Elon Musk Decries ‘M.B.A.-ization’ of America
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Re: Elon Musk Decries ‘M.B.A.-ization’ of America
#2He is onto something there. Bean counting is useful and companies cannot survive without good cashflow, but it should not become Mission A of the company, or engineering (and other) talent will look elsewhere.
If one company's de facto mission statement is "We want to grow our market by 8.2 per cent and give our bosses higher Christmas bonuses" and another one comes and says "Guys, we want to fly to fscking Mars!", chances are that people like Tom Mueller [0] or Gwynne Shotwell [1] will choose the latter.
Re: Elon Musk Decries ‘M.B.A.-ization’ of America
#3Innovation is learned. When u go to school, u r mostly rated on giving the single correct answer. This is fine. But if you get a chance to go into graduate studies (Ph.D.), u would see some good innovators there, and learn how to innovate. I am sure there are other life conditions that also teach you how to innovate. But I agree, by comparisons with the product managers in the enterprise where I work, people are scared of innovations and prefer the sure thing instead.
Re: Elon Musk Decries ‘M.B.A.-ization’ of America
#4He is onto something there. Bean counting is useful and companies cannot survive without good cashflow, but it should not become Mission A of the company, or engineering (and other) talent will look elsewhere. If one company's de facto mission statement is "We want to grow our market by 8.2 per cent and give our bosses higher Christmas bonuses" and another one comes and says "Guys, we want to fly to fscking Mars!", c…
> or engineering (and other) talent will look elsewhere.
I agree in spirit, unfortunately there is far more reasonable talent than reasonable places to look elsewhere.
Re: Elon Musk Decries ‘M.B.A.-ization’ of America
#5Re: Elon Musk Decries ‘M.B.A.-ization’ of America
#6Finally, he says something I can agree with.
MBAs are for optimizing stable firms. They're walking death for startups, I personally have seen it happen.
Re: Elon Musk Decries ‘M.B.A.-ization’ of America
#7The most significant thing he said in this interview was probably on the regulatory burden that California businesses have to deal with. He compared regulatory creep to a frog boiling slowly in water. He also indicated his 2 companies Tesla and SpaceX are the last - automotive and aerospace companies in California, a state that was once a leader.
Re: Elon Musk Decries ‘M.B.A.-ization’ of America
#8> more students than ever who are pursuing the graduate degree are interested in entrepreneurship and tech
And their degree is telling them to suggest that Tech companies laser-focus on a small portion of the market. I keep hearing it. There's excellent theory behind that reasoning: it's hard to execute and compete. Here's the reality: people are sick and tired of having 100 apps to check that all do one little thing.
I passionately disagree with Musk on many things, but I strongly agree with him here. Innovation is hard. If MBAs were really trying too innovate (I am sure there are some who do!), they would be figuring out how to broadly compete despite the challenges involved. Instead it's formulaic anti-innovation. It's possible, just look at Amazon.
Re: Elon Musk Decries ‘M.B.A.-ization’ of America
#9I feel like the problems (to the extent there are problems—covid aside, a lot of things are going pretty well is my understanding) are more structural in nature. Right now, afaik the fed is pursuing a strategy of cheap capital, with the idea that the economy running hot will benefit workers by eventually increasing competition for workers. From some data I've seen, this was actually working before covid set in, with even the lowest wage workers beginning to see upticks in their wages.
However, I think a low-regulation, high-capital environment ends up favoring the "MBA-ization", because investors gain a lot of sway, without many backstops. For example, when unions are strong, they can drive employers to invest more in their workforces. If your employees are expensive, you're more inclined to spend money to improve their productivity. This happens when the minimum wage is increased as well. But without those incentives, companies instead spend their surplus on buybacks to keep investors happy. I think that low regulation on private equity may be another factor here. So it's not that just that MBAs have a particular way of viewing things that creates problems. It's that the economy is structured in a way that gives the stereotypical MBA point of view a lot of power.
Re: Elon Musk Decries ‘M.B.A.-ization’ of America
#10So Mr. Musk doesn't have swarms of top MBAs working in upper echelons of Management in each and every one of his Companies?
I am sure Mr. Musk and Mark Zuckerberg and Steve Jobs can succeed without having MBAs but I would believe that they heavily rely on MBAs to actually run the financial matters of their respective Companies.
But alas, who am I to differ Elon Musk - he is the Thomas Edison + Henry Ford of our era.