
MBAs as CEOs - allengeorge
http://www.mintzberg.org/blog/mbas-as-ceos
======
alphonsegaston
I think it's more useful to think of MBAs as ordination into something like
the Jesuits of American Corporatism.

Late Capitalism in the US has evolved in such an obviously unequal and
environmentally dangerous way that the only recourse we have is to a kind of
"mystical" rhetoric. In this kind of system, being some kind of guru is just
as important, if not more, than one's actual business acumen. Hence all the
TED talks, CEO aphorisms, and hollow simulations of benevolence.

In this context, an MBA takes the form of acceptance into this quasi-religious
order. It's either a readymade set of sacraments and oaths one can apply to
any business to achieve magical effects. Or it's a kind of born-again
incorporation, where people who have achieved something outside this system
can be integrated back inside (why you see already successful business people
going back to pursue these credentials).

~~~
aaron-lebo
That's spot on and incredibly unsettling.

I come from a conservative religious background and I'm genuinely creeped out
by the mythologies that surround companies. I think there are a ton of
parallels between today's business leaders and megachurch pastors. There's
similarities in the way they build brands, the way followers reverently speak
of them, assume they do no wrong, are willing to defend them, and the
cognitive dissonance used to justify what they are doing.

I assume they must be following a shared playbook, but I don't know who
borrowed from what.

~~~
alphonsegaston
Look into Amway - that's where a lot of this ideology was first cultivated.
They literally took American Christianity, substituted an ambiguous notion of
"business" with God, and pyramid schemed their way to immense wealth and
political power. They also pioneered selling business sermons (in the form of
cassette tape sets) long before this whole social media deluge of similar
nonsense.

~~~
cholantesh
I was nearly bamboozled by their successor Quixtar while in university.
Luckily I was able to smell the scam when I went to one of their sessions.
Very vague and very pushy about us buying into a scheme before we could learn
how it worked.

~~~
alphonsegaston
Glad you were able to dodge that one. They've ruined a lot of lives and
families in the Midwest, where, incredibly, they still are treated as a
legitimate business.

~~~
cholantesh
My understanding is that, as a multi-level marketing scheme, they are doing
enough to be considered a legal entity as opposed to a pyramid scheme (which
is what they are).

------
simonsarris
I know its popular to hate on Peter Thiel here but I think he's been right
about this cohort for a long time, and that its not really surprising.
Emphasis mine:

> I think one challenge a lot of the business schools have is they end up
> attracting students who are very extroverted and have very low conviction,
> and they put them in this hot house environment for a few years — at the end
> of which, a large number of people go into whatever was the _last_ trendy
> thing to do. They’ve done studies at Harvard Business School where they’ve
> found that the largest cohort always went into the wrong field. So in 1989,
> they all went to work for Michael Milken, a year or two before he went to
> jail. They were never interested in Silicon Valley except for 1999, 2000.
> The last decade their interest was housing and private equity.

> So there is something about the way in which business school is decoupled
> from anything really substantive that I’d want to rethink.

From this article: [https://www.washingtonpost.com/news/on-
leadership/wp/2014/10...](https://www.washingtonpost.com/news/on-
leadership/wp/2014/10/10/peter-thiel-on-what-works-at-work/) (but I heard him
express this in a talk on Youtube that I can't find, and not in that article.)

There seems to be something that's almost by definition _generic_ about MBA
types that's built in to the network of people (paraphrasing Thiel and others,
who decides to go to business school, unless they simply have no other ideas
and its the "thing to do"?) or the education itself. They are probably still
excellent for lots of businesses, but they may be the businesses that Warren
buffet calls "a business that's doing so well an idiot could run it." They may
not be businesses that need to pivot in any meaningful way.

~~~
bmpafa
I have an MBA from one of the top 3 programs, and I see a lot of evidence to
support this, but I disagree that it's a lack of conviction.

