Skip to comments.America's monumental failure of management (Many Harvard MBA Grads are failures as Executives)
Posted on 02/03/2010 9:56:03 AM PST by SeekAndFind
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If you always do as you always did, you will always get what you always got." So goes an old saying. And so goes the American economy.
The problem has become the solution. Americans are now getting from their government what they got from their corporations. The automobile companies are collapsing because of their short-term perspectives and so the government has provided one bailout projected to last a few weeks, and here comes another.
We call this a financial crisis or an economic one, but, at the core, it is a crisis of management. To understand this, consider the mortgage debacle.
How could these mortgages have come to exist in the first place and, worse, how could they have spread to so many of the bluest of blue-chip financial institutions? The answers seem readily apparent. Those who promoted these mortgages were intent on driving up sales as quickly as possible for the benefit of their own bonuses, the ultimate consequences be damned. In fact, they sold off these mortgages as quickly possible.
But how could any serious financial institution have bought this junk - or, more to the point, tolerated a culture of people too lazy or disinterested to realize it was junk? That, too, is simple: These companies were not being managed. They were being "led" - heroically, no doubt - for short-term spectacular performance. The executives didn't know, and the employees didn't care.
What we have here is a monumental failure of management. American management is still revered across much of the globe for what it used to be. Now, a great deal of it is just plain rotten - detached and hubristic. Instead of rolling up their sleeves and getting engaged, too many CEOs sit in their offices and deem: They pronounce targets for others to meet, or else get fired.
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Executive compensation, the most evident manifestation of this legal corruption of management, was labelled scandalous by Fortune magazine more than 20 years ago, and repeatedly ever since, to no avail. While America escalated its love affair with leadership, its corporate leaders singled themselves out for increasingly obscene pay packages, all the while extolling the virtues of teamwork and sustainable enterprise.
Alongside this came all that "downsizing": Fail to make the targets, no matter how profitable the company remained, and out the door went thousands of employees, those "human resources." So conveniently called, in fact, because while managers have to be careful about human beings, they can dispose of human resources like any other resources.
But at what cost? Rather high, because these people carried out much of the critical knowledge of their companies, as well as those companies' hearts and souls. A robust enterprise is a community of human beings, not a collection of human resources.
We have been told how productive the American economy has been. Well, check the way productively is calculated: Firing great numbers of people, and expecting those left behind to carry the load before they burn out, is productive, indeed - until the longer-term consequences show up. They have been partly showing up in the massive U.S. trade deficits. The U.S. economy is collapsing because the American enterprises - and worse still, the country's legendary sense of enterprise - have been collapsing.
To get bailed out yet again, the auto companies have to offer plans. No problem: American companies specialize in making plans. It's the execution that's been the problem. (Remember those grand auto shows, with all their exotic cars that never made it to market? That was "planned obsolescence.") These companies couldn't succeed by doing, so how are they supposed to succeed by planning? The only thing we know for certain is that these plans will result in many more layoffs. That's some way to fix an economy.
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From where I sit, management education appears to be a significant part of this problem. For years, the business schools have been promoting an excessively analytical, detached style of management that has been dragging down organizations.
Every decade, American business schools have been graduating more than a million MBAs, most of whom believe that, because they sat still for a couple of years, they are ready to manage anything. In fact, they have been prepared to manage nothing.
HUBRIS ON A MASSIVE SCALE
Management is a practice, learned in context. No manager, let alone leader, has ever been created in a classroom. Programs that claim to do so promote hubris instead. And that has been carried from the business schools into corporate America on a massive scale.
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Harvard prides itself on how many of its graduates make it to the executive suites. Learning how to present arguments in a classroom certainly helps. But how do these people perform once they get to those suites? Harvard does not ask. So we took a look.
Joseph Lampel and I found a list of Harvard Business School superstars, published in a 1990 book by a long-term insider. We tracked the performance of the 19 corporate chief executives on that list, many of them famous, across more than a decade. Ten were outright failures (the company went bankrupt, the CEO was fired, a major merger backfired etc.); another four had questionable records at best. Five out of the 19 seemed to do fine. These figures, limited as they were, sounded pretty damning. (When we published our results, there was nary a peep. No one really cared.)
