Elon Musk On the Problem With Corporate America: 'Too Many MBAs' (cnbc.com) 195
An anonymous reader quotes a report from CNBC: Tesla and SpaceX founder Elon Musk says the biggest problem with corporate America today is that too many business school graduates are running the show. "I think that there might be too many MBAs running companies," Musk said Tuesday at the WSJ CEO Summit. This "MBA-ization of America," isn't great, Musk said, especially when it comes to product innovation. Big corporate CEOs often get caught up in the numbers and lose sight of their mission, which is to create "awesome" products or services, according to Musk.
"There should be more focus on the product or service itself, less time on board meetings, less time on financials." "A company has no value in itself. It only has value to the degree that is [an] effective allocator of resources to create business services that are of a greater value than the costs of the inputs," Musk said. This thing they call "profit," Musk added, "should just mean over time that the value of the output is worth more than the inputs." Musk said the biggest mistake he has made as a leader of both Tesla and SpaceX was spending too much time in meetings looking at PowerPoints and spreadsheets, instead of being out on the factory floor. "When I go spend time on the factory floor or really using the cars or thinking about the rockets...that's where things have gone better," Musk said at the WSJ summit.
He finds that if he is engrossed in the details of the issues, it boosts morale and his team is "more energized." Musk urged CEOs to "get out there on the goddamn front line and show them that you care, and that you're not just in some plush office somewhere."
"There should be more focus on the product or service itself, less time on board meetings, less time on financials." "A company has no value in itself. It only has value to the degree that is [an] effective allocator of resources to create business services that are of a greater value than the costs of the inputs," Musk said. This thing they call "profit," Musk added, "should just mean over time that the value of the output is worth more than the inputs." Musk said the biggest mistake he has made as a leader of both Tesla and SpaceX was spending too much time in meetings looking at PowerPoints and spreadsheets, instead of being out on the factory floor. "When I go spend time on the factory floor or really using the cars or thinking about the rockets...that's where things have gone better," Musk said at the WSJ summit.
He finds that if he is engrossed in the details of the issues, it boosts morale and his team is "more energized." Musk urged CEOs to "get out there on the goddamn front line and show them that you care, and that you're not just in some plush office somewhere."
Wait, isn't Musk an MBA? (Score:5, Insightful)
Well, he's not wrong on this one. I'm just bitter because every time he echoes something I've said for years, they treat it like a stroke of pure genius, when it's really just common sense. MBA's have ruined everything for everyone not an MBA, and Musk himself is only realizing it now this late in the game because finally he's seeing them starting to even ruin stuff for other MBAs, like himself.
Re:Wait, isn't Musk an MBA? (Score:5, Insightful)
It's not a new thought, certainly. The US has been dominated by MBA's for decades, with many pointing out that it's dangerous because MBA's understand only business and not the substance of the company. It's a very american thing, though - in Germany and Japan, for example, CEOs of technology companies are engineers, CEOs of medical companies are doctors or researchers, etc., and they have financial people who work for them. In the US, the MBA's run things, and they tend not to appreciate the fundamentals of the business - they view all businesses as spreadsheets to optimize to maximize ROI, ignoring the actual goal of the company which is to do something of value to customers and society. Because in the US, companies tend to forget that they exist to deliver value, not purely to make money for investors.
Re:Wait, isn't Musk an MBA? (Score:5, Insightful)
It's a very american thing, though - in Germany and Japan, for example, CEOs of technology companies are engineers, CEOs of medical companies are doctors or researchers, etc., and they have financial people who work for them.
Hell, in Germany the Chancellor (head of government) has a Ph.D in Physics.
Can you image a scientist being elected as the President of the US . . . ?
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A scientist would be too smart to want the job of course. However, we have had very educated presidents in the past, but it's more important to understand the law and society than physics or engineering. Being hard working isn't all that necessary either: compare Carter vs Reagan, where Carter was extremely hard working and understood policy well but presided over economic malaise, Reagan was much more easy going and let others do the work and was much more popular.
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compare Carter vs Reagan
An engineer vs an actor. The peanut farmer thing was just for votes. Maybe we are reading some correlations about the job of presidents that aren't really there?
Re:Wait, isn't Musk an MBA? (Score:5, Insightful)
A lot of it is timing. Carter inherited an economic malaise and Reagan inherited a fixed economy.
It's why Biden is going down in history as a shitty President due to being President during even a worse economic malaise and the next Republican President in 4 years will get the credit for the fixes implemented during the next 4 years, at least if the American dollar can stay the course. By then it'll be 16 years of printing money and borrowing.