I came from a diff't background than most of my classmates, but the sense I
got was that, for a lot of them, life was a series of clearly defined
competitions & steps. I took to calling it the Gilded Pipeline, but in
general, it was ivy undergrad -> banking/consulting -> private equity -> MBA
-> ???.

The '???' triggered a surprising # of identity crises. A lot of people felt
they'd had a clear way ahead their entire lives, and now there was no clear
goal in the horizon.

Most of them had strong convictions--from community work to personal beliefs
to long-term goals--at least as strong as the general pop., I'd argue. But
give anyone $100k of student debt & the promise of exit options galore, and
I'd wager most would take the 'last big thing.'

~~~
overcast
diff't ??

~~~
c0achmcguirk
diff't = different

------
thegoldenchild
I'm aware that HN is a pro-engineering, anti-MBA group of folks, but hopefully
my perspective helps add a bit of color from the other side.

I got a BS and MS in Computer Science and ended up working as a software
engineer for a number of years. After a while, I was left wanting more, so I
enrolled in an MBA program. IMO, 50-60% of classes in business school are
fluff leadership rah-rah self-development bullshit. But the other 40% is
valuable.

Why? Because Sundar Pichai isn't losing sleep at night over which tech stack
the Gmail team is using. Satya Nadella doesn't give a fuck about a 5% latency
reduction on the Bing landing page. The higher you climb in the ladder, the
more you focus on non-technical topics like scaling, budgeting, revenue
growth, recruiting, etc etc etc.

In the bubble of Silicon Valley, it's easy to generalize every incompetent MBA
you meet into a group that you classify as being useless in an organization.
Just remember: a handful of tech CEOs have MBAs. HBS will always produce
leaders, regardless of whether or not they succeed once they're in the CEO
role. McKinsey churns out more CEOs than any other company in human history.
The business skill set may seem trivial, but playing the political game
usually gets your further than raw skill alone.

~~~
mdorazio
Of the "valuable" set of classes, what % would you have only been able to
attend/learn from in an MBA program? I was accepted to several top MBA
programs and decided not to go for a variety of reasons, including that
virtually all of the classwork was things I had already learned or could
easily learn via online coursework or community college without spending a
quarter of a million dollars.

~~~
thegoldenchild
There's nothing stopping you from learning everything on your own. BUT you
miss out on the MBA network. When you're forced to spend 2 years with a cohort
of 75-100 people, you develop a close-knit bond when you spend most of your
time eating, drinking, studying (and sometimes sleeping) with these people. If
I want a job at a company that one of my MBA classmates works at, an interview
is literally one phone call away.

~~~
tensor
I realize the network effect is positive for you, but I think it's negative
for the world at large. One would hope that hires would be merit based, not
simply that your are friends in the MBA club.

~~~
deong
It doesn't have to be binary there. It can be merit-based _and_ heavily
dependent on having friends in the club. And that's not a special property of
the MBA folks. That is to say, you might be good enough to be a lead engineer
at Google, and they're not going to give you that job if you aren't, but it's
still a whole lot easier to put yourself into the position of being able to do
that if people in your network work at Google. MBAs are no different. You
don't get to be a VP of finance because you used to do bong hits with the CEO,
but if you're someone who is able to do the job of VP of finance (and can
convince people of that), then that connection to the CEO is hugely valuable.

------
ziszis
Google CEO Sundar Pichai has an MBA. Microsoft CEO Satya Nadella has an MBA.
AWS CEO Andrew Jassy has an MBA, etc.

It is easy to undervalue marketing, sales, financial and other non-technical
skills. There are definitely terrible MBAs, but also amazing ones.

~~~
aviraldg
But they have that in addition to an engineering degree.

~~~
ziszis
No True Scotsman? [0] What is Andy Jassy's engineering degree? What is Sheryl
Sandberg's engineering degree?

The reality is that people aren't one-dimensional. If you have overly simple
rules: no MBAs, must have University degree, must have Ivy league, Uber people
are unethical etc, you make worse decisions.

