There Is Hope - The Death Of The MBA.

[Sunfish]

America, the country that foisted the concept of the MBA who can manage anything on the world now appears to be realising the flaws of this model.

Just don't hold your breath.

(disclaimer: I have an MBA and a little airline experience, but the airline stuff came before the MBA.)



Bob Lutz, the former Vice Chairman of General Motors, is the most famous also-ran in the auto business. In the course of his 47-year rampage through the industry, he's been within swiping range of the brass ring at Ford, BMW, Chrysler and, most recently, GM, but he's never landed the top gig. It's because he "made the cars too well," he says. It might also have something to do with the fact that Maximum Bob, who could double as a character on Mad Men, is less an éminence grise than a pithy self-promoter who has a tendency to go off corporate message. That said, his new book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business, has a message worth hearing. To get the U.S. economy growing again, Lutz says, we need to fire the M.B.A.s and let engineers run the show.

Lutz's main argument is that companies, shareholders and consumers are best served by product-driven executives. In his book, Lutz wisecracks his way through the 1960s design- and technology-led glory days at GM to the late-1970s takeover by gangs of M.B.A.s. Executives, once largely developed from engineering, began emerging from finance. The results ranged from the sobering (managers signing off on inferior products because customers "had no choice") to the hilarious (Cadillac ashtrays that wouldn't open because of corporate mandates that they be designed to function at -40°F).............

..................The pendulum began to swing in the postwar era, when Harvard Business School grad Robert McNamara and his "whiz kids" became famous for using mathematical modeling, game theory and complex statistical analysis for the Army Air Corps, doing things like improving fuel-transport times and scheduling more-efficient bombing raids. McNamara, who later became president of Ford, brought extreme number crunching to the business world, and soon the idea that "if you can measure it, you can manage it" took hold — and no wonder. By the late 1970s, M.B.A.s were flourishing, and engineers were relegated to the geek back rooms. (See why you should still go to college.)

This is not to say that the Whiz Kidding of American business yielded no positives; things like the hyperefficient FedEx logistical hubs and the entire consulting industry were born out of it. But ultimately, moving numbers around can do only so much. Over the long haul, you've got to invent or improve real products and services to grow.

read more.....



Why a Rise in M.B.A.s Coincided with the Fall of American Industry - TIME (http://www.time.com/time/magazine/article/0,9171,2081930,00.html)

[UPPERLOBE]

You are batting 1000 today, another good post.

It was the MBA who destroyed Qantas Engineering and Line Maintenance in particular. Seems that all the aircraft were supposed to run exactly on schedule, never have a defect and the chaps should have been able to work two or three at a time. I had to constantly hear about how wonderful everything was in the in the Component workshop and how they planned to incorporate those same production methods across the entire engineering spectrum :yuk:.

Ex "Stakeholder" thankfully.

[troppo]

Yeah nice try blaming the MBAs of which I also have.
GM has been a basket case for forever a bit like Ansett and dare I say it Qantas. It is nice to have a scapegoat. They were all for it in the time of globalisation and outsourcing but MBAs will be valued for a significant time to come.

[PLovett]

and let engineers run the show

Mmmmm..............the last company that I recall who did that was Rolls Royce, .........just before they declared bankruptcy. :ugh:

Engineers vs bean counters............they are the polar opposites and when either is allowed to dominate there are problems. The object of the exercise is to achieve a balance so that the extremes don't dominate.

I will admit that the problem in much of the airline industry is that the bean counters are in the ascendancy and that has caused problems but on the other hand I wouldn't let a pilot anywhere near the financial levers either. :=

[Tankengine]

Companies need a mix of experience and qualifications to function well.

Now tell me, who on the Qantas board and senior management know anything about aeroplanes or successful airlines?:ugh:

[TIMA9X]

Now tell me, who on the Qantas board and senior management know anything about aeroplanesThey all know how to use the first class seat buttons or should I say, most of them.:rolleyes:

[lk978]

Its funny to me reading posts like this one and others with a similar nature. I am an university educated person with an undergraduate degree and a masters degree in business. I honestly believe that yes there is too much emphasis put on education especially in the US. University study should be seen as getting a good grounding of key concepts and looking at what has worked in the past and what we can do in the future, although I don't believe universities here in Australia do a great job teaching innovation in the business schools.

I also don't subscribe to the thought process of this is how it has always been done and I have been doing this for 40 years... This works to a point but there are a few guys like Henry Ford and the Boy's who started Google (both have Degree's) that may disagree.