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Really with Carter it was all about failed Iranian hostage rescue and to some extent the economy.
The popular memory is that Carter was destroyed at the polls, but he really wasn't. The popular vote margin was like 8 million votes out of nearly 80 million votes cast. And that was with Independent candidate Anderson bringing in nearly 6 million votes, and I would almost guarantee you most of those votes would have gone to the Democrats as Anderson was much more moderate than Reagan. Plus on top of all that
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Being a good leader is a different skill set than being a good engineer or scientist or any other profession really. Most politicians are lawyers by education. Lawyers are just as highly educated as any other credentialed profession like engineers and doctors, they are just educated in different things.
One of the key skills a leader needs is the ability to take counsel from subject matter experts, way the information and then make informed but difficult decisions. This requires the ability to have enough sa
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Re: Wait, isn't Musk an MBA? (Score:2)
Re: Wait, isn't Musk an MBA? (Score:5, Interesting)
And with all the nepotist shit that usually goes on in such regimes you can't even be sure if those who call the shots actually possess those qualifications and don't just have phony ones.
I say that as someone who experienced the neo-Stalinist dictatorship in Romania during the 80's. There the "parents of the nation" awarded themselves various scientific degree and titles. Dissertations and papers that were written by other people, but attributed to them.
Re:Wait, isn't Musk an MBA? (Score:5, Informative)
Hell, in Germany the Chancellor (head of government) has a Ph.D in Physics.
She also barely worked in the field and has been a career politician for almost her entire adult life.
And sadly, it used to be that German companies are run by people who care and know their shit. That was the past. By now, most of the top-level management has been replaced by McKinsey and co, by consultants and MBAs. And it shows. Dieselgate, the VW manipulation software? Could only happen with people who try to "massage" the numbers and think that's all there is to running a company.
There are still good companies run by good people in my home country, but they are mostly the middle-sized companies. The big and famous ones have been taken over by PHBs.
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Herbert Hoover was a mining engineer and geologist. That didn't work out very well either.
Arguably he listened too much to the MBAs of the day but he still messed up.
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Engineers as CEOs can be a problem also, and you can spot various companies in the past that really took off once the engineer founder stepped down and someone took over that understood business. Remember "business" is not just numbers and spreadsheets, it also means understanding the product, understanding the customers, and understanding how you get from one to the other. An MBA show focuses on the low level number side of thing is just as bad as an engineer that focuses on how to build a product in a c
Re:Wait, isn't Musk an MBA? (Score:5, Informative)
It's not as popular as Business Administration, because you have to do some very complicated math that'll have you solve worse things than quadratic equations, but these people acquire the skills to form a bridge between business administration and the world of engineering.
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There's a reason that Jobs was the head of Apple and not Wozniak and why the two together managed something much better than either could have done solo.
Well Jobs was hardly an MBA.. he was more of a free thinking hippy with a very strong opinion. And he had a good vision for what is a good product.
But he was also kind of bad at business once the company got huge and was unable to handle things after the Apple II success. Years and years of other projects made him experienced. So when he was older and wiser he actually became a very good CEO for Apple (in the iPod era).
Jobs earned his chops by failing over and over again.. until he no longer failed but actu
MBAs do *not* only understand business ... (Score:5, Interesting)
The US has been dominated by MBA's for decades, with many pointing out that it's dangerous because MBA's understand only business and not the substance of the company.
That is a myth, a false one. About 1/3 of MBAs come from scientific and engineering backgrounds. They started their MBAs as scientists and engineers and they finished their MBAs as scientists and engineers. An MBA is not like other Master's degrees, it is not a deep dive into anything. Rather it is a survey of many things. It does not change your field of expertise, whatever that may be. The purpose of an MBA is to make someone familiar with all the different parts of a large organization, to allow them to see things from that perspective, to better represent and advocate their particular field of expertise to these other parts. In others words to make the scientist or engineer more persuasive when dealing with accounting or strategy or operations, etc.
... they tend not to appreciate the fundamentals of the business - they view all businesses as spreadsheets to optimize to maximize ROI, ignoring the actual goal of the company which is to do something of value to customers and society.
That is an absolutely *false* statement. MBAs are taught precisely otherwise. They *are* taught to get out of their office and go to the factory floor and learn what is really going on from line supervisors and workers. They *are* taught the necessity of understanding the company's product or service, their customers. They *are* taught to deliver value to customers and society. At least they have been in recent decades. Maybe they were taught to be strict bean counters in the 1950s but such an approach has been debunked by business schools and taught to be a foolish practice in more recent decades.
