That's unfortunate. MBAs are toxic to businesses. They're the classic middle-manager, the random internal goal creators, the inefficiency masters, and so on. They also, as this article makes clear, only care about short term profitability over long term growth or stability (as they won't be there in five years anyway!).
You can look at tons of formally successful businesses that took in too many MBA types and lost their edge (e.g. IBM, Microsoft, HP, Cisco, et al). Google is also starting to go in that direction. Amazon has actually been fairly successful in avoiding that culture (partly due to their own internal culture being almost anti-MBA philosophy).
I'd happily hire an accountant, a lawyer, or even an economist. They're all specialists who bring different knowledge and perspectives to the table. I'd avoid hiring an MBA as they're largely useless people who just want to gum up the works with bullshit.
Engineers for engineering managers aren't perfect, but at least they aren't so far removed as MBAs are. At least once in their lives they knew what it took to deliver, and I'd prefer to train up an engineer into a decent manager than take in a pre-trained MBA.
I'll play devil's advocate as your brush strokes are hyperbolically broad. Couldn't one just as simply say "Programmers are toxic to business. They're classically myopic optimizing for 'fun' technical stacks without understanding the business they're working in." That's obviously untrue as well. I've been lucky enough to work with some very good folks who are MBAs. I would suggest the issue you're seeing is similar to what we try to avoid in the tech culture. We want to hire the best engineers out there...not the average code monkeys. Similarly, if you hire great MBAs they should not be toxic to businesses.
"I wouldn't recommend an MBA. I'd say no MBA needed. An MBA is a bad idea. [...] It teaches people all sorts of wrong things. [...] They don't teach people to think in MBA schools. And the top MBA schools are the worst. Because they actually teach people that you must be special, and it causes people to close down their feedback loop and not rigorously examine when they are wrong. [...] I hire people in spite of an MBA, not because of one. If you look at the senior managers of my companies, you'll see very few MBAs there."
IMO, hardly any school will teach someone how to think. At best, they can give a good environment to pick up those skills and fail out those who can't hack it. This is especially true because of how much guessing the teacher's password looks like learning.
The way to learn to think is to be a curious, introspective and observant person. Then, retreat to a cabin in the woods for a couple of years reading plenty of classic literature, philosophy, modern non-fiction, etc etc.
Now, if I put this on my resume and applied to Tesla, would Musk toss my resume in the trash or want to speak to me?
He would likely toss it rightfully because you spent time talking about something of almost no relevance on your resume, which is a place wherein bang for the buck is of utmost importance and you have just demonstrated you do not understand even that.
You make an excellent point. I might even argue the more extreme position that the goals of contemporary schooling are antithetical to rigorous thinking.
Couldn't one just as simply say "Programmers are toxic to business. They're classically myopic optimizing for 'fun' technical stacks without understanding the business they're working in." That's obviously untrue as well.
Is that untrue? I'd say it's true, and it's exactly why you need a skilled manager to keep an eye on the big picture. Programmers are professional rabbit-hole chasers, and it's extremely easy to lose sight of the business goals.
The difference is that the programmer, if properly wrangled, creates real value. The MBA, in my opinion, primarily creates the impression of value.
Interesting. Looking at Michael O. Church's premise, I wonder if it might be possible to bootstrap a professional organization by (initially) inviting only those engineers who already work at a level we'd consider professional: basically, the false negative rate here would need to be <~5%. One option might be to pick only those who have worked, for 2+ years, at a level above "terminal" levels: http://www.quora.com/Engineering-Ladders
So the initial invite would be for E6s+ at a few organizations (Google, Facebook, others?). Those people would know others they can vouch for, at either the "senior" level (the E6+ level) or at a "junior" level, but who are on a trajectory to make the "senior" level, eventually. At some point, this group would need to establish either which schools, or which certifications (i.e. MOOC programs) qualify someone for "aspiring junior" or similar roles, much like the bar. Or it could be entirely "project based", i.e. you show the organization some work you've accomplished, and the source code, in order to qualify. I haven't fully thought this through, so I don't really know how to get this right.
Given enough cachet, this should allow SDEs to form partnerships, with relatively little "reputation verification" required from their clients, much like how for most lawyers and doctors, people don't really care which one they go to (at least at first), just that they're seeing someone qualified.