[0]
[https://en.wikipedia.org/wiki/No_true_Scotsman](https://en.wikipedia.org/wiki/No_true_Scotsman)

~~~
benchaney
"No True Scotsman?"

Nope.

------
rdtsc
Company I worked for had an explicit policy to never hire MBAs. We had people
from all walks of life but no MBAs. The reason is owners have worked in a
large company under clueless MBAs who were neither good managers nor good
engineers, and just repeated the latest corporate-speak buzzwords over and
over, while drawing sizable salaries.

~~~
basseq
This seems like throwing the baby out with the bathwater. "I worked with some
bad MBAs, so anyone who holds that degree must be bad."

~~~
Retric
MBA's add other MBA's so having zero tends to be the better choice than
looking for the 'good ones.' Remember, a primary focus of MBA programs is
getting to positions of power, so they are great at self marketing.

Further, if the market says X is valuable and you think it's useless then you
are better off saving money by avoiding the price premium.

~~~
basseq

      Remember, a primary focus on MBA's is getting to 
      positions of power...
    

Now you're projecting! For every power-hungry poorly-managing CEO-wannabe MBA,
there's someone who just wants to know how to administer a business well. A
MBA is _a_ (but certainly not _the_ or _the only_ ) path to accomplishing
that.

~~~
Retric
Don't get defensive.

 _a_ primary focus != only focus. But, networking for example is a large part
of how MBA programs are setup.

PS: Probably should have explicitly used MBA programs not MBA's for the place
you quoted, but it's also a large motivator for many people getting an MBA.

~~~
basseq
I don't have a MBA, so not much to get defensive about here. And I see what
you're saying: yes, networking is a MAJOR part of a MBA. Morso than other
programs. I don't think that translates to unmitigated desire for "power" so
much as a desire to succeed and learn from well-connected peers. In which
case, any well-regarded graduate or undergraduate program would have a similar
benefit.

------
Mitchhhs
Startups is the new thing for MBAs, our research report showed that now close
to 10% of MBA classes go to work for startups and its beginning to eclipse
investment banking (might be a good time to be a banker :) ).

If you want to see the full report on these trends for MBAs going to startups,
including their average compensation, here it is:

[https://gallery.mailchimp.com/570b962c65552f112714db835/file...](https://gallery.mailchimp.com/570b962c65552f112714db835/files/7987f3c5-3ad9-41c6-aea9-a2b39259a1d6/MBA_Startup_Recruiting_Guide_TransparentCareer_1_.pdf)

~~~
Mitchhhs
Also if you're interested in checking out detailed MBA compensation across
roles check this out:

[https://app.transparentcareer.com/explore](https://app.transparentcareer.com/explore)

------
throws_away
MBA programs are definitely about networking. It's certainly not about the
quality of classes. Some time ago I worked at a top business school in the UK
and what I saw changed how I view b-schools.

At the place I worked at, students would need to take out a small mortgage
just to pay tuition. Yet, the quality of teaching was shockingly low on the
list of priorities of faculty. The administration was more concerned about
growing the program (i.e. revenues) than it was about maintaining quality of
teaching or research.

The big expenditure that I saw was to maintain and develop ties with the big
consultancies. The more students that could get lucrative consulting gigs
after graduation meant that the average salary of graduates was higher. This
in turn meant that the program received higher rankings from the FT... and so
more MBAs wanted to attend. In terms of research and teaching, I think the
main goal was to appear to be doing good work rather than to actually be doing
it. Keeping up appearances / being part of the club of top schools meant a lot
to everyone I met.

The research can be multi-disciplinary and I suppose that is good. However,
b-schools like to keep up the pretense that they are technocratic (or value
free). I saw a lack of any real research that could be considered critical of
the status quo. (In one case, a major project was funded by a major consulting
company. They also had a hand in the research to develop their own white
papers. It was a farce.)

In short, for academia it's a lucrative gig for all involved. Why be a poorly
paid sociologist when you can be a "strategy expert"? The trade-off is simply
that you don't ask some questions. In return you get a really, really nice
place to work, great perks (free food, drinks in the quad, fancy dinners,
etc.) I don't blame any individual for making that choice.

But I don't believe for a second that it's anything but a scam for most middle
class students who will carry that debt for years. I suppose it is no wonder
than MBA students are looking out for themselves when they graduate.

------
acalderaro
One question I asked that turned me off from pursuing an MBA was "what happens
when the MBA pool becomes as saturated as the <liberal arts degree> pool?"
What other degree can one get besides an MBA to demonstrate success at
business? How can one manage a social network that large at the minimum level
required to get referrals to jobs. What will happen to wages?

When I started thinking long term, I realized that people everything an MBA
teaches you can be learned online and through a few books. Excel modeling,
financial analysis, case studies, it's all readily available.

And I came to the unfortunate conclusion that one doesn't need an education to
teach you how to be a good manager. Good managers are competent in both the
technical skills required of their subordinates and also in the interpersonal
skills required to communicate and understand their subordinates. So the
question for me became how do I learn technical skills? And the solution was
to study technical fields.

We're at the start of a transition period, where companies no longer outsource
their leadership to individuals with alphabet soup after their name. As
innovation and expansion occur more rapidly, people left asking "is it better
to be the technical or the non-technical co-founder" will lose to technical
founders with a desire to lead.

