graduation

Engineers with MBAs, coming to a business near you…

Increasing numbers of engineering graduates are taking up MBAs, but what’s triggering this shift, what does the qualification offer an engineer, and how is it benefiting business?

Originally an American invention, the Master of Business Administration has seen a rise in the number of courses on offer around the world, as well as increases in the take-up of participants over the last few decades, and engineering graduates in particular seem to be switching on to MBAs. But what’s driving this surge in interest and how do engineers fit into the equation?

The world is changing and with that change have come shifts in attitudes and cultures, across geographical boundaries and industry sectors alike. The Association of MBAs (AMBA) is an impartial authority on postgraduate management education, accrediting programmes in over 70 countries, and produces research exploring global trends within the sector. Its Application and Enrolment Report 2016 reveals a resurgence in the number of applications for AMBA-accredited MBA programmes, plus a global net growth of five per cent in the number of applications between 2014 and 2015.

So what’s the story with engineers? The Sainsbury Management Fellows (SMF) is the MBA scholarship scheme of Engineers in Business Fellowship (EIBF), enabling professional engineers to add business, finance and marketing expertise to the diverse skills they gained through their engineering training and qualifications. Each year £300,000 worth of MBA scholarships are awarded to engineers with exceptional education qualifications and leadership potential.

David Falzani, president of the EIBF, believes the rise in the number of engineers considering MBAs is due to changes in the workplace and the increasing pace of technology-driven change. “In the past, someone could acquire business skills as required, organically, as part of a career," he said. "Today, it’s beneficial to have the skills traditionally once reserved for the most senior board positions now available to more junior staff, and companies are increasingly looking for this.

“A key point is that due to the pivotal role of technology in increasing the rate of change it’s natural for scientists and engineers to be well placed to profit from these commercial skills, and, of course, engineers sit on the boundary of science and commerce anyway, so it makes them one of the most natural recipients of these skills.”

Another piece of AMBA research reveals that in a study of 3,335 MBA graduates from across the world, the main reason for choosing to study an MBA programme was career progression and promotion. The report also showed that 44 per cent of people that completed an MBA did so in order to change career, industry or function and that two thirds of these (66 per cent) agreed or strongly agreed they’d gained the knowledge and experience during their course to do this.

The study shows that before completing an MBA, 9.1 per cent of survey respondents indicated that they had worked in production/manufacturing roles, but this fell to 5.1 per cent within a year of graduating from an MBA. During the same time period the percentage of MBA graduates that reported working in generalist positions increased. For instance, 4.4 per cent of respondents reported that they worked in strategy/planning roles before studying for an MBA, and this increased to 12.8 per cent of respondents within a year of graduation.

This seems to be borne out by the comments of SMF MBA scholarship winner Alessio Falcone. Before starting his MBA at IESE Business School in Barcelona, Falcone was working in London in the oil and gas industry. Within construction and civil engineering company Bechtel, he was a project/process engineer responsible for complex hydraulic calculation, technical drawing and the design for LNG, gas processing or refining complexes.

“I wanted to explore different fields,” he says. “I was working in engineering and it was very narrow, very focused, so I felt I needed a broader scope for my life. Since I wanted to move into management and senior management in the future, I really needed to get exposure to different fields and to gain more business sense. So I had to change something in order to get to a management position and an MBA is the perfect way to do that.”

Falcone wanted a different approach to his sector, not to leave it entirely.

“At the management level you still have to deal with a lot of numbers. It’s just the approach to the numbers that’s different. When you’re an engineer you just do the numbers, you’re not able to handle incomplete data or assumptions, but when you get into the business world, there’s no such thing as perfect or consistent data. It’s a different approach and you have to gather insight from that data. It’s a switch in approach.”

Apart from a change in approach and widening of focus, what other benefits does an MBA offer to engineers? According to AMBA chief executive Andrew Main Wilson an MBA focuses on educating students on core areas of business such as marketing, operations and finance, which provide a holistic understanding of all areas of running a business.

“They also include classes on crucial contemporary topics such as innovation and sustainability, making it an excellent choice for those seeking to expand their skill set. Yet an MBA can offer much more than that; it’s a transformative experience in terms of employability, salary and networking opportunities,” he added.

AMBA’s report also shows that UK MBA graduates experienced a 20 per cent salary increase within one year of completing an MBA, with a reported mean salary of £89,203. In addition, research conducted by AMBA’s strategic partner the Graduate Management Admissions Council found that 84 per cent of employers planned to recruit MBAs in 2015 compared to 74 per cent in 2014. In fact, the MBA was the most sought after postgraduate qualification in the opinion of the employers surveyed.

