Managers not MBAs

The Charges

Only three things are seriously wrong with business schools and MBA programs:

1. They train the wrong people.
2. They teach the wrong way.
3. They produce the wrong results.

Business schools draw their students from a self-selecting population. Ambitious youngsters with good grades and high scores on standardized tests apply to business school. Why? They know that if they leave school with an MBA (masters degree in business administration) they'll be on the career fast track. They'll be able to fly by workplace colleagues who have spent their time working on the job and gaining experience instead of sitting in a classroom analyzing hypothetical situations.

“Were management a science or a profession, we could teach it to people without experience. It is neither.”

Business schools operate on the presumption that management is a science and that an MBA grad is a professional. Management is not a science. A science involves the pursuit of knowledge. Managers do not pursue knowledge. They have a completely different function. If management is not a science, is it a profession?

“We require better managing in this world, and need serious educational institutions to help get us there.”

The professions of law, medicine and engineering have codified modes of practice. In a profession, some things clearly work and some things clearly do not. But management has no such code of proven, accepted practice. A student can go to school and learn to be a doctor, lawyer or engineer. But no student can go to school and learn to be a manager. The only way to learn to be a manager is by managing.

“The old joke about MBA standing for management by analysis is no joke at all.”

What is managing? It is helping others do well. Ask if the self-selecting students who attend top MBA schools intend to help others do well or to help themselves do well? The answer is patently obvious. One might plausibly suggest that job applications ask, "Do you have an MBA?" in much the same spirit as they ask, "Have you been convicted of a felony?" Some felons reform; some MBAs become decent managers, but the prognosis is generally not good.

Teaching the Wrong Things, the Wrong Way

Business schools have changed little since the early twentieth century. They teach economics and the various functional disciplines of business: accounting, marketing, finance and such. They take an analytical approach to things that, while they may be analyzed, do not necessarily benefit from it.

“Leadership is not about making clever decisions and doing bigger deals, least of all for personal gain. It is about energizing other people to make good decisions and do better things.”

Consider, for example, strategy. If any part of business should be viewed as dependent on subtle factors such as content, it's strategy. A strategist must consider the resources, the people and the facts of a unique situation, and must, somehow, bring all of those considerations together in a plan. A strategist must synthesize and have the gift of intuition. But business schools approach strategy using the methodology of Michael Porter, who wrote, "I favor a set of analytic techniques to develop strategy." Analysis is not strategy. Porter's approach offers little to managers, although it offers a great advantage to business school professors. It makes them look more "scientific" and intellectually credible.

“The term slack may have a negative connotation, but it (down time) has to be an important component of academic pursuits, for both faculty and students.”

The consequences of MBA education are fairly dismal. MBAs spend some time away from the real world of work and management. They leave school knowing that their new MBA degrees put them in a class above workers who lack such degrees. They are quite confident. They are also incompetent. The combination of high confidence and low competence produces arrogance. Really great leaders and really gifted managers are humble. You won't find much humility among MBAs.

“In a democratic society, we do not exist for our social and economic institutions; they exist for us.”

MBAs generally gravitate to such fields as investment banking and consulting. These areas provide ample occasion for the MBA to apply what business school teaches: analysis and presentation. They do not provide much opportunity for real, hands-on, management. MBAs in these fields tell other people what to do, and then they leave. Other people take the consequences of the advice, good or bad.

“Management educationa€|should be a privilege earned by performance as a manager, not a right granted by the score on a test.”

When MBAs take jobs in "real" companies that make "real" things, they tend to avoid the "real" parts of the business. They don't tend to get involved in selling or operations. Those functions demand specific knowledge that depends on context and can only be gained by experience. MBAs tend to find their way into staff jobs in human resources or strategic planning. Those jobs are somewhat remote from the "real" business, tend to rely on abstract knowledge and, therefore, tend to be extensions of the MBA school experience.

“An obsession with ’facts’ blinds the calculating manager to everything but the present.”

MBAs are notorious bandwagon riders. They swarm toward "hot" fields. They are like na?ve investors driven by momentum who chase the stock that has just gone up in the hope of riding a further rise.

Leaders, by contrast, do not tend to jump on bandwagons. One can almost predict that a surge of MBAs entering an industry presages that field's decline. But MBAs swarm to trendy fields for the same reason the famous robber Willie Sutton robbed banks — that's where the money is. MBAs are mercenaries. Their view of leadership is that it provides an opportunity for self-advancement.

Exemplary MBAs

Considering some famous MBAs of recent history is illuminating. Consider, for example, Robert Strange McNamara, who earned an MBA from Harvard in 1939. He was a member of Harvard's faculty for three years before his World War II service. He spent the war years as a statistical control officer. After the war, he and a group of veterans joined Ford Motor Company as a band tagged the "Whiz Kids." They rose rapidly and eventually produced two presidents of Ford, including McNamara. Appointed Secretary of Defense by President John Kennedy, McNamara applied MBA principles to the Department of Defense from 1961 to 1968, when its most important project was the Vietnam War. McNamara developed an approach to waging war by the numbers, placing great emphasis on body counts. When told that the American-supported government in South Vietnam was becoming unpopular among peasants, McNamara asked for numbers to back the statements — statistics, not "soft" realities. One military writer referred to this approach as "an educated incapacity to see the war in its true light." McNamara went on to become head of the World Bank. He once again set forth a strategy based on analysis and supported by numbers. This approach succeeded no better in economic development than it had in war.

