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MBAs as CEOs

mintzberg.org

61–70 of 167 posts

Re: MBAs as CEOs

#61
MBA programs are definitely about networking. It's certainly not about the quality of classes. Some time ago I worked at a top business school in the UK and what I saw changed how I view b-schools.

At the place I worked at, students would need to take out a small mortgage just to pay tuition. Yet, the quality of teaching was shockingly low on the list of priorities of faculty. The administration was more concerned about growing the program (i.e. revenues) than it was about maintaining quality of teaching or research.

The big expenditure that I saw was to maintain and develop ties with the big consultancies. The more students that could get lucrative consulting gigs after graduation meant that the average salary of graduates was higher. This in turn meant that the program received higher rankings from the FT... and so more MBAs wanted to attend. In terms of research and teaching, I think the main goal was to appear to be doing good work rather than to actually be doing it. Keeping up appearances / being part of the club of top schools meant a lot to everyone I met.

The research can be multi-disciplinary and I suppose that is good. However, b-schools like to keep up the pretense that they are technocratic (or value free). I saw a lack of any real research that could be considered critical of the status quo. (In one case, a major project was funded by a major consulting company. They also had a hand in the research to develop their own white papers. It was a farce.)

In short, for academia it's a lucrative gig for all involved. Why be a poorly paid sociologist when you can be a "strategy expert"? The trade-off is simply that you don't ask some questions. In return you get a really, really nice place to work, great perks (free food, drinks in the quad, fancy dinners, etc.) I don't blame any individual for making that choice.

But I don't believe for a second that it's anything but a scam for most middle class students who will carry that debt for years. I suppose it is no wonder than MBA students are looking out for themselves when they graduate.

Re: MBAs as CEOs

#62

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…

>>Satya Nadella doesn't give a fuck about a 5% latency reduction on the Bing landing page.

He might if you are a smart engineer and demonstrate that that 5% reduction in latency results in $100 million additional revenue per year by way of more users and more ads.

I just made up that number, but still. My point is, at the end of the day one doesn't need an MBA to draw the connection between their technical endeavors and the business effects of those endeavors.

Re: MBAs as CEOs

#63
post #59

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…

I'm an MBA & startup founder, and I don't think it's fair to suggest this is an MBA-only thing. Talk to any startup co-founder or early-stage employee, and tell him/her that Lean Startup principles are wrong, or that VC $ is never worth it, or that Tim Ferriss (PBUH) should work longer hours--I'm certain they'd get just as dogmatic as you suggest MBAs are about capitalism. MBA teachings are useful in the same way tha…

I agree entirely that this phenomenon is by no means exclusive to MBAs. It's deeply embedded into the context/psyche of our economy.

You can just as easily be a tent preacher with your business podcast as a Jesuit with your MBA. But the mysticism pervades.

Re: MBAs as CEOs

#64

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.

I don't think that's the purpose of the MBA -- i.e. to become trained for a specific role (though I assume you had opportunities for internships.)

You're now (hopefully) more aware of how to structure decisions for a firm and can leverage your awareness to get better results more efficiently.

Re: MBAs as CEOs

#65
post #58

Earlier quoted context omitted.

There's nothing stopping you from learning everything on your own. BUT you miss out on the MBA network. When you're forced to spend 2 years with a cohort of 75-100 people, you develop a close-knit bond when you spend most of your time eating, drinking, studying (and sometimes sleeping) with these people. If I want a job at a company that one of my MBA classmates works at, an interview is literally one phone call away…

I realize the network effect is positive for you, but I think it's negative for the world at large. One would hope that hires would be merit based, not simply that your are friends in the MBA club.

It doesn't have to be binary there. It can be merit-based and heavily dependent on having friends in the club. And that's not a special property of the MBA folks. That is to say, you might be good enough to be a lead engineer at Google, and they're not going to give you that job if you aren't, but it's still a whole lot easier to put yourself into the position of being able to do that if people in your network work at Google. MBAs are no different. You don't get to be a VP of finance because you used to do bong hits with the CEO, but if you're someone who is able to do the job of VP of finance (and can convince people of that), then that connection to the CEO is hugely valuable.

