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“You dropped $150k on an education you coulda got for a dollar fifty in late charges at the public library,” says Matt Damon in ‘Good Will Hunting’, summing up the dilemma for would-be MBA grads everywhere.

This article sets out why a majority of MBAs are overhyped and why the MBA needs to be replaced or overhauled and if agree then please add a LIKE at the end of article, as well as share with your networks and provide your suggestions for a future article.

The MBA promises much, but in 95% of cases doesn’t leave you a master of leadership. It’s more of a foundational business degree, and not worth all the hype and prestige. The 5% of cases where the MBA is currently worth doing? Where you have an offer from a Top 10 Business School and are looking for a corporate, consulting or banking career. According to the FT Global MBA Ranking 2013, this will give you an average salary of $163k three years after graduation.

“You will have a good-housekeeping seal of approval for your business IQ, and you will have a great network,” says Penelope Trunk of Brazen Careerist. The top schools have better lecturers and are able to attract higher quality business leaders to campus. They, “have such a wide range of applicants that the schools themselves are great at sifting through who should be in business school and who shouldn’t.” She then cautions, “If you did not get into a top ten school, then you’re making a mistake if you attend. Really.”

I believe that we need to start again from the ground up, trying to build the ultimate elite business leadership qualification. It is supposed to groom you to become a business leader or prepare you to start your business. I’m going to call it the MBL or Master Of Business Leadership.

First, why is the current MBA broken and what needs fixing?

From my personal experience of doing an MBA and the growing clamor against it, these are main reasons why it’s currently not fit-for-purpose:

1. The entrance test

The common test for entrance is a GMAT score, which is a test of your reading, writing and math ability but very little to do with business or leadership.

2. The curriculum

The MBA is a bit like a Business 101, i.e. here’s accounting, here’s strategy, here’s marketing. They teach you all the basic subjects and give you a few additional options, but generally fail to integrate it all together.

3. The teachers

The majority of teachers are mainly academics rather than ex-business leaders and they are set up in functional department silos.

4. A qualification everyone passes

In this mainstream world of education, people complain about children’s high school exams getting too easy, grade inflation, and how this is reduces the value of the qualifications. But for an “elite” MBA, nearly everyone passes (in my MBA, out of a intake of 160, everyone passed. 100%!).

5. An expensive qualification that 95% of people don’t need

Josh Kaufman, a 28-year-old entrepreneur and founder of PersonalMBA.com believes, “Business schools don’t create successful people. They simply accept them, then take credit for their success. With heavy debt loads and questionable returns, MBA programs simply aren’t a good investment – they’re a trap for the unwary.”

He argues that, out of the world’s 200,000 MBA graduates each year, more than 190,000 people every year are getting a degree they don’t need. This is because only 5,000 – 10,000 jobs exist at the prestigious consulting firms, investment banks and Fortune 50 companies that use an MBA from an elite business school as a filter to decide who to interview:

“If you want to work in an industry that uses the MBA as a screen, you are effectively buying yourself a $150,000 interview… For pretty much everyone else, it’s a waste and a very bad investment… If you want to do anything else in business, if you want to start your own company, get a job in another field, you don’t have to have an MBA. It’s better if you don’t because of the debt.”

6. A poor preparation for the world of startups and entrepreneurship

Many of the highest impact jobs with the biggest growth potential are now at startups, but tech entrepreneur and Stanford lecturer Vivek Wadwha argues that, “most courses are focused on preparing people to work in large corporations. The truth is that a masters degree is not necessary for starting a company. You can learn more by doing and failing. Having a real company in which to practice these skills will accelerate the learning process better than textbooks and academic case studies in an MBA program can.”

Wadwha says, “I no longer advise startups to hire MBAs, and I discourage students who want to become entrepreneurs from doing an MBA. That’s because I have seen a growing mismatch between the skills that business schools teach and what fast-paced startups require. And corporate management isn’t the best path to entrepreneurship anymore – the best way is to work for a startup.”

It actually takes an average of 13 years for MBA graduates to get around to starting their own company. We hear about star entrepreneurs like Bill Gates and Steve Jobs dropping out of college to set up a business, but Ryan Holmes, fellow Linkedin Influencer and CEO of HootSuite, went one step further and quit his MBA program: “In 1999, I dropped out of business school. I think it was one of the best decisions I ever made. Fast-forward to the present and I’m CEO of HootSuite, a quickly growing social media company with 300 (amazing) employees and more than 6 million customers. It was real-world experience in business that led me every step of the way – not an expensive college degree.”

7. Even top corporations priced out of the MBA jobs market

The high cost of MBAs is fueling graduates’ need to seek only high-paid jobs when they leave in order to be able to pay off their debts. Harvard Business School professor Clay Christensen acknowledges the problem, arguing that even established companies are being priced out: “If you look at who recruits our graduates, there are very few operating companies,” he said in a panel at the Nieman Journalism Lab, “So there’s no General Motors, no General Electric, no General Mills, only one Johnson and Johnson company, no Intel, no Dell, no Motorola.”

