MBAs: the holy grail?

It used to be generally agreed that the only thing you needed to manage a
business successfully in the UK were the letters ACA after your name. But is
being a fully qualified accountant – from the ICAEW or another institute –
enough these days? Wouldn’t another business-orientated qualification help?

As David Tyrrall, senior lecturer in accounting at Cass Business School in
London, points out, the UK has always been something of an ‘outlier’ by
regarding training in accountancy as a business education.

In Germany, for example, that role might be taken by a technical education
and subsequent training within a company, and in the US by an MBA.

The question is, is the MBA – the Holy Grail for many young people looking to
move into top-flight business jobs – now the natural progression from the ACA or
other accounting qualifications in the UK? Many believe that it is.

‘If you want to make your way to the top of a large business – not just as
CFO, but as chief executive or chairman – then you need a rounded business
education and doing that on the job is not the best way,’ says Andrew Stark,
Coutts professor of accounting and finance at Manchester Business School.

‘An MBA lets you see the big picture and not just your bit of it.’

Ray Ball, Sidney Davidson professor of accounting at the University of
Chicago Graduate School of Business in the US, has a slightly different take on
the issue.

‘Is accounting a good background for a manager? It depends on the company
you’re managing,’ he says. ‘I don’t think it’s a good idea for a start-up – you
don’t see many CEOs with an accounting background in Silicon Valley. But for
mature companies in stable industries then I think accountants do have special
skills that they bring.’

Sheryl Miller, finance manager of operations at energy supplier npower in the
UK, qualified as an ACA at Ernst & Young and then joined IT group EDS. It
was while working in areas such as project evaluation, that she felt the need
for an MBA. ‘I saw it as a way of building my business toolkit, in areas like
marketing and strategy, and being able to understand what people in other
functions were saying,’ she says.

Even if people see their career firmly routed on the practice side of the
fence, many believe that there are reasons why an MBA would be more than just a
good idea.

Modern accounting firms are very large businesses and they need to be managed
by people who know about strategy, managing people, marketing and so on. In
addition, they have to deal with their clients and understand the issues facing
senior people running large and complex organisations.

Mark Ward, a financial services partner at Deloitte in London with an MBA,
agrees. But he believes that there is still no substitute for experience. ‘I
would agree that an MBA gives you an academic framework in which to place that
experience and also a language and structure to address these issues. And even
in the line that understanding can give you a context for client problems that
is quite powerful in delivering a professional service,’ he says.

Raymond Maddon, executive director of learning and professional development
at the ICAEW, has a career background in business schools and, perhaps not
surprisingly, is very much in favour of an MBA as a general management
qualification. But he points out that most professional service companies have a
similar problem of recruiting from a technically-expert elite.

The issue, Maddon says, is whether the very broad business coverage offered
by an MBA is appropriate. He favours the increasing number of specialised
masters programmes, such as the masters in finance offered by London Business
School.

Indeed, the ICAEW recently teamed up with Oxford University’s Said Business
School to offer chartered accountants a diploma in financial strategy aimed at
broadening their knowledge and sharpening their senior business skills. The
diploma will cover some of the quantitative subjects included in an executive
MBA and count towards a Said MBA.

The problem in choosing an MBA is that there are hundreds of programmes in
the UK, and very few of them are specifically tailored for qualified
accountants. There are exceptions. Manchester Business School runs a series of
accelerated distance learning programmes aimed at professionals, including
accountants. Bear in mind, though, whichever you choose can have an impact on
your career.

David Tyrrall at Cass draws a distinction between people working in big
accountancy firms such as PwC or KPMG and those in a corporate accounting
function, as well as between those who want to make a complete career switch
outside the accounting function and those who want to progress within it.

For accountants in practice, he believes that a full-time MBA is the ideal
vehicle for a radical career change. ‘Full-time MBAs are very expensive and
people who take them are announcing that they are investing in themselves,’ adds
Professor Stark at MBS. He argues that a full-time MBA is basically a way of
shifting your career out of accountancy.

For the others, a part-time or distance learning MBA will probably signal to
your superiors that you have an interest in progressing to a higher managerial
function.

Also, while some business schools allow qualified accountants to waive, or be
exempt from, accounting courses, which can make up a significant amount of an
MBA programme, others insist that all students take all courses.

Perhaps surprisingly, many believe this is good for accountants. David
Tyrrall says that putting accountants into groups where they have to help others
to understand the subject can be extremely useful. ‘You can find that you only
understand a subject when you start to teach it, when you have to explain it to
non-technical people,’ he says.

There are, of course, other advantages to an MBA. Professor Ball at Chicago
Graduate School of Business points out that there is a lot of on-the-job
learning involved in accountancy. ‘An MBA is a way of accelerating that and of
changing the way you think. Accountants tend to think in a very particular way.’

The proof of the pudding, as they say, is in the eating. Deloitte partner
Mark Ward says his MBA was a fun and challenging experience, but he believes its
main value is in allowing you to step outside the daily client/office routine
and explore business issues with like-minded professionals from a mix of
disciplines. ‘I think it depends on what you want to do and what stage you are
at in your career. But I’m not sure that ultimately it makes an awful lot of
difference.’

Sheryl Miller believes that having an MBA really accelerated her career.
‘People do value an MBA when they see it on your CV. It has certainly helped me
to get where I am now. Although the ACA qualification has changed, I still think
an MBA is almost a must to broaden your experience.’

But not everyone is convinced. A recent poll of ICAEW members showed that
less than 5% believed they needed an MBA. The institute is keen to point out
that while a large majority of FTSE100 CEOs and FDs have the ACA qualification,
many fewer have an MBA.

‘I may be wrong, but if you want to progress in finance and business
generally then I think the ACA is still a strong-enough qualification to do
that,’ says Mark Ward at Deloitte. ‘The MBA probably makes a marginal
difference.’

George Bickerstaffe is the author of Which MBA? – an annual guide to MBA
and executive education programmes published by The Economist Intelligence
Unit

Feeling the benefit

After Daniel Cavanagh graduated from Leeds University in 1995 with a degree
in economics, he joined Cooper Lancaster Brewers, a regional accountancy firm in
Manchester with about 30 partners, and took a further four years to get his ACA
qualification, working, fairly traditionally, first in audit and then in the
financial services area, compliance and then M&A.

Though enjoying the work he felt he lacked particular business skills and,
working for a firm with young partners, he felt it was unlikely his career would
progress as he hoped. And in any case, he says, ‘I had always wanted to do an
MBA.’ He left CLB to join MBNA, the credit card and financial services group, in
Chester.

From there, he again left to pursue the long-admired MBA at Manchester
Business School, joining the full-time MBA programme in September 2003 and
graduating in March 2004. Subsequently MBNA welcomed him back and
he now works in Dublin as portfolio development manager.

The MBA, he says, provided him with the business skills toolbox he was
looking for
and was a thoroughly enjoyable experience ? ‘I’d do the MBA again tomorrow,’ he
says. But he’s also keen to extol the virtues of his chartered accountancy
qualification. ‘The analytical and diagnostic skills I was trained in are second
to none.’

And surprisingly, after three years as an undergraduate, another four
training as an accountant, and studying full-time for 18 months to become an
MBA, he still regards the MBA as the hardest of all.

‘Even though I was working in audit and studying outside of hours, when I was
training as a chartered accountant, the broadness of the MBA programme was a
real challenge,’ he says. Though, interestingly, he adds that he uses his MBA
and accountancy training about 50/50 in his current job.

And, potentially, he adds, he may one day even go back to accountancy.
‘Perhaps eventually,’ he says.