New Study Finds Those With Degrees Underperform

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CINCINNATI ( -- A Master of Business Administration degree is not only worthless, it can work against a marketer, according to a survey of marketing executives from 32 consumer-products companies by consulting firm Ken Coogan & Partners.
The study found that marketing executives from underperforming companies were twice as likely to have been recruited out of M.B.A. programs than marketing executives from out-performing companies.
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The study used scanner and panel data from VNU’s ACNielsen to show marketers from companies with significant market-share gains are far less likely to have M.B.A.s than those from companies posting significant share losses.

Major marketers
The M.B.A. factor wasn’t the only difference, but it was perhaps the most striking one between winners and losers among the companies, which included General Mills, Kraft Foods, Nestle, Pfizer, Clorox Co., Reckitt Benckiser, Energizer, Alberto Culver Co., Hasbro, Cadbury Schweppes, Kodak and Dunkin’ Donuts.

Marketing executives from 18 underperforming companies -- which had sales grow 7% less than their categories on average in the two years ended August 2005 -- were twice as likely to have been recruited out of M.B.A. programs than marketing executives from out-performing companies, which averaged growth 6.2% faster than their categories over the two years. Of executives from underperforming companies, 90% had M.B.A.s vs. 55% at outperforming companies.

Not all master’s degrees appear worthless in the study. Just M.B.A.s. About 10% of the marketing executives at the out-performers had master’s degrees other than M.B.A.s vs. none at underperformers.

That twice as many underperforming companies as out-performing ones participated in the survey may indicate something, too. Possible theories: Underperforming executives, particularly ones with M.B.A.s, spend more time filling out surveys, or are more likely to be in contact with consulting firms like the one that administered the study.

Recruitment practices
The out-performers in the survey got about a fifth of their marketing executives from undergraduate programs and another fifth from advertising or marketing agencies or other industry vendors. None of the executives from underperformers had been recruited as undergrads and only 5% came from agencies or suppliers.

Perhaps surprisingly, the out-performers were understaffed compared to their underperforming peers. Out-performers averaged one marketing executive for every $37.9 million in sales, compared to one for every $28.5 million in sales at the underperformers. But the out-performers spent more on marketing—averaging 12.4% of sales vs. 11.6% for the underperformers.

Ken Coogan, principal of the consulting firm, isn’t sure the marketing-budget differential is significant, but believes the staffing number might be. Possibly, it reflects staffing at both out- and underperformers not having caught up yet with their changing marketplace results, he said. But he said too much staff -- and bureaucracy -- could actually be slowing down the underperformers.

Outsourced marketing services
In a separate bit of counterintuitive research, Mr. Coogan said he has found marketers that outsource marketing-services functions the most actually have higher staffing levels than ones that outsource less.

Though they don’t value M.B.A.s as much, out-performers in the survey place a much higher value on personal and professional development once they hire people. The survey showed the share winners far more likely than the losers to support attendance at industry conferences and seminars, involvement in industry associations and peer-share groups, internal training groups, formal mentoring programs and graduate-level seminars.

The only professional-development perks supported more by the underperformers were -- you guessed it -- executive M.B.A. programs.

Equally unsurprising, executives at the out-performing companies were far more likely to believe career advancement at their companies was based on merit rather than politics. Underperforming marketers were more likely to see politics at play. Overall job satisfaction measures were higher at the out-performers.

Stock option differential
But executives were about equally happy with compensation at both the winners and losers. And the underperforming marketers were more likely to offer stock options than the out-performers. Both findings could create some interesting fodder for executive-compensation critics.

Retention programs that were more common among the out-performers than the underperformers included assignments outside marketing to groom for general management, part-time or job-sharing assignments for managers who request them and giving more tenured executives preference in job assignments.

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