So why do we have so many pointy haired boss (PHB) problems? For the exact same reason we have so much bad software. People were taught how to do things correctly in school but they do otherwise once they graduate.
By the way, Dilbert cartoons are as beloved among MBAs as they are among engineers. For the exact same reasons. Yet some MBA and some engineers promoted into management turn in PHBs.
Both are needed - I wish I worked with an MBA (Score:5, Interesting)
I've largely failed at running two different companies that had amazing products. They were run by somebody who was a great engineer, passionate about the products and serving customers, and apparently I suck at business.
Everyone who has seen my Clonebox product thought it was awesome. Way ahead of it's time. The company closed because I didn't watch my numbers and do the things that the numbers were telling me were necessary.
Somebody pointed out that Apple was Steve Jobs + Steve Wozniak. Great engineering, a great product, PLUS a great businessman. Come to think of it, Wozniak left Apple in 1985. It was the businessman, Steve Jobs, who ran the show and created the success, partly by hiring good engineers.
I really think you need both - you need a great product, and I needed someone to point out that the marketing budget was 99% less than it should have been. People don't buy a great product if they never hear about it.
Failing to get the MBA things right cost me millions of dollars.
I really, really could have used someone with that knowledge and skillset.
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Somebody pointed out that Apple was Steve Jobs + Steve Wozniak. Great engineering, a great product, PLUS a great businessman. Come to think of it, Wozniak left Apple in 1985. It was the businessman, Steve Jobs, who ran the show and created the success, partly by hiring good engineers.I really think you need both - you need a great product, and I needed someone to point out that the marketing budget was 99% less than it should have been. People don't buy a great product if they never hear about it.
This is why I recommend engineering students to get involved in entrepreneurial competitions. They beat this lesson into your heads, that you need to look at things from both sides. The National Science Foundation has a program to beat this lesson and other similar one's into the very think skulls of PhD level scientists and engineers.
Something to consider about Jobs. The Mac was a failure while he was at Apple. Wozniak's Apple II had to pick up the slack and carry the company on its own. There is a very
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The Mac was a failure while he was at Apple. Wozniak's Apple II had to pick up the slack and carry the company on its own.
You are mixing up the timeframes quite a bit.
The Mac was a decade after the Apple ][
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The Mac was a failure while he was at Apple. Wozniak's Apple II had to pick up the slack and carry the company on its own. You are mixing up the timeframes quite a bit. The Mac was a decade after the Apple ][
No, I am not. The Apple II was still being sold, especially into education, and was basically paying the bills. The Mac would not become profitable until after Jobs' ouster. The Apple II was certainly not the focus of the marketing and press, it was probably overly deemphasized, but it was selling and highly profitable unlike the Mac.
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No it wasn't, the last Apple, the IIGS, had a ported Mac toolkit and looked like a colour Mac in the time when Jobs was saying how users didn't need colour, or expansion.
Look at the timeline, https://en.wikipedia.org/wiki/... [wikipedia.org]
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MBAs are great in specific roles, and having a few is very important. They key is that they should not be running the show.
You do realize many MBA have technical backgrounds? Should an EE+MBA not be eligible to run an electronics company, a ME+MBA an auto company, an AE+MBA an aerospace company?
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People [with] scientific skill (engineers) must be a pre-requisite to run a company of any sophistication.
Yes, in the sense that the CEO should have a deep understanding of the product or service being offered. That however does not necessarily mean they are scientists or engineers themselves. Consider an aerospace company. Someone graduates with a business degree and gets an entry level management position on a component's production line. There they develop a detailed understanding of the operations involved in the production of a manned spaceflight rated component or subsystem. Does that not count? Knowing h
Re: Both are needed - I wish I worked with an MBA (Score:3)
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Mr Jobs was a business man who famously did not have an MBA.
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Mr Jobs was a business man who famously did not have an MBA.
1. First slide in the entrepreneurship class: "You are NOT a unicorn".
2. Jobs had a Wozniak.
3. When Jobs had control over the Mac project it failed. It never made a profit under Jobs' leadership, the Apple II had to pay the bills at Apple.
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I really, really could have used someone with that knowledge and skillset.
Been there, done that. I've got a failed company somewhere in my sideboard for that same reason. The product was excellent (everyone said so) and I had no idea how to reach my market and make it work business-wise.
But that's what you say: We both needed someone to work for us, not someone to run the show.
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The mistake is to put them at the top, without adult supervision by people who understand where the value of the company comes from. MBAs fulfil an important function, like janitors and watchmen, but they are poor at leading companies.
