Also, anyone who thinks the FedEx network is "ultra-efficient" (as the article claims) hasn't shipped anything FedEx lately. More than ten years ago, FedEx bought RPS for FedEx Ground but never bothered integrating any of the systems. There are still two types of tracking numbers. Shipping something overnight from San Francisco to Los Angeles via FedEx Express routes the package through Nashville, while it could be sent just as quickly over FedEx Ground at lower cost and without using jet fuel. Also, their web site is just about the biggest piece of junk Oracle has ever produced. When you deal with their executive support team, as I unfortunately have, they give you FedEx coupons that the FedEx Office (formerly Kinko's) cashiers have absolutely no idea how to scan. I think what they need is engineers.
I think that MBAs should prove their worth by running their own businesses. The tricky situation is that they claim to be able to run any business using the same rules, but most of them choose to run other people's business instead of their own.
If MBAs were good. They would make their own businesses and win. Is it the case or not?
A lot of MBAs graduate and get into management consulting--basically they get paid to make bullshit Powerpoint decks and provide expert guidance in torpedoing their clients. In the consulting world, everyone agrees senior-level consultants (with an MBA) who are hired for C-level positions will run the company into the ground.
Not a huge fan of an MBA. But I don't think your ability to run your own business is necessarily a strong indicator of your ability to be a VP at a Fortune500.
I think at least some of them already do now. In fact, I has been thinking that hiring execs from the startup world may be a good idea for a while now.
Oh, God, Fedex. The only company where to return something you drive to the boonies where their Service Center is located, and they tell you sorry, this is FedEx Express, you need FedEx Ground or FedEx Home Delivery, which have their own service centers at opposite ends of the city.
Oh, God, Starbucks. The only company where you drive to the boonies where their Corporate Headquarters is located, walk in and order a latte, and they tell you this story about, "to get coffee, you need to go to a starbucks store, not our cube farm".
P.S. Never ship anything with any FedEx service other than Express. Otherwise, use the postal service or UPS.
Your quora piece first argues that MBAs have negative impact because a bunch of the people involved in the financial crisis had them. They also had undergrad degrees and were all human. To actually know if MBAs have a negative impact we need to compare a treatment group (with MBAs) with some kind of control (without them).
As for your view of the "average" MBA, that may very well be the case. There's plenty to write about how MBA programs suck, even (or especially) the "elite" ones. From that to argue that we as a society should have no ambition to teach business seems strange to me.
I disagree. To actually know if greenhouse gases have an impact on Earth's average temperature, do we need a control Earth? In both cases the evidence is pretty clear.
On the other hand, doing a controlled experiment wouldn't be a bad thing, either, so if we just shut down the business schools for the next 50-100 years, perhaps we can find the answer at the end of the study and decide whether or not to open them back up again. :)
>I disagree. To actually know if greenhouse gases have an impact on Earth's average temperature, do we need a control Earth? In both cases the evidence is pretty clear.
We have much better evidence for global warming than "the temperature has been rising and CO2 is also present in the atmosphere". You say that "the evidence is pretty clear" but at least in your piece there's only your anecdotal experience with an unspecified number of people.
>On the other hand, doing a controlled experiment wouldn't be a bad thing, either, so if we just shut down the business schools for the next 50-100 years, perhaps we can find the answer at the end of the study and decide whether or not to open them back up again. :)
I know you're joking but that experiment has already been ran in reverse (from no MBAs to the present state), so that data should already exist. It's not much of an experiment though as you have a bunch of other relevant factors evolving at the same time.
Personally I only disagree in that shutting down the business school is the only solution. In fact, I have known many of the problems of "legacy" MBAs for a while now. Of course, even if the business schools were fixed, older graduates will still exist with the problems you mentioned, which is IMO the hard problem.
At the risk of sounding overly snarky, I don't think that GM's leadership is in any position to make recommendations on how to run a car company.
And to get to his point, it's fluff. Which engineers, exactly, will run the show? The ones with the marketing skills, the social influence, and business knowledge to get the job done. I wonder if he knows that about 1/3 of MBA's are engineers.