This is empirically false. A recent look at 39 $1B+ companies founded in the last 10 years: 33% had an MBA founder, to say nothing of the MBAs that have played significant early-stage exec roles (e.g., Facebook's Sandberg, Evernote's Gullicksen)[0]
Amazon also does not appear to be "anti-MBA."[1]
A broader misunderstanding comes from the fact that MBAs are all a particular "type." Top MBA programs are going to have everything from engineers to Peace Core volunteers. Is there any reason to suspect comp. sci. majors who spent 3 years at [insert reputable tech, consulting, banking firm here] and then went to get an MBA are systematically worse for tech jobs than those who did not?
I met a woman who was doing the Sloan program at Wharton who's boss told her "get an MBA or you won't move up in the company". She then went on to explain that everyone higher than her was an MBA.
To further the whole discussion - MBA's are typically very good at optimizing businesses at later stages. These typical results are usually just as anecdotal as the argument "MBAs are toxic". In other words, YMMV, and generally speaking MBA programs pick strong work candidates, but it doesn't universally mean they are all the best.
> Someone1234 says: Are you sure you're measuring the right things? All that proves is that MBAs are able to convince other MBAs or investors to give their startups money. It doesn't prove an MBA's value in an existing company.
So now MBAs are poor performers because you think they are only helping each other do well?
Sounds like a case of confirmation bias.
Edit: And now you've deleted it to hide your confirmation bias on HN. Bravo.
[Edit] PLEASE DONT DELETE YOUR REPLY IF PEOPLE ARE GIVING THOUGHTFUL FOLLOW-UPS.
That is a very mature sample given the short duration of the relevant time frame. Admittedly I'm ignorant about the specifics of several of these 39, but I recognize most as public, acquired for $1B+, or pretty clear "winners" (e.g., Uber).
Do any in particular seem suspicious or are there examples you think are missing? I'm not arguing an ideological position, I'm genuinely interested in the "right" answer. The definition of "success" is nebulous, and data are limited, but what's available would suggest you're strongly overreaching.
2 more recent ~$1B ones that just came to mind: Wayfair and HubSpot, both of which are MBA founder teams. The latter is also a dual technical founding team: ee and cs undergrad majors.
Sadly, MBA is billed as a "career changer" for a lot of people that either a) had technical degrees and ended up hating their life as an engineer or b) people with a complete and total lack of any real skill set beyond some generic "soft skills" and vocabulary learning who couldn't apply nut to bolt.
Type A's generally crush the accounting, finance, and enter into banking or back into tech as a Operations centric manager.
Type B's go off to become the organizational gunk that you expect. They're just dangerous enough with some generic managerial skills, but they have learned a whole new level of meaningless vocabulary, spent a few years polishing their XLS, PPT and Public Speaking chops, and are ready to continue to be dumbasses for the rest of their career, but with more pay.
This is the true problem. There's a false perception of what a business education actually provides people.
All it does is provide you with some knowledge. Whether that knowledge is applicable to your real professional career is up to the person receiving the education. And not all MBAs are equal, since there are multiple disciplines within the degree itself.
I got my MBA before the proliferation of the high priced "executive MBA", so I can't necessarily speak for the more recent MBA grads, but from my time, you didn't really acquire any real world skills from the degree. You basically acquired some knowledge that could help you understand certain situations you'd get in. There definitely was nothing that made a person behave or operate a certain way in a business situation.
The problem with the perception of MBAs is that it is somewhat conflated to the level of a profession or certification by people who don't know any better. Assuming that an MBA grad is a business expert is like assuming an English major is a grammar expert. It might be the case, but most likely, it's not.
Maybe if you are talking about MBAs in general. But for an MBA from an elite school the knowledge is secondary: The primary benefit is the stamp of approval; the filtering in the selection process.
But what you're saying applies to any degree from an elite school -- whether it's a law degree from Harvard, engineering degree from MIT, etc.
In the end, a diploma from a prestigious school reduces the risk of hiring a lower quality candidate, but it is still no guarantee that you're getting a good one.
Not any degree, some degrees are more competitive than others and select on different things. Importantly, (elite) MBAs filter on demonstrated leadership and work accomplishments.
The issue isn't about guaranteeing high quality candidates but narrowing the search. Instead of looking at all applicants you only look at the top 20% from the most elite programs. As you note that is not exclusively MBA: Most people who want to hire a Harvard MBA would be happy with a Rhodes scholar or Harvard Law alumnus.