8. A perception problem about the character of MBA graduates

The anti-MBA mood is then reinforced by the sense that some MBA graduates are rather arrogant people, who believe that they are the finished article just because they’ve done an MBA. This particularly affects how they’re perceived by small and medium-sized businesses. Dino Forte, Director of Converso Contact Center says: “An MBA appears to be simply a ‘must-have’ qualification, taken by sharp-suited, introspective, career-focused individuals who use the latest jargon and theories of current management gurus to impress colleagues, and progress up the corporate ladder”.

Weighing Up The Current Alternatives

So what if you are at early stage of your career and want to get on the fast track to become a business leader?

Here are some options today:

1. Do a regular college business degree then go straight into the corporate or entrepreneurial world

2. Do an MBA if you’re really determined, but ensure you maximize the experience

When I reflect on my own MBA, there were flashes of great value within a sea of ‘this is a so basic and waste of time’. Important to maximize the flashes, some of which are hidden :

– Focused electives selection: I maximized the amount of time I could spend on entrepreneurship modules and tried to focus my project work with real startup companies, to give me the best possible chance of learning something valuable.

– Go global if you can: I was fortunate to be able to do an exchange program from Cranfield School Of Management in the UK and spend three months in Seattle (at the University of Washington), at a time when Starbucks and Microsoft were flying. This definitely added value and helped broaden me from business and cultural perspective.

– Build your personal network: You are likely to meet maybe three to five quality individuals who you’ll stay in touch with and do business with in the future. Work together to look for jobs and prepare for a interview.

– Headspace, resources and peers to help launch the killer job campaign

3. Consider a part-time or Executive MBA

You may get more value from this kind of business education if you embark on it slightly later in life, with an Executive MBA peer group that brings more diversity, maturity and practical experience to the classroom. Also you can relate learning to a real day-job. You could also get the course partially funded by employer.

4. Do-it-yourself or remote learning

Josh Kaufman argues that, “You can get a better education faster and cheaper if you do it yourself.” His site PersonalMBA.com offers a reading list of 99 books (http://personalmba.com/best-business-books/) that he claims can offer a world-class business education without the exorbitant cost.

In reality, while reading lists are at the foundation of most university degrees, you’re likely to require somebody, whether a tutor or a mentor, to guide you through them, challenge your understanding and help you apply the concepts in practice. I think peer coaching and networking groups are important for young leaders, supplemented with periodic attendance at interesting events such as TED.

More broadly, make a commitment to apprenticeship in leadership and learning. For me it is about gaining and maximizing both business and personal leadership experiences and then applying those lessons into your own leadership and career. In my earlier article ‘, I talk about a number of fast track leadership experiences, such as my “global walkabouts”. Compared with my MBA, these actually gave me much broader learning and allowed me to develop my own “leader’s way”.

5. Join a company with an in-house ‘corporate university’

Harvard’s Clay Christensen explains the growing trend of the ‘corporate university’:

“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: This is not in West Lafayette Indiana, but it’s in Salisbury, Maryland. Perdue Farms, the chicken company, has its own university. They teach themselves while they work, and it’s growing like crazy.”

While I have my doubts about a chicken university, this option can certainly be much more cost-effective for companies than hiring MBA graduates, and ensure the content is in line with the relevant industry skills they actually need.

Replacing The MBA With The Master Of Business Leadership

By focusing on ‘business administration’ too much, the current MBA is creating an army of overrated professional managers and not enough startup-ready CEOs.

Having said that, it is easy to critique something this doesn’t deliver and is over-hyped but harder to come up with a alternative.

I have emerging view – maybe 70% baked – of what the alternative could be. I’d like to share the following principles as a starter:

– Two variants on the MBL program: a Master of Entrepreneurial Leadership and a Master of Global Corporate Leadership

– New criteria for acceptance based on more achievements, talents, and psychometric testing for the suitability of one’s chosen corporate or entrepreneurial path

– The mix of lectures would be more weighted towards classes featuring experienced CEOs, leading corporate practitioners, top entrepreneurs and leaders in various fields

– More exposure to leaders in human performance, e.g. neuroscience and psychology

– More exposure to outstanding performance outside business, such as from the world of sport and the British cycling team

– More studies in the history of leadership

– More global experiences and exchanges, especially in emerging markets

– Much more use of remote learning and online conferencing

– More personalized coaching for participants

The program would fundamentally be much more focused on creating leadership experiences than learning concepts. I set out some examples of this in my previous post .

Over To You

I am not saying that I have all of the answers here.

But if you agree that majority of MBAs are overhyped, and the MBA needs to be replaced or overhauled, then please add a LIKE at the end of article.

I’d love to hear your views on what should be incorporated into an elite business leadership qualification of the future. I will credit the best ideas in a future article offering a detailed blueprint for an MBL.

It is inevitable when challenging an existing convention to prompt strong reactions, so I also expect that this article will generate some lively views on both sides of the MBA fence! However, the aim is this is to add to the momentum for a overhaul, as I believe that if we can raise the bar on leadership education, we can make a massive different to the business world.

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