DRIVEN OFF THE ROAD BY MBAs

DRIVEN OFF THE ROAD BY MBAs

James R. Fisher, Jr., Ph.D.

© July 10, 2011

The organization’s romance with the MBA needs to be necessarily a brief one.  The argument, that the training middle managers and MBAs receive makes them good candidates for top management, is faulty.  That is what we now have.  No, the whole mystique of middle management and MBAs is wrong.  Middle managers are gophers and MBAs are mechanics, dedicated to ‘cipher management.’  Leadership requires more, much more.

James R. Fisher, Jr., Work Without Managers: A View from the Trenches (1990)

*     *     *

In zeroing in on MBAs, which at the time was America’s sacred cow, and the meal ticket to the good corporate life, I created a fair share of enemies. 

In Work Without Managers, I argued that they were the personification of our one-dimensional society.  Just as we now fight wars without understanding the cultures of the lands that we would nation build, the United States was producing products for disappearing markets such as big automobiles.  We were being beaten at our own game of producing quality products by Japan, South Korea and Europe. 

Now, today, we are virtually a service-oriented society with Europe setting the curve in manufacturing.   Exports of German manufactured goods in May exceeding 4 percent, considerably higher than the expected one percent. 

*     *     *

The MBA degree, I suggest, is a vocational degree not unlike trade schools, only it is exalted because it deals with cipher management or primarily finance.  I wrote Work while living and working in Europe in the 1980’s.  I write:

A corps of 80,000 new MBAs, epitomizing the quintessence of the verbal, analytical and rational mode of left-brain thinking, annually marches out of American universities to exacerbate the problem rather than resolve it.  Meanwhile, Western Europe, which represents a population approximately 100 million greater than that of the United States, produces only 4,000 MBAs per year. Remarkably, because we have turned to MBAs for salvation, we have fallen further into our own inferno.

*     *     *

I share these tidbits with you because Rana Foroohar of Time magazine (July 18, 2011) has written a column suggesting that the rise of business schools coincides with the fall of American industry.  She builds her case around a new book by Bob Lutz, an automotive executive.  He claims Detroit’s demise was driven by the fact that it “made the cars too well.”  I don’t think so.  His book is titled, Car Guys vs. Bean Counters: The Battle for the Soul of American Business.

His simplistic answer to the problem, according to Rana Foroohar, is to fire MBAs and let engineers run the show. 

My training is in engineering, worked as one with a chemical company, then worked with engineers as on organizational development (OD) psychologist for a high-tech company, including working with engineers at Charles Draper Laboratories at MIT in Cambridge, Massachusetts.  For ten years, I also taught mainly engineers as an adjunct professor at several Florida colleges and universities in MBA Programs. 

This prompted me to write in A Look Back To See Ahead (2007):

The paradox is that insiders capture our attention while outsiders stir the drink.  Outsiders write most of the books with insiders’ names on the jackets . . .This is played out with bizarre finality in the engineering community.  The modern world is a product of the engineering mind.  Yet while they created this world, it does not belong to them.  It has been stolen from them (p. 113).

Later, I attempt to explain why:

Engineers have a fatal attraction for being exploited.  This inclination is derived from their conformist education in which skills are honed out with well-established engineering and mathematical principles that can easily be replicated and therefore are indisputable.  Yet engineers are disinclined to selling or messy politics.

This results in the hard wiring of engineers to stay and not stray from consistency.  While developing their essence to the fullest, their personality is left vulnerable to attack on all sides.  They are outsiders in which insiders can exploit them at will, and unfortunately do.

A consistent complaint of engineers is that they are under utilized.  It never occurs to them that it is their fault.  They expect their value to be self-evident and appreciated.

Engineers are not decisive because they don’t see decision-making as part of their job.  They are problem solvers that are easily thrown off stride by turf wars or the politics incidental to perks and salary concerns.  Consequently, pay them a dollar more an hour than they can afford to quit and you own them (p. 115).

