

Driven off the Road by M.B.A.s - bcl
http://www.time.com/time/magazine/article/0,9171,2081930,00.html?xid=fblike [-]

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yaix
Nice linkbait, but the problem is elsewhere.

The problem is the focus on short term Shareholder Value and quarterly
profits. It destroys the companies in the long term. Worse, it undermines the
trust employees in their companies, because they know that they can get fired
anytime for the sake of short term profits. They know that investors make big
money, while they earn less and less each year (after inflation).

The Western economic system (that developed in northern Europe from the 1500s
on and then went to North America, Australia, etc with the English
colonization) is build on mutual trusting relationships (a high degree of
Social Capital, see eg books F. Fukuyama, "Trust" or R. Putnam, "Bowling
Alone"). That is what made the West economically so successful.

But to maintain our high degree of Social Capital, people need to feel that
what is happening in society and in companies is mostly fair. Its doesn't
really matter who is running the show. The problem with current MBAs is, that
they are trained on short term Shareholder Value instead of long term
stability.

~~~
Vivtek
I'm trying to see how linking to TIME is linkbait, but ... don't you think
maybe this short-term mercenary outlook is the _effect_ of the problem, not
the cause?

I mean, you're not at all wrong.

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mattgreenrocks
It never ceases to amaze me why we give power over to those who do not
themselves produce, and have no experience doing so. There are some great
leaders out there, but I find it hard to follow someone who has little domain
experience. Actually, why do we view 'business' as its own separate field when
it doesn't mean anything in a vacuum?

~~~
CoffeeDregs

        It never ceases to amaze me why we give power
        over to those who do not themselves produce
    

Given the context, "those who do not themselves produce" means MBAs? I've got
an MBA (and an MSEE) and am a CTO, and I think people think I can produce. Of
course, there are useless people who graduate with every degree imaginable.
MBAs happen to have graduated too many people and have gotten a bunch of focus
over the past decade, so are rightly getting their ration of shit, but that's
not about the notion of an MBA being useless; it's about oversupply and under-
quality.

Also, I assume you meant "those who _did_ not themselves produce" because one
of the most frustrating things about management is that you don't get to
produce much. That sucks, but it's part of the job (I hate leaving work when
my big accomplishment for the day was to talk to a bunch of co-workers, but
it's my job...).

    
    
        Actually, why do we view 'business' as its own separate
        field when it doesn't mean anything in a vacuum?
    

Because running a business _is_ something people do and is has very specific
rules, regulations, mechanics, knowledge, etc. Accounting and finance _do_
matter (a lot) and products, people and ideas _do_ fail because they neglect
to understand these things. But business studies are cross-functional/domain:
I took the "core" stuff, but I also took great classes on control system
theory for business ("system dynamics"), industrial economics, strategy,
technology strategy, organizational processes, finance (NPV, capital structure
anyone?). These types of knowledge give you a very different (and, hopefully,
more effective) perspective on what businesses are and how they operate.

Computer science doesn't mean anything in a vacuum either. What if you wrote a
program and you couldn't market, sell or support it?

~~~
Vivtek
I respect your MBA skills, but ... back in the early 90's I did a multi-year
consulting gig at Eli Lilly (pharmaceuticals, if you didn't know: Prozac,
among others) and they've got the MBA disease bad.

The MBA _disease_ \- and this is what the article is about, obliquely - is
thinking you don't need to know anything about the business itself to manage
it, because business as a whole is a uniform set of actions. At Lilly this was
endemic to the point that people were _advised_ \- I kid you not - to avoid
learning any technical information or anything too specific about their areas,
because it would harm their careers. Lilly people were discouraged from
associating too much with contractors, because contractors were hired to do
specific domain-knowledge things like, oh, develop key software that governed
their manufacturing procedures, including generating all expiration dates for
the company. (God forbid anybody at Lilly should sully themselves with
learning how expiration dating works - I sure enjoyed it, though.)

So you're right, business administration is an essential set of skills, but
the point here is that without knowledge of the business you're
administrating, you can't make valid decisions - except on the basis of short-
term financial goals that ultimately result in the downfall of society.

(Lilly was unreal. They don't have fountains in the courtyard, they have water
features. The whole place reeks of pretentiousness. Corporate headquarters
rocks, though; long, long ago, Eli Lilly himself ended up buying the whole
street of old brick buildings, which are now perfectly preserved under a
common roof. Architecturally fantastic! The Lilly people hate it; it's too old
and has weird corners. They are all idiots.)

~~~
CoffeeDregs
Nice point. And, as you noted, I might have missed the real point of TFA, but
it was so generally written it was difficult to see the point of it (wasn't
the point kinda: listen to the customer ?). And I completely agree about the
"MBA disease", but ...

    
    
        that without knowledge of the business you're [XYZing], 
        you can't make valid decisions
    

Agreed, but this is true of all disciplines (XYZ). How often have you seen
random software or features because the product, dev, QA, whatever group
didn't understand the business or were wrapped up in politics? The biggest
difference between the "MBA disease" and the "computer science disease" was
that we identified the "computer science disease" and proposed a number of
cures (e.g. waterfall, agile, scrum, nom du jour). "Business" is less well-
defined, so we're just discovering and looking to cure the "MBA disease".