At the risk of sounding overly snarky, I don't think that GM's leadership is in any position to make recommendations on how to run a car company
Despite the general level of incompetence among GM's leadership there were a few smart people there. Lutz was one of them. He has a strong track record of developing successful products and has never been shy about criticizing his bosses.
And to get to his point, it's fluff
It's not fluff. Perhaps this synopsis of his book didn't provide sufficient detail, but his point is broadly acknowledged as one of the major problems with the US auto industry. If you look at a US made car from the early 2000's, the level of cost optimization at the expense of all other factors is embarrassing. It's indisputable that as MBAs have gained prominence in the US auto industry, the products have become less compelling. Lutz is simply advocating that the people who love the product be the ones who have the final say.
Yet I think GM's leadership is in an ideal position to point out what they tried and failed with. And to note the exceptions to that approach that birthed their few successes.
The only time Apple ever lost the plot was when it put the M.B.A.s in charge.
Tim Cook runs Apple's operations, is widely credited as a supply chain genius, and has been acting CEO of the company since Jobs started his latest medical leave. He received an MBA from Duke.
Operations might be a good place for someone with certain business talents. But also, apple has lately received a lot of flack for their off-shoring and the types of workers and working conditions.
A counter argument to this was Carlos Ghosn's experience with Nissan. He said that one of Nissan's problems was engineers making cars for engineers, but that people did not want to buy.
In reality creating, marketing and being successful with a product requires diverse perspectives.
I think engineers beating up on MBA's is no different from MBA's beating up on "propellerheads." It's counter productive.
And just because you have an MBA, should you then be typecast by engineers? Why does having an MBA reduce someone's potential to be a passionate product person, or to have productive relationships with the makers?
The problem is that the old business school courses taught a lot of flawed stuff, including stuff from Jack Welch like cutting costs by treating engineers etc as disposable.
That's a good point, and poor cost accounting practices..
I have a friend (an engineer) who is doing his MBA right now. At his school he said there is a big focus on ethics and ethical behaviour. Based on what I've witnessed in business, I wish some of that was maintained once people entered the work world!
In the first half of the 20th century, industrial giants like Ford, General Electric, AT&T and many others were extremely consumer-focused
I couldn't really read any more of the article after seeing this outright lie. In the first half of the 20th century, At&T wouldn't even let you plug in a third party telephone. How is that customer focused in any way?
It's customer focused because it allowed them to enforce strict standards[1] with regard to how devices on the telephone network behaves, which in turn let them provide high quality telephone service to a huge number of people. The Bell telephone network of the first half of the 20th century was a marvel by the standards of the day.
Anyway, there honestly wasn't much of a problem with doing things that way from most customers' point of view: Bell owned the telephone equipment, but that was a good thing because it was expensive stuff, and they would maintain it for you. Moreover, there just wasn't much opportunity for differentiation in CPEs (customer premise equipment, the stuff in your house): battery technology wasn't at the point where wireless handsets made sense, commodity answering machines were a long way off, et cetera. In total, in terms of Bell's ability to roll out the network quickly, it was probably a net win with regard to the technology that they kept the whole thing closed.
Now, obviously it also gave them the opportunity to act pretty anti-competitively, and obviously that was not good for customers. But it's often been observed that huge infrastructure buildouts are much more efficiently done under central control, and given the choice between the Federal government doing it and Ma Bell doing it, I'll take the latter.
[1] I've read and implemented most of the Bellcore standards; in the past I worked on a team doing integrated telephone line control circuits (SLICs), and if you think fifteen years of web standards turns into a rats nest, try implementing 100 years of standards plus working around well-known cases that break those standards but are too widespread to ignore. The telephony equivalent of IE6 is the Casio Phonemate answering machine. That single piece of equipment is, I shit you not, singlehandedly responsible for about a 10% bloat in the cost of telephony equipment because it sold so many units and yet so badly breaks the ringing standard.
