To What Degree—MSEE Or MBA?

March 16, 2006
More EEs today wrestle with whether or not to go for an advanced technical degree or an MBA. Now, they can have it both ways.

Thinking about pursuing a graduate degree? If so, you've got an important decision to make: Will it be an advanced technical degree, an MBA, or something in between? "I get this question from every student that comes and talks to me," says John Farr, director of the Department of Systems Engineering and Engineering Management (SEEM) at the Stevens Institute of Technology in New Jersey.

Most of the time, the question doesn't come from undergraduates. Farr says many engineers put off pursuing a master's degree until about five years after graduation. The biggest decision at this point is whether to continue in their technical specialty or consider an MBA.

"It depends on your ultimate goals and where you are in your career," notes Farr. "If you're 10 years into your career, you want to develop management integration skills, which is what managers do now. They integrate complex systems."

With MBA enrollments declining, business schools are working to become more relevant to prospective students. For instance, MBAs now come in different flavors. These include what Allan Hoffman, a tech jobs expert at online job service Monster, calls a "techno MBA." In this case, the focus is on teaching engineers and other technologists how to intersect business and technology.

According to Hoffman, two broad changes turned the tide in bringing more engineers to the management side. First, due to technology growth, engineers and information technology (IT) specialists in particular play a larger role in the corporation. They find themselves increasingly involved in betthe-ranch decisions and projects. Second, many engineers coming out of top schools already hold MBAs and are quickly ushered into the company's mainstream business environment.

"Then, systems engineering management is a great career path," says Stevens Institute's Farr.

Many current engineers seem to be pondering that path, too. According to Farr, data indicates that more than 75% of engineers choose an MBA over an MSEE or other advanced technical degree, often after assuming managerial responsibilities for which they have little or no formal training.

They may be on the right track. The National Center on Education and the Economy recently predicted that the most in-demand positions in 2006 will be hybrids of management and technology. Kforce Professional Staffing, an executive search firm with offices in 45 U.S. markets, says essentially the same thing in its 2006 employment guide: While routine tech jobs remain vulnerable to outsourcing, strong demand continues for those who combine technical aptitude with industry-specific knowledge and business skills.

The perception among many of these engineers is that an MBA—techno or traditional—is now the quickest route to the executive suite. Intel may be setting an example. Under CEO Andy Grove, engineers essentially ruled the company. Today, under CEO Paul Otellini, who isn't an engineer, it's mostly about marketing.

An informal survey taken at two recent trade shows suggests engineers are getting the message. Paul C. George is a young system design engineer at Intel in Hillsboro, Ore. He says just about all of his engineering friends and colleagues, perhaps nine out of 10, are pursuing or plan to pursue MBAs rather than graduate technical degrees.

STILL TECHNICAL BUT FLEXIBLE Stevens' SEEM program offers master of engineering degrees in systems engineering, engineering management, integrated product development, and systems design and operational effectiveness, as well as a PhD in systems engineering or engineering management (see the figure). Stevens' fiveyearold ME program has grown to more than 400 students and 75 PhDs. Students can also opt out of the program after the first four courses and obtain a graduate certificate in engineering management.

You don't even have to attend these courses on campus. Increasingly, they're offered at various locations around the world. Farr also teaches regularly onsite at IBM, ITT, Lockheed Martin, Nokia, Northrop Grumman, and other company and government (mostly defense-related) facilities.

Other schools have moved in the same direction.They offer new integrated engineering and business programs, culminating in a master's degree in engineering management or, in the case of Carnegie Mellon University, a bachelor's degree in engineering and an MBA. Carnegie Mellon's program, begun in the fall of 2003, was designed to admit 20 students who were interested in completing a five-year program leading to the BSEE degree from the Carnegie Institute of Technology and an MBA from the university's business school.

"I think this approach takes us back to what I experienced when I was an engineering undergrad," says Philip L. Dowd, a member of Carnegie Mellon's board of trustees and a managing director of financial services company Sherick Enterprises LLC. Dowd, who received his undergraduate engineering degree in 1963, says he went into an MBA program right after graduation. "I found that the addition of an MBA to my engineering degree changed the way employers looked at me."