I for one have seen many peers get out into the work force and make a complete balls up of it because the text book said to do it one way and that didn't go over to well. I have also seen so many other people with years of experience that have no idea about how they could be doing something a better way because there is no other way.

I would say don't put too much emphasis on a uni degree (I am not that smart and can't spell for sh!t), I made it through, but don't disregard best practice as it may save you allot of time and hassle experimenting.

As for QANTAS, I think there are some executives that do need to go and take some weekend courses in employee engagement and motivation as well as a bunch of other courses as they are clearly incompetent or are purposely destroying the company, but pilot's don't do themselves any favours by saying board members don't know anything about aeroplanes so they shouldn't be there... you sound like a miner on an excavator for BHP saying that the boss couldn't do my job so he is no good. How many pilot's know about Directors' fiduciary duties?

[porch monkey]

Interesting question there IK. Care to guess how many of the current QF board might know the answer to that?:rolleyes::rolleyes:

[ampclamp]

How many pilot's know about Directors' fiduciary duties?
Fair point lk978 but considering what has gone down at Centro there are a few directors that have no clue either! They gave a good impression of being rubber stamping numpties.

[Capetonian]

The infamous Master Bull**** Artist, refuge of the inept. Placing the stamp of authority on utterances of the banal and obvious.

It's all about making people believe in themselves, the end result being that they take themselves so seriously that they can never see a way other than their own.

[lk978]

Ahh yes sorry I thought i touched on it but I see so many graduates throw out what they learnt out the window

Inside Job
Inside Job (2010) - IMDb (http://www.imdb.com/title/tt1645089/)

[Tankengine]

Since I was the one who brought up the board, I have actually been a director of a [small] company.:p
I ask again : do any of them know anything about aeroplanes or [successful] airlines?:ugh:
You don't need to be a pilot to know SOMETHING?:confused:

[lame1]

Was listening to the little Irishman on the TV the other day.He stated the new gen aircraft need less maint .I guess thats a clear example of having no understanding of the actual product.

[gobbledock]

lame1, you need to 'look outside the box' ! By making the comment that the new gen aircraft require less maintenance is most likely a sly plug for the manufacturer, and that earned da little fella some extra retirement money !!

[600ft-lb]

Was listening to the little Irishman on the TV the other day.He stated the new gen aircraft need less maint .I guess thats a clear example of having no understanding of the actual product.

Maybe he should actually ask the TEAMS of people attending the A380 every transit and overnight and A check if it needs less maintenance.

For an aircraft roughly double the size of a 767, it doesn't scale very well.. put it that way.

[1me]

This is a really interesting topic and something that I have been thinking about over the last little while.

ik978.. I admit that I have no idea of what the fiduciary duties of directors are, but then I am but a lowly engineer..

It seems to me that managers and technical staff reside at opposite ends of the spectrum. In this country, people in management roles have more flexibility to shift from company to company and position to position than people such as engineers and pilots. We don't necessarily have that same luxury because our chosen professions are highly specialised and the job market for our skills is significantly smaller. Also, not everyone wants to, or even can, move overseas to chase other opportunities.

This was highlighted brilliantly back in the day when Strong was CEO. He was speaking at an employee roadshow and taking questions when one employee prefaced his question with the fact that he had been with the company for 15 years. JS immediately retorted that the subject employee had been there too long!

Firstly, this indicates that managers have no idea of the concepts of loyalty or dedication and secondly, that they really have no understanding of the mechanics (no pun intended) of our industry.

It may be fine for a manager to change jobs or companies every 3 to 7 years, given they regard this necessary for their professional development, but to apply this same philosophy to all employees in their charge displays a high level of ignorance and contempt.

I, for one, am sick and tired of the latest and greatest management catchphrases and buzzwords spouted by business school graduates with no real world experience. Give me an MBA graduate and I'll show you how to run a great company into the ground!

[lame1]

Airbus or Boeing or some consultant would have told AJ that rubbish.The fact that he believes it is further proof he shouldnt be running the airline and the managers below him are way out of their depth and are weak.We live in a very isolated part of the world.What made us stand out from the rest was our ability to operate efficiently and stand on our own feet and deliver a product to the community that (a)SAFE (B)RELIABLE.
Have a look at the new worlds best model produced by this new breed of so called leaders.They dont care about safety and reliability,they only care about short term KPI's that deliver large amounts of money to their pockets.Over the past ten years the product delivered to the passenger has been slowly eroding.But in the same time the leaders pay have increased.
AJ and his mates will move on to greener pastures and leave behind a total mess.And they will say its all OUR FAULT.
Its time to say NO MORE.
What are the effects of the SUSTAINABLE FUTURES PROJECT
It has reduced our workshops,our stores,our training,our heavy maint,our line maint,our pilot training.
All this has a flow on to SAFETY and RELIABILITY.
ITS time to put the line in the sand.

