"Why does that suddenly seem ridiculous?"

[unixronin]

Today’s Dilbert strip nails one of my principal problems with the Harvard School of Business and its MBA program.

I will never understand how Harvard managed to slip the ridiculous idea over on American business that having studied how to run an abstract ideal company on paper qualifies anyone to step straight into any company and run it competently without having any substantial in-depth understanding whatsoever of the company, its product, its processes, or its market.

Comments

[cipherpunk.livejournal.com]

I blame the CxOs, myself. It used to be the guy at the head of the company got there either by nepotism or extreme competency in the nuts and bolts of the firm. Sometimes, as in the case of the early Ford Motor Company, both. Then, as you point out, complex financial instruments became commonplace and finance professionals were brought on board. So far, so good.

Then the financiers started running the companies. That’s what a CEO is — a financier. Many CEOs have little understanding of the nuts and bolts of their companies and don't especially want to know. They just want to know cashflow: are we profitable? Can we make this buyout? What’s in it for us if we approve this merger?

There’s nothing wrong with that kind of analysis and there’s certainly nothing wrong with having answers to those questions — but the idea that business should be driven by those kinds of questions is, IMO, madness. The closest we have nowadays to a nuts and bolts guy is the Chief Operating Officer. If the COO is competent, they’ll have a strong background in the company’s operations and some math–heavy business school knowledge (Operations Research FTW!). If the COO is incompetent, well — substitute “I once led a Boy Scout troop” for nuts and bolts background and “of course I’m good at math, I’ve got an MBA, right?” for the math.

[ithildae.livejournal.com]

You are exactly right about the madness. The financial aspect were no longer illuminating the business, they were driving decisions. (Never use statistics like a drunk uses a lamppost, for support rather than illumination.) Alaric identifies the other major problem, short term thinking. When CEO compensation changed to market forces rather than salary, the ten year, five year and one year plans disappeared. It was all about quarterly earnings reports and stock price. The MBA's just provided data for where to gut next.