Managers Not MBAs

Key Takeaways

Under Consideration — to be added.

Interconnections

Under Consideration — to be added.

Highlights

The trouble with “management” education is that it is business education, and leaves a distorted impression of management. Management is a practice that has to blend a good deal of craft (experience) with a certain amount of art (insight) and some science (analysis). An education that overemphasizes the science encourages a style of managing I call “calculating” or, if the graduates believe themselves to be artists, as increasing numbers now do, a related style I call “heroic.” Enough of them, enough of that. We don’t need heroes in positions of influence any more than technocrats. We need balanced, dedicated people who practice a style of managing that can be called “engaging.” Such people believe that their purpose is to leave behind stronger organizations, not just higher share prices. They do not display hubris in the name of leadership.
No one can create a leader in a classroom. But existing managers can significantly improve their practice in a thoughtful classroom that makes use of those experiences. All this suggests that the business schools themselves need to be reconceived, including a metamorphosis into management schools
This may seem like a strange contention at a time when MBA programs are at the height of their popularity, when MBA graduates are at the pinnacle of their success, and when American business, which has relied so heavily on this credential, seems to have attained its greatest stage of development. I shall argue that much of this success is delusory, that our approach to educating leaders is undermining our leadership, with dire economic and social consequences.
Some clarifications to begin. First, by “conventional” MBA, I mean full-time programs that take relatively young people, generally in their twenties, and train them mostly in the business functions, out of context—in other words, independent of any specific experience in management. This describes most MBA programs today, in the United States and around the world. With a few exceptions, the remaining ones (usually called EMBAs) take more experienced people on a part-time basis and then do much the same thing. In other words, they train the right people in the wrong ways with the wrong consequences. That is because they mostly fail to use the experience these people have.
Management without leadership is sterile; leadership without management is disconnected and encourages hubris. We should not be ceding management to leadership, in MBA programs or anywhere else.
It’s never too late to learn, but sometimes too early. —CHARLIE BROWN IN PEANUTS
Leadership is different. There are natural leaders. Indeed, no society can afford anything but natural leaders. Leadership and management are life itself, not some body of technique abstracted from the doing and the being. Education cannot pour life experience into a vessel of native intelligence, not even into a vessel of leadership potential. But it can help shape a vessel already brimming with the experiences of leadership and life. Put differently, trying to teach management to someone who has never managed is like trying to teach psychology to someone who has never met another human being. Organizations are complex phenomena. Managing them is a difficult, nuanced business, requiring all sorts of tacit understanding that can only be gained in context. Trying to teach it to people who have never practiced is worse than a waste of time—it demeans management.
management is craft, meaning that it relies on experience—learning on the job. This means it is as much about doing in order to think as thinking in order to do.
Because engineering and medicine have so much codified knowledge that must be learned formally, the trained expert can almost always outperform the layperson. Not so in management. Few of us would trust the intuitive engineer or physician, with no formal training. Yet we trust all kinds of managers who have never spent a day in a management classroom
After almost a century of trying, by any reasonable assessment management has become neither a science nor a profession. It remains deeply embedded in the practices of everyday living. We should be celebrating that fact, not depreciating it. And we should be developing managers who are deeply embedded in the life of leading, not professionals removed from it.
School teaching is a facilitating activity, more about encouraging learning than doing teaching.
Managing is largely a facilitating activity, too. Sure, managers have to know a lot, and they often have to make decisions based on that knowledge. But, especially in large organizations and those concerned with “knowledge work,” managers have to lead better, so that others can know better and therefore act better. They have to bring out the best in other people. The idea that the chief does it all, coming up with the grand strategy and then driving its implementation by everyone else, is frequently a myth left over from the mass production of simple goods. Yet it is one of the impressions left by MBA education. “Our goal is to create an environment where students learn how to tackle difficult, complex problems… . Students learn what it feels like to exercise judgment, make decisions, and take responsibility”
“He has the technique, thinks he knows best. But he is frustrated because he doesn’t understand the complexities and the politics. He thinks he has the answers but is frustrated by being unable to do anything about it.” He never learned management in the business school.
