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Have American Businesses Been Stranded By the MBAs?
theodp writes "In his new book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business, legendary car-guy Bob Lutz says to get the U.S. economy growing again, we need to fire the MBAs and let engineers run the show. The auto industry, writes TIME's Rana Foroohar, is actually a terrific proxy for a trend toward short-term, myopically balance-sheet-driven management that has infected American business. In the first half of the 20th century, industrial giants like Ford, GE, AT&T and others used new technologies to create the best possible products and services with the idea that if you build it better, the customers will come. But by the late '70s, if-you-can-measure-it-you-can-manage-it MBAs were flourishing, and engineers were relegated to the geek back rooms. 'Shoemakers should be run by shoe guys,' argues Lutz, 'and software firms by software guys.' Learning that China plans to open 40 new graduate schools of business in the next few years, Lutz quipped, 'That's the best news I've heard in years.'"
Shoemakers most likely can run their business good.. but really, the usual geek.. no, and I'm one as well. Most of the geeks are truly hard to do business with or make witty comments about "how could this person possible know this thing?". There are exceptions, but geeks usually lack that kind of people skills. They also usually lack the knowledge of what people really need. Good example of this is the linux usability and GUI. It's far from good and mostly unfinished with most software because geeks just aren't interested in that kind of thing.
People work best together. You mix the best attributes from several different kinds of people. Hell, if you want a good geeky example look at different classes in multiplayer games. No one can do or master everything. That's why it's best to do what you know yourself and let other people handle the other parts.
Most engineers know next to nothing about marketing and sales... to the degree that they actually despise interacting with customers. You can have the best product in the world, but if no one knows about it, your business will fail. Consistently in this world, inferior products with better marketing win over superior products. You have to know how to get your name out there, and how to get people to buy your stuff.
I agree your average engineer has zero business skills, but moving them to the back room and having MBAs run the show is still bad.
Get rid of the MBAs and let the engineers have business input, but not run front office.
Oh, and get rid of the lawyers, they are even worse than an MBA.
---- Booth was a patriot ----
Indeed, people with different beneficial skills are essential in any organization. The key idea there isn't "different", however; it's "beneficial skills".
MBAs typically have absolutely no helpful skills or abilities. They are often people who tried engineering, but couldn't cut it. They are people who tried accounting or finance, but couldn't cut it. They are people who tried marketing, but couldn't cut it. They are, in essence, the rejects of the business world.
For many of them, their only "skill" (if we can even call it that) is forcing bullshit down the throats of productive, useful people. They do this by holding wasteful meetings, by putting in place absolutely stupid and counterproductive workplace policies, by making decisions about stuff they know absolutely nothing about, and by hiring in a way that protects them from any negative repercussions.
They've been successful at this, and that's why America is as economically and socially fucked as it is today. The rejects are leading the operation, and it shows. Thankfully, it's only a temporary "success". It inherently can't be sustained. It's a so-called "race to the bottom", and the bottom is going to be met very quickly. "Free trade", off-shoring, outsourcing and other popular MBA techniques are the best way to destroy not only individual companies, but entire economies.
I don't think that anyone is suggesting that a software business, for example, should consist only of software developers. Rather, it should merely be led by people who understand how to properly build and provide on-time, on-budget, functioning software systems, rather than by some MBA who can spew out this month's buzzwords in order to fool some other idiot MBA at some other company into buying a shitty software system. Different kinds of people will still be needed, of course, but they should be useful workers, not MBAs.
Only an MBA could be as ignorant as you are, and publicly display so much blatant misunderstanding of reality.
Engineers and technicians are often the best at dealing with customers. Hell, many of them enjoy it, too. They just don't like to bullshit the customers, though. They want to provide them with the best service and the best products. True, this may not be in the best short-term interests of the company, but it often works much better for everyone in the long run.
Engineers and technicians are good at thinking for the long term. They can think beyond the next quarter's results. They realize that maybe they can't please the customer today with the current offerings, but they'll be able to provide the customer with what the customer needs in the future. Sure, the company could sell them some shit today and make a little bit of money now, or we could be truthful with them and make a far bigger and more significant sale in the future.
When this happens on a large scale, the whole economy benefits. Resources end up being allocated far better, and the resulting systems actually do help improve productivity. Contrast this to America today, however. With MBAs running the show, we end up with trickery being used to sell useless products that don't provide any tangible benefits. That's why we see the daily Slashdot stories of some software system implementation project being millions upon millions of dollars over budget, and then often just discarded in the end. This misuse of resources harms the entire economy, and is what allows third-world nations like India and China to pull ahead of America.
