One of my in-laws is a geologist who works for the oil companies, and he tells me in that industry almost all the big executives are engineers. Since he's been in the news, take Rex Tillerson. His degree is in engineering.
Or take any of "the professions": law, accounting, medicine, business consulting, engineering firms. In all those cases you have "partners" who have moved into sales and management. Sometimes they are even still practicing too. Also I get the impression their management is more about giving expert direction to their team, rather than watching Gantt charts.
Also when I read Skunk Works by Ben Rich, it sounded like the upper management had come up through engineering.
So I don't think management-by-MBAs is necessarily the right thing for tech workers. The more you consider programming to be "knowledge work", the more it seems like managers should be experts in the field. Of course they will need to learn new skills---to lead, to manage, to design products, to sell, to hire, to budget, to read financial statements, etc.---but having that technical background seems very important.
My hypothesis is that the MBA degree is largely valued by other people with MBA degrees, so you have pockets of high MBA concentration that grow within specific businesses. MBA's hire other MBA's, but also encourage their most promising subordinates to get MBA's.
> My hypothesis is that the MBA degree is largely valued by other people with MBA degrees, so you have pockets of high MBA concentration that grow within specific businesses.
I have a friend who got a specialist business degree and then got an MBA. I don't really recall him ever really talking about what he studied or learned during the MBA, but he did talk a lot about networking. A lot of the program consisted of taking many foreign "educational" trips all over the world (networking with classmates) and then access to the alumni network was supposed to help you get a job. It really sounded more like a high-class job placement club than an educational pursuit. If that's how it actually is, I can totally see how a business can get colonized by MBAs once one gets his foot in the door.
My friend himself is a good guy, but a couple of his classmates are some of the shallowest people I've ever met.
I have an undergrad in computer engineering, and an MBA from a top-10 or top-5 (depending who you ask) school. I learned a LOT from it, even though my experience after my undergrad degree was mostly in business.
Businesses, finance markets are far more complex than people usually think, and if you like to learn, an MBA is a great way to build a solid base for being a product manager, or a director who actually understands the sides of the company: how products are made, how they are sold/monetized/etc. and how to manage the overall structure of the company.
Sadly, I know a lot of great product managers, directors, etc. who are former engineers and have little understanding of competitive strategy, market forces, economics, marketing & finance.
In terms of learning, I took a generalist approach, but focused mostly on strategy & game theory, finance and technology. Here's some of the key things I learned, which I actually use frequently:
- Overconfidence bias: we usually think we're better than the average on something we know how to do (driving) and worse than the average in something we don't (juggling), even if almost nobody knows juggling and everyone knows how to drive
- No alpha (aka can't beat the market): you can only consistently beat the market if you're far better at financial analysis than a lot of people who do it every day all day. So don't bother trying.
- Value chain vs. profits: you'll find that most of the excess profits in the value chain of a product will be concentrated in the link that has the least competition
- Non-linearity of utility functions: the utility of item n of something is smaller than item n-1. Also, the utility of losing $1 is smaller than (1/1000) utility of losing 1000. This explains insurance and lotteries: using linear utility function, both have a negative payout, but they make sense when the utility function isn't linear
- Bullwhip effect in supply chain: a small variation in one link of the supply chain can cause massive impacts further up or down as those responsible for each link overreact to the variation (also explains a lot of traffic jams)
- Little's law: in supply chain (and a lot of other fields): number of units in a system = arrival rate * time in the system
Sadly, a lot of people in my class weren't that interested in learning, and focused solely on the networking and entertainment parts of the MBA.
Hate to be blunt, but first of all, the things you pointed out are really common knowledge/common sense, and secondly, most of these are not necessary to be an engineering manager at all. 'No alpha' is something that even Warren Buffet has been talking about, and it doesn't impact any EM's job day to day.
You'd be surprised how many great engineers I know don't actually follow that, either by believing they can pick stocks better than the market (false) or by thinking that you can derive economic profit simply by doing the same as everyone else in an industry.
There is a major difference between "knowing something" and having it ingrained in your thinking process so it happens seamlessly.
You don't need this to be an engineering manager, but you need this to be a good engineering manager. Knowing and dealing with your own (and other people's) biases, understanding how power works in organizations, how different pieces of an organization interact and how the products you are building impact the financials of the company are basic requirements (but not enough) to be a good engineering manager.