[Chronic Snoozer]

Dug this up from 2006, pre-GFC. Seems the dubious merit of an MBA was recognised quite some time ago. According to BusinessWeek's survey of S&P100 executives,

Some startling numbers came to light. Only 146 of the 500 executives reported having MBAs, a surprising number considering the hundreds of thousands of B-school alumni with enough experience to qualify them for top jobs. What's more, only 71 received MBAs from the top 10 B-schools, and two-thirds of those executives have degrees from just three institutions: Harvard Business School, Stanford University's Graduate School of Business, and the University of Pennsylvania's Wharton School.

Is the MBA overrated? (http://www.businessweek.com/magazine/content/06_12/b3976089.htm)

I have to admit I have an 'MBT', (still in the packet) and if nothing else it provides you with a good filter to sort BS from brilliance in the world of corporate speak. It really comes down to the age old question of 'qualification vs experience' when running a company. A healthy balance of the two would seem the optimum framework for management.

I think its also safe to say that graduates that destroy shareholder value would do so whether they have the qualification or not. So the problem probably lies with HR and the way they recruit rather than the MBA philosophy. By this I mean an MBA could make a very good manager outstanding but a below average manager may well still turn out to be, well, below average and possibly outright reckless with an MBA in his/her pocket.

Reasons for an MBA qualification have diverged significantly from the original intent. MBAs are sold as means of achieving a better graduating/start salary. Right from the start its 'all about me'. Wouldn't it be nice if the reward for gaining an MBA was 'to be able perform your management role brilliantly increasing your staff's job satisfaction and productivity whilst enjoying a healthy, balanced lifestyle'. Sadly this ideal is not touted on the application form.

[priapism]

We can thank the Harvard business school for the GFC.

[Sunfish]

The MBA is actually a "licence to learn" general management. The trouble is that some graduates and companies regard an MBA is an end point and not a beginning.

It isn't that hard to get an MBA, the workload is rather crushing to begin with, but it isn't rocket science. I did the part time years early morning lectures and worked Ten to Six instead of Nine to Five with the D. Engs. permission. You meet very interesting people from all walks, some of whom I'm still in touch with although I don't go to the endless Alumni meetings.

When you are a newly minted MBA, there are people who think you walk on water. If you are lucky, and almost drown three or four times proving this is incorrect, you start acquiring a little wisdom, and are actually useful to some employers.

[lk978]

Priapism, free markets in theory work well but human nature seems to get in the road along the way that is why we need governance and regulation.

[Propstop]

Sunfish....Have you just described an apprenticeship?????

[Neptunus Rex]

I am an (sic) university educated person with an undergraduate degree...

Please explain how an undergraduate can hold a degree. Perhaps it is more MBA "Doublespeak?" (William Lutz, 1987)

[Anthill]

There are 2 types of degree: Undergraduate and Post-Graduate. The undergraduate degree is your normal run of the mill BA, BSc, BEc, LLB, BEng, BAv..

Post Graduate is a qualification awarded to someone who has already fulfilled the requirements for award of an Under Graduate Degree:ie MA,Phd, Graduate Diploma/Certificate etc.

[Sunfish]

Propstop, I guess you could say so.

The interesting deduction from Lutz's theorem, if its correct, is that the first companies that realise the limitations of a lack of management hands on expereince are going to make a lot of money.

...And give it Thirty years and the pendulum will have swung in the other direction. Remember that when Branson tried to borrow money to start his first business venture, he was told he was too young and inexperienced....

[Worrals in the wilds]

Post Graduate is a qualification awarded to someone who has already fulfilled the requirements for award of an Under Graduate Degree:ie MA,Phd, Graduate Diploma/Certificate etc. Or someone who can satisfy a token 'work/real life experience' requirement and will come up with the cash. Some years after being awarded a degree I did a postgrad course and there were students who could barely speak (let alone write) English and hadn't realised that copying great wads of Wikipedia does not maketh a great essay, which is something taught practically at gunpoint in the first course of any decent bachelor degree. It was a reasonable university and the staff did their best to maintain an academic standard, but it was obvious that money talked and every kid got a prize, Wiki-fanatics included. :uhoh:

Even some of the posh unis are offering the 'prior management experience' option to get MBA students, and seeing the fees they charge for an MBA course I'm not surprised. They must cover the costs of a lot of sandstone arches and lab upgrades. However, I think it debases the postgrad concept and cheapens their product.