The author seems angry about MBA programs, and he doesn't support his claims with solid data.
(2) An MBA.
If an MBA didn't take quite a lot of time and money and, possibly, opportunity cost, then, sure, get an MBA.
If someone has a clear objective where an MBA is important, then maybe get one.
If someone wants to be in business but really has no significant background in business from family or experience and, say, didn't major in business as an undergraduate, then maybe get an MBA.
Some of what is taught in some MBA programs is not easy to learn from experience or independent study and might be useful later in business. Examples include optimization (e.g., linear programming), statistics (random variables, distributions, expectation, variance, independence, central limit theorem, law of large numbers, conditioning, hypothesis tests, confidence intervals, the general linear model), an overview of information systems (likely not worthwhile for readers of Hacker News!), accounting, mathematics of finance (e.g., Black-Scholes), business law, organizational behavior.
(3) Professional Education.
I never wanted to be a college prof but, due to some strange circumstances, for a while was a prof in one of the better MBA programs. I concentrated on optimization and computing.
Since I was in such a program, I wanted to try to do something useful. So, I tried to offer professional education to the students. But I learned that business schools are very much against being professional, say, like law or medicine.
Instead, business schools have physics envy and want the profs sitting alone in their little offices with the door and curtains closed and thinking up some business world version of Newton's second law F = ma or Einstein's E = mc^2. So, they want research.
Of course, so far no business school prof has found anything like F = ma, but there are journals run by B-school profs where B-school profs can get whatever they do published. The journals do have some value as examples of make-work, junk-think, busy-work, prof-scam!
Shockingly, the business schools very much discourage the profs from having significant contact with real business.
If medical education were like business education, then all the med school profs would be at best second rate experts in biochemistry doing third rate work on imaginary cures for imaginary diseases and would never see real patients, and no one would go to a hospital no matter how much they hurt. Law schools? The profs there would never see clients, file a legal case, or appear in a courtroom and would do statistical studies about whatever in legal cases pursued by others. Gee, maybe they'd do research on the ratio of nouns to verbs in legal briefs!
Instead, in medical school, the students actually get a good start on medicine, that is, how to take sick people and make them well, and that utility totally blows away anything in an MBA program.
So, what happened? In WWII, the US military concluded that research in physical science was crucial. Then the top 24 or so US research universities got an offer they couldn't refuse: Take big bucks from the US Federal Government as grants for research that is promising for US national security (eventually, or medical care) or cease to be a competitive research university.
Then the B-schools, somehow, got dragged into the same thing: The profs needed no business accomplishments or experience, had no on-going contact with actual business, taught theory sometimes close to business but usually not, and did research that has little promise of utility in business or anything else for at least 100 years.
In simple terms, the business school profs commonly don't know enough about business to run a lemonade stand.
from a business school class in Dangerfield's Back to School. The clip is perceptive on several points:
(A) The prof's idea is to set up a business "from the ground" up "with a 30,000 square foot facility" and an "efficient administrative and executive structure". Uh, generally that's a lot of money spent and likely at risk before any revenue. So, it is more common in practice to start small and, if successful, then grow.
(B) Dangerfield asks, "What's the product?". The prof wants to say "That is immaterial for the purposes of our discussion here". Well, maybe "immaterial" is okay from 100,000 feet up or when just talking with the general contractor, but anyone actually in business cares a lot about the product and would want to discuss it. The prof makes a stab, "tape recorders" and from Dangerfield gets a big lesson, "Are you kidding? The Japs'll kill us on the labor costs." The lesson: It's not trivial to think of a promising product. Quite generally the "product" is from important up to crucial. So, Dangerfield doesn't want to discuss spending big bucks without the product clearly in mind, and here he is correct.
(C) Dangerfield asks, "Why build? You're better off leasing at a buck and a quarter, a buck and a half, a square foot, save your down payment". One lesson here is that the prof is being too simplistic on the build/lease decision. For a growing business, building is likely a monument to ignorance. Another lesson is, Dangerfield has actual, current costs for leasing; in a real business of that scale, the CEO knows costs in fine detail. The clip is accurate: Commonly profs don't know real costs. E.g., I ended up leading the college in buying some computing; from the work I'd done before being a prof I knew the current costs in good detail, and the other profs in information systems didn't. For a student to toss out actual cost data in class can be embarrassing, intimidating, and infuriating for a prof!