Agreed. They had a great model, "The HP Way", which was based on the way the founders like to treat people and be treated. Bill and Dave were both engineers and built the company up to be a major international by encouraging everyone in the company to both co-operate and work for self-improvement - exactly as they had done themselves. They recognised the importance of their management in knowing the product field they were involved in and understanding the culture of creativity and job security needed for long term success. The company's slide began when they started to appoint to senior positions from outside the company - and outside the engineering field - resulting in the dilution of the HP ethic and outsourcing the engineering and manufacturing functions which had driven their innovation and growth historically. Sadly this has happened with so many western companies that we have a deficit of home-grown talent in anything other than managerialism (of which we have a surfeit). Sadly, "management" has been the real growth business of the last 30 years. The Chinese are welcome to all the MBA graduates they want.
Seriously, we should not have sold off chrysler and simply bailed out GM. The problem in America is that America's business school are in charge of far too many of our businesses. These are basically neo-cons who think short terms rather than long-term or what is good for everybody. An engineer who is in charge would keep everything local so that they can deal with issues quickly. An American MBA has no real knowledge so they trust that others will botch everything and they can pass the blame.
I prefer the "u" in honour as it seems to be missing these days.
said, "Charge me a buck more and make this part out of metal instead of fucking plastic" or words to that effect?
Pick the product, I mean it doesn't matter what it is anything thing from your car, house, cell phone, kids bicycle, toilet paper, laptop pick the damn product.
THAT is the MBA / Bean Counter Problem.
They don't think in terms of high customer satisfaction they think in terms of "I can shave 0.0001 dollars per unit" and "I can predict that we will only increase our returns and warranty repair by 0.0001% and we will increase profit by .5 %".
Huge pet peeve... I like gauges I like to see actual oil pressure in my car, actual engine temperature but these days those are rare things in cars. I know the cost difference might be 2 dollars per car and frankly I will happily pay 30 times that since 60 bucks on the cost of a new car is nothing.
Plastic gears in assemblies... My wife drives a Mercedes C320 and there is a plastic gear someplace under the dash that is attached to a vacuum servo of some kind that has something to do with the air handling. The damn thing has some teeth missing and it chatters now and the sound is really annoying. The replacement part costs 40.00 bucks. But it will cost close to 1000.00 bucks in labor to get at the damn thing since you have to basically dis-assemble the dash to get at it.
The above reasons are why they need to be yacked out of the chain of command.
Hey KID! Yeah you, get the fuck off my lawn!
Most engineers know next to nothing about marketing and sales... to the degree that they actually despise interacting with customers. You can have the best product in the world, but if no one knows about it, your business will fail.
Which is true and important and entirely beside the point. MBAs aren't about marketing. They hire people for that. MBAs are all about managing, not marketing. MBAs are the guys who export American manufacturing jobs to the Third World, the guys who cook the books to pump up their employer's apparent profitability enough to raise the stock price again this quarter, the guys who, with apologies to Oscar Wilde, "know the price of everything and the value of nothing." They're the guys who have spent the last 30 years or so systematically dismantling America's industrial base while simultaneously enriching themselves. They nearly destroyed the world's economy three years ago, and yet, mysteriously enough, they're still in charge of basically everything today.
They are the people to whom Santayana was referring, when he warned about repeating the past's mistakes. They are our leaders.
May Chthulu have mercy on our souls.
Check out my novel.
I seriously doubt that MBA managers make these kinds of efforts when they take charge of companies.
That's an AWFULLY broad brush you are painting with there. A MBA is a college degree. Nothing more. People with MBAs go into finance, accounting, marketing, sales, engineering (yes, engineering), and of course management. Having a MBA is not an automatic ticket to management either. At best it might get you some interviews you might not get without the degree much like an engineering degree can open a few doors. After that it is up to the talent of the individual. Futhermore, lots of people get MBA degrees AFTER they already are in charge (see executive MBA programs) because they seek to do their job better. Management has a skillset much like engineering, and many (though not remotely all) of those skills can be learned in school.
The dominant ethos of that profession appears to be to run a company by the numbers just long enough to move on to a higher paid position.
A MBA is a college degree, not a profession. There are good managers with MBA degrees and bad managers with MBA degrees. The degree is just training. It is in no way, shape or form a profession.
Most that I have met have little to no underlying understanding of the businesses they are being paid handsomely to operate.
That would be true of many people regardless of whether they possess a degree in business administration.