Watch out HBS, Perdue University is pecking at your heels.

Nope, not a typo.

It’s Perdue as in chickens, not Purdue as Boilermakers.

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Who says so?

None other than HBS Prof. Clay Christensen — the father of the idea of disruptive innovation.

According to Business Insider

Christensen says that his employer is ripe for disruption.

Previously, he has argued that higher education as a whole … will be disrupted by online competitors.

Now, there’s a bigger threat looming for Harvard’s b-school.

Christensen  says there are two things that make MBA programs like Harvard’s ripe for disruption,

The first is the cost.

“To get a Harvard MBA, you gotta to be the best of the best of the best to get yourself admitted, and then we empty your pockets to the tune of $120,000.”

“Then you have two years of foregone salary. So this is a very intensive investment.”

The second is the high salaries expected by top MBAs.

For new HBS grads, according to Christensen, the average combined base salary and bonus was around $160,000.

That’s a price many companies simply can’t afford for early-career workers.

“If you look at who recruits our graduates, there are very few operating companies …  no General Motors, no General Electric, no General Mills,  no Intel, no Dell, no Motorola.”

The only people who can afford HBS graduates are places like McKinsey, Goldman Sachs, hedge funds, and private equity.

So in “classic disruption style,” top MBA programs have overshot the salaries that the majority of companies can bear.

The result?

Competition on the low end that will eventually move to the top.

What’s disrupting us is that operating companies are pulling in the training of management inside. They’re creating their own corporate universities, like Intel University, GE at Crotonville.”

“The best corporate university that I’ve visited is Perdue University: Perdue Farms, the chicken company, has its own university. .”

Corporate universities aren’t new. But they’re starting to grow. And as they get bigger and better, and start to cater to people who might have gone for an MBA in the past, they’ll be a compelling alternative for many executives-to-be.

Bringing training in-house is:

  • much cheaper than hiring MBAs;
  • more accessible to those who don’t want to take on huge debt loads;
  • much more in line with what companies actually need;

… and people are working, getting experience, and earning a salary the whole time, rather than two years away from their career.

There are only so many consulting and banking jobs out there, and when starting salaries start to dip, paying $120,000 and giving up two years will look less and less appealing.

Excerpted from Business Insider

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One Response to “Watch out HBS, Perdue University is pecking at your heels.”

  1. Scott Says:

    great headline

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