Yale School of Management

ROI for all this?

I am in the MBA for Executives program, class of 2015. A big question for me before I came here was: what will be the ROI on this hefty investment of time and money?

November 14, 2013

There’s always a lot of debate about the value of an MBA. Last spring, after a lot of discussion with my family, the program administrators, and former students, I made a leap of faith decision and enrolled in the executive program at Yale. For years I had toyed, on and off, with the idea of doing an MBA. At one point a few years ago I applied to a few full time MBA programs, including Yale’s, but I never made the jump. Life kept getting in the way: jobs that required more than a full-time commitment, family (two kids), extracurricular stuff (competitive road-racing took up an inordinate amount of my time for a few years), etc. An MBA costs a lot of money, takes a lot of time, and is there really an ROI (return on investment) for all this?

For years I’ve worked on brand building and overall strategy in pharma, biotech and medical devices. I have contributed to the development of many big and small brands in healthcare. As all who work in my field know, we spend a lot of our time on products that you’ve never heard of because they never launch, either because they simply aren’t effective coming out of clinicals, or the FDA says they are not worth approving. (Disclaimer: I have no hand in the clinical development or filing of products). I know a lot about market assessment and sizing, audience segmenting and targeting, brand positioning and communication development, etc. However, if you had ever asked me how to structure a financial deal, whether investment, on the one hand, or acquisition on the other, I would have been hard pressed to help you.

My imperatives began to change this year. This year a business partner and I have taken a little foray into building a new company. We’ve known each other for years and together had already built a company 10 years ago. We work in the market research/business information space, primarily in healthcare. We were looking for ways to put our business plan into action. We were targeting Investments on the one hand, and acquisitions on the other. He has an MBA from Chicago, and he’s been structuring deals since he learned to walk. As we were out seeking capital, it became clear to me he had an acquired set of financial and negotiating skills that I also needed. Otherwise, honestly, I was going to be dependent on him for too much and for too long. He’s a great guy, don’t get me wrong, but I just wanted more control. We have been negotiating investments from some very large corporations. Talking to people who report into the CEO of companies that generate $20 billion in revenue. (Oh that elusive CEO, if I could just get him in the room!). Now, by nature of the size of the investments and partnerships we were working on, the skills I could acquire from an MBA started making a lot of sense.

Since I started at Yale, I’ve participated in valuations of a couple of companies we’ve been looking at as potential acquisitions. In fact, just after the 2015 EMBA group completed our summer “Boot camp” (two weeks of nonstop in-residence classes in accounting, management and economics), my partner and I got the books from a company we were talking to. With some new skills in accounting I discovered gaps in both the balance sheet and the income statements that didn’t make a lot of sense. We talked with the owner of the other company, and reworked some numbers so they made more sense. Hidden in the other party’s errors was the potential for a lot of upside. My partner was impressed; I had seen discrepancies where he hadn’t noticed any.

Just as we started negotiating the terms of an acquisition, at Yale I fortuitously began a negotiation class. The skills learned in the classroom setting had a real world application almost instantaneously. One good lesson learned: the aggressive stance I had typically taken, like some sort of bulldog thinking I’d get what I wanted if I attacked, was usually the wrong way to go about achieving a deal. Honestly, I think there have been some negotiations over the years where I’ve left a lot of money on the table because I huffed and puffed and left the more substantial details forgotten on the side. I wanted to win, and I was probably losing. I learned more subtle ways to deal with a negotiating partner, targeting the achievement of better financial success and using a softer interpersonal approach. I also learned to walk away from the table, which my partner and I recently did as we realized our target had no real sense of the true worth of his company. Regretfully, in the end the value just wasn’t there. On to the next deal.

As the partnership begins talking to other companies, I am looking forward to tying in more learning from the Yale program. The Competitor course is fascinating in this regard. In it we look at ways to position a company strategically for success using methods I haven’t learned before. One thing I am looking into right now is the idea of staking a claim into a territory heretofore unoccupied by one’s firm, and using that claim to leverage other opportunities. It’s fascinating stuff. This week, we start a finance class and I am eager to see how I can tie that too into my objectives.

Pollyanna I am not. I honestly have two regrets with the program right now. One, I live in Northern New Jersey and can’t take advantage of many of the opportunities that Yale University presents. There’s talks I’d love to attend, groups I’d like to participate in. I am just not around. We’re on campus alternating Fridays and Saturdays and in class most of the time. Fridays typically run from 9 AM to around 6 or 7 PM, sometimes later. There’s isn’t time to do much of anything else on campus. The other issue we have as executive MBA students: we’re working full time and there are only so many hours in a week. I’d love to spend more time on a few of the course subjects, but there’s a limitation. Still, that’s where the real-world application has true value. We are constantly experimenting in our work with ideas we’re learning from the courses, and constantly achieving, I believe, greater measures of success.

About the author

John Mitchell

MBA for Executives, 2015