Driven off the Road by M.B.A.s

http://www.time.com/time/magazine/article/0,9171,2081930,00.html?xid=fblike [-]

by bcl • 15 years ago

55 29 15 years ago

teyc2• 15 years ago

MBAs are misunderstood. These are business hackers. They may hack the signals that are being sent to the market quarterly, but they are also capable of hacking other parts of the business for better long term outcomes if the market lets them. The problem is market analysts are like news reporters, always chasing after the next car crashes.

mattgreenrocks2• 15 years ago

Interesting, can you elaborate more?

teyc2• 15 years ago

The basic thesis is this: What ever we can measure and whatever we pay attention to, we improve. It's just like Hacker News karma.

A management that forms a tight feedback loop with market watchers and stock prices tend to learn very quickly what pleases the market, and optimize for it. MBAs learn about how to hack the balance sheet so that earnings per dollar capital rise, and the stats look good.

However, there are alternative management score cards being developed to measure businesses better. Measuring willingness of customers to refer friends is one. Mining companies for example measure near misses and lost time injuries as a priority because the publicity of one bad accident can jeopardize new investments.

mattgreenrocks2• 15 years ago

It never ceases to amaze me why we give power over to those who do not themselves produce, and have no experience doing so. There are some great leaders out there, but I find it hard to follow someone who has little domain experience. Actually, why do we view 'business' as its own separate field when it doesn't mean anything in a vacuum?

billswift• 15 years ago

Well businesses have to do something with people that are too incompetent to trust with doing actual work; making them managers at least limits how much they can screw up. (see http://en.wikipedia.org/wiki/The_Dilbert_principle).

nickolai• 15 years ago

I hope it stays a joke. Thats like putting a blind and deaf sailor to the rudder because you can't order him around the boat to manipulate the sails. Either position has screwage potential. Put him into some cmmi compliance group instead.

CoffeeDregs4• 15 years ago

    It never ceases to amaze me why we give power
    over to those who do not themselves produce

Given the context, "those who do not themselves produce" means MBAs? I've got an MBA (and an MSEE) and am a CTO, and I think people think I can produce. Of course, there are useless people who graduate with every degree imaginable. MBAs happen to have graduated too many people and have gotten a bunch of focus over the past decade, so are rightly getting their ration of shit, but that's not about the notion of an MBA being useless; it's about oversupply and under-quality.

Also, I assume you meant "those who did not themselves produce" because one of the most frustrating things about management is that you don't get to produce much. That sucks, but it's part of the job (I hate leaving work when my big accomplishment for the day was to talk to a bunch of co-workers, but it's my job...).

    Actually, why do we view 'business' as its own separate
    field when it doesn't mean anything in a vacuum?

Because running a business is something people do and is has very specific rules, regulations, mechanics, knowledge, etc. Accounting and finance do matter (a lot) and products, people and ideas do fail because they neglect to understand these things. But business studies are cross-functional/domain: I took the "core" stuff, but I also took great classes on control system theory for business ("system dynamics"), industrial economics, strategy, technology strategy, organizational processes, finance (NPV, capital structure anyone?). These types of knowledge give you a very different (and, hopefully, more effective) perspective on what businesses are and how they operate.

Computer science doesn't mean anything in a vacuum either. What if you wrote a program and you couldn't market, sell or support it?

smugengineer69• 15 years ago

  What if you wrote a program and you couldn't market, sell or support it?

People do this all the time, it's called open-source software and people come upon it by merit of the quality of the code. It doesn't need buzzwords, jargon, sales, and demographics numbers. It's the closest we've got to a vacuum sometimes and I'm proud of this.

Vivtek3• 15 years ago

I respect your MBA skills, but ... back in the early 90's I did a multi-year consulting gig at Eli Lilly (pharmaceuticals, if you didn't know: Prozac, among others) and they've got the MBA disease bad.

The MBA disease - and this is what the article is about, obliquely - is thinking you don't need to know anything about the business itself to manage it, because business as a whole is a uniform set of actions. At Lilly this was endemic to the point that people were advised - I kid you not - to avoid learning any technical information or anything too specific about their areas, because it would harm their careers. Lilly people were discouraged from associating too much with contractors, because contractors were hired to do specific domain-knowledge things like, oh, develop key software that governed their manufacturing procedures, including generating all expiration dates for the company. (God forbid anybody at Lilly should sully themselves with learning how expiration dating works - I sure enjoyed it, though.)

So you're right, business administration is an essential set of skills, but the point here is that without knowledge of the business you're administrating, you can't make valid decisions - except on the basis of short-term financial goals that ultimately result in the downfall of society.

(Lilly was unreal. They don't have fountains in the courtyard, they have water features. The whole place reeks of pretentiousness. Corporate headquarters rocks, though; long, long ago, Eli Lilly himself ended up buying the whole street of old brick buildings, which are now perfectly preserved under a common roof. Architecturally fantastic! The Lilly people hate it; it's too old and has weird corners. They are all idiots.)

pnathan• 15 years ago

Because those of us who hack code tend to be abysmal at managing business and other people. So it's a specialization thing.