~~~
nradov
In theory you can learn everything that an MBA program teaches through self
study. In practice it's tough to get more than a superficial understanding of
the subjects without actively participating in class discussions, working
together with other students on group projects, and taking exams to really
measure your knowledge. Autodidacts are often overconfident and missing key
knowledge because no one ever really challenged them.

The size of the MBA pool is somewhat self limiting because the coursework is
kind of a grind. None of it requires any real genius but there's a lot of it.

------
basseq
Is there a causation factor here? Meaning: are MBA CEOs hired by companies who
are in "trouble", or Boards who want to "achieve growth via acquisitions"
instead of more organic ways? In other words, does this reflect _companies who
are more likely to hire MBA-types as their CEOs_ rather than the individuals
themselves?

~~~
zach417
When you lack vision, you ask yourself, "How do I do great business?", which
is a question that never leads to the actual answer. It does, however, lead
you to hire people who are trained in the art of doing "great business": MBAs.

------
anjc
I wish that people who rail against MBAs, as if they're a cult that should be
demonised, would take 3 minutes to look at the classes and topics that you
cover in a typical programme.

You'll quickly see that they aren't programmes that you go into to exchange
business cards and smoke cigars, and go off to do a few fun team building
exercises and projects while casually reading Ries and Thiel and other pop-
business bullshit...they're generally _highly_ academic and _very_ difficult
to do well in.

An MBA is to business what Computer Science is to coding as a junior web dev.
You'll probably never use 90% of what you learn, but you'll get a high level
overview of several important fields which lots of important academics (e.g.
Mintzberg) have explored over the last century, and you'll be a better worker
for it.

~~~
tingbadimalo
"An MBA is to business what Computer Science is to coding as a junior web dev"

great analogy. I think the additional challenge is that coding has a clear
feedback loop. Management and business does not and therefore most people
remain 'junior web devs' and make mistakes throughout their careers.