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Example, in my company a group of engineers was able to build something new on their own which of course they enjoy, as we all do. It seemed interesting from a distance. However eventually it became clear that the value proposition wasn't fully crisp and well thought out.
Re:MBAs do *not* only understand business ... (Score:4, Interesting)
The US has been dominated by MBA's for decades, with many pointing out that it's dangerous because MBA's understand only business and not the substance of the company.
That is a myth, a false one. About 1/3 of MBAs come from scientific and engineering backgrounds. They started their MBAs as scientists and engineers and they finished their MBAs as scientists and engineers. An MBA is not like other Master's degrees, it is not a deep dive into anything. Rather it is a survey of many things. It does not change your field of expertise, whatever that may be. The purpose of an MBA is to make someone familiar with all the different parts of a large organization, to allow them to see things from that perspective, to better represent and advocate their particular field of expertise to these other parts. In others words to make the scientist or engineer more persuasive when dealing with accounting or strategy or operations, etc.
Can you provide some documentation or something because this is SOOO not reflected in my personal experience with people with MBA's and I would like to have more faith in the world than I do now. I've had a friend that was setting up a photo booth for a graduating class of a fairly well known business school in the US. When they were talking to him, they were all talking about what they planned to do after graduation. A lot of them said they're going to make a startup. And him, being curious, goes "Oh, that's great! A startup in what?" and their face just goes blank. "A startup." they replied. He insisted, "Right, in what? In tech? In biology? Do you plan to make your own products or start a kickstarter?" And their replied was " You know... a startup." That's also ignoring the actual MBA's I've talked to that often say things to the effect of "All business are pretty much the same for the most part." Which also ignores the CEO shuffle that goes on among the large companies in the US that, often do extremely different things, but will shunt CEO's from one into the other. Take the currently CEO and general as*hat, Bobby Kotick. He's a director at the Coca-Cola company as well as CEO of Activision-Blizzard. And that's after he had controlling ownership of 4Kids entertainment, which, I'm pretty sure, is how 4Kids managed to snatch defeat from the jaws of victory by having rights to some of the biggest anime franchise known to date and then f*cking it up royal and losing all of them almost at the exact same time. Due to, you guessed it, not understanding the anime culture nor it's American fanbase. Like, if not understanding the business and failing upward was personified, it would be Bobby Kotick. And that's before the Diablo Immortal debacle and the blitzchung debacle.
So why do we have so many pointy haired boss (PHB) problems? For the exact same reason we have so much bad software. People were taught how to do things correctly in school but they do otherwise once they graduate.
I'd have to disagree with you on the bad software part. I've met a lot of programmers that were taught badly in college and just continued that practice. I've had some professors that were bad programmers and I've had to just ignore their entire class. How do I know they were the bad programmers and I wasn't? Most of example code, which they run to show us examples, couldn't run or compile due to bad syntax or bugs. Some of them provided basics of a program we had to add to that, you guessed it, had bugs that we all (students in that class) had to fix before we could finish that assignment. One professor that was the advisor to the masters program, constantly talked about how programmer he was. He's infamous among students and professors for this. When you look at his code, at lot of it were spaghetti'ified into one long, nearly unreadable, certain un-debuggable to him, line. We know because we saw him try to troubleshoot his own code in class. It came down to that line and, rather than fixing it, he gave up, in front of the class.
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Can you provide some documentation or something because this is SOOO not reflected in my personal experience with people with MBA's and I would like to have more faith in the world than I do now.
In 2005 at my MBA program's orientation we were told that we were about 1/3 scientists and engineers, 1/3 management and operations, and about 20% accounting and finance; and that this was in line with national numbers. It was then explained that we would be assigned to small (5-6 person) teams for group projects in the various core classes, that you would have the same team for the next two years. That they were assigning members so that every team had members from the previously mentioned groups; that suc
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Fortunately he has several long serving engineers who spent decades at Blizzard under Morhaime and who have also earned MBAs. So they should be able to effectively communicate technical and cultural issues to him. ;-)
https://www.washingtonpost.com... [washingtonpost.com] A lot of those long serving engineers had complained about what was going on at Blizzard. Things changing, upper management not listening to them. Promises to them not being kept, etc. It kind of all culminated during the Blitzchung thing. A lot of them left. I'm not saying this as any sort of argument or proof. Just wanted to inform you in case you were unaware.
Re:MBAs do *not* only understand business ... (Score:4, Interesting)
Hi, Technical Subject Matter Expert, with an MBA here
By the time the dot.com crash came along, I had become a project manager at the datacenter arm of a global telecom, despite having no college degree, but decades of experience with Unix administration, Oracle DBA/Dev, and GIS usage...