I think not, for two reasons. First, too early can make the right people wrong. Giving them a questionable impression of managing can distort how they practice it subsequently.
The best way to get rid of bias is to get rid of judgment. MBA programs that rely on these numerical scores get rid of judgment, and so, too, do they get rid of assessing managerial potential. In the process, they introduce their own bias—for science over art and craft.
Successful managing, in Livingston’s opinion, is not about one’s own success but about fostering success in others. “Universities and business organizations that select managerial candidates on the basis of their records as individual performers often pick the wrong [people] to develop as managers… . Fewer and fewer [management graduates] are willing to make the sacrifices required to learn management from the bottom up; increasingly, they hope to step in at the top from positions where they observe, analyze, and advise.” Interesting words from 1971!
T]he MBA degree is not a magic wand that transforms inexperienced and immature undergraduates into licensed managers.”
To conclude, we need leaders with human skills, not professionals with academic credentials. In the larger organizations especially, success depends not on what the managers themselves do, as allocators of resources and makers of decisions, so much as on what they help others to do.
The secondhandedness of the learned world is the secret to its mediocrity. —ALFRED NORTH WHITEHEAD
There are no right ways to develop the wrong people. We could, therefore, stop here and have a really short chapter. But the problem goes much deeper; and so does this chapter and those that follow. The MBA programs not only fail to develop managers but give their students a false impression of managing that, when put into practice, is undermining our organizations and our societies. Indeed, the ways of the MBA—the contents of the programs and the methods by which they are taught—are so entrenched that they are regularly used, with similar consequences, for the right people—namely, practicing managers in so-called Executive MBA and shorter management development programs.
confident that they could discover an underlying ‘science’ of business, convey that science to the future leaders of corporate America, and thereby develop a new profession of management.” Even at Harvard, “All four founders were academics with limited business experience” (10, 11), including Edwin Gay, the first dean, who had also done his doctoral thesis in Germany.
Management itself was taught in business schools as a collection of vague principles, akin to folk wisdom—for example, that the manager’s span of control should not exceed seven.
they hired Herbert A. Simon, a brilliant young political scientist, to direct the undergraduate program in business. Zalaznick (1968) later wrote in Fortune magazine that Simon’s hiring “was a signal to the academic community that a business school might be an appropriate place in which to work on … profound … if less immediately relevant” problems
One thing, however, did not much figure in all of this: the development of managers. GSIA was more concerned about getting the academic house in order and its professors properly respected. So it had to look inward, to its status in the university, not outward, to the needs of practicing managers. But this was a problem not so much ignored as assumed away, as it has been ever since: that properly respectable academic schools would produce properly practicing managers. Besides, if to manage is to make good decisions, then developing students’ analytic skills could only improve the practice of management.
RESEARCH YES, BUT TEACHING? That stamp should have read “Business Research” (except who would have bought it?), for it was in research that these two reports brought about their revolution. While management hardly became a profession—or, indeed, received much attention in the business schools at all—research, especially in the functions of business, flourished. Scholars from all sorts of backgrounds gathered in business schools to address issues of marketing, finance, analysis, human behavior in organizations, and so on. 29
With the MBA’s newfound respectability, enrollment took off. From 4,041 business masters degrees granted in the United States in 1958 (most of these MBAs) and 6,375 in 1964, the numbers more than doubled in the next two years, to 12,998. Ten years later, in 1976, they reached 42,654. The year after that, Forbes magazine called the MBA “second in esteem only to the coveted Doctor of Medicine as a passport to the good life” (quoted in Cheit 1985:46). The numbers continued to grow rapidly, although not at that pace. By 1997–1998, they passed the 100,000 mark (AACSB Web site, November 2001).2 At this rate, the United States alone now produces upwards of a million people per decade who believe that they have the capacity to manage by virtue of having spent two years in an academic school of business.