Georgia Institute of Technology offers a similar program, enabling students to earn an MBA in one year if they earn another MS degree at the school.

"We do have a few students earn our MS ECE and then spend another year earning an MBA," says Doug Williams, associate chair for the academic programs in Georgia Tech's School of Electrical and Computer Engineering. "Our students earn the MS Electrical and Engineering (ECE) first, so I'm not sure how many go on to get an MBA."

At Northwestern, all of the students seeking its so-called techno MBA hold down full-time jobs. "Everybody's working," says professor Marc Meyer, co-director of the program. "They're all fast-track managers, who tend to be between the ages of 30 and 45."

Georgia Tech's MBA program is currently 128 students strong. Most of these students (62%) received undergraduate degrees in engineering/ computer science.

"While most MBA programs have a good number of engineers enrolled in their programs, I would say that our percentage in that area is significantly higher than most," says Paula Wilson, director of MBA admissions in the College of Management at Georgia Tech.

But the engineering program remains strong. "In any given year, about 75 of our BS students enter our graduate program in electrical and computer engineering," says Doug Williams. "About 60 continue directly after earning a BS, and another 15 have come back to school after being gone for a while. We graduated a total of 385 BSEE and BSCmpE \[bachelor of science in computer engineering\] students this past year."

The Massachusetts Institute of Technology's Sloan School of Management started its Leaders for Manufacturing (LFM) program in 1988 in response to the need for U.S. companies to become more competitive. It's a collaboration among the MIT Sloan school, the MIT School of Engineering, and industry partners. Most of these are high-tech companies like Agilent Technologies, Dell, Hewlett-Packard, Intel, Motorola, Raytheon, and Teradyne. Under the LFM program, students can earn an MBA or MS in management—as well as a master of science in one of its engineering programs—in two years.

Information technology (IT) seems to be taking the same approach. More schools feature purely online courses as the easiest route to growth and expansion. For example, Walden University's NTU School of Engineering and Applied Science offers a high-tech MBA online, along with PhD programs in engineering management and certificates in engineering and technology management. The University of Phoenix also offers an MBA/technical management (MBA/TM) degree, as well as a master of information systems (MIS/M) degree, entirely online.

Gartner Inc., which researches and analyzes the IT industry, recently identified several IT trends it believes will significantly impact the industry. One of these trends suggests that IT specialists should learn more about the business they and their customers are in. Gartner's view is that the next several years will see the emergence of IT " versatilists," people whose multidisciplinary assignments, roles, and experiences will create a blend of synthesized knowledge, competencies, and context that will make them more valuable to their employers.

"Today's IT specialists must focus on a rapid and intentional expansion from technical specialization to business competence in order to position themselves as tomorrow's business contributors," says Diane Morello, research vice president at Gartner. "The long-term value of today's IT specialists will come from understanding and navigating the situations, processes, and buying patterns that characterize vertical industries and cross-industry processes."

IT workers seem to be getting little guidance or support from their employers when it comes to career training and education, according to the findings of a survey by the Computing Technology Industry Association (CompTIA). By far, most respondents (85%) say they decided what IT training and education they need based on their own career plans. Just 8% said they make these choices based on their employer's recommendations or requirements.

Does an advanced degree necessarily mean higher pay? According to the U.S. Bureau of Labor Statistics (BLS), that is the case, at least for EEs. The BLS expects engineering and computing to be two of the fastest growing fields through 2012, especially for those with advanced degrees. As for pay, the BLS says the median weekly earnings of EEs with a bachelor's degree is $1221, which climbs to $1440 for those with a master's degree.

A PERSONAL APPROACH Who decides what direction EEs should take in their continuing education—the employee or the employer? Often, companies select engineers for executive training programs, where most of the training is conducted either at a nearby university or in-house.

These formal, well-established programs usually have preset courses. But Farr says there are also instances where individuals may "just want to reinvent themselves, where they might have a background in math and work for a defense contractor and realize they need to better understand the systems integration process."

In most cases, Monster says the MSEE versus MBA decision is also left to individuals. They get little guidance from their employers, even though the cost is steep to recruit, train, and retain high-tech employees in a highturnover environment.