As the crash induced job-hopping, I decided that I should go get a college degree and, after completing a technical bachelors, I enrolled into an MBA program
I learned a lot because, as a technical jock I really never had to worry about budgets, and in the case of many projects actual cost was kind of an after thought (I shit you not), but the MBA program taught me to question every cost and find some suitable to means to manage that cost.
Outsourcing, nearshoring, offshoring, etc... were featured in just about every class and I entered into many aggressive debates since I had actually been working with these situations over the past decade, and could tick through the inherent problems of each, and the VALUE of retaining internal talent.
Eliminating financial burdens such as long-term employees, with large overhead costs like years of accrued time-off, pensions and wages above the midpoint, was enabled by a perceived torrent of cheap replacements.
So, yeah, it is a mixed bag. Great for running a profitable business, piss-poor for maintaining workforce or technical supremacy.
just my 2 bits
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I think a lot of what's changed over time is the business world no longer thinks in terms of creating long-term value, it's all about maximizing short term revenue and cash flow. Long term employees are valuable in a long-horizon enterprise, they're a liability if you're just looking to skim the maximum amount of cash in a short amount of time.
I kind of blame Michael Milkin for this -- he kind of showed the world how to look at enterprises as being something you could strip the valuable assets out of for s
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So you want to extend the success of the few that do have real degrees to somehow give credibility to the MBAs? MBA is a worthless degree in itself. You can take an engineer and turn him into a business leader with or without any MBA training.
You don't seem to understand what an MBA is. It is not about bean counting. It is about understanding all the pieces of a big machine. So that you in your occupational specialty can better communicate with and be more persuasive with other specialties, plus learning something about leadership. Regard learning the same stuff elsewhere, let me offer an analogy that should be insightful:
"Those who don't understand Unix are condemned to reinvent it, poorly."
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Had to work on a camera in an executive meeting room at an important local company one time, and while I sat around waiting for a very long meeting to break up leafed through the magazines in the waiting area. Things like (not making this up) 'CEO Magazine' and 'American Executive', mostly made up of interviews with various C-level executives and advertising for Rolexes and such. The common strain through all of it was that they provided "leadership" and "inspiration", most of them seemed to truly believe
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Imagine being the guy in the conference room who had to explain how percentages work and what 5-nines meant, to the marketing executives for a datacenter, and why they should not be selling that to customers for entire application stacks.
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Imagine being the guy in the conference room who had to explain how percentages work and what 5-nines meant, to the marketing executives for a datacenter, and why they should not be selling that to customers for entire application stacks.
My marketing professor had a degree in Electrical Engineering. The current dean of the business school started out as a mechanical engineer. Each was eventually promoted into management, got an MBA, eventually decided to teach. Be careful about assuming what folks in marketing know or don't know.
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My experience from Europe is different - we have many people with business degrees in leadership positions. I was very surprised when I came to the Silicon Valley that pretty much every VP (except for sales) and every head of a BU had technical background.
Re:Wait, isn't Musk an MBA? (Score:4, Informative)
He does not have an MBA.
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What makes you think he's only realizing it now, just because someone put it in a headline?
What in the way he has managed his companies makes it seem like MBA style decision making was ever welcome?
Re:Wait, isn't Musk an MBA? (Score:5, Informative)
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Yup. It's like when he said 'manufacturing is hard' after all the problems trying to ramp up their Tesla factory. Anyone who has worked on a physical product could tell you that. But when Elon says it the wall street media make him out like he is the first person to ever discover this.
To be honest though, I appreciate the fact that Elon recognises that dealing with BS media and finance idiots is part of life if you want to achieve anything, and plays the role. I wouldn't 'have the patience to do it myself.
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MBAs are useful in companies, if they're placed where they are supposed to be. You want upper managers to be MBAs or at least have similar skills if not the dime-a-dozen degrees. The problem comes when running the company from the top this way, or having lower tier managers running a team this way. Somewhere along the way though the promotion path to the executive level has started mandating MBAs. And for a long time the MBA was considered to be a must-have item for anyone looking to be in management at
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CEOs and other executives should at least know what the frack their employees do, and most of them today don't. They came out of schools with their shiny new diploma and six figures of debt, never having worked at an actual job for a day of their life, and set out to manage what they don't understand. Once upon a time the CEO of Target had started on the sales floor, he had an idea what people at the various levels under him did. The guy today has only worked in management, and the decisions coming down
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Musk himself is only realizing it now this late in the game because finally he's seeing them starting to even ruin stuff for other MBAs, like himself.