GM didn't fail because of product, that failed because of lack of management talent. GM had vastly higher costs than it competitors due to a heavily unionized workforce, long term dealership contracts that were losing them money, and a huge pension deficit (roughly $1500 from every GM car sold goes to paying pensions). It didn't matter how great their products were, they'd never be able to compete with new or foreign car manufacturers.
In the past decade, product really seemed to matter. I knew a few Saturn owners who loved the car, but the sedans that were being sold in the last five years of Saturn's life did not appeal to them, and that shows in the sales figures too.
from his wikipage it seems that he isn't an engineer, he is a professional manager and salesman. If he were following his own advice, he wouldn't had been running the show himself in the first place. Of course, as a result nobody would care today what some old man going by the name of Bob Lutz is thinking.
Pointless generalization. Engineers have their place: as individual contributors without customer facing roles. Not at the top or any management position.
I think there is a problem in business school focus on short-term optimization. There's data showing the while businesses have fatter profit margins than ever, total profit growth has been much weaker than in past decades. Hmm I think I saw that data in a Umair Haique presentation.
I would say that especially in fast-moving companies, like in the "Web" space (generalize as you see fit), MBAs have no role. But they do have a role in established companies (like Intel, IBM, etc.) where "processes" have to be followed and nobody wants to rock the boat.
What are the odds that this happens over the next decade? I'm only asking because I'm not sure where those engineers are going to come from unless we fix immigration laws.
For the past quarter-century, the American Medical Association and other industry groups have predicted a glut of doctors and worked to limit the number of new physicians. [1]
The problem is that the supply for doctors is artificially constrained leading to better salaries for them. If anything let's have more doctors so that the salaries are in parity with engineers.
All due respect, you could've chosen a better source for your bit of history than an article that uses a book by the name "The Homeopathic Revolution: Why Famous People and Cultural Heroes Choose Homeopathy" as its only source.
When taking into consideration how much time an engineer has to spend educating himself and the salary he gets, it would take a while to match that from a doctor's perspective. For example, 4 yrs of undergrad and a starting job at Google can see you making close to over $100K in 3-4 years. As a medical student you have 4 yrs of undergrad and 4 yrs of medical school (that can be a tremendous amount of loans). Then throw in anywhere from 3-7 years of residency making $40K. Depending on the specialty you choose and how hard you wish to work the median salary can range from $120K to $450K.
They may not be equal, but I know developers pulling in $200K that are just turning 30. Not to mention their lifestyle is a lot less stressful.
I imagine that not a lot of people know what you can make as an engineer and too many people still don't give engineers the credit they deserve.
Yup, plus don't forget that the risk posed by having bad engineers isn't nearly the same as bad doctors. So to the extent that the control on doctors results in fewer bad ones, I am ok with it.
With engineers you can have one making 50K and another pulling 200K as you mentioned...despite similar degrees. I feel there is less variance in doctor pay at least partially because there is less variance in doctor quality.
> Yup, plus don't forget that the risk posed by having bad engineers isn't nearly the same as bad doctors.
I'm not sure that this is totally true. I don't want to drive on a bridge designed by an incompetent engineer any more than I want to take drugs prescribed by an incompetent doctor.
It gets me so angry when I see complete idiots getting free corporate trips to europe to "present to customers" stuff that me and my fellow engineers built working late on weekdays,sacrificing our weekends...while these douchebags were at the bar talking to women about their exciting "work".
http://www.quora.com/Aaron-Greenspan/Shut-Down-the-Business-...
Also, anyone who thinks the FedEx network is "ultra-efficient" (as the article claims) hasn't shipped anything FedEx lately. More than ten years ago, FedEx bought RPS for FedEx Ground but never bothered integrating any of the systems. There are still two types of tracking numbers. Shipping something overnight from San Francisco to Los Angeles via FedEx Express routes the package through Nashville, while it could be sent just as quickly over FedEx Ground at lower cost and without using jet fuel. Also, their web site is just about the biggest piece of junk Oracle has ever produced. When you deal with their executive support team, as I unfortunately have, they give you FedEx coupons that the FedEx Office (formerly Kinko's) cashiers have absolutely no idea how to scan. I think what they need is engineers.