Are MBAs Really the Problem?

Time Magazine’s review of Bob Lutz’s book about the car industry bothered me. It’s easy to blame the MBAs and exalt the engineers. Yes, there are too many MBAs. And yes, we desperately need to transform what an how we teach them. (That’s what this business school prof is spending his own time thinking about, at least.) And engineer-driven companies like Google can do wondrous things.

But it’s false to condemn all MBAs as myopic bean-counters, and exalt all engineers as customer-focused innovators. Anyone ever heard of a bad UI because the engineers weren’t in touch with mainstream users? This is selection bias in action. Engineers who are good managers are better than MBAs who aren’t, but that doesn’t tell us much.

At least some of Apple’s current success is due to its extraordinary supply chain, which is the kind of structured management exercise the Time article relegates to MBAs. And at least some of Google’s success was due to is mastery of “mathematical modeling, game theory and complex statistical analysis” (supposedly MBA stuff) by people who weren’t “advertising guys”, but changed the advertising industry regardless. So these generalizations are just not that useful. I’m not so sanguine about my other profession, law, but that’s another story.

To take the central example of the article, Steve Jobs isn’t an engineer; he’s a college dropout. So are Bill Gates and Larry Ellison. With apologies to Peter Thiel, the best education policy isn’t to kick everyone out of college after a year or two. There’s nothing wrong with allowing room for a small number of extraordinary outliers to thrive outside the traditional educational system. The harder and more important issue is how to improve that system.

So the question is this. If we’re going to have MBAs (and we will, lots of them), how do we make them more like the idealized engineers that Lutz and the book reviewer celebrate? Academics and business executives haven’t focused nearly enough energy on this challenge, so it’s fair to criticize us. But the criticism should be constructive. I’m teaching a new MBA course on gamification this Fall, partly because I want students to step back from their spreadsheets and think about user experience, motivation, design, and innovation. That’s just one tiny step. If we can’t take all the talent coming into our business schools and turn it into something valuable for both business and society, we’re all in trouble.