>You can look at tons of formally successful businesses that took in too many MBA types and lost their edge (e.g. IBM, Microsoft, HP, Cisco, et al). Google is also starting to go in that direction. Amazon has actually been fairly successful in avoiding that culture (partly due to their own internal culture being almost anti-MBA philosophy).
If you don't back that statement with some data, it is really difficult to believe.
>Engineers for engineering managers aren't perfect, but at least they aren't so far removed as MBAs are. At least once in their lives they knew what it took to deliver, and I'd prefer to train up an engineer into a decent manager than take in a pre-trained MBA.
So an engineer with an MBA is a worse engineering manager than an engineer without an MBA? MBAs come from various fields.
But the meta question "is that bad". For example if you want to learn geography, jus. the basic map in your head, you could do worse than "OK the rockies are the high point, and death valley is the low point and everything is in between". In isolation, a very one sided story about DV that doesn't even point out its an extreme rather than a norm would provoke some really weird ideas. So its of value to point out thats an extreme and here's the other extreme and have fun exploring the middle on your own.
If a racist were to come on here and make hyperbolic generalizations about a group of people without data, they would also get called out on their bias. The fact that you are trying to worm your way into supporting it with hypotheticals shows that you are also ignorantly discriminatory.
>"This kind of seething diatribe is what's wrong with HN."
The problem with your "MBAs are toxic to businesses" theory is that you're not separating the people from the degree.
Like any degree, the MBA is just a tool. There's a difference between hiring a tool (in the pejorative sense) and an otherwise smart person who has a tool. Anyone who hires a tool gets what they deserve.
The pedantic MBA is everything that the stereotype makes him/her out to be, but you can basically say that about any pedantic person. I would argue that most MBAs don't even fit the stereotype. The MBAs that fit the stereotype usually identify themselves strongly with their education, and they're in the minority.
"The MBAs that fit the stereotype usually identify themselves strongly with their education, and they're in the minority."
Exactly.
I've noticed over the years that one can find people whose self-esteem is grounded in their MBA across the entire spectrum of selectivity, from the top-5 programs to online degree mills. Regardless of where they went, it's a very good heuristic indicator that you should STAY AWAY.
Not understanding the business of the company is the problem. It usually helps having a technical background, true, but that's not always necessary.
Not to mention once in a while we get a story on HN about someone who knows about the technical side but fumbles on the business side and having trouble because of it.
What will happen if you give two kids straight out of university a shot at being a manager? One guy has a business degree and the other has a CS degree.
I believe both kids will have an equal chance of being great or being really bad regardless of the degree. Although, The CS guy might have a slight edge because he understands what's going on at the technological level.
On the other hand if you decide to give both kids a shot at being a programmer, the kid with a CS degree has a astronomically higher chance of becoming successful.
Programming is a skill that is acquired time and training. Where management comes from is more ambiguous. Both skills are mutually exclusive; you can be good at both, bad at both or only good at one.
tl;dr: People with MBAs ran some of the great companies of the 80s, pushing up demand and graduation rates in the 90s (every company suddenly wanted some), but in the last few years the curriculum has become more focused on startups.
Amazon has actually been fairly successful in avoiding that culture (partly due to their own internal culture being almost anti-MBA philosophy).
Amazon has stack ranking, which is the most toxic MBA/McKinsey innovation (although most good MBAs in 2014 recognize it as toxic and best avoided) of the past 25 years.
The conceit of the MBA is that you don’t need to have any substance at all. It’s just this management science, and you can apply that equally well in [any company].
At the end of [their MBA program], a large number of people go into whatever was the last trendy thing to do. They’ve done studies at Harvard Business School where they’ve found that the largest cohort always went into the wrong field. So in 1989, they all went to work for Michael Milken, a year or two before he went to jail. They were never interested in Silicon Valley except for 1999, 2000. The last decade their interest was housing and private equity.
I figured this would be a lively comments section. MBA-hatred might be the most common blind spot in the Valley, and it bums me out.
Within the historical context, the animosity makes sense; during the 99-00 bubble, fast-growing companies that were founded and led by engineers realized that they couldn't grow managers organically and maintain their growth rate -- so, they recruited MBAs from the top schools, especially HBS and Stanford. In so doing, they made a categorical error -- they inferred that all Harvard MBAs are, at a minimum, competent managers in the same way that all Stanford CS master's degree holders are, at a minimum, competent programmers. Many people got burned for making this assumption.