However, such additional training may be partly responsible for more engineers choosing to relocate. Monster reports that about 44% of technology job seekers indicate they are somewhat or very unlikely to stay with their current employer in the next 12 months. The cumulative engineering job postings growth on Monster, over 49% in 2004, continued to balloon in 2005, making for a more challenging recruiting environment.

Case in point: Jason Anderson, an EMC engineer with Round Rock, Texas-based Professional Testing, holds a BSEE. He says that while many of his colleagues look to pursue MBAs, he's considering pursuing a master's in engineering management. Anderson estimates that more than half, perhaps 60%, of his engineering friends and colleagues with undergraduate EEs are considering the MBA route.

Why take the time and weather the cost of pursuing an MBA? Most companies have reduced contributions to their tech staffs' continuing education. In fact, many cap their contribution at about $5000 annually. With most universities requiring 20 courses for an MBA at $2500 per course, that's little relief in the overall cost of obtaining an advanced business degree.

But there's a very strong perception among many EEs that an MBA will speed their advancement. It will ultimately create bigger and better career opportunities, especially when they see people being offered six-figure salaries right out of B-schools. Another and perhaps more realistic reason why many EEs pursue an MBA, Anderson suggests, could be that some of them may not feel strong enough technically to continue their careers along a purely technical track.

Doug Slansky, a product marketing engineer at Sawtek, a Triquint company, supports Anderson's thinking. He says that when he worked at Motorola, the company would have supported any direction he wanted to take. But he realized that some of his contemporaries were stronger technically, and he was more comfortable in management and marketing.

At one point, he says, "I was seriouslyconsidering going into patent law, but my brother is an attorney and he talked me out of it."

Slansky believes that four to five years ago, the ratio of EEs seeking MSEEs versus MBAs was 60/40 in favor of an advanced engineering degree. But that has turned around, largely because of the Internet.

"There are so many opportunities to get rich with a good idea," he says.

Donnie Symonds is an RF engineer with Emhiser Micro-Tech, which makes voltage-controlled oscillators. He also says he sees more colleagues and friends going the MBA route, while he's getting more involved in the business aspects of his company.

"I might want to start my own company," says Symonds, "and having an MBA would make it easier to communicate with venture capitalists (VCs), especially since most VCs probably also have MBAs."

Are there real job opportunities in engineering management? High-tech jobs made somewhat of a comeback in 2005, and the trend should continue at least through this year, according to industry human resources specialists.

Management consulting positions also are on the rise over the past few years. Engineers and computer scientists with active security clearances are in particularly strong demand for government and defense jobs.

Overall, Monster says more people with advanced degrees are seeking jobs in the engineering category than in other technology categories. However, Monster also says it recently posted fewer engineering "manager" and "experienced" non-manager job seekers and more "entry-level" job seekers compared to all technology job seekers (see the table).

INDUSTRY GROUPS OFFER PROGRAMS Several industry associations and societies also provide, and continue to experiment with, programs for engineers that help them cope with the growing business and management demands of their jobs. The IEEE Engineering Management Society (EMS) very recently kicked off a program that's aimed at creating new businesses and better business practices through the integration of technical and business knowledge.

"We're in the early stages of developing this program and are looking for input from managers to share their experiences as they progress from professional to manager status," says Gerard H. (Gus) Gaynor, executive vice president of the IEEE EMS. "Our intent is to focus on the problems that managers face in their daily operations" and develop them into case studies to help guide new managers.

As for formal education, "there is no doubt that some engineers are seeking MBAs and others are matriculating to various versions of a master's degree in management of technology or some alternate version of an MBA in a particular specialty," says Gaynor.

Yet he questions whether an MBA develops everyone who has one into a manager, let alone a good one: " Managing is about doing, integrating the efforts of talented people, meeting objectives, taking the initiative, and above all, making innovation happen."

In those terms, engineers hold up well. A recent survey by the global executive search firm SpencerStuart indicates that nearly a quarter—22%—of the CEOs of S&P 500 companies have undergraduate degrees in engineering. Only business administration majors come close at 21%. The survey also shows that in 2005, all S&P 500 CEOs had earned some type of graduate degree—an MBA, master's, law degree, or PhD.

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