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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.'"
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.
The problem appears when the managers don't understand what the geeks are doing and give orders based on unrealistic (or completely wrong) understanding of what's happening downstairs.
A percentage of geeks have people skills, they should be the ones in charge.
No sig today...
The problem are pure business guys who understand everything the MBA tought them, but don't have a true appreciation for the type if business they are running.
Jumpstart the tartan drive.
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.
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!
My father was a management accountant, and worked in a fairly diverse set of businesses. While his job was more or less the same one in each business, he always made an effort to understand the rudiments and fundamentals of the business in his spare time. For example when working for glass company, he familiarised himself with how glass was made, the major companies in the industry, and the types and uses of glass. He would never have as much expertise as someone who worked in that industry their whole lives, but he would have enough understanding to acknowledge and even foresee problems when they came to his attention.
I seriously doubt that MBA managers make these kinds of efforts when they take charge of companies. 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. Most that I have met have little to no underlying understanding of the businesses they are being paid handsomely to operate.
So we have a situation where NASA managers literally do not know how rockets work, and yet will pride themselves on that fact, even as their shuttles and rockets explode after take-off. Our banks are being run by "fairly dim former [sports] players", who couldn't even perform a compound interest calculation without assistance. And above all the senior decision making levels of government, the civil service, and private industry are saturated with people who are literally incapable of understanding even why they are making their decisions, let alone which they should make.
The quintessential manifestation of this pervasive dysfunction in western management was the US President George W. Bush. The man ran everything he ever managed into the ground, and stayed true to form while in office. People may moan about old families, money, and influence, but a large portion of the blame lies in a culture which sees fit to appoint unqualified, unknowledgeable, sweet talkers to positions of responsibility, and moreover to even deny those positions to competent candidates.
This isn't about choosing between inarticulate geek savants and networkers. This is about choosing between experienced professionals who can communicate effectively if dryly, and people with the training, mentality, and ethics of used car salesmen. The analogy is exact.
May the Maths Be with you!
The quintessential manifestation of this pervasive dysfunction in western management was the US President George W. Bush.
And at every opportunity, he boasted of being a "C" student, rubbing his "greater position" in the faces of those who'd spent their lives hitting the books.