That said, we got too damn many MBAs...

~~~
Vivtek
Well, but the CS disease may be suffered by individuals and - occasionally,
you're right - groups or even the IT department as a whole. The MBA disease is
currently suffered by top management of huge multinational conglomerates,
because its vector is in fact the people within companies who allocate all the
money.

It's like the difference between the flu and AIDS - if the disease targets the
immune system you're dead.

Regarding discovering it, though, speak for yourself about the just-nowness.
When the corporate raider became front magazine cover hero in the 80's, that's
when it became endemic. Since then, America has been eating its seed corn.

I was in high school and college at the time, so I didn't know what was going
on, but looking back, it should have been obvious. And like I say, I figured
it out in the early 90's. I've been self-employed since that job and never
regretted it.

------
teyc
MBAs are misunderstood. These are business hackers. They may hack the signals
that are being sent to the market quarterly, but they are also capable of
hacking other parts of the business for better long term outcomes if the
market lets them. The problem is market analysts are like news reporters,
always chasing after the next car crashes.

~~~
mattgreenrocks
Interesting, can you elaborate more?

~~~
teyc
The basic thesis is this: What ever we can measure and whatever we pay
attention to, we improve. It's just like Hacker News karma.

A management that forms a tight feedback loop with market watchers and stock
prices tend to learn very quickly what pleases the market, and optimize for
it. MBAs learn about how to hack the balance sheet so that earnings per dollar
capital rise, and the stats look good.

However, there are alternative management score cards being developed to
measure businesses better. Measuring willingness of customers to refer friends
is one. Mining companies for example measure near misses and lost time
injuries as a priority because the publicity of one bad accident can
jeopardize new investments.

------
neovive
I think it comes down to the old adage "everything in moderation". When the
balance of power in the auto industry shifted to numbers over products,
quality began to decline. However, the value of skilled business leadership
shouldn't be discounted. All large businesses need strong finance and
marketing people to ensure products have relevant markets and are profitable
(Apple is a great example of this). However, in the end, it's the products and
services that define a company and the engineers, inventors, developers and
designers should have equal influence in decision making and company strategy.

BTW: It's funny that the decline in the auto industry seems to coincide with
the rise of the consumer advertising industry :)

------
ajays
Discussion on the same article from a couple of days ago:
<http://news.ycombinator.com/item?id=2746481>

------
brendino
This article seems to make a lot of sweeping negative generalizations about
MBA students. I agree with the author's obvious argument that people who lack
domain experience and who focus on short-term outcomes should not be in-charge
of the mentioned businesses. But what about MBAs who _do_ have domain
experience? Or MBAs with backgrounds in engineering? I'm sorry, but a handful
of anecdotes is not enough to support the author's argument here.

------
buckwild
I think the biggest difference between an engineer/scientist and someone with
an MBA is primary focus. I (being a scientist myself) feel like MBAs often try
to make a product cheaper where as I am trying to make it better. We both add
value, but we do it in different ways. If there is one thing that bothers me
about folks who work on the business side, it's this. MBAs need to understand
that a larger profit margin (while diminishing a dimension of the product)
does not necessarily equate to success.

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buyx
In South Africa I've seen quite a few complaints about our equivalent cult.
But it's for Chartered Accountants, rather than MBAs. I haven't seen any
analysis of the effects of this, but I doubt it's good.

[http://www.businesslive.co.za/incoming/2011/04/15/a-third-
of...](http://www.businesslive.co.za/incoming/2011/04/15/a-third-of-ceos-of-
jse-top-companies-are-cas)

------
johnx123-up
"Getting things done by others" is the mantra of MBAs, my Harvard friend says
that often. That is one of the reason they suck.

------
WalterBright
There's nothing in an engineering program that teaches one about sales,
marketing, accounting, inventory management, etc.

~~~
CoffeeDregs
Agreed, but an engineering degree does give you a stronger framework for
noticing, observing, planning, building and acting than most other non-
scientific degrees. (That said, as I noted elsewhere, I do have an MBA and
appreciate the knowledge.)

------
VladRussian
when displayed to me, that page on time.com contained the ad for their another
article - "Top 10 spells from Gary Potter". I think the ad network algorithm
got it right - both articles' subjects are of the same plausibility and
practical effectiveness.

------
GaryOlson
Scott Adams has made a fortune for decades documenting this development. I've
never seen an MBA who comprehended or laughed or groaned with Dilbert.

The skills necessary to engineer and build effectively usually require a
certain patience and humble appreciation. Unfortunately, this allows clueless
MBAs and psychotics to run business in self destructive methods.

~~~
slindsey
With a B.S. in Computer Science, a few years of professional programming
experience, and a decade of "playing" with programming, I went and got my MBA
with the hope that I would "advance" in my career.

What I got was a very frustrating look into the attempt at logic used as the
foundation for the stupid decisions that business people make. People who
major in business (with exceptions of course) are focused on making money
today at any cost. There is no concern for business longevity or taking care
of employees. They actually teach short-term gains over long-term growth, tax
evasion, and employees as replaceable cogs.

I'm happy for having the degree because like so many other experiences in
life, I learned more of "what not to do." And FWIW, the school is top 100 for
MBA.

~~~
dkrich
Top 100? I didn't know there were 100 MBA programs in the entire world.

