Do I Need an MBA to Be a CEO?
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- Fifty-nine percent of North American CEOs hold an advanced degree.
- At the CEO level, job performance is more important than the type of degree you hold.
- MBA programs provide a broad business education, which is useful in leadership positions.
- There are a variety of different educational paths aspiring CEOs can follow.
Although the majority of CEOs are well-educated, an MBA is not a prerequisite for these roles. An analysis by Study.eu conducted in 2017 revealed that only 37% of North American CEOs held an MBA degree, although 59% had some type of advanced degree. Among Fortune 100 companies in 2019, 54% of CEOs held a graduate degree, and 59% of those graduate degrees were MBAs.
An MBA doesn't guarantee that you'll be better at running a company than a peer with another type of degree. In a study conducted by Institutional Investor, CEOs with MBAs performed no better than other CEOs when analyzing company stock price performance.
At the CEO level, what matters most is what you've accomplished throughout your career — not whether or not you have an MBA. Many CEOs founded their own companies or rose through the ranks without an MBA.
The potential benefits of an MBA to CEOs also depends on the size of their company and their specific industry. For example, you can be the CEO of your own tech firm without an MBA. And if you want to become the CEO of a bank or financial institution, you may be just as well off getting a master's degree in finance.
Why Get an MBA to Become a CEO?
Earning an MBA provides you with a well-rounded, advanced education in business. This education is helpful at companies that don't necessarily require a specific skill set related to the particular industry. To be a successful CEO of a company that operates in multiple product and service areas, you need a good understanding of all functional areas of business.
Pursuing an MBA degree can prove important for professionals with expertise in a specific discipline, such as finance, marketing, sales, technology, or operations. An accredited MBA program can round out your business skill set and provide you with an in-depth education in multiple business disciplines outside of your core area.
Although a master of business administration degree can help you achieve your dream of running a company, it's not the only educational path that you can take to get there. Decide for yourself if an MBA is right for you by reviewing some of the pros and cons listed below.
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Pros of Getting an MBA to Become a CEO
The majority of CEOs have some type of advanced degree, and an MBA is the most sought-after advanced degree among these CEOs.
An MBA can provide you with both the hard and soft skills needed to run a business. Unlike traditional master's degrees that focus on only one business discipline, MBA programs aim to build business leaders for any type of industry.
An MBA can help you climb the corporate ladder quicker than professionals who only hold a bachelor's degree. According to a survey conducted by Forte Foundation, 85% of respondents with an MBA said their degree helped them advance their careers. With an MBA, you also have a better chance at entering a company at the management level.
An MBA can provide you with more connections in the business world than any other type of degree because of the focus on professional network building. You can use these connections to help elevate yourself to the rank of CEO.
Many companies require an MBA for certain executive positions.
Accredited MBA programs provide more internship opportunities at top companies, making it easier to get your foot in the door and work your way up to CEO.
You can pursue an MBA while still working your way up the corporate ladder. There are many flexible and online programs that allow you to earn a degree on your own schedule. Many programs also offer evening and/or weekend classes.
Many employers will cover or contribute to your tuition, as long as you stay with the organization for a certain period of time after you earn your MBA.
Cons of Getting an MBA to Become a CEO
An MBA won't ensure your success as a CEO — it all depends on the industry you're in. For example, a degree in engineering or information technology may be more useful than an MBA when running a tech company. In a 2018 Harvard Business Review ranking, 34 of the top 100 performing CEOs had an engineering degree, compared with 32 who held an MBA.
An MBA doesn't guarantee that you'll rise through the ranks and make it to the level of CEO. For most organizations, your achievements matter more than your education. Making yourself visible both inside of and outside of the organization you work for can do more for your career than simply having an MBA.
An MBA may not be as helpful as actual business experience if you plan to be CEO of your own company. Only about 25% of founders of unicorn companies (i.e., private startup companies with a value of over $1 billion) hold an MBA.
Pursuing an MBA is a big commitment of both time and money. There are other ways to round out your business education and experience that are less expensive and may require less time.
Alternatives to Getting an MBA
- Become certified in multiple business disciplines, such as finance, marketing, information technology, supply chain management, and/or business administration. The more certifications you have in different subject areas, the more valuable you can be to a company. There are multiple certification courses available online, including the certified manager credential offered by the Institute of Certified Professional Managers.
- Earn a certificate in business administration or business management through an accredited online graduate school.
- Pursue a master's degree in finance or another business area in which you lack expertise. This can help you round out your skill set.
- Take advantage of corporate training and development programs offered by your company. Doing so can help you become more familiar with company operations and demonstrate your dedication to your organization.
Frequently Asked Questions About Getting an MBA to Be a CEO
Does an MBA help you become a CEO?
Although it's no sure thing, earning an MBA can help you achieve your goal of becoming a CEO. MBA programs offer a well-rounded business education in multiple business disciplines, and the degree is recognized around the world.
What percentage of CEOs have an MBA?
According to 2017 data collected by Study.eu, around 37% of North American CEOs hold an MBA.
Which MBA is best for becoming a CEO?
A general MBA from a top business school is a good path to take for aspiring CEOs. However, if you already have a well-rounded business education, earning an MBA in finance or another relevant discipline could also be an effective approach.
Krystal Covington, MBA
Krystal Covington, MBA, is a business growth strategist with 15 years of experience in marketing and public relations. Her company, Go Lead Consulting, provides clients foundational tools to build new client and customer relationships. Covington founded Women of Denver, one of the largest privately held membership organizations in Denver, Colorado. Her program helps women increase their business acumen, sharpen leadership skills and connect with other high-achieving women. Covington received her MBA from Western Governors University in 2012.
Krystal Covington is a paid member of the Red Ventures Education freelance review network.
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