Today, as such, they are rock solid in the business schools. Each pushes its own angle, its own content, its own biases, and, at the limit, its own ideology: “shareholder value” in finance, worker “empowerment” in organizational behavior, “customer service” in marketing, and so forth. Students are consequently left with what Whitehead (1983) once called the “passive reception of disconnected ideas” (2,11).
This is not to say that business schools do not teach material that cuts across the specialized functions, only that they do so within particular functions. So collaborative teamworking, for example, gets taught within organizational behavior, without collaboration or teamworking, and new product development gets taught in marketing or else in strategy, with the result that the schools rarely engage in new product development of their own. We know about the dangers of doing such things in business practice—indeed, we teach about these dangers—while we succumb to them in our own practice. As businesses work valiantly to bust down the walls between their “silos,” business schools work valiantly to reinforce them. Business schools teach a great deal about managing change, notably that it has to get past the existing categories. Yet because business schools themselves cannot, they remain more or less where the two foundation reports of 1959 put them.
Management is not marketing plus finance plus accounting and so forth. It is about these things, but it is not these things. Pour each of these functions, of a different color, into that empty vessel called an MBA student, stir lightly, and you end up with a set of specialized stripes, not a blended manager.
What all of this did, of course, was take strategy exactly where earlier efforts had taken marketing, finance, and other functions—to a place compatible with what business schools had generally become: Porter taught the business schools to develop analysts, not strategists. 35
Professors of management the world over embraced Porter’s approach, too. It allowed them to gain the respect of their functional colleagues, by dropping soft management in favor of hard analysis.
Synthesis is the very essence of management. Within their own contexts, managers have to put things together in the form of coherent visions, unified organizations, integrated systems, and so forth. That is what makes management so difficult, and so interesting. It’s not that managers don’t need analysis; rather, it’s that they need it as an input to synthesis, and that is the hard part. Teaching analysis devoid of synthesis thus reduces management to a skeleton of itself. This is equivalent to considering the human body as a collection of bones: Nothing holds it together, no sinew or muscle, no flesh or blood, no spirit or soul.
And so we have this comment from a business school dean, that the prominent consulting firm in which he used to work “officially gave up on the notion that graduates of the Harvard Business School or Stanford knew anything more about thinking integratively about business problems than a Swarthmore or Amherst or Williams undergraduate in philosophy”
(Roger Martin of the University of Toronto, interviewed in the Financial Times, September 11, 2000).
that Business Policy textbook referred to earlier (Christensen et al. 1982) repeatedly used the words choice and decision to describe the strategy process, as if creating a strategy is equivalent to making a decision (which it, of course, is in a case study classroom). Even the Harvard Business Review used to describe itself on its cover as “the magazine of decision makers.” As noted earlier, while managers certainly have to make decisions, far more important, especially in large networked organizations of knowledge workers, is what they do to enhance the decision-making capabilities of others. Reducing managing to decision making is bad enough; reducing decision making to analysis can be far worse.
Formal management education programs typically emphasize the development of problem-solving and decision-making skills … but give little attention to the development of skills required to find the problems that need to be solved, to plan for the attainment of desired results, or to carry out operating plans once they are made.
Technique applied with nuance by people immersed in a situation can be very powerful. But technique taught generically, out of context, encourages that “rule of the tool”: Give a little boy a hammer and everything looks like a nail. MBA programs have given their graduates so many hammers that many organizations now look like smashed-up beds of nails.
Think of this as a problem of push. MBA programs push theories, concepts, models, tools, techniques in a disconnected classroom. Management practice, however, is about pull—what is needed in a particular situation. Managers can certainly use a toolbox full of useful techniques—but only if they appreciate when to use each.
As the chief executive of a pharmaceutical company told a group of MBA students, “My problem is that when I face a problem, I don’t know what class I’m in.”
