Does an MBA Make You a Better CEO?

Are chief executives with MBAs actually stronger leaders? The answer might depend on the age of the CEO.

Inspired by the raging debate last year over the role of MBAs in the financial crisis, we analysed whether having a business degree influences overall CEO performance. In a large-scale study of the performance of 2,000 CEOs around the globe, we found that MBA CEOs had a slight edge over their non-MBA peers. On average, CEOs who had an MBA ranked 40 places higher than CEOs who didn’t have an MBA.

Why the positive effect? Is it simply that CEOs with MBA training are better equipped to lead companies? Does our study vindicate MBAs programs battered by criticism for their supposed role in the ethical and strategic lapses that led to the current economic crisis?

Perhaps it’s not that simple. Thinking through these questions, we reflected on changes in MBA programmes over the past couple of decades. MBA programmes experienced a massive influx of students during this time.

The curriculum of these programmes also underwent a transformation from generalist topics taught by faculty grounded in the world of business to a specialised one taught by a research faculty increasingly disconnected from the practice of management.

Given these changes, we wondered if having an MBA would have a different effect for different age cohorts of CEOs. The median age for becoming a CEO is 52 years old. When we restricted our sample to CEOs who started when they were younger than 50, the ranking advantage for having an MBA increased.

We also decided to split our sample between those CEOs who started before the year 2000 and those who started after. We found that the MBA advantage was bigger for CEOs who had their first day before 2000. That is, in the pre-2000 group, CEOs who had an MBA tended to perform better than those who didn’t have an MBA.

Therefore, if you were “young” (less than 50 when becoming CEO) and started the job before 2000, you got more out of your degree. For older CEOs, the benefit of an MBA was there before 2000, but not after.

This raises an important question: Is the value of the MBA for aspiring leaders declining? Or is the degree more important than ever as we dive into a highly globalised and uncertain business world in 2010?

Herminia Ibarra is a professor of organisational behaviour at Insead, in Fontainebleau, France. She is the author of “Working Identity: Strategies for Reinventing Your Career.” Morten T. Hansen is a management professor at the University of California, Berkeley, School of Information, and at Insead. He is the author of “Collaboration: How Leaders Avoid the Traps, Create Unity, and Reap Big Results.”

Distributed by The New York Times Syndicate