------
acconrad
> _o Joseph Lampel and I studied the post-1990 records of all 19. How did they
> do? In a word, badly. A majority, 10, seemed clearly to have failed, meaning
> that their company went bankrupt, they were forced out of the CEO chair, a
> major merger backfired, and so on. The performance of another 4 we found to
> be questionable._

So 70% failed, 30% succeeded. Wasn't the average that 90% of businesses
(perhaps more specifically startups) fail within the first 3 years? So if
anything, wouldn't this show that Harvard MBA grads do _better_ than the
average CEO?

~~~
sacheendra
I think the 2 datapoints are different. More than 90% of startups fail, yes.
But, in the above scenario, these people ran established companies into the
ground.

------
fanzhang
Are bankruptcies the right metric to measure a CEO? For example, startup
founders as a cohort probably lead a lot more companies to bankruptcy (or
disbandment) than laundromat owners. Yet probably the average startup owner is
producing companies of higher value than laundromat owners (adjust for the
right startup cohort to prove this point, like YC startups).

Wouldn't you want to run a fair horserace like: \- Randomly select MBA CEOs
and non-MBA CEOs in a vintage year like 2000. \- See the average earnings
growth during their tenure, or stock price appreciation, or employee
satisfaction, etc.

He does cite two academic articles, but the first looks only at CEOs that have
been featured on the cover of magazines, and in neither studies are the output
variables the ultimate metrics that matter. (E.g. earnings management is fine
if there are enough other positive qualities to redeem the CEO -- like getting
long run growth for example).

------
tlb
I'm not a big fan of MBAs as CEOs, but I think the evidence in the article is
weak. There's never been a randomized study of installing different kinds of
CEOs, so all they can measure is what happens to the kind of companies that
hire MBAs fresh out of school as their new CEOs.

What kind of company offers the biggest pay package to an MBA fresh out of
school? Large ones where the board believes the company needs a major
turnaround. If they didn't have serious management failures, they'd promote
from within.

It's the same phenomenon as discovering that the most famous cardiologists
have the most patients dying.

------
pcurve
Below is the article in a nutshell. Conclusion is not vry satisfying.

"So why do they persist in promoting this education for management, which,
according to mounting evidence, produces so much mismanagement?

The answer is unfortunately obvious: with so many of their graduates getting
to the “top”, why change? But there is another answer that is also becoming
obvious: because at this top, too many of their graduates are corrupting the
economy.7"

------
awl130
This article requires further data to corroborate it's claim. For example,
there needs to be a delineation between companies run by founders and non-
founders. MBAs are almost never founders, they are hired. Therefore, their
analysis should control for founder-run companies. By the time you hire a MBA
as CEO, most of the growth has already occurred, the original management team
has left to cash out their equity, etc.

In fact, oftentimes, MBAs are hired to solve a major problem, usually of
growth. Why else would the founder leave? What founder leaves in the middle of
a growth spurt? Often it's when the founder has reached the limits of their
abilities that a MBA is called in.

------
HillaryBriss
George W. Bush is the only US president to have earned an MBA. He got it from
Harvard.

[https://en.wikipedia.org/wiki/George_W._Bush#Education](https://en.wikipedia.org/wiki/George_W._Bush#Education)

------
amorphid
I got an MBA. Going into the program, I was super excited about it. Coming
out, I was pretty frustrated. I felt like it gave me a lot to think about
without teaching me how to do any of it. I was not an master of administering
a business.

~~~
caminante
I don't think that's the purpose of the MBA -- i.e. to become trained for a
specific role (though I assume you had opportunities for internships.)

You're now (hopefully) more aware of how to structure decisions for a firm and
can leverage your awareness to get better results more efficiently.

~~~
amorphid
An MBA might have been better if a worked for a company that paid for it, and
wanted MBAs. I didn't follow that path. Live and learn...

~~~
caminante
Happens... Certain roles match well with "general" MBA learning experiences.
However, I see many fail by not specializing with their MBA experiences. Each
year something like 100K new MBAs join the workforce.

------
YZF
I'm probably going to misquote him but Amos Michelson who was the CEO of the
billion dollar company Creo, and a Stanford MBA, used to say that you can
teach someone intelligent the useful bits from the MBA program in a week. He
tried to get every Creo employee to know those useful bits so they can make
the best decisions for the company.