These calls for soft skills seem well founded. After all, managing, as discussed earlier, is mostly about the soft stuff—working with people, doing deals, processing vague information, and so forth. But the fact is that business schools have been trying to teach the soft skills for years, yet the calls for more never cease. What is going on?
The soft skills simply do not fit in. Most professors do not care about them or cannot teach them, while most of the younger students are not ready to learn most of them. And few of these skills are compatible with the rest of the program—they get lost amid all the hard analysis and technique. So rather than teaching the soft skills, the business schools have tended to “cover” them, in the two meanings of the word: review them and obscure them. They have courses on the soft skills, develop theories about them, and use cases to illustrate them. They just have not embraced them, internalized them. For example, you do not develop leaders by dropping in a course on leadership amid all the others depicting managers as analytical decision makers.
Aaronson (1996) concludes in her review of the teaching of perhaps the most popular skill that “there is no consensus [among the prestigious schools] on how to teach leadership, if leadership can be taught, or even what leadership means” (219, citing an AACBS publication).
“We have concluded that ethics [is a] discipline much like marketing.” But what is the use of a course in ethics amid all the other courses extolling shareholder value? One student who referred to ethics as “the biggest dud” in the MBA program commented on hearing in the other courses “that taxes were always hateful and that one could profitably choose currency trades based on which nations were crushing street riots”
the authors interviewed an entering class of Harvard MBAs and concluded that they were hindered by “a lack of experience in making value-based decisions, a lack of comprehension regarding the consequences of their actions on society … , and an inability to articulate their own values in a leadership role”
So the soft skills and the soft issues end up as questionable content in the MBA programs, not because they are unimportant, but because the rest of the content and the nature of the students marginalize them.
The easiest way to teach is to lecture and then call for questions. Business schools, like the rest of the university, do their share of this so-called chalk and talk. If the professor said it, the students must have learned it (at least until the exams are over). Thus are those empty vessels called students filled up.
The problem is that the “real world” is not out there, to be plucked from some tree of practice. It has to exist in here—not just in the classroom, but in the head of the learner. The real world, in other words, exists as lived experience.
And if this is real experience, then why do it from a university? People in real jobs do such projects all the time. After graduation, most MBAs will have their fill of them. So what is it about doing this in school that makes it better—or makes it learning? There is an evident answer—in principle. The university is a place to reflect, to step back from experience and learn from it. But with such projects, that is no simple matter. It has to be done carefully, deeply, experience by experience, team by team, with the help—and a great deal of time—of a skilled faculty. For a class of, say, two hundred students in groups of five, that could amount to the full teaching loads of more than two professors.10 How many business schools have been prepared to invest that? Indeed, how many of their professors have been able and willing to do that? And without this, the projects are just projects—they have nothing to do with education.
Harvard may keep the boys (and girls) talking, but effective practice keeps managers listening and looking. (Ewing’s comment about being on top of the pyramid is especially interesting, because from that high up, you can barely make out what is on the ground. As for “seeing the whole,” you can hardly make out the shape of the pyramid, let alone what is inside.)
What the case does simulate (and encourage) may be precisely the problem with so much managing today: the executive office where people sit around discussing words and numbers far removed from the images and feel of the situation under consideration, the verbal in place of the visual and the visceral, management as some kind of artifact distant from the situations it so mighty influences. “The damn guy just sits there waiting for a case study,” remarked a manager about a Harvardeducated colleague.
Words are life reduced to categories, numbers reduce the words to ordered categories. These take on meaning only when embedded in the rich experience of life, the world beyond the executive office and case classroom. Malcolm McNair (1954),
I recall vividly one event in my own masters degree. The professor was a seasoned person in operations management, more concerned with practice than theory. One day he asked one of us how many columns there were in the entrance hall of the building, a place we all walked through many times every day. The student didn’t know. So the professor suggested he go have a look. When he came back, the professor asked him, “What color is the floor?” Next time the student came back, he could tell you everything about that hall. The professor’s point was made—but all too rarely: we are just not trained to see in business schools.