(D) Of course the high point of the exchange is where Dangerfield interrupts and says, "Oh, you left out a bunch of stuff.", and with contempt the prof responds, "Oh, really. Like what for instance?". So, Dangerfield rattles off several points of costs in the real world! Could be very good to know! The clip shows a student taking notes furiously; that's accurate: Commonly the students really do want the real stuff. Finally the line, "How about Fantasy Land" is on target and a hoot.
It's a well done clip and parody of B-school and indicates that the movie makers and much of the audience got the points quickly.
The profs are pursuing a scam and know it: The smarter ones see how to game the system and do but are ashamed of all they do. The still smarter ones leave for something else in academics or just for actual business.
Instead, for a much better model, business schools should become plainly professional and borrow from medicine. If some problem in a real business in, say, supply chain optimization becomes important, then a B-school prof with such a problem should contact the campus applied mathematics, civil engineering, or operations research department much as a medical school prof might contact someone in biochemistry or cell biology.
A business school prof is someone who teaches students how to avoid the pitfalls in business they avoided by being business school profs.
(4) Business.
For someone who wants to start a business and make it successful, there are various directions:
There are the businesses common on Main Street, and likely the best way to learn such a business is to have a father who is successful in that business and learn from the father while working in the business.
There are businesses successful due to parts of globalization; some of these opportunities are too new to learn from a father, and how to learn is not clear. Travel the world on a tramp steamer and spend a few days in each of 100 foreign ports?
And for readers of Hacker News, sure, software.
For such possibilities, I have a tough time seeing that an MBA would be worth the time, money, effort, or, especially, the opportunity costs.
So, instead of just cursing the darkness, what might B-schools do?
Well, as I said, borrow from medicine. Or, health care is important: Medical school teaches students how to deliver high quality health care; to do this, the profs need to be experts in health care and relevant parts of the human body, disease, and how they work. This expertise was difficult to get and to confirm, formulate, and teach but is crucial. The research, say, in biochemistry, is important but not nearly the same thing.
Well, business is important: B-school should teach students how to do well in business; to do this, the profs need to be experts in business and how businesses work, the problems they encounter, and how to solve the problems and do well. This expertise will be difficult to get, confirm, formulate, and teach but is crucial. The research, say, in statistics is important but not nearly the same thing.
Shockingly, the business schools very much discourage the profs from having significant contact with real business.
This was not my experience at UMass Lowell's undergraduate College of Management program (graduated 04). One of my professors was CEO of a manufacturing company in South Korea, teaching at the same time because he loved to teach. Another one came directly from Gillette (now P&G) and shared tons of personal experiences which were extremely insightful. A third professor was a consultant to numerous companies. I can go on and on, but virtually all of my professors had strong ties to the business world, and that made them extremely good teachers. While I can't speak of their MBA program specifically, many of my professors taught those courses too.
There were some academic professors, but they were the exception rather than the rule. In fact, come to think of it, I can't name one of the top of my head. In other departments, sure, but not in their management program.
I think it's safe to say that every college is different, and you'll get a unique mix of backgrounds and experiences from Professors pending on where you go. There very well may be academic-only business schools, but that's not everywhere. Some schools are terrible, while others are great.
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One thing that I wish I had more exposure to in college was working directly with businesses. There were internship programs, but during my Junior/Senior year the economy was utter crap, and opportunities were virtually non-existant. As you pointed out this is something you see in medical and legal education, and I wish I saw more of it in business school. I agree with you that it's an area that needs improvement if it hasn't been universally implemented yet.
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(A) The prof's idea is to set up a business "from the ground" up "with a 30,000 square foot facility" and an "efficient administrative and executive structure". Uh, generally that's a lot of money spent and likely at risk before any revenue. So, it is more common in practice to start small and, if successful, then grow.