This is echoed in the words of SMF MBA scholarship winner Fani Pournara, two months into her one-year MBA at INSEAD business school. “My main reason was career progression. I was in engineering roles for nearly six years, before I enrolled on the MBA programme, so I figured out that I could follow a purely technical route or I could learn about business and switch to a business role. I wanted to have the hard skills, but I wanted to learn business as well.”

As a rolling-stock engineer with London Underground, Pournara provided specialist technical knowledge across projects. “I think for women it’s even more important. I don’t want to progress just because of quotas, but I want to backup my technical experience with an MBA from a top business school to help make me more credible and further progress my career.”

According to Falzani, there are as many different answers to the merits of undertaking an MBA as there are SMF MBA graduates. In a nutshell this is what he thinks are the most common responses to the question of what an MBA offers an engineer:

    • a new set of skills that enables MBA graduates to secure posts for which they previously did not have adequate commercial/qualifications and skills
    • the ability to compete confidently for very senior level/leadership roles – senior consultants, directors, managing directors, CEOs, non-executive directors etc
    • a deeper understanding of how to commercialise engineering opportunities
    • a new world perspective - understanding problems from multiple perspectives and therefore finding diverse/better solutions
    • the knowledge and confidence to become an entrepreneur with all that entails including raising investment
    • a high quality, global network of contacts on which to call on, for example, for ideas sharing, mentoring, advice, support and even joint ventures and investment.

Top of the list is a new set of skills and this is reiterated by another SMF MBA scholarship winner, Deviyani Misra-Godwin. With a distinguished career in the energy sector and now studying at Harvard Business School, she explained: “I wanted to get access to the formal academic training an MBA provides, as there were a number of areas I didn’t get exposure to as an engineer, such as finance and accounting. In addition, I wanted to get exposure to the incredible network Harvard Business School has to offer. I spend every day with some of the most fascinating and talented people I ever met. The case method pedagogy at Harvard teaches you to be persuasive, yet open to being persuaded by the diverse views of your section mates.”

The merits of an MBA in progressing the careers of practising engineers is clear, but what can the engineering mindset bring to the MBA, and beyond that, what have businesses got to gain from having more engineers at the top?

“Engineers are able to analyse business problems in a very different way to non-engineers,” Falzani asserts. “They’re trained to identify and manage the risk of failure positively by working with variables where mistakes, unknown consequences or side-effects might develop. Risk analysis skills are an integral part of their skill set which they bring to their MBA study, both in the classroom when working through case studies and during their placements.”

Misra-Godwin agrees. “Engineers have a very strong quantitative basis to work from, which stands them in good stead in the more technical classes. Engineers are also taught to think very logically, with clear, rational fact-based arguments. In addition, many engineers will have had operations/industry experience by the time they do an MBA and a lot of classmates, professors, and recruiting companies really value this hands-on experience as it is not very common.”

This value that is placed on the particular skill set of an engineer is increasingly being recognised in industry and represents something of a shift in business culture. As AMBA’s Wilson explains: “Engineers have proved themselves as excellent corporate leaders. According to research from INSEAD, a combination of sound engineering acumen with an MBA from a top business school tends to be a common path to leadership.

“Microsoft CEO Satya Nadella is an engineer. So is General Motors’ Mary Barra and Amazon’s Jeff Bezos, as well as Klaus Schwab, founder and executive chairman of the World Economic Forum, who has an engineering PhD; and the list goes on. In fact, engineering is ranked as the most common undergraduate degree among Fortune 500 CEOs.

“And, according to Inc, research shows that leaders who have come from an engineering background tend to rank higher in terms of efficiency, tenacity and decision-making, detailed analyses and recruitment of top talent; all vital facets of the boardroom dynamic.”

An MBA completes an engineer’s profile, creating a more rounded professional and increasing their value from a business perspective. This drive seems to be coming from engineers themselves as they set out to gain the additional skills through an MBA in order to pursue the more strategic roles in major corporations.

“The world is changing at an unprecedented rate, creating new challenges for UK businesses such as globalisation and cross-culturalism, the rise of the Asian markets, flux in the international economy, technology and environmentalism,” Falzani says. “These are forcing boards to consider how a much wider range of issues affect their businesses. To make sound strategic decisions, the board needs to ensure that it is able to deal with different paradigm shifts and the challenges they bring, and restructure to take advantage of new technologies.”

Enter the MBA-qualified engineer…

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