Re: MBAs as CEOs

#66

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…

I don't think this is an MBA vs STEMLord thing. Rather an MBA versus "everything else" thing. Especially studies and experiences that really are mind-broadening:

"""The strange thing about my utter lack of education in management was that it didn’t seem to matter. As a principal and founding partner of a consulting firm that eventually grew to 600 employees, I interviewed, hired, and worked alongside hundreds of business-school graduates, and the impression I formed of the M.B.A. experience was that it involved taking two years out of your life and going deeply into debt, all for the sake of learning how to keep a straight face while using phrases like “out-of-the-box thinking,” “win-win situation,” and “core competencies.” When it came to picking teammates, I generally held out higher hopes for those individuals who had used their university years to learn about something other than business administration."""

https://www.theatlantic.com/magazine/archive/2006/06/the-man...

Re: MBAs as CEOs

#67

Earlier quoted context omitted.

While MBAs might learn stuff like budgeting, recruiting, etc. Are they going to better at doing this than an accountant or a professional recruiter? Is this the additional value they add when the join a company?

No, but it's the same as a CS student taking one class on operating systems, machine learning, android development, etc. You won't be an expert after one or two courses, but you develop a foundation level of understanding. As a CEO, you'll be in meetings with accountants, marketers, engineers, recruiters, lawyers, etc. Knowing the common vocabulary helps you avoid wasting unnecessary time asking questions about the c…

And you're going to be in the position of having people under you frequently disagree with one another, and they're going to try to provide the best argument they can as to why you should pursue their preferred strategy. If you don't know the difference between an capital and an operational expense, you're heavily compromised in your ability to decide who's right.

Re: MBAs as CEOs

#68
post #58

Earlier quoted context omitted.

There's nothing stopping you from learning everything on your own. BUT you miss out on the MBA network. When you're forced to spend 2 years with a cohort of 75-100 people, you develop a close-knit bond when you spend most of your time eating, drinking, studying (and sometimes sleeping) with these people. If I want a job at a company that one of my MBA classmates works at, an interview is literally one phone call away…

I realize the network effect is positive for you, but I think it's negative for the world at large. One would hope that hires would be merit based, not simply that your are friends in the MBA club.

Networks aren't just for MBAs. I'm a software engineer, and I got my current job partially because one of my best friends works here and he gave me a referral. Now, I'm sure I passed the interview on my own merits, but I might not have even gotten to an interview if not for my friend letting me put his name on my job application.

Re: MBAs as CEOs

#69

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…

Of the "valuable" set of classes, what % would you have only been able to attend/learn from in an MBA program? I was accepted to several top MBA programs and decided not to go for a variety of reasons, including that virtually all of the classwork was things I had already learned or could easily learn via online coursework or community college without spending a quarter of a million dollars.

You might want to re-explore your opportunity cost.

At any top educational program, you'll get better competition and coaching from professors, peers, and alumni access than self-teaching. At most MBA programs, you can take accelerated courses or skip re-learning skills.

Re: MBAs as CEOs

#70

> 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…

These were successful companies at one time. What is the percentage of Fortune 500 companies three years ago that have failed - I don't know, but it isn't 90% (it probably isn't hard to look this up if someone wants to fact check me - for extra credit find other measures companies of different sizes that are not startups). Of course bankruptcy is only part of failure. So really it is what percentages of Fortune 500 (or other measure of successful companies) have "their company went bankrupt, they were forced out of the CEO chair, a major merger backfired, and so on"

Startups are in fact the wrong measure. A startup has nothing to lose, and often is trying something that will not succeed. Large companies often fund startups to limit their potential loss if it fails (if things seem not be going well they pull out without having to lay off all the people working for the startup which looks bad), and they buy the company if things go well.

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