You don't know that. He didn't say that he just noticed this. It's likely he didn't say it sooner because he didn't want to piss people off that he needed on his side. Maybe it just hadn't really come up before. Who knows.
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Well, he's not wrong on this one. I'm just bitter because every time he echoes something I've said for years, they treat it like a stroke of pure genius, when it's really just common sense. MBA's have ruined everything for everyone not an MBA, and Musk himself is only realizing it now this late in the game because finally he's seeing them starting to even ruin stuff for other MBAs, like himself.
Yeah it's not an uncommon observation. Along with too many lawyers.
I've often though when I see someone smirking over what they consider "useless degrees" like theater, art, literature, even women's studies and such, that I'd much rather see people getting those degrees than turn out yet another MBA or lawyer.
Re: Wait, isn't Musk an MBA? (Score:2)
Rousing speech (Score:2)
If this were a movie, you'd see Musk strapping himself into the next Starship prototype to go up (in the air).
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Kudos (Score:2)
I completely agree (Score:3)
Managers need some real insights into whatever they are managing. MBAs can, with very rare exceptions, only count beans. That is excellent for short-term profits, but medium and long-term it is the road to hell.
This is not a new or deep insight. But it is important to make it widely known and Musk saying it is excellent for that.
Musk moving TSLA from CA to TX is MBA thinking (Score:5, Insightful)
Clearly the move is to minimize taxes and maximize profit.
1) Invent in California
2) Move to Texas
3) Profit!!!
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Uh...Tesla is moving to Texas? How?
Giga Texas. [wikipedia.org] Musk has also moved personally. [bbc.com]
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OTOH, California has over and over turned Tesla and SX into their Whipping boy and not think about WHO it is they are whipping.
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Apparently the original plan was for a factory in New Mexico.
They went for the California location because they could get floor space and equipment from the previous owners for pennies on the dollar at a time they were strapped for cash and needed room to grow.
So ironically the negative business environment people ascribe to California, which contributed to the site's closure by the previous owners ended up being a positive for Tesla, at least in the short term.
Wow, what a genius (Score:5, Funny)
MBAs are like Comp Sci grads ... (Score:5, Insightful)
Musk urged CEOs to "get out there on the goddamn front line and show them that you care, and that you're not just in some plush office somewhere."
Funny, that is what business school's teach MBAs to do.
Musk is perpetuating a bit of a myth, that MBAs are all about accounting and the numbers. Its not true. An MBA is a weird degree, unlike other Master's degrees it is not a deep dive into anything, it is merely a survey of many things. The point is not to create a bean counter, the point is to expose a person to a little bit of accounting, a little bit of sales and marketing, a little bit of strategy, a little bit of operations, etc. It allows one to understand and communicate with people from all these areas.
About a third of MBAs are scientists and engineers. All their MBA program did was turn them into scientists and engineers that could understand the concerns of non-engineering non-scientific parts of the organization. To take these other people's concerns and translate them into something the engineers and scientists could understand, and to take the issues of the scientists and engineers and translate them into something these other people could understand. To be a more effective and persuasive advocate for the scientific and engineering concerns.
Yes some of those PowerPoints and spreadsheets were coming from MBAs. But many of those useful and productive conversations on the factory floor probably involved MBAs too. The former the accountant who got an MBA, the latter the engineer who got an MBA.
Again, going to the factory floor and talking to line supervisors and actual workers is something MBAs are told to do. That you cannot just sit in your office and only look at info filtered through many layers.
MBAs are like Computer Science grads. They were taught how to do things properly but many do otherwise and take short cuts and create their respective bad plans and bad software.
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About a third of MBAs are scientists and engineers.
Two thirds of them are not. Moreover, "Business Administration" is the number one degree in the US at 19% of all degrees.
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About a third of MBAs are scientists and engineers.
Two thirds of them are not. Moreover, "Business Administration" is the number one degree in the US at 19% of all degrees.
And of that remaining two thirds the majority are *not* from accounting nor from finance. Typically only 20-something percent of MBAs are coming from accounting or finance.
BA is not accounting specific either (Score:3)
"Business Administration" is the number one degree in the US at 19% of all degrees.
Which is not an MBA. A BA gets you an entry level management position, probably one on or near the factory floor far away from the "decision makers". A BA is also not an accounting specific course of study. People from this sort of hands on / operational background also represent about a third of MBA candidates, like those from scientific or engineering backgrounds. Those coming from an accounting or finance backgrounds represent only about 20-something percent.