------
inputcoffee
The first study shows that MBA CEOs do poorly but there is no control. i.e. it
may just be the case that capitalism is competitive and that most companies do
poorly.

The second study which compares MBA v Non-MBA on the covers of magazines is
the more interesting study.

Firstly, 25% of the 444 CEOs had MBAs. I will assume that is statistically
significant.

There are three questions that I would ask:

1\. The difference was statistically significant, but what was the effect
size? If you've squeezed out a 0.01% significance at 95% confidence, then that
isn't impressive.

2\. Was the effect driven by one or two CEOs? If Steve Jobs, Bill Gates, Jeff
Bezos and Larry Page were in there, that alone may have accounted for the
difference.

3\. Is there another reason that magazine covers would lend themselves to a
difference?

------
marze
What can you say? They suck.

On the other hand, it might make a nice long term investment strategy, and
alternative to the S&P 500 index fund. Buy stock in 200 non-MBA led firms and
hold for 15 years.

~~~
Nicholas_C
Would be an interesting study to calculate the performance of companies share
price and compare based on the leadership's educational background.

------
Paul-ish
Is there any controlling for the the type of person that would go to these
schools? ie Is it the school or is it the person?

------
m23khan
All Fortune 500 CEO's either have MBAs or surround themselves with army of
smart MBAs.

Best we accept the value a person gets out of such a cut-throat, aggressive
top MBA school and embrace it - afterall, we IT folks are famous for embracing
all the advantages presented to us.

Disclaimer: I don't have a MBA nor do I plan on getting one.

------
contingencies
I am an experienced entrepreneur in that I have both run and been a part of a
few (mostly successful!) small businesses, one in which I was second-tier
management on the tech side (hiring, personal and team execution,
partnerships/integrations) sold for USD$48.5M. Another at which I was first
employee I just sold my shares in at a still higher valuation. Currently I am
running another, which I believe without a doubt will be the most successful
by a significant margin, as I have multiple offers for a large portion of that
capital on the table already.

I'm considering a well regarded MBA program (HKUST), in go-slow part time
mode. The (ex-KPMG) head of a VC firm interested in leading our subsequent
round encouraged me not to do it, suggesting it would take too much time and a
mentor would be superior, despite the schedule being essentially weekend-
oriented and specifically designed for people already in industry. I believe,
despite the VC's concerns, that it may be useful to me at this point in my
life, though maybe for different reasons than most.

1\. I've spent a lot of my career working remotely or as a fly-in short term
worker in different cultures (UK, US, Korea, etc.), or running my own
businesses in a foreign culture (China), I haven't been in the formal business
environment very much. While I have made successful VC presentations and been
part of critical meetings with all sectors, I do feel I can up my game in
terms of professionalism. Spending time amongst a motivated peer group from
industry with similar focus and goals will no doubt do wonders.

2\. By understanding the scope and depth of a leading MBA course (some of
which I will have already encountered) I can better grok others I encounter in
the business landscape in terms of their probable levels of education and
thinking on various issues.

3\. I dropped out of my undergraduate degree (though with excellent marks,
multiple scholarships, and glowing head-of-department references) so having
something formal and tertiary may make more of a difference later.

4\. Students reside on campus with an eastward morning view of the ocean in
Hong Kong, which will provide a nice sporadic (every two weekends) physical,
mental and social break from urban Shenzhen, where I am currently relocating
with my company [http://8-food.com/](http://8-food.com/) and family.

While I understand the VC's concern - "run the business! don't prepare to run
someone else's business later!", as well as harboring the same concerns
outlined below, and do have the Thiel quote on MBAs in my fortune database -
[https://github.com/globalcitizen/taoup](https://github.com/globalcitizen/taoup)
\- I am frankly leaning towards doing it anyway... if they'll take me. ;)

I'll let you know in a few years!

~~~
imron
Several years back I did a semester of the MBA program at Tsinghua University
as part of a (now discontinued) Australian government scholarship program.

