, as well as conflicting perspectives.
But it is this clash of worldviews where horizons become wider and ideas glow brighter:
“People in open networks have unique challenges and opportunities. Because they’re part of multiple groups, they have unique relationships, experiences and knowledge that other people in their groups don’t.”
Being part of an EMBA programme will provide just that – a chance to be a part of an open network which will not only expand a person’s contacts pool, but alter the way they think about business and management, ushering them into previously unthinkable ventures.
This is arguably the most cherished ROI advantage of MBA and EMBA education, albeit the most unquantifiable one.
But then again, can you put a price tag on being better than the rest?
This article has been produced by Advent Group and featured in the 2015-2016 Access MBA Guide.