Musicians are legendary for having this problem.

GaryOlson• 15 years ago

Scott Adams has made a fortune for decades documenting this development. I've never seen an MBA who comprehended or laughed or groaned with Dilbert.

The skills necessary to engineer and build effectively usually require a certain patience and humble appreciation. Unfortunately, this allows clueless MBAs and psychotics to run business in self destructive methods.

slindsey• 15 years ago

With a B.S. in Computer Science, a few years of professional programming experience, and a decade of "playing" with programming, I went and got my MBA with the hope that I would "advance" in my career.

What I got was a very frustrating look into the attempt at logic used as the foundation for the stupid decisions that business people make. People who major in business (with exceptions of course) are focused on making money today at any cost. There is no concern for business longevity or taking care of employees. They actually teach short-term gains over long-term growth, tax evasion, and employees as replaceable cogs.

I'm happy for having the degree because like so many other experiences in life, I learned more of "what not to do." And FWIW, the school is top 100 for MBA.

dkrich• 15 years ago

Top 100? I didn't know there were 100 MBA programs in the entire world.

brendino• 15 years ago

This article seems to make a lot of sweeping negative generalizations about MBA students. I agree with the author's obvious argument that people who lack domain experience and who focus on short-term outcomes should not be in-charge of the mentioned businesses. But what about MBAs who do have domain experience? Or MBAs with backgrounds in engineering? I'm sorry, but a handful of anecdotes is not enough to support the author's argument here.

neovive• 15 years ago

I think it comes down to the old adage "everything in moderation". When the balance of power in the auto industry shifted to numbers over products, quality began to decline. However, the value of skilled business leadership shouldn't be discounted. All large businesses need strong finance and marketing people to ensure products have relevant markets and are profitable (Apple is a great example of this). However, in the end, it's the products and services that define a company and the engineers, inventors, developers and designers should have equal influence in decision making and company strategy.

BTW: It's funny that the decline in the auto industry seems to coincide with the rise of the consumer advertising industry :)

ajays• 15 years ago

Discussion on the same article from a couple of days ago: http://news.ycombinator.com/item?id=2746481

WalterBright• 15 years ago

There's nothing in an engineering program that teaches one about sales, marketing, accounting, inventory management, etc.

CoffeeDregs4• 15 years ago

Agreed, but an engineering degree does give you a stronger framework for noticing, observing, planning, building and acting than most other non-scientific degrees. (That said, as I noted elsewhere, I do have an MBA and appreciate the knowledge.)

carsongross• 15 years ago

And, as luck would have it, there's nothing an MBA teaches you about that stuff either.

buckwild• 15 years ago

I think the biggest difference between an engineer/scientist and someone with an MBA is primary focus. I (being a scientist myself) feel like MBAs often try to make a product cheaper where as I am trying to make it better. We both add value, but we do it in different ways. If there is one thing that bothers me about folks who work on the business side, it's this. MBAs need to understand that a larger profit margin (while diminishing a dimension of the product) does not necessarily equate to success.

VladRussian• 15 years ago

when displayed to me, that page on time.com contained the ad for their another article - "Top 10 spells from Gary Potter". I think the ad network algorithm got it right - both articles' subjects are of the same plausibility and practical effectiveness.

yaix• 15 years ago

Nice linkbait, but the problem is elsewhere.

The problem is the focus on short term Shareholder Value and quarterly profits. It destroys the companies in the long term. Worse, it undermines the trust employees in their companies, because they know that they can get fired anytime for the sake of short term profits. They know that investors make big money, while they earn less and less each year (after inflation).

The Western economic system (that developed in northern Europe from the 1500s on and then went to North America, Australia, etc with the English colonization) is build on mutual trusting relationships (a high degree of Social Capital, see eg books F. Fukuyama, "Trust" or R. Putnam, "Bowling Alone"). That is what made the West economically so successful.

But to maintain our high degree of Social Capital, people need to feel that what is happening in society and in companies is mostly fair. Its doesn't really matter who is running the show. The problem with current MBAs is, that they are trained on short term Shareholder Value instead of long term stability.

Vivtek3• 15 years ago

I'm trying to see how linking to TIME is linkbait, but ... don't you think maybe this short-term mercenary outlook is the effect of the problem, not the cause?

I mean, you're not at all wrong.

johnx123-up• 15 years ago

"Getting things done by others" is the mantra of MBAs, my Harvard friend says that often. That is one of the reason they suck.

buyx• 15 years ago

In South Africa I've seen quite a few complaints about our equivalent cult. But it's for Chartered Accountants, rather than MBAs. I haven't seen any analysis of the effects of this, but I doubt it's good.

http://www.businesslive.co.za/incoming/2011/04/15/a-third-of...

Driven off the Road by M.B.A.s

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