Agree to disagree I suppose. Engineers have the technical skills to look into basic financial and budgeting, and there are financial planning guys involved in big projects to do the really in depth stuff if required. A degree will not fix their unwillingness to learn, MBAs can be earned by going through the motions of the coursework. It happens in more technical degrees all the time.
As for the power dynamics stuff, firms in other professional fields do it all the time, and they don't seem to care about MBAs at all.
Lastly, a lot can be learnt on the job too. Maybe, statistically, engineers are more unlikely to show interest in this stuff, and that makes an MBA a "signal" that this person is interested in management.
It's a bloody expensive signal though, and it just saddens me that my career options and advancement might be limited because of it.
> Engineers have the technical skills to look into basic financial and budgeting, and there are financial planning guys involved in big projects to do the really in depth stuff if required.
If by "technical skills" you mean "being able do to math", you're as far away from finance as "pressing keys on the keyboard" is from "coding".
You don't need a degree to be an engineer, and you don't need a degree to be in "management". But that's not the point.
Most of the content was cases, with some parts of books, for example:
Biographies of Robert Moses and LBJ by Robert Caro - we used this for studies of power in organizations. We'd read parts of it and understand where these people would get their power from, how they would yield it, and so on.
A lot of it is hard to learn without discussions and debate, trying and getting it wrong, and figuring out where you got it wrong. Even some of the things I mentioned are never stated like that during the course, you kinda build that along the way (such as the link of the value chain example).
Micro-/macroeconomics and computer science (queueing theory) could cover most of the key items ... but people would need to understand the connections / generalizations / limitations. Perhaps MBAs make it obvious with case studies and in-class debates.
I have BS in EE, went into software development and got an MBA after becoming a software manager. The two most impactful subjects that really changed the way I think were Queuing Theory and Real Options Valuations.
You don't need an MBA to learn about these yourself, but without an MBA I probably would have come across Queuing Theory (in the form of Kan Ban), but likely never Real Options Valuations.
So if anybody here is considering an MBA, look into both subjects and see if another half a dozen or so similar and related topics might be interesting to you.
Yes, they can, but you can only create "muscle memory" by practice. And practice includes reading cases, trying to figure things out and getting it wrong, discussing how to do it and so on.
You can read a hundred books about coding, but until you actually try, you don't really know anything.
So a technical background with an MBA can be a killer combination. You know how things work across the company, and that gives you a huge edge over everyone else.
As a more obscure example at a former nationwide financial services employer I was the only WAN engineer ever hired on to the team who wasn't involved in a specific niche of IPSC competitive handgun shooting. I got hired only because I was ex-military and the VP assumed I had experience with the 1911 platform (actually we had M9 by then) so I'd join the team once the paychecks rolled in.
You don't think any of the skills needed to manage people or businesses can be taught in school?
I feel very fortunate that one of my cofounders has an MBA. We'd be much worse off if I had to build financial models and negotiate contracts and motivate the team myself.
Having an MBA obviously doesn't automatically qualify you to manage a dev team (nor does being a good engineer), but speaking from my first hand experience, the skills have value.
I think the ability to manage either people or businesses varies all over the map, and between techies and MBA's, maybe it's like a pair of overlapping distributions. For managing people, I think that there are both positive and negative skills, and I'm not sure MBA's learn exclusively one kind in the absence of the other. Stack ranking and open plan offices had to have come from somewhere.
Negotiating contracts is win-lose, so it's at best a coin toss.
I could see certain tasks being performed by someone who has shown a motivation to learn how, such as making business plans, schedules, and contracts. The MBA's at my workplace are certainly busy. But it could be selection bias: People with MBA's are selected from among people who want to learn those skills.
In big oil, most execs have a degree in engineering but they go up the ranks after they got their MBA's, look at Rex's replacement --> https://en.wikipedia.org/wiki/Darren_Woods
Unlike programming/software engineering most engineering managers in other domains have other work to do than just approve leaves/vacations and forward emails.
Or take any of "the professions": law, accounting, medicine, business consulting, engineering firms. In all those cases you have "partners" who have moved into sales and management. Sometimes they are even still practicing too. Also I get the impression their management is more about giving expert direction to their team, rather than watching Gantt charts.
Also when I read Skunk Works by Ben Rich, it sounded like the upper management had come up through engineering.
So I don't think management-by-MBAs is necessarily the right thing for tech workers. The more you consider programming to be "knowledge work", the more it seems like managers should be experts in the field. Of course they will need to learn new skills---to lead, to manage, to design products, to sell, to hire, to budget, to read financial statements, etc.---but having that technical background seems very important.