This touches on the "level of abstraction" that some business types fall into. It's basic South Park Underpants Gnomes logic: Phase 1: Collect Underpants. Phase 2: ???. Phase 3: Profit! (http://cart.mn/aYOY1h - maybe NSFW)
Basically, skip over the most difficult parts and focus on the easy ones. It's "easy" to walk out with a business degree and not understand Phase 2. Real world experience hopefully fills in that gap. Definitely another opportunity for business school improvement.
When it comes to web-startups though, I can't say this loud enough: LEARN HOW TO HACK! Otherwise you're nerfed because you can't do Phase 2.
Yes, in the Dangerfield clip, it's possible to argue that the prof was being appropriately general and abstract. But, then, to what end for the costs for the plant? Is this to test ability to add some numbers? No. Is the detail enough actually to help someone work with an architect and general contractor to get the building constructed? No. Is it useful in business to address business planning in such an abstract way, that is, so distant from actual details such as Dangerfield was mentioning? No.
There is a role for some abstract work in business, but the lecture in the clip was not an example.
E.g., long in some schools of agriculture, e.g., Iowa, a question was, say, for growing corn, what corn variety, planted when, with what density, with what soil chemistry, with what fertilizer would be best? Broadly the key was the special case of the general linear model called experimental design and/or analysis of variance. It's powerful stuff, a nice tool to have, broadly applicable, and can be presented quite abstractly. In the end, the corresponding software knows nothing about the real problem, from an ag school, P&G, some ad agency, etc. Still, real examples are important.
The B-school where I was a prof had rule: No more than one day a week consulting. And any outside contact with business was a black mark as in evidence that the prof didn't really care about research. To the best of my knowledge, no one on the faculty had any significant on-going contact with business, and only a tiny fraction of the faculty had any significant business experience at all.
I wanted the B-school to be like a research-teaching hospital where the halls were full of people from real businesses with problems looking for solutions. So, I wanted to look at the problems and assign them to, say, undergrads, grad students, grad student research, faculty research, or maybe hand them off to profs in, say, engineering. For the student projects, have faculty supervise the work. Hopefully have the problem presented in class, maybe by the person with the problem, and later, by the students, also the solution. The students would make some real business contacts and get some internship experience.
The usual standards for peer-reviewed research are "new, correct, and significant". Well, if the business person is doing something new and significant, then any "correct" solution for the business problem likely also satisfies "new and significant"! Also, once have a solution for one real problem, the chances that the solution applies to another real problem are increased! If find a third problem the solution solves, then are on the way to some progress. So, for research, starting with a real problem can be one heck of an advantage in several ways.
Fees? Med schools have worked all that out, along with professional peer review, ethics, etc.; so borrow that.
The work I did for the school in computing helped the school a lot, and the deans knew that I was really interested in real business and not research in the form of generalized abstract nonsense; I was relatively well qualified to do such research but just wanted contact with real business instead or at least first as in the recipe for rabbit stew that starts, "First catch a rabbit.".
So, to thank me for the computing work I did, the deans passed lots of consulting to me, and I doubled my income. Yes, lots of business people do have problems and do contact B-schools; it's just that mostly the B-schools tell the business people to go away.
I very much wanted to bring the consulting into the school for the students, in classes, etc, but made only partial progress: After I did the computing work, I gave a grad course on it. The first half of the course I lectured on speeds, capacities, costs, and principles of operation and other overview topics in computing. The second half of the course was all presentations from vendors! The class was well attended by grad students, faculty, and staff! Everyone got current on a lot in computing! The final was to write a paper. A few students got together, formed a team, went off campus, dug into some deep stuff, and got close to some significant business opportunities!
The first lecture in the course was to pop the covers off the computing I'd had the college buy and show people the main pieces. Students were thrilled.
Seeing what the school, profs, chairs, deans felt they wanted in research, I, uh, did them a favor! We needed to do some faculty recruiting, and resumes came across my desk. So I saw and picked one with some rare and powerful qualifications and led the recruiting effort, and the person was hired! They quickly wrote a lot of highly regarded papers in applied math and became famous, not so much in B-schools but in some parts of applied math. Their work was novel and curious applied math, actually at times close to the question P versus NP in computer science. But the work was done with no contact with actual business, and it will be a very long time until that work actually impacts business. Still, just as research, that person totally knocked the socks off everyone else in the school.