“Fast learners in the classroom often … become slow learners in the executive suite,” he wrote. That is because managers “are not taught in formal education programs what they most need to know to build successful careers in management”—namely, “to learn from their own firsthand experience” (79, 84). Instead, “They study written case histories that describe problems or opportunities discovered by someone else, which they discuss, but do nothing about.” Even “what they learn about supervising other people is largely secondhand … what someone else should do about the human problems of ‘paper people.’” Without responsibility or the chance to take action, they cannot “discover for themselves what does—and what does not—work in practice” (84).16
Turner (1981) concludes that the skills managers learn in the case study classroom are “relevant to the situation they are in” but “mostly irrelevant to what managers do” (8). They include, for example, “how to speak convincingly in a group of 40 to 90 people,” to “impress [them], and especially the instructor.” To Turner, this “suggests a disturbing hypothesis: the more skillful the instructor and the more pleased the students with the process, the less useful may be the learning” (7).
Argyris (1980) counted the comments students made to each other compared with those made to and by the faculty member. In all but one session, the number of student-to-student responses was “significantly lower” than those to and from the professor. (“A flurry of hands went up, wagging for attention,” Ewing [1990:23] wrote of one Harvard MBA case discussion. Turner [1981] described the process as “not really a ‘discussion’ so much as a series of instructor-student dialogues” [6].) As a consequence, Argyris describes the class discussions as “a series of games and camouflaging of the games” (195): faculty members established controversy; they “induc[ed] students to generate incorrect solutions”; they made sure to reveal principles only at the end of sessions. Asked why key questions were not given ahead of time, one faculty member responded, “That would blow the whole game.” The point for them was to keep “control of the learning”
Listen to their rhetoric, and it sounds like one is concerned with management as a profession, the other with business as a science. But step back, and perhaps you can appreciate how remarkably similar these two approaches really are: Their students have little or no “management” experience yet are supposedly being trained as managers; the management they learn takes the form of decision making by analysis,19 taught largely through the business functions; both schools believe in research and scholarly publication, and they hire each other’s doctorates to do it; together they pour out graduates mostly for specialized jobs many of whom nonetheless expect to end up as general managers, supposedly able to manage anything. And so it goes. (Harvard and Stanford now cooperate on their customized executive programs.)
In a world rich with experience, in a world of sights and sounds and smells, our business schools keep the boys and girls talking, and analyzing, and deciding. In a world of doing and seeing and feeling and listening, they develop our leaders by thinking. In the final analysis, what they master is not what we need. These schools may be broadening their students’ knowledge about business, but they are narrowing their students’ perceptions of management.
Cooper argued that all a student learned by reading one hundred cases was just that: one hundred unrelated bits of information, void of any generalizable knowledge that could inform action in a new situation” (Schlossman et al. 1994:118).
Finally, the student faces a given problem for a relatively short time and without operating responsibility. In the actual situation, of course, operating personnel must live with their problems.
Education, n. That which discloses to the wise and disguises from the foolish their lack of understanding. —AMBROSE PIERCE, THE DEVIL’S DICTIONARY
Destruction is so much easier than construction. It takes nine months to grow a human being and a moment to destroy one, years to build a great organization and months to run it down, centuries to establish a democratic society and decades to undermine it. Leadership is an old phenomenon; the managership promoted by the MBA is a rather new one. In my opinion, it has contributed to what will be described here—and I have chosen the word carefully—as a pervasive corruption, from education through management to organizations and into society.