There were times I hoped my thesis would prove wrong when a brilliant engineer was promoted into top management.  Invariably, they became bean counters braying to the corporate cheer that would seem true of the book by Bob Lutz.

Foroohar writes in her article:

Lutz wisecracks his way through the 1960s design and technology led glory days at GM to the late 1970s takeover by gangs of MBAs.  Executives, once largely developed from engineering, began emerging from finance.  The results ranged from the sobering (mangers signing off on inferior products because customers “had no choice”) to hilarious (Cadillac ashtrays that wouldn’t open because of corporate mandates that they be designed to function at –40 degree Fahrenheit (Time, July 18, 2011, p. 22).

*     *     *

This is not new, and in the telling it may be entertaining but nothing changes.  Take this scenario reported in Work:

The General Motors assembly plant in the Van Nuys area of Los Angeles instituted the Japanese approach to the team concept in 1987. Three years (1990), an incident indicated how badly it was failing.  Barry Stavro of the Los Angeles Times tells the story:

“It was only one of the 3,000 or so parts that go into a new Chevrolet Camaro or Pontiac Firebird.  But for Larry Barker, a welder . . .one part summed up all that is wrong with the way GM builds cars.

“One night last fall, Barker, along with the rest of the shift was sent home early after GM ran out of a reinforcement panel that is welded next to the wheel wells near the motor compartment.  The panels come in pairs, one for the right side, one for the left side.  When the plant ran out of panels for one side, the assembly line stopped.

“A night shift supervisor came down and actually took one of the panels from the other (wrong) side and literally tried beating it into place with a hammer and then welding it.

“The Rube Goldberg-fix-it took so long, Barker said, that GM decided ‘it wasn’t worth it, so they sent us home.’  But if the wrong part could have been forced into place faster, he believes, ‘they probably would have run the assembling line’.” (pp. 145 – 146)

*     *     *

Foroohar concludes: The only time Apple ever lost the plot was when it put the MBAs in charge.  As long as college dropout Steve Jobs is in the driver’s seat, customers (and shareholders) are happy.

This brings to the fore my frustration with this article and, I suspect, with this new book.  It is not as simple as she would imply.  I wrote in Six Silent Killers: Management’s Greatest Challenge (1998):

The lessons of workplace culture and organizational structure don’t end here (I was referring to the train wreck when Jobs stepped down).  The man Jobs personally recruited to give Apple stability, John Sculley of Pepsi fame, curtly kicked him out of the company he co-founded.  Jobs was brutal, brash, and brilliant, and treated and trained co-workers as part of his intellectual harem.  This was okay for a newborn company, but not for one when it found its own legs.  The hubris that technology will save us from ourselves is encountering some uncertainty.  Technology has changed us.  It has made the organization, as we know it, anachronistic and management irrelevant.  It has changed the nature of work and created a professional class of workers, but the workplace culture and the organizational structure remain essentially unchanged.  So the dream still implodes causing nightmares for nearly everyone (Six Silent Killers, p. 56).

The plot at Apple is, indeed, the personification of Steven Jobs, and the culture reflects his beliefs, values, interests, and expectations.  John Sculley was a bad fit because he wasn’t  Jobs, couldn’t be Jobs, and therefore didn’t appreciate and was unable to absorb the culture.  The culture drives performance.  Jobs, in his writings, points out that when he came back he recognized this and assumed the burden, sometimes at the expense of his health.

The late John Kenneth Galbraith wrote in Economic in Perspective (1987) that the hysterical search for profits would find most companies surviving on the basis of playing the money market.  He envisioned capitalism giving way to a mandarin like technocracy, where moving money around would take precedence over making things.  To support his thesis, he pointed out that for every 840 graduating MBAs only 50 planned to go into manufacturing jobs. 

We not only kick the can down the road.  We kick it around the block and always end up right where we started.  Why should the MBA dilemma be any different?

*     *     *