One of my main takeaways from that experience was finding out that disciplines
such as marketing and sales had far more rigor than I previously realised.
Coming from a technical background it was easy to be dismissive of these
fields.

From that perspective, I think your point 2 is likely to be where you get the
most value.

I'd also add a point 5. the alumni network and all the networking advantages
that provides. At a top-tier program, your classmates will likely go on to be
movers and shakers in their industries, though it might take quite some time
to manifest.

~~~
contingencies
Sounds interesting... I had no idea Qinghua offered MBA courses to exchange
students. Re: rigor in other fields, I've already learned that lesson, but I
suspect you are right on both points.

------
aaronchall
> So why do they persist in promoting this education for management, which,
> according to mounting evidence, produces so much mismanagement?

> The answer is unfortunately obvious: with so many of their graduates getting
> to the “top”, why change? But there is another answer that is also becoming
> obvious: because at this top, too many of their graduates are corrupting the
> economy.

The MBA is a graduate degree that is the highest compensated of the Masters
degrees that you can get from business schools. Here's why I think that is:

How do you put together economics, finance, accounting, organizational
behavior, marketing, and operations, in a way that makes sense?

A lot of people have trouble thinking of these things both holistically and
distinctly.

The MBA is both a high-level overview of these subjects, and a sustained study
on putting them all together in an aligned way.

The degree says the owner has studied that specific body of knowledge
rigorously and at length. It does not mean the owner has studied each
component as in-depth as someone with a degree in any of these individual
subjects.

I have a generalist MBA myself. But I supplemented my studies with a lot of
time in the library studying books and journals on finance, statistics,
computer science, and management. I tried to lock down my learning by logging
each article and book, and I believe I had 400 items in my bibliographic
database when I graduated - I understand the rest of my cohort used the
bibliography tools built into Microsoft Word. I didn't get any networking
value from the degree - I got it from a half-decent state school in Florida -
most of my cohort was civil service, local accountants, and a couple of
engineers and housewives.

I used R for my statistics project. The rest of my cohort used Excel.

For the capstone project, a business competition, I tracked my competition in
spreadsheets for simple charting (every turn took about an hour of data input
manually from pdf) - I don't believe the rest of my cohort did anything of the
sort.

I was able to do a lot more than my cohort with the same education as my
cohort. The business school was accredited by the same standards body as
Harvard.

I don't know if I'm qualified to be a CEO yet. I like to say that I want to be
qualified to run technology at a hedge fund. I'm continuing my education by
signing up for the CFA, and I take my first test in December. Wish me luck.

But to answer Mintzberg's question - why keep promoting this education for
management, which, according to mounting evidence, produces so much
mismanagement? - This is the wrong question. The course material is correct.
The problem is selection bias. Those looking for the fastest route to career
acceleration go for their MBAs - thus being, at least on paper, the best
qualified to run firms. We need to get this education in the hands of the
_right_ people.

We can also address the problem on the CEO side by better aligning their
compensation to long-term performance instead of short-term performance
measures. But shareholders are fairly impatient, and boards of directors seem
to like the idea of juicing short-term performance.

~~~
bobby_the_whale
Just out of interest, but what do you think someone qualified to run
technology at a hedge fund should do on a daily basis?

~~~
aaronchall
I reckon they should be actually working at a hedge fund. They need a strong
understanding of the business and theory of finance, as well as the systems
and technologies the fund uses. If they're running technology there - on a
daily basis, I expect they would be tracking dashboards and thinking about and
planning on how to reduce risk and improve operations.

I may not be there yet, so on a daily basis, I continue to improve my
skillsets in management and technology, teaching technology, both theory and
practice. I'm building my leadership abilities through teaching, organizing,
lecturing, tutoring, speaking up where appropriate at work, and moderating on
Stack Overflow where I'm focusing on using soft power (talking to people
instead of pushing buttons).

If you have thoughts on that, I'd like to hear them.

------
api
I strongly agree with Thiel on lots of things about business and innovation. I
just don't think I agree with him on politics or social issues _to the extent
that I can figure out what he actually thinks_ on these issues. The latter can
be challenging since he seems to keep those cards face down.