Re:MBAs are like Comp Sci grads ... (Score:5, Interesting)
There a great book on the subject, “Managers not MBAs” by Mintzberg. It points out the shortcomings of MBA programmes in teaching mostly analysis, leaving out strategy and actual management. He did cite a few MBAs that did get it right, such as INSEAD. MBAs have changed a bit since the book was published, but much of the criticism remains valid.
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That’s actually a fairly new way to teach MBAs, until recently it really was all about management-by-numbers.
I have first hand knowledge from about 2005, a friend from the late 1990s. I couldn't say about the 1980s. I'm sure there is some variance among schools, my friend and I came out of the University of California system. The business case studies we were reading were from Harvard.
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The life cycle of a "successful" company, greatly simplified:
1. Mom and Pop shop / start up
2. Move out of the garage into a legit store front
3. Open up a couple additional locations, have employees with
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Activist investors, in my opinion, are often what drive the decisions.
It happens long before going public. Once you are dependent upon investor money you are out of control. Operate in a manner that the investor(s) does not approve of and you are likely to be replaced as CEO.
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to teach business understanding for people who already are engrossed in whatever they do (science, engineering, development, even politics)
Nicely and concisely put. That is literally what it is for.
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How can you give credit to MBAs if the only worth you defend it for depends on a real degree firstly? MBA is a worthless degree in itself. You can take an engineer and turn him into a business leader with or without any MBA training.
You don't seem to understand what an MBA is. It is not about bean counting. It is about understanding all the pieces of a big machine. So that you in your occupational specialty can better communicate with and be more persuasive with other specialties, plus learning something about leadership. Regard learning the same stuff elsewhere, let me offer an analogy that should be insightful:
"Those who don't understand Unix are condemned to reinvent it, poorly."
Story (Score:2)
We need MBAs (shudder) because you go out of business if you can't / don't make a profit. But there's also a point of diminishing returns; profit is more than money.
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My dad and uncles worked with UAW guys who got their heads cracked by Ford's thugs when they came in to break up unionization meetings. There were damn good reasons why the unions were brought in, including jobs that would leave a guy disabled from repetitive motion injuries in under a year. Since it was cheaper to hire a new employee than adjust the assembly line those jobs didn't change until the Union made them change.
Ford was an admirer of Hitler's anti-union stand, and funded Naz1 publications until
Ya think? (Score:5, Interesting)
Then, the layoffs hit. The first round was, yeah, those folks were deadwood. The second round was "really?". The third round was we made something like 40% profit, but that wasn't enough for Wall Street as we were seen as a growth company. I made it to, I think, the 6th round. This was all within 2 years. The company was profitable, just not profitable enough.
Fast forward to 2000. I was working for a company that was making about 30%. profit. They wanted to IPO cuz, hey, it was when IPOs were hot. But making 30% wasn't good enough so, layoffs. I had been interviewing at another company and went to my boss, saying "I'm leaving anyway, lay me off". He did, and a week later I started my new job.
Lets go past human capital. Remember when you would buy something and it would last for years? Those days are gone. Now you buy something and are glad the hardware holds up for 3-4 years. Software? It kills your device in a few years. Personal Example? Plex. I bought a pi 3 in June '17 and got it running. About 2 weeks ago I got notice that if I didn't upgrade my server my Plex would go away. Keep in mind all I do with Plex is play the movies and music from my NAS. I don't use any of their special sauce. When I got Plex running on my Pi was was running something called Jessie? from some site dev2day? I don't remember. Anyway, plex officially supported the pi a couple years ago but I couldn't find any way to cleanly upgrade. Skip to today, plex doesn't work, my upgrade doesn't work, and google is of no use.
At least I still have hardware that will work if I can come up with the magical incantations. Look at all the hardware that quit working once the MBAs decided it wasn't worth supporting them anymore.
I'm not even going to delve into the MBAs that decided transferring all our manufacturing to other countries was A Smart Thing. The best assembly lines for clothes? Vietnam, S Korea. Best assembly lines for chips? Taiwan, China.Best assembly lines for basic stuff, even if they may poison your pets? China. Best assembly line for sucking money out of a local government? Foxconn. .
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Pandering to Wall St (Score:2)
I used to work for a big Californian smartphone chip maker and every quarter we'd have division execs give the employees a state of the nation presentation. It was clear that they never adjusted their slides or speaking points from what they had just told investors on the earnings call. There was no understanding that the audience had changed and that employees cared about completely different things. They didn't even try and were often shocked by the venomous questions in the Q&A sessions (there's noth
MBAs running railroad companies (Score:5, Funny)
He pored over the charts, numbers, ran through spreadsheets and saw a stunning inefficiency that no one had seen before. His spreadsheet showed that all the rolling stock of the company lined up end to end stretched for just 5 miles, yet the company owned 500 miles of track. The track usage efficiency is 1% at best, 99% useless.