The points, I'm saying, about B-school being professional with good contact with real business is no secret at all; it is widely, thoroughly understood. The problem for the B-schools isn't understanding the points but liking them. To like them, have to give up on physics envy, etc. And with the contact with business, have to be vulnerable to accusations, say, from elsewhere on campus, that the school is just being used for something crass that has nothing to do with contributions to knowledge for progress in business. People who so criticize contact with real business and have a child with a really big tummy ache should take them to a research prof in biochemistry instead of a gastroenterologist!
But just contact with business is not enough: Instead it is important to identify important principles, test and confirm them, organize the knowledge, and teach it. So it's research analogous to mapping out new geography and finding the main features. This work is actually not easy to do; problem is, it's important. Medicine did it, with a lot of hard work, bloody hands, horror stories, but finally some of the best progress in civilization. It can be done, but B-schools are not much trying to do it.
At least for the most common knowledge about business, you can learn what you need to know whether you get a BA or MBA in business or neither of these two.
My opinion is that there are two kinds of knowledge that can hurt you, (1) good knowledge you don't yet know but need and (2) bad knowledge you know, believe, and act on. By far the most dangerous is (2). Thus one of the best parts of education is to learn what high quality knowledge is, looks like, walks like, talks like, etc. so that you can become a critical consumer of knowledge. For this a good undergraduate degree is usually important.
The most solid knowledge going is math; it is also very widely applicable although good, new applications are not easy to find. A close second and closer to reality are the physical sciences. Engineering is also quite solid.
Actually, one really good application of math in business can give your career one heck of a boost into orbit. That is, you don't have to look for a good application each day or in each spreadsheet.
Generally the bottleneck of people in physical science, engineering, computing, or business who want to do things that are quantitative (or want to do academic research) is how much math they know.
So, don't expect the best education to be just vocational training you can apply on a job tomorrow.
My opinion is that the most important knowledge to get, both in life and for business, is about people. The materials available, say, from the social sciences, are not solid at all, but the subject is so important that you have to make do anyway. There it is especially important to look for high quality sources.
Fictional literature and movies commonly do illustrate some important correct points about people; sadly about as often they pass out confusing nonsense about people! So, can take such fiction as conjectures to be considered. If you actually carefully evaluate a lot from movies, then you will learn a lot about people. Still many important lessons about people are not in the movies; some of the lessons are in books and elsewhere, and some of them you have to get from your own observations.
For the rest about business, you can get some of it in school and the rest out of school or just get all of it out of school.
Again the B-schools don't really have the more difficult knowledge about business it would be good for you to know assembled, confirmed, formulated, organized, etc.; it would be good if they did; but you can, as people have done in various fields for centuries and still do, dig out much of it out of school.
For business, read the blogs of venture partners Fred Wilson, Ben Horowitz, and Mark Suster. Realize that heavily they are looking for publicity for themselves, etc., at least for more 'deal flow'. They may also be trying to do something like "win you with honest trifles in order to deceive you in deepest consequence": Of course, this is a slightly modified quote from Shakespeare who didn't provide any evidence that people actually do this, but you can observe on your own that sometimes they do. So, take such blogs with many "grains of salt". Still, can learn some things there, about business and, indirectly, about people. Also read the blog by Steve Blank. Sure, also read Paul Graham! These blogs have some advantages for people on Hacker News who are interested in business -- the blogs are up to date and focused on starting businesses in the hottest part of computing.
There is likely much more and much better on the Internet. Finding it is a challenge.
Likely a little more solid would be
Jim Collins, Good to Great, ISBN 0-06-662099-6.
and his other books. Generally his work is not considered solid enough to be academic research, but it's better than nothing.
I would suggest that generally take anything from the old news media as valuable only indirectly; e.g., it says something about people that they will pay attention to that stuff! So, you need to understand what the newsies are doing: Largely it is deceptive manipulation. They distort in various ways, some with long traditions, often close to formula fiction entertainment, to get eyeballs for ad revenue.
Generally books written by people successful in business, e.g., Andy Grove at Intel, should have some value and not be just efforts at polishing their public images.