“But traditional management education has favored professors who believe they know better, and that, in turn, has produced managers who believe they know better, too.”

McNamara is not an isolated example. In 1990, author David Ewing published Inside the Harvard Business School. His book identified 19 alumni who had climbed to the top in business. A look at this roster 10 years later revealed that getting to the top was a distinctly short-term phenomenon. Most eventually distinguished themselves by egregious failure; a few managed to cling to mere mediocrity; successes were rare. Consider:

• William Agee ran Morrison Knudsen Corporation into bankruptcy.
• D'Arcy Masius Benton & Bowles shut down just a few years after the departure of ten-year CEO Roy Bostock.
• Robert Cizik left Cooper Industries after a big acquisition failed.
• Marshall Cogan was forced out of Knoll International Holdings just ahead of the company's bankruptcy.
• Levi Strauss CEO Robert Haas surrendered his post when the firm hit dire straits.
• Robert Hauptfuhrer had such trouble with Sun Exploration and Production that it earned the contempt of Wall Street.
• Richard Jenerette headed Equitable Life, a company that lingered in mediocrity.
• Frank Lorenzo ran three airlines (Eastern, Texas Air, Continental) into trouble, clashed with employees and presided over two bankruptcy filings.
• Shareholders forced Vernon Loucks out of Baxter International because they were fed up with unacceptable performance. Prosecutors convicted the company of a felony.
• Robert Malott of FMC was known for questionable performance and strategy.
• Joseph McKinney was forced to retire from the Tyler Corporation because his conglomerate did so poorly it had to be broken up.
• Jerry Pearlman had to retire from Zenith because he could not make it successful.
• The board of American Express gave James D. Robinson his walking papers.
• Cray Computers suffered massive losses shortly after John Rollwagon left.

“Managing is mostly about nuances, while the popular works mostly provide formulas – painting by numbers, so to speak.”

Did these corporate failures have anything to do with the education these MBAs received? A review of press accounts shows that these CEOs were often criticized for self-interest, indifference to or exploitation of employees, failure to understand the context of the business and more. Jeff Skilling of Enron presents a very egregious example of an MBA in action. He was a star at the Harvard Business School. His focus on "shareholder value" and his indifference to everyone and everything else, including ethics and law, is fairly characteristic of MBAs.

A Better Way?

One of the interesting things about the MBA phenomenon is the degree to which MBA jargon has penetrated non-business areas of society. Government institutions and even churches have begun to think of themselves and their mission in terms of MBAs — defining clients, analyzing performance by the numbers and so on.

“So, of Harvard’s nineteen presumed best of 1990, only five left their jobs with an apparently clean record. If any bottom line gets closer to the ultimate performance of the MBA, this is it!”

The consequences of bad MBA education include a society whose institutions do not really understand themselves, their mission or the criteria for their success. Reforming management training into something positive instead of something negative requires thinking about management education in an entirely new way. The following propositions will help:

• Provide management education — But give it only to experienced, practicing managers. Determine management school admission by aptitude, as identified by an objective, unbiased performance assessment. Students should not be self-selecting.
• Design new classroom training — Have it draw on and build on experience.
• Theory is important — And, abstraction is important. Managers need theories and frameworks to help them understand what they experience. Theory should challenge, not reinforce, conventional wisdom. False theories, alternative theories and uncomfortable theories all have their place in the management classroom.
• Reflection is indispensable — Slack time is the most valuable time in a management program. Cramming as much work as possible into every minute subtracts from the educational experience.
• Share skills — In addition to sharing concepts, managers in the classroom should share competencies, including such skills as reflection, strategic thought, time management, dealing with people and communicating. These are among management's most important functions, yet business schools do a very inadequate job of teaching them (partly because they are difficult, if not impossible, to teach).
• Send teams to management school — Management education is only valuable insofar as it affects an organization, so train people in work units.
• Focus management education — Emphasize the process of "experienced reflection."

“Screw tenure. Better to be able to look at yourself in the mirror than to hang your head in the faculty club.”

McGill University in Montreal worked with other schools to create a program incorporating these propositions: the International Masters in Practicing Management (IMPM).

Management education is fundamentally but perhaps not fatally flawed. The world needs better managers, but today's system of management education does not and cannot provide them.

The MBA degree trains analysts, not managers. Business schools exist and are run for the benefit of the faculty, not for the benefit of society. Businesses and society need to hold educators' feet to the fire and demand management education that provides valuable managers, not just high-priced divas and dilettantes.

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About the Author

Henry Mintzberg is Cleghorn Professor of Management Studies at McGill University in Montreal, Canada. He was named Distinguished Scholar for the year 2000 by the Academy of Management and won its George R. Terry Award for writing the best book of 1995 (The Rise and Fall of Strategic Planning).