Ask Your Accountant

While I am not your tax accountant, I do hope you will look into a possible tuition write-off. Recently the "Clarke Decision" ruled in favor of Lori Singleton Clarke, an MBA pursuing the degree to improve existing skills. She was allowed the work-related tuition write off as a qualifying "miscellaneous itemized deduction" within the years she paid for advancing her education. This may be good news for non-sponsored EMBA students, increasingly the rule rather than the exception as corporate sponsorship has taken a break.
Here's why:

Career Enhancing, Not Career Switching: EMBA programs were designed as general management degrees for professionals already deep into career specialties (10-20 years typically), where they need to enhance those skills to stay current and continue moving up their career path to senior leadership. To the extent that students are planning to stay in their field and thus pursue general management programs without concentrations of study in a different field of business, this bodes well for tax implications. (Conversely, many weekday MBA programs and some newer iterations of EMBA programs are designed -- through concentrations or internships or both -- to enable career switchers, typically at a lower experience level.) Improving skills is the key -- the CPA to controller or CAO path, the technical lead to CTO path, the sales director to EVP sales transition, etc. EMBA programs were designed for this upward path, to the extent they still encourage incoming students looking to escalate versus change career direction.

Employer Not Requiring/Sponsoring: The proactive nature of Ms. Clarke's case seems to have helped. She was not required to, but did pursue advanced education related to her job to be better at it. As a bridge against uncertainty in business and the job market, that's smart. I'd rather have an MBA than not in this job market. One of my recent EMBA graduates told me that a large number of her colleagues were laid off, but she was specifically told (in this medium sized company) that she was not, because her MBA would enable her to pinch hit across the organization when the number of employees is down. As she put it, "That's one sort of six-figure ROI that's pretty critical, even if it's not a promotion."

The education cannot lead to a new line of work altogether, from what I understand. In some cases, the marketing executive may be able to write-off the marketing portion of EMBA education and organization management courses if presumably in a leadership role, if not the whole degree. So now is a good time to talk to you accountant and Uncle Sam about continuing in your path and strengthening your position in your field through the EMBA program.

Could You Win the Strategy Jeopardy Challenge?

(See if You’re As Smart as EMBA 2010 Team 2)

Strategy—a two-course sequence that integrates all core MBA knowledge--has long been one of the keys to the Vanderbilt EMBA program. The EMBA Class of 2010 started year two of their MBA program by selecting their strategy client, then tackling Business Strategy. (Strategy Project swings into gear this semester.) But EMBA 2010 finished up a tough final exam weekend in December with a challenging, fun holiday treat: Strategy Jeopardy!

Alex Trebek holds nothing over Professor Brian McCann…with such categories as External Forces, Cite that Case, and Frameworks, he encouraged ten EMBA teams to fight hard to recall what they’d learned and find those elusive Daily Doubles. Mastering the game was Team 2 (pictured) including Craig Brooks, a QA Manager for Wackenhut in Knoxville, TN; Charlie Crowe, Design Engineer a.k.a. “rocket scientist “for KBM Enterprises in Huntsville, AL; Chandra Kumbar, Director of Cardiac Electrophysiology for the Heart Group in Evansville, IN; Brad Tidwell, Design Engineering Manager for ADTRAN in Huntsville, AL; and Aaron Withers, Controller of Batesville Casket in Manchester, TN. They won candy bars wrapped as $1,000,000 bills for their efforts. Tidwell enthusiastically concluded: “I would have been better off with extra credit points for my final Strategy grade.”

And the losing team? That would be Team 3, as explained by David Parks, an ER physician at Medical Center at Bowling Green: “When we realized we might risk all our points, come in dead last and also win a prize, we did the Rational Actor thing as learned in economics. Luke [Professor Froeb] would have been proud.”

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So, challenge yourself to three questions posed to EMBA 2010 during their final day of Corporate Strategy…would you have bet all your money to win in Final Jeopardy?

1. The fact that around 50% of new business owners rate their probability of success at 100% (and the fact that 86% of EMBAs rate themselves as above average) is an indication of this decision-making bias.
   
   Answer: What is: ___________________


2. This governance form is an interim solution between market transactions and full integration in the firm; often has a learning-related goal.
   
   Answer: What is an: ___________________


3. Staged venture capital investments and joint ventures as a stepping stone to full acquisition both represent this approach that highlights the value of uncertainty and flexibility.
   
   Answer: What are: ___________________

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If you have a topic of interest you’d like to see on my blog, send me your question or suggestion. I look forward to hearing from you. Happy New Year.