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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.'"
MBAs are useful, but not in leadership roles. Give the top jobs to engineers who understand what their company is building, and have competent accountants and marketers working as advisers to the engineers. (And no, I'm not an engineer looking out for number one. I'm actually an accounting student.)
Indeed you need many different kinds of people to manage/run any organization. In any well run organization, every one understands they have a role to play in keeping the organization working AND that they responsibility is shared. In a well run organization an engineer/programmer/scientist is not sneered at and verbally abused, nor are the sales/accounting/IT people. The problem that has occurred as Lutz keeps repeating is that because of B-schools MBA's specifically and B-school graduates in general have been told/taught that ONLY a B-school graduate knows anything about how to manage a company. They are TAUGHT that only this quarters results are important, that research and IT support is a waste of money and if you don't have an MBA you are a waste of company resources. A long time ago people started at a low level in a company and worked their way through the company learning along the way what works and what doesn't in that company Now B-school graduates learn real garbage, move into middle management and drag a company down. From my own experience as a scientist managing a successful company, I no longer hire B-school graduates. The last one I hired told me I don't know how to run my own company and that they could increase my profits several hundred fold if I would just stop wasting resources on taking care of the staff and coddling the other scientists. When he came into my lab I laughed at him and then showed him the door
One word, Android.
You are wrongly accusing weaknesses in linux desktop GUI functionality with the difficulty of penetrating an entrenched market. I have used Windows, OSX, OS/2, Irix, linux (gnome, KDE, XFCE) extensively and the Windows and OSX GUIs have their failings the biggest failing being the retarded "it wasn't developed here" brick wall. A good example, multiple desktops, they have been available in the linux GUI for ages but blind stubbornness kept them from being a standard part of other GUIs.
And some people just don't play well with others.
True story: While working full time as an engineer I went back to school and was taking some courses that were a mix of information technology and business management so many of the fellow students were business types coming from the other end of the spectrum. This was during the late 90s when the economy was booming and technical skills were in demand and good wages were required to retain talent. During a break a CIO employed at one company was conversing with a middle manager of software development from another company. They knew in common various talented people who had worked for both of them at one time or another but had moved around to gain better wages and benefits. The CIO made a telling comment, "when this boom economy ends we are going to get back at them", them being the technical people who did not stick around for the lower wages and benefits.
True story: Working with a group of engineers an equipment upgrade plan was developed that would reduce chemical usage costs and reduce hazardous waste disposal costs. Our calculations showed a 1 year payback due to reduced costs alone with the currently intangible benefit of advancing process performance for future product needs that the product designers and process engineers predicted. In presenting the project to the division VP in front of factory management I was laughed at and told "if engineers were putting your own money into these projects you would put more realistic cost savings numbers" which was followed by a round of laughter from management. My response was that I would put up my own cash to fund the project but I expected to collect any measured profitable gains as my return on investment. The laughing stopped and everyone had a poker face. The project was not approved and two years later when the latest product design was released for full production the equipment that was the target of the engineering upgrade was causing huge yield losses due to ineffective performance on the new product design.
We need the talent of MBAs, they learn valuable business skills and techniques in school, but they are currently overrated and overreaching in their decisions and control. When you extend this to the MBAs who climb the corporate ladder to the board level they are corrosive not only to their own work force but to the entire economy and future of the nation.
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.
That's pretty much it. That's how the corporate American works and we're taught accordingly.
Engineers who want to know the business end of things this is what you study:
Pretty much the first semester of B school is all you really need. That's all. everything else is fluff. And as far as the group behavior/personal dynamics class goes, we were taught that "sensitivity training" was the solution for all human resource problems - it was all basic psych and sociology and lots of buzz words. Let's put it this way, if you don't have any social skills, getting personal coaching will do much more for you than those fluff classes.
There! Now you won't waste 2+ years and $40K+ on a big piece of toilet paper.
Want a Masters Degree for ego, promotion, or whatever? Get it in something you'll enjoy.
I've been thinking along these lines for years. One of the original catalysts of this was reading a book called Voltaire's Bastards: The Dictatorship of Reason in the West, by John Ralston Saul, an historian. It isn't a perfect book, but it is definitely thought provoking. It is difficult to summarize, but I'll give it a shot. He argues that our modern management class is obsessed with a somewhat myopic version of reason concerned mainly with measurement. This management class lacks a sense of imagination, of history, and of human nature, preferring to retreat to a world of graphs, tables, and equations.
The example he gave that sticks with me concerns the Mad Cow Disease crisis in the UK a while ago. Mad Cow Disease is a strange phenomenon, where protein structures called prions propagate when animals eat other animals that have the prions in their flesh. The prions eventually result in brain disintegration. They cannot be destroyed by cooking and processing. Managers in the beef industry knew that Mad Cow Disease existed, knew that it was growing, but they did not take it seriously. They likely tried to measure it in terms of number of cows infected, number of people infected by its human variant, Creutzfeldt-Jakob Disease, and concluded that its rarity made it a negligible risk. They could have wiped it out by quick action, but they did not. What they didn't seem able to imagine was that this disease and the fear surrounding it would eventually result in the destruction of the entire British beef industry. Almost all of the stock of British cows was destroyed. Britain was banned from exporting beef to most of the rest of the world. The financial losses were huge for the industry. Saul argues that these losses were due in very large part to the lack of imagination of MBA type managers.
I also have first hand with these issues. A friend worked for a food manufacturer that hired as plant manager an MBA graduate whose only previous experience was in a machinery assembly plant. Predictably, food safety practices and quality control went out the window, as these things were seen as negative items on a balance sheet. Lab testing and random bacterial swabbing budgets were reduced, until predictably there was a food recall that cost the company prestige, customers and a lot of money. He managed the plant primarily from his upstairs office, and he spent most of his time staring at graphs. He would seldom come down to the plant floor, and he had little comprehension of the processes and details of the plant he was managing. In the end, he left in disgrace, after transforming a plant that had formerly been extremely profitable and efficient into a money losing albatross.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)