For people, the best single book I found was
E. Fromm, The Art of Loving.
So, he explains a lot about what motivates people. E.g., he has (rough quote from memory):
"The fundamental problem in life is getting security in the face of the anxiety from our realization that we are vulnerable to the hostile forces of nature and society. Only four ways have been found to get this security ...."
I'll let you get the book to find his four ways!
Then, when you find someone doing something and you don't see just why, see if one of those four ways gives an explanation!
Of course, Fromm was a Freud student; anyone who could make sense out of Freud has to be bright! Since Fromm was an early clinical psychologist, he had the advantage of listening to a lot of people explain their problems. Then, apparently, being a bright guy eventually he got some understanding of people. Solid knowledge? HECK no. Still it's likely important.
Not everything in B-school research is worthless! There is at least one guy at Harvard's B-school who writes on negotiating and likely does have some good, useful, practical, and non-obvious things to say!
And there are no doubt other examples from B-school profs.
Also remember, that often in business you are trying to innovate, that is, do something new, so that there can't really be a vocational training course that just passes out innovative ideas ready for a Series A. Parts of education can help (and parts can hurt) your ability to innovate. Mostly, then, the challenge of innovation is yours.
Finally, there is an attitude: If you have made enough progress in business to need some good knowledge of accounting (or other specialized topic), then hire an accountant! The hard part is doing well enough to need an accountant. Hiring and working with a good accountant is much easier!
Thanks doubly for the detailed response. I very much enjoyed Fromm's Escape from Freedom when I read it a few years ago, I will definitely buy the Art of Loving.
(1) The Article.
(2) An MBA.
(3) Professional Education.
(4) Business.
(1) The Article.
The author seems angry about MBA programs, and he doesn't support his claims with solid data.
(2) An MBA.
If an MBA didn't take quite a lot of time and money and, possibly, opportunity cost, then, sure, get an MBA.
If someone has a clear objective where an MBA is important, then maybe get one.
If someone wants to be in business but really has no significant background in business from family or experience and, say, didn't major in business as an undergraduate, then maybe get an MBA.
Some of what is taught in some MBA programs is not easy to learn from experience or independent study and might be useful later in business. Examples include optimization (e.g., linear programming), statistics (random variables, distributions, expectation, variance, independence, central limit theorem, law of large numbers, conditioning, hypothesis tests, confidence intervals, the general linear model), an overview of information systems (likely not worthwhile for readers of Hacker News!), accounting, mathematics of finance (e.g., Black-Scholes), business law, organizational behavior.
(3) Professional Education.
I never wanted to be a college prof but, due to some strange circumstances, for a while was a prof in one of the better MBA programs. I concentrated on optimization and computing.
Since I was in such a program, I wanted to try to do something useful. So, I tried to offer professional education to the students. But I learned that business schools are very much against being professional, say, like law or medicine.
Instead, business schools have physics envy and want the profs sitting alone in their little offices with the door and curtains closed and thinking up some business world version of Newton's second law F = ma or Einstein's E = mc^2. So, they want research.
Of course, so far no business school prof has found anything like F = ma, but there are journals run by B-school profs where B-school profs can get whatever they do published. The journals do have some value as examples of make-work, junk-think, busy-work, prof-scam!
Shockingly, the business schools very much discourage the profs from having significant contact with real business.
If medical education were like business education, then all the med school profs would be at best second rate experts in biochemistry doing third rate work on imaginary cures for imaginary diseases and would never see real patients, and no one would go to a hospital no matter how much they hurt. Law schools? The profs there would never see clients, file a legal case, or appear in a courtroom and would do statistical studies about whatever in legal cases pursued by others. Gee, maybe they'd do research on the ratio of nouns to verbs in legal briefs!
Instead, in medical school, the students actually get a good start on medicine, that is, how to take sick people and make them well, and that utility totally blows away anything in an MBA program.
So, what happened? In WWII, the US military concluded that research in physical science was crucial. Then the top 24 or so US research universities got an offer they couldn't refuse: Take big bucks from the US Federal Government as grants for research that is promising for US national security (eventually, or medical care) or cease to be a competitive research university.
Then the B-schools, somehow, got dragged into the same thing: The profs needed no business accomplishments or experience, had no on-going contact with actual business, taught theory sometimes close to business but usually not, and did research that has little promise of utility in business or anything else for at least 100 years.
