MBAs as CEOs • Hacker News Board

Re: MBAs as CEOs

#21

Post by hyperpape » Fri, Mar 31, 2017, 2:20 PM UTC

acconrad wrote: post #14

> o Joseph Lampel and I studied the post-1990 records of all 19. How did they do? In a word, badly. A majority, 10, seemed clearly to have failed, meaning that their company went bankrupt, they were forced out of the CEO chair, a major merger backfired, and so on. The performance of another 4 we found to be questionable. So 70% failed, 30% succeeded. Wasn't the average that 90% of businesses (perhaps more specificall…

I had the same concern about not having a clear comparison to non-MBA results, but the second study mentioned did have a clear comparison.

Re: MBAs as CEOs

#22

Post by arcanus » Fri, Mar 31, 2017, 2:21 PM UTC

api wrote: post #8

I strongly agree with Thiel on lots of things about business and innovation. I just don't think I agree with him on politics or social issues to the extent that I can figure out what he actually thinks on these issues. The latter can be challenging since he seems to keep those cards face down.

> The latter can be challenging since he seems to keep those cards face down

Agreed. I think a variety of his actions are driven by pragmatic expediency as well. Trump was essentially a five million dollar contrarian put option, from that perspective.

Re: MBAs as CEOs

#23

Post by levelist_com » Fri, Mar 31, 2017, 2:21 PM UTC

aaron-lebo wrote: post #12

alphonsegaston wrote: post #10

I think it's more useful to think of MBAs as ordination into something like the Jesuits of American Corporatism. Late Capitalism in the US has evolved in such an obviously unequal and environmentally dangerous way that the only recourse we have is to a kind of "mystical" rhetoric. In this kind of system, being some kind of guru is just as important, if not more, than one's actual business acumen. Hence all the TED ta…

That's spot on and incredibly unsettling. I come from a conservative religious background and I'm genuinely creeped out by the mythologies that surround companies. I think there are a ton of parallels between today's business leaders and megachurch pastors. There's similarities in the way they build brands, the way followers reverently speak of them, assume they do no wrong, are willing to defend them, and the cognit…

This probably isn't the best link but what you said reminded me of an article I read a number of years back. http://www.cnn.com/2011/TECH/gaming.gadgets/05/19/apple.reli...

Re: MBAs as CEOs

#24

Post by Chris2048 » Fri, Mar 31, 2017, 2:22 PM UTC

ziszis wrote: post #4

Google CEO Sundar Pichai has an MBA. Microsoft CEO Satya Nadella has an MBA. AWS CEO Andrew Jassy has an MBA, etc. It is easy to undervalue marketing, sales, financial and other non-technical skills. There are definitely terrible MBAs, but also amazing ones.

You don't look at what successful people have an MBA, you see which MBAs are successful. There are many factors to success, you could just as easily conclude that people managed to succeed, despite wasting time on an MBA...

Re: MBAs as CEOs

#25

Post by thegoldenchild » Fri, Mar 31, 2017, 2:22 PM UTC

I'm aware that HN is a pro-engineering, anti-MBA group of folks, but hopefully my perspective helps add a bit of color from the other side.

I got a BS and MS in Computer Science and ended up working as a software engineer for a number of years. After a while, I was left wanting more, so I enrolled in an MBA program. IMO, 50-60% of classes in business school are fluff leadership rah-rah self-development bullshit. But the other 40% is valuable.

Why? Because Sundar Pichai isn't losing sleep at night over which tech stack the Gmail team is using. Satya Nadella doesn't give a fuck about a 5% latency reduction on the Bing landing page. The higher you climb in the ladder, the more you focus on non-technical topics like scaling, budgeting, revenue growth, recruiting, etc etc etc.

In the bubble of Silicon Valley, it's easy to generalize every incompetent MBA you meet into a group that you classify as being useless in an organization. Just remember: a handful of tech CEOs have MBAs. HBS will always produce leaders, regardless of whether or not they succeed once they're in the CEO role. McKinsey churns out more CEOs than any other company in human history. The business skill set may seem trivial, but playing the political game usually gets your further than raw skill alone.

Re: MBAs as CEOs

#26

Post by inputcoffee » Fri, Mar 31, 2017, 2:22 PM UTC

The first study shows that MBA CEOs do poorly but there is no control. i.e. it may just be the case that capitalism is competitive and that most companies do poorly.

The second study which compares MBA v Non-MBA on the covers of magazines is the more interesting study.

Firstly, 25% of the 444 CEOs had MBAs. I will assume that is statistically significant.

There are three questions that I would ask:

1. The difference was statistically significant, but what was the effect size? If you've squeezed out a 0.01% significance at 95% confidence, then that isn't impressive.

2. Was the effect driven by one or two CEOs? If Steve Jobs, Bill Gates, Jeff Bezos and Larry Page were in there, that alone may have accounted for the difference.

3. Is there another reason that magazine covers would lend themselves to a difference?

Re: MBAs as CEOs

#27

Post by Mitchhhs » Fri, Mar 31, 2017, 2:24 PM UTC

Startups is the new thing for MBAs, our research report showed that now close to 10% of MBA classes go to work for startups and its beginning to eclipse investment banking (might be a good time to be a banker :) ).

If you want to see the full report on these trends for MBAs going to startups, including their average compensation, here it is:

https://gallery.mailchimp.com/570b962c65552f112714db835/file...

Re: MBAs as CEOs

#28

Post by fanzhang » Fri, Mar 31, 2017, 2:26 PM UTC

Are bankruptcies the right metric to measure a CEO? For example, startup founders as a cohort probably lead a lot more companies to bankruptcy (or disbandment) than laundromat owners. Yet probably the average startup owner is producing companies of higher value than laundromat owners (adjust for the right startup cohort to prove this point, like YC startups).

Wouldn't you want to run a fair horserace like: - Randomly select MBA CEOs and non-MBA CEOs in a vintage year like 2000. - See the average earnings growth during their tenure, or stock price appreciation, or employee satisfaction, etc.

He does cite two academic articles, but the first looks only at CEOs that have been featured on the cover of magazines, and in neither studies are the output variables the ultimate metrics that matter. (E.g. earnings management is fine if there are enough other positive qualities to redeem the CEO -- like getting long run growth for example).

Re: MBAs as CEOs

#29

Post by amorphid » Fri, Mar 31, 2017, 2:29 PM UTC

I got an MBA. Going into the program, I was super excited about it. Coming out, I was pretty frustrated. I felt like it gave me a lot to think about without teaching me how to do any of it. I was not an master of administering a business.

Re: MBAs as CEOs

#30

Post by Chaebixi » Fri, Mar 31, 2017, 2:30 PM UTC

basseq wrote: post #11

rdtsc wrote: post #5

Company I worked for had an explicit policy to never hire MBAs. We had people from all walks of life but no MBAs. The reason is owners have worked in a large company under clueless MBAs who were neither good managers nor good engineers, and just repeated the latest corporate-speak buzzwords over and over, while drawing sizable salaries.

This seems like throwing the baby out with the bathwater. "I worked with some bad MBAs, so anyone who holds that degree must be bad."

If MBAs often come with a particular ideology and attitude that you want to avoid, then it makes sense to not bother trying to find the good ones. A successful miner wants to focus on the rich ore.