~~~
arcanus
> The latter can be challenging since he seems to keep those cards face down

Agreed. I think a variety of his actions are driven by pragmatic expediency as
well. Trump was essentially a five million dollar contrarian put option, from
that perspective.

~~~
gragas
> Trump was essentially a five million dollar contrarian put option

See, this is what distinguishes the SV circle jerk bubble from Peter Thiel.
Trump was _not_ , in fact, a contrarian put option. Many companies are
extremely hopeful about a future under Trump rather than Hillary; this is
reflected in the extremely bullish market since Trump's election.

Everyone in SV flounders around thinking "how could Trump be a good thing? how
could anyone ever bet on him? he's a sexist/racist/xenophobe!" Perhaps SV is
right that Trump is truly [X|Y|Z], but they are wrong in thinking that it has
so much weight on the economy. It is clearly _not_ the case that the consensus
is a Trump presidency will ravage the economy---good sentiment about a future
under him is literally baked into the price of the S&P 500.

Peter Thiel's bet on Trump was only contrarian in places like Sillicon Valley.

~~~
igk
What's your analysis on why this is? Because the assumption is he will bring
back the robber baron times, which were good for established businesses? This
is the only interpretation that makes sense to me, since everything I've seen
so far looks like selling the long term future for short term gain. But I'm
leftwing and humanist for European standards, so i have an obvious bias.

------
Pica_soO
Can you please deliver the following numbers and correlate them?

X: Reliance of the manager on numerical only input.

Y: Short-term improvement, usually gained by burning a non-measurable resource
(brand-trust of the consumers, etc.)

T: Time from Promotion to a different Department till Disaster Impact

F: Time from Consequence Impact to arrival of capable fire-brigade CEO,
basically reverting disastrous changes and recruiting back the personal that
left.

If you put these in a formula, you should be able to derive the approximate
bonus a MBA can have on a department, lets that from now on approximate with
the sinus.

~~~
metaphorm
F(T) = AX^2 + BY^(1/T)

where coefficient A is the current retail price of this season's latest best-
seller on quantitative management fads, and coefficient B is absolute value of
the difference between the manager's real shoe size and shoe size claimed on
their OK-Cupid profile.

------
11thEarlOfMar
An MBA doesn't make a CEO. CEOs are born, but their rise can be accelerated
with an MBA.

Successful CEOs have a particular perspective and mindset that allow them to
understand both the underlying value of their company, and, the business
strategies that enable the value to be realized. The MBA program cannot
instill this perspective and mindset. But it can fill in the gaps of knowledge
that is used to realize value.

An engineering degree, coupled with product development experience, goes a
long way towards developing the sense of what is valuable in a tech firm. In
order for an engineer to rise to CEO and be successful, they would need to
understand:

\- A P&L

\- A Balance Sheet

\- The liability of different hiring/firing approaches

\- The standard terms of different partnership and marketing contracts.

\- I.e., the basic functional operation of the Legal, Financial, HR,
manufacturing ops, facilities, and, importantly, Marketing & Sales.

You can learn a lot of that in business school, but I believe you can learn it
well enough just by getting involved in those functions in some way and seeing
how it all works together. For me, I view it like any system: functional
blocks and interfaces that interact to cause profit and growth. Engineers who
become successful CEOs can more or less naturally assimilate this and make
solid plans and strategies.

~~~
Blackstone4
> CEOs are born

I feel that this statement is too strong. Maybe something along the lines of
"CEOs are formed"... Some people also believe entrepreneurs are born
entrepreneurs .... is that what you meant?

I always come back to the fact that the brain is a muscle and we can change
our thinking and improve our abilities