Anecdotal evidence suggests that the MBAs who "answered the call" and/or beat down the doors of hot startups in the bubble years exemplified the worst of the MBA stereotype: arrogant, entitled pricks whose life plan from high school was get the right grades, do the right extracurricular activities, go to the right college, get the right grades, get the right internship, get the right job, kiss everyone's ass and get good evaluations, get the right GMAT score, get into HBS, and then be anointed as the elite, highly-paid business person that they were born to be. They were process-oriented people who didn't care about creating value, they just wanted their slice of the pie.
I'll be honest, I knew a few people like this in business school, but they were a small minority. It's unfortunate that people who meet this stereotype have punched above their weight when it comes to making an impression on popular opinion in the Valley.
In my case I got a lot out of going to business school. It was a great transition from military service: I got a comprehensive crash course on a lot of relevant topics, got a recruiting platform from which I got a good job where I subsequently learned a lot, and got a broad and deep network of a lot of people (most of them not douchebags) across a wide set of industries.
On the topic of the article itself....I think the author is trying to squeeze the data too hard. The story here is not "i-banking no longer cool for trend-following MBAs", it's "i-banks are cutting costs and realizing that it's cheaper to hire more people out of college and try to keep them around longer".
MBAs, as used to segregate people in a bureaucracy, are a good idea. Your company has a pretty good idea that you have heard of accounting and it's theory, marketing as a profession, and the business and it's place in law and society having done an MBA. Yes, to many people, this is 'common sense' but with thousands of people working for you 'common' is very hard to come by. MBA degrees fill a function, to get everyone the same vocab, ideas, and implementations of those things. It leads to group think by design, it has to. You simply cannot have 500 people working together with different definitions or fuzzy ideas of what accounting actually does. It would be chaos.
MBAs are a symptom of bureaucracy, not a cause of it. Group Think as well, you have to have standard definitions, processes, and procedures. The issue is when you loose sight of that need and create orthodoxy.
So your saying MBA's teach zero skills save for vocabulary necessary to enforce bureaucratic segregation? I guess you can say the same thing about law.
I don't see the same thing happening at my company though. Concepts discussed at the management level are usually communicated in a way any layman can understand.
No, the skills are a part of the vocab too, so to speak. Accounting, for example, has definitions as well as methods. If your department uses MatLab then trying to get the other department that only uses Excel is going to be hard. It's not just 'software' issues either. The ethos, the rounding of fractions of a cent, knowing when to run an internal audit, how to deal with Janet's crappy way of writing 9 and 4, all those little tricks and 'common sense' things need to be sussed out in a huge bureaucracy. Multiply this over hundreds of different fields of work, states and nations and you see why a training course that is not just 1 weekend long is needed.
I don't think it's ever fair to generalize and hate on people just because they have a specific degree. Sometimes grad school is a good place to reboot your career and I'm of the belief that education is never a bad move.
There's plenty of insanely smart people I know who have an MBA and can get their hands dirty and hustle (versus the stereotype that they can just build a powerpoint on execution but can't actually deliver). It's just a matter of finding the right people.
Applying the same contrarian point of view, it's probably a good time to work for a record label or a physical bookstore.
I don't think IB is on the same level of obsolescence as those industries (it's not obsolete at all, although banking as a whole has surely changed since 2008), just pointing out the flaw in that reasoning.
Well the main one was just learning, know more people and I thought I would learn how to start or make my own company.
Look, the best part was knowing a LOT more people, learning from them, and just getting all that business stuff/crap/insights...
But the single best and most important advice I could give some one that doesn't want to take a full MBA, it's:
1. Learn finances, OMG, just do it. Loan payments, ballon payments, how interest works, credit lines, bonds, leisures, etc. Just LEARN IT, its really usefull, no matter how, just learn it and really well!
It's one of the single most important things you could learn as an adult.
2. Learn Marketing. Not just the social media crap, but the "Emotional Branding" stuff. OMG, GO GO GO. Learn to creat "experiences" with the senses, to manipulate prices, learn the marketing lingo and feel the bliss of learning how to sell your producs.
DO. IT. NOW.
Anyway, I'm getting my degree in about two weeks. It was hard. It was fun, and actually cheap (third world country yey!).
To me, "business" in any generic sense just seems incredibly boring. It always has, it always will. I could care less about what the trends are or where I perceive the money is.
In contrast, "technical challenges", have and will always be of interest to me, even if they are pointless, like the Euler Project or going to ground on some obscure syntax question.
