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May 4, 2006
Breaking news: MBAs are useless!
Posted by Mike Hofman at 11:09 AM
This month's Atlantic Monthly features an article called "The Management Myth" (paid subscription required), by Matthew Stewart, the founder of a management consulting firm. (It should be noted that the Atlantic is owned by David Bradley, who also previously founded a management consulting firm.)
In the article, Stewart asserts the following:
"As a principal and founding partner of a consulting firm that eventually grew to 600 employees, I interviewed, hired, and worked alongside hundreds of business-school graduates, and the impression I formed of the M.B.A. experience was that it involved taking two years out of your life and going deeply into debt, all for the sake of learning how to keep a straight face while using phrases like 'out-of-the-box thinking,' 'win-win situation,' and 'core competencies.' When it came to picking teammates, I generally held out higher hopes for those individuals who had used their university years to learn about something other than business administration."
While this statement may shock readers of the Atlantic, I suspect most entrepreneurs have grappled with the question "Are MBAs useless or worse than useless?" for some time. The dim view that company builders take with regard to MBAs contrasts sharply with the view taken by corporate leaders, many of whom have MBAs themselves, and many of whom still recruit MBAs in large numbers to join their companies. (Let me take this moment to disclose that some of my best friends are MBAs.)
Some entrepreneurs, of course, have MBAs and believe they have real value. (Check out this 1997 article from Inc.)
So what do you think? What did you study in college and what subject did you find to be the most valuable in your entrepreneurial life, and why? Do you have an MBA? Do you want one? And how valuable do you think formal business training is in today's environment?
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There seems to be this unfortunate misconception that, on the detractors' side the MBA education is a substitute for real world business experience, and that all MBAs do in school is learn code words, and on the supporters' side, that and MBA is a magical ticket to business acumen.
So, as a recent (graduating in a few weeks) MBA let me talk about my experiences and people can judge for themselves.
I worked in IT systems for 8 years after graduation. I had a strong background in entrepreneurial companies, having grown up in a small business, starting small businesses, and later working for startups. In B-school I learned some things that I know I wouldn't have learned even if I switched to a business/management role (which would have been tough from IT). I learned some things that are "cutting edge" in management research, from the people who developed them (MIT Sloan), and I built an amazing network of people who are interested and dedicating their careers to business management.
Then again, I met some people I'd never want on my team. Many of them are going on to great jobs, and I can honestly say that the MBA, for them, was probably about learning fun words to use. I went to undergrad at an ivy and I could say the same thing about people in undergrad. Some with a lot of common sense, and lesser academic credentials, some that couldn't tie their shoes.
Making gross generalizations about the value of an education is foolish. Admissions committees are not perfect, and a lot of people get MBA's for the wrong reasons. Using one's common sense about hiring and finding people that have paper, verbal, and experiential credentials are the way to get good employees. None is a substitute for the other two.
Anyone have thoughts on an MBA was an explicit entrepreneurship focus, such as Babson's?
What with my MBA?
Check out the article for free (fair use, Title 17 U.S.C. Section 107):
http://www.susanohanian.org/show_commentaries.html?id=390
I believe the post from the soon to be graduating MBA says it all...he focused on his experience and the experience of those of his classmates as being the most relevant vs. the formal education. Speaking from personal experience, I have a BBA from Michigan and what it did for me was provide the opportunity for me to go to Wall Street out of school which is where the real education started! Working with hundreds of companies is where the experience and knowledge really comes from. My partner has an undergrad accounting degree and an MBA, but no one cares about that...they want to hear about the five companies he purchased and the handful of others he started! So I can understand the lament that MBAs are useless from the general business owning public...it's just a way of saying I'm not going to hire you just because you now have some letters after your name...you need some real world experience to make you interesting!
An MBA or an undergraduate business degree is one of the most useful and practical degrees today. I received mine 20 years ago. There has not been a day that goes by that I have not drawn on some knowledge or understanding from the degree. Having now had 20 years of business experience, 14 of those in accounting, tax, information techncology and consulting to small businesses, the degree was absolutely invaluable in putting the real world experience in perspective and advising clients on how their businesses could be improved. All of these business owners have expertise in their particular businesses. They have no formal business training. However, when businesses grow fast and get big, it saves reinventing the wheel by putting tried and true business theory and practice into place. This is where the consultant's formal business training is absolutely invaluable.
I have a university degree in Business Administration covering the same courses as an MBA.
have an MBA diploma is important.but the experience is more important
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I received mine 20 years ago. There has not been a day that goes by that I have not drawn on some knowledge or understanding from the degree. Having now had 20 years of business experience
it's just a way of saying I'm not going to hire you just because you now have some letters after your name...you need some real world experience to make you interesting!
I came across this link and was interested in what people had to say about MBAs. Being one myself, as well as an Economics & Politics graduate and a qualified (UK) accountant, I find MBA people fascinating. I can't fathom them at all. I run a venture capital fund which invests in early stage technology companies and, of all the companies in our portfolio, the two that have MBAs as chief executives are by far the worst performing. The two guys in question genuinely cannot seem to formulate a cohesive business plan and execute against it. Instead, they hide behind double-Dutch business speak that makes no sense at all. These guys will be removed by us and the other shareholders very shortly. I seriously don't think I'd ever hire an MBA again. The MBAs who come to present their business ideas to us are consistently and by a long, long way the most useless, dumb and clueless people we ever meet. MBAs seem to think that doing an MBA teaches them how to be a good entrepreneur - this is nonsense - entrepreneurship is inate and if you ain't got it you'll never learn it. If you have got it you'll have realised you needn't to waste valuable money-making time on doing an MBA. I wish I'd realied that sooner.
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