He tore up the tracks and sold them for scrap, sold 250 mile by quarter mile right of way between Pittsburgh and Cincinnati. Showed 2000% increase in cash at hand, 25000% increase in revenue, stock went up 1600%, cashed out all his stock options and bonuses.
Elon Musk could not beat that guy's record for stock price increase, so he got jealous and maligned all MBAs.
Yup (Score:2)
Fact is, that American MBAs are total DISASTERS to America.
Been saying that since last century! (Score:2)
MBAs can help, but should not run the show.
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Not wrong at all (Score:2)
Managerialism (Score:3)
The too-many MBA problem seems like part of the larger and longer-term trend characterized by James Burnam in his 1941 book, The Managerial Revolution.
Wikipedia summarizes [wikipedia.org] its central thesis.
Burnham argued that in the short period since the First World War, a new society had emerged in which a social group or class of "managers" had waged a "drive for social dominance, for power and privilege, for the position of ruling class."For at least the previous decade, there had grown in America the idea of a "separation of ownership and control" of the modern corporation, notably expounded in The Modern Corporation and Private Property by Berle and Means. Burnham expanded this concept, arguing that whether ownership was corporate and private or statist and governmental, the essential demarcation between the ruling elite (executives and managers backed by bureaucrats and functionaries) and the mass of society was not ownership so much as control of the means of production.
The growth of managerialism is closely tied to the advance of credentialism, a reliance on credentials rather than ability as the measure professional merit.
Ironically, one of the clearest expressions of the opposing mindset originated at the University of Chicago school of business, which its faculty in the post-war era praised a place where, "No matter who you were, you were only as good as your last argument."
On a personal note, the most worthless incompetent I have ever encountered in my professional career was a Harvard MBA. Maybe the problem with MBAs is not their number, but popular overestimation of the worth in that credential.
short terms gain (Score:3)
The MBAs are there because the market expects and rewards short term gains. MBAs helped unlock more short term gain. Target the problem not the symptom.
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Thanks (Score:2)
I've said this on slashdot a million times. Proving that if Elon does browse slashdot, he never gets mod points.
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In case people didn't believe me .. the most recent time I said it was last month: https://slashdot.org/comments.... [slashdot.org]
Objection, projection! (Score:2)
Just because he sat in too many meetings and looked at too many presentations doesn't automatically mean every CEO is terrible. I'm sorry to hear that he made this experience and we're all happy that he managed to move past it and got to where he is now. But if all these terrible CEOs are so terrible, then how come they got to be CEOs?
It cannot just be the fault of others and those more successful than oneself. They must have done something right, and keep doing right, or they wouldn't be CEOs. So what is i
not just the USA (Score:2)
It isn't just the USA.
I started my career working for two companies run by CEOs who cared about the company and what it did first. Ever since, I increasingly run into CEOs whose entire focus is on business numbers. Revenue, EBITDA, turnover, profit margins, the lot. They are so lost in their world of numbers that they don't even realize that other people's job ISN'T to worry about their little numbers. Their entire thinking revolves around KPIs and balance sheets.
It's disgusting, to be honest. It used to be
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Successful small companies care about creating new quality products to customers. They are agile and adjust rapidly to an ever changing landscape.
Big companies are about repeating some formula that is actually long lost, but they think it's still there. People are more concerned about protecting their jobs than doing anything new. They are slow and never adapt.
That is why big companies often find it easier to buy up small companies (and ruin them).
Comment removed (Score:3)
Re:load of crap (Score:5, Funny)
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Read this interesting interview by Steve Jobs from 95 [businessinsider.com].
Basically tech people and engineers get the company up and running by inventing new things and adding game-changing features. But once the company has a hold of its market, the only people who get promoted are those who can bring in more sales and growth: Salesmen, marketers, MBAs...
In time, the company loses its edge as the decision makers and the people on the helm arent engineers and technicians who know their products and ask "How can we make them be
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Not so long ago x86 was the cheap low performance offering, while the other architectures were way ahead. They only fell behind because their either focused on low power (arm, mips), had development stopped (alpha, parisc, sparc) or reduced to virtually nothing (power).
ARM is doing what x86 did, focus on the low end and achieve sufficient volume that you can fund R&D.
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