It seems likely that sharp graduates coming into tech because they perceive they can make a lot of money there or because they perceive it is a good launching pad into an executive lifestyle is not going to be a net benefit to the technical community in the long run. This group of people, as a whole, will never share in the ESR-style hacker ethos.
This is very true and too many people overlook it. Many "generic" challenges faced by "business" are similar in nature to technical challenges.
For example, a common business challenge is organizational design.
How do we create an organizational structure that serves the needs of the business and the people who work there? Well to start, what are the basic inputs and outputs of the business? What is needed to transform those inputs to the outputs in a manner that is efficient, adaptable, safe etc. Are there common groups of people that tend to work on common inputs and create common outputs ? Within those groups, are there specific people needed to do specific tasks? Imagine person A, in group A, needs an output from person B in group B. Does person A need to know exactly how the output was created? If you've got this far, hopefully you realize the parallels I'm drawing.
Same types of thought experiments can be applied to all kinds of operational and financial aspects of running a business- most are clear optimization problems. It's unfortunate that too many "hackers" hear the word business and assume it's about boozy dinners with other business people, or boring powerpoints that tell us nothing.
There's plenty of interesting challenges in business, and strong MBA-types are often better prepared to address them because they understand the various design patterns available to them.
I suppose this is true, but I'm talking about what these MBAs coming out of top-tier programs are all about. In my experience, they're not interested in technical challenges, they're interested in money and status.
That is why the Economist can write headlines like this in the first place; in other words, why the "interests" of MBAs can shift at all. I don't think that legions of MBAs were going into investment banking because it was just so fascinating to them, and I don't think that's why they're gravitating to SV, either.
- Many "Managerial" people flocking to Tech only and solely because they see it as a shortcut to making a quick buck. When a field becomes inundated with people who are not core to the field but still wield power - guess what is going to happen
- Many MBAs are convinced that there is some mystical science of "Business Administration" that applies equally well in any company irrespective of size, type of business, types of customers etc. This has led to some spectacularly BAD decisions and programs that could be ruinous in the medium to long term but look good on the shorter timescales.
A crash in the "Tech Sector" has now become a real possibility in the next 1-2 years
not sure if this is the correct headline. finance overall is less popular but in 2008/9 most investment banks where either bought by "normal" banks or where simply allowed to convert their bank type from investment to "normal":
Goldman Sachs and Morgan Stanley "abandon their status as investment banks" by converting themselves into "traditional bank holding companies", thereby making themselves eligible to receive billions of dollars each in emergency taxpayer-funded assistance.
The subject (due to length constraints) unfortunately left out technology too.
For all the knock that MBAs get, it's worth noting that to make money and survive, businesses must do two things:
1 - Create Value
2 - Capture Value
Many of the people here excel at #1, but there are plenty of CS majors who don't create any value. Good MBAs help in capturing value. This can come from turning the business into a monopoly (a goal of Peter Thiel) or from figuring out how to incentivize a sales force. These are things generally not well understood by great programmers.
That said, MBAs also tend to be a tailing indicator. Which tells me that it's probably time to be a banker, and look for cash over equity for the next few years. :-)
For those in the know, the prospects for an investment banking career just haven't been the same since 2008—2009, so it's not surprising to see graduates go elsewhere.
The article seems to imply MBAs are consulting right out of business school, in other words without experience? The education is valuable, but unless consulting is very different in the "business" side of things, this sounds dangerous.
Most MBA programs only accept students with several years of work experience. There are always a few straight from undergrad, but the vast majority aren't. Typically , fresh MBA grads that are 'consulting' are just juniors on the projects. They are basically just excel monkeys for a few years until they gain more specific experience.
You can look at tons of formally successful businesses that took in too many MBA types and lost their edge (e.g. IBM, Microsoft, HP, Cisco, et al). Google is also starting to go in that direction. Amazon has actually been fairly successful in avoiding that culture (partly due to their own internal culture being almost anti-MBA philosophy).
I'd happily hire an accountant, a lawyer, or even an economist. They're all specialists who bring different knowledge and perspectives to the table. I'd avoid hiring an MBA as they're largely useless people who just want to gum up the works with bullshit.
Engineers for engineering managers aren't perfect, but at least they aren't so far removed as MBAs are. At least once in their lives they knew what it took to deliver, and I'd prefer to train up an engineer into a decent manager than take in a pre-trained MBA.