In simple terms, the business school profs commonly don't know enough about business to run a lemonade stand.
Far, far too close for comfort is the clip
http://www.youtube.com/watch?v=YlVDGmjz7eM
from a business school class in Dangerfield's Back to School. The clip is perceptive on several points:
(A) The prof's idea is to set up a business "from the ground" up "with a 30,000 square foot facility" and an "efficient administrative and executive structure". Uh, generally that's a lot of money spent and likely at risk before any revenue. So, it is more common in practice to start small and, if successful, then grow.
(B) Dangerfield asks, "What's the product?". The prof wants to say "That is immaterial for the purposes of our discussion here". Well, maybe "immaterial" is okay from 100,000 feet up or when just talking with the general contractor, but anyone actually in business cares a lot about the product and would want to discuss it. The prof makes a stab, "tape recorders" and from Dangerfield gets a big lesson, "Are you kidding? The Japs'll kill us on the labor costs." The lesson: It's not trivial to think of a promising product. Quite generally the "product" is from important up to crucial. So, Dangerfield doesn't want to discuss spending big bucks without the product clearly in mind, and here he is correct.
(C) Dangerfield asks, "Why build? You're better off leasing at a buck and a quarter, a buck and a half, a square foot, save your down payment". One lesson here is that the prof is being too simplistic on the build/lease decision. For a growing business, building is likely a monument to ignorance. Another lesson is, Dangerfield has actual, current costs for leasing; in a real business of that scale, the CEO knows costs in fine detail. The clip is accurate: Commonly profs don't know real costs. E.g., I ended up leading the college in buying some computing; from the work I'd done before being a prof I knew the current costs in good detail, and the other profs in information systems didn't. For a student to toss out actual cost data in class can be embarrassing, intimidating, and infuriating for a prof!
(D) Of course the high point of the exchange is where Dangerfield interrupts and says, "Oh, you left out a bunch of stuff.", and with contempt the prof responds, "Oh, really. Like what for instance?". So, Dangerfield rattles off several points of costs in the real world! Could be very good to know! The clip shows a student taking notes furiously; that's accurate: Commonly the students really do want the real stuff. Finally the line, "How about Fantasy Land" is on target and a hoot.
It's a well done clip and parody of B-school and indicates that the movie makers and much of the audience got the points quickly.
The profs are pursuing a scam and know it: The smarter ones see how to game the system and do but are ashamed of all they do. The still smarter ones leave for something else in academics or just for actual business.
Instead, for a much better model, business schools should become plainly professional and borrow from medicine. If some problem in a real business in, say, supply chain optimization becomes important, then a B-school prof with such a problem should contact the campus applied mathematics, civil engineering, or operations research department much as a medical school prof might contact someone in biochemistry or cell biology.
A business school prof is someone who teaches students how to avoid the pitfalls in business they avoided by being business school profs.
(4) Business.
For someone who wants to start a business and make it successful, there are various directions:
There are the businesses common on Main Street, and likely the best way to learn such a business is to have a father who is successful in that business and learn from the father while working in the business.
There are businesses successful due to parts of globalization; some of these opportunities are too new to learn from a father, and how to learn is not clear. Travel the world on a tramp steamer and spend a few days in each of 100 foreign ports?
And for readers of Hacker News, sure, software.
For such possibilities, I have a tough time seeing that an MBA would be worth the time, money, effort, or, especially, the opportunity costs.
So, instead of just cursing the darkness, what might B-schools do?
Well, as I said, borrow from medicine. Or, health care is important: Medical school teaches students how to deliver high quality health care; to do this, the profs need to be experts in health care and relevant parts of the human body, disease, and how they work. This expertise was difficult to get and to confirm, formulate, and teach but is crucial. The research, say, in biochemistry, is important but not nearly the same thing.
Well, business is important: B-school should teach students how to do well in business; to do this, the profs need to be experts in business and how businesses work, the problems they encounter, and how to solve the problems and do well. This expertise will be difficult to get, confirm, formulate, and teach but is crucial. The research, say, in statistics is important but not nearly the same thing.