How much discussion has there been at Harvard about the role it might have played in forming the management styles of graduates who, over the past eight years, have been running America and what used to be its largest company? The school is now reviewing its MBA program, but the dean has made it clear that questioning the case-study method will not be on the agenda.
In this, we have America's problem in a nutshell: the utter absence of collective introspection, whether it be the current crisis, the relationship between the Vietnam and Iraq debacles, even what might have contributed to 9/11, as well as the way it has been compensating and educating its corporate "leaders." The country seems incapable of learning from its own mistakes.
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The college cookie cutter concept.
Notice how the CEOs of the largest corporations are not the founders of those companies. Except for Bill Gates and Steve Jobs - there are no Henry Fords or Ross Perots in the executive suites.
The best ideas for cost-savings and innovations come from the guys on the factory floor or in the field.
MBAs are paper pushers!
Wait, this is not breaking news...it’s old news.
Dad, here’s a great read PING (I’d rather have an “MBA” from life’s lessons learned working in MJ’s than Hahvad University anyday!)
that’s because Harvard’s MBA program has been teaching “social responsibility” and not business for a quarter-century
It’s for the same reason that many(not all) service academy grad wear their HUGE(Super Bown Ring Huge) Academy class ring everywhere, it’s like being admitted to the club. Alot of Masons do this too.
Most business people I know, look to hire REAL kids from the state schools, even....gasp....community colleges. These kids usually work a real job while in school and don’t graduate with the snobby sense of entitlement and utter cluelessness about the real world, inherent in those that attend our local “prestigious” Ivy League school, Washington University.
College professors are one of few professions--along with politicians, with enough media cover--where people can go through their entire career spouting their pseudo-wisdom insulated from ever having their theories tested in reality. They don't even need to be good teachers!
Major universities, along with the media, are the proverbial family businesses of Progressiveism.
Competence is irrelevant. Service to the cause is all that matters.
The students steeped in their theoretical BS then find themselves ill equipped for reality when they hit the real world.
Most companies who are run by people who came up in the operational side of the business do pretty well. Companies that are run by people who came up the financial or legal ladder tend to tank.
I think it comes down to, quite simply, the difference between managers and leaders. I have found that you can, in most cases, teach people to be managers but the same is not true regarding leaders. Good leaders employ good managers.
My brother-in-law has a Harvard MBA and is a CEO for Seagate, twenty years. He does well, but the problem is he’s a flaming liberal. Well indoctrinated at Hahvahd.
Robert McNamara and McGeorge Bundy
I blame it on the increasing lack of military service.
The military (all branches) teaches people how to LEAD, and how to do it with a long-term goal in mind. The military also trains its leaders in an environment where mistakes are fatal, not merely expensive.
I’d generally rather have someone who spent some time in the military as an officer or NCO than someone fresh out of Harvard Business.
The following Presidents of the United States graduated from Harvard ( only Bush Jr. had an MBA ) :
* John Adams
* John Quincy Adams
* Rutherford Hayes
* Theodore Roosevelt
The two Ivy League grads before 1830 (John Adams and James Madison), were decent enough presidents, but they came from an era of great presidents, including the three who are on everybody's list of the greatest-- Washington, Jefferson and Monroe. So "pretty good" really doesn't cut it in an era of greatness.
On the other hand, some of our greatest presidents (Ronald Reagan) come from no-name colleges (Eureka) or even no college at all, as in the case of Grover Cleveland, the last Democrat which I would easily put in the list of the 10 greatest.
He later wrote that he got most of his valuable real world education as a young rancher in North Dakota. So I think you should forgive him for the Harvard degree.
Also, you left BO off your list.
Isn’t it odd how liberal sycophants cite Obama’s Harvard JD as proof of a very keen intellect and conveniently overlook the fact that Chief Justice Roberts also received his JD from Harvard graduating magna cum laude in 1979? Roberts also graduated summa cum laude with an A.B. in history, also from Harvard, in just three years! Antonin Scalia also graudated from Harvard with a JD magna cum laude after obtaining a history degree from Georgetown summa cum laude. The real difference? When Roberts and Scalia received their degrees it really meant something. And incidentally, Michelle Obama also has a JD from Harvard. Sorry, but I’m not impressed. The real problem with the Obamas is that they both confuse liberal fawning and obsequiousness with achievement. Alas, they’re both empty suits. Truly, the Emperor & Empress wear no clothes.
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