“There are four things a student should want from a business school,” James March, a prominent business school professor at Carnegie and then Stanford, told an interviewer in 1995: One is to learn something about business disciplines like organizations, accounting, finance, production, and marketing. The second is to deepen an intellectual understanding of the relation between activities in business and the major issues of human existence. The third is to be able to signal that you’re the kind of person who goes to a certain kind of business school. And the fourth is to lay the basis for a set of personal connections. (in Schmotter 1995:58)
An earlier book by Cohen (1973), The Gospel According to the Harvard Business School, is far more sophisticated and more negative than the other two. For example, about the WACs (Written Analyses of Cases), due every other Saturday, Cohen wrote, “The incredibly tight rules of a WAC strangle your thoughts. No leaps of faith allowed; no grandiose assumptions permitted. You’ve got to slug it out, covering all your bases” (48). When the results come back, “You will look frantically for the little white slip, and you don’t care what Petra Cement [a case company] should or could have done, what your mistakes were, or the flaws in your argument,” but that you received “a P (for Pass) on the slip; that you have made it past yet another one, and that thank God— five WACs down. Only six to go” (53).
It may have been putting in more cases “on pollution and social responsibility. But it isn’t really doing anything to change the mood, the attitude, or the place … the school remains more concerned about placing its graduates and getting business’s financial support than about whether business is using the nation’s productive resources for the good of the nation” (328–29).
“There is a shift in priorities during the two years of business school from customer needs and product quality to the importance of shareholder value” (3). Over 70 percent of the students ended up choosing “maximize value for shareholder” as one of the “primary responsibilities of a company,” while 50 percent chose “invest in the growth and well-being of the employees.” Just over 30 percent chose “create value for the local community” (8). Hardly any included improving the environment. In fact, twice as many students identified the primary benefit of companies fulfilling their social responsibilities as “better public image/reputation” as did those identifying a “stronger/healthier community”
Indeed, while 24 percent of the executives identified “compassion” as the most important characteristic of future leaders, only 4 percent of the MBA students did. The report’s author, Thomas Dyckman of Cornell, concluded that “Apparently experience teaches compassion. Maybe business schools should too” (16). But can they?
CONFIDENCE – COMPETENCE = ARROGANCE Humility is not a word often pegged on MBAs. Arrogance is. That the label has been used so often is not an indication that all MBAs are arrogant, only that a noticeable number of them are.
The word confidence appears again and again in reports by MBA graduates about the benefits of their education; for example, the program “has given me the confidence I needed” and “the EMBA experience expanded the breadth and scope of my self-confidence” (in Hilgert 1995:69). As for competence, employers “failed to utilize [their] new competences,” so most of these MBAs left their jobs! (73)
Imagine a 2 2 matrix of confidence and competence. The effective people have both, the sad ones neither. The unfortunate people have competence but lack confidence. They are worth worrying about, however because a small boost in confidence can have great benefits. The dangerous people, especially in this hyped-up society, are the remaining group: those whose confidence exceeds their competence. These are the people who drive everyone else crazy. MBA programs not only attract significant numbers of such people but encourage their tendencies, by boosting their confidence to manage while providing little competence to do so. 75 As a student
After a talk I gave to Insead students about MBA education, one woman put up her hand and said that while it is true that the program might not teach them that much about managing, it did give them the confidence to manage. I thanked her for making my point!
“Newest,” “world class,” “know how,” “fast moving managers,” “mastering the skills,” “manage in the new millennium”—these words come from just the first paragraph of a letter from the head of IMD in its 1998–1999 EMBA brochure. “Turbulent times” and “constant change” appear in a University of Chicago brochure, as they do in most others, including the word global. All of these are labels that stop thinking, not start it.
John Byrne of Business Week has commented on business schools not having cared “about the perceptions of their customers, the people who actually buy their product” (in Mast 2001a:18). But what other “business” examines its “customers” and dismisses them when they fail?
Now the business schools have their own bottom line—which is really a top line—and it may be aggravating the problem. The schools get rated and ranked by the business press, regularly and relentlessly.
Moreover, innovation may be discouraged because high rankings are earned by conforming to the standards more than breaking away from them. The truly novel programs don’t even get ranked—they don’t fit. Even slight variations can get punished. Stanford “fell two spots, to ninth,” reported Business Week in 1998, “due in part to the ire of recruiters frustrated because students abandoned them for tiny Silicon Valley startups” (Reingold 1998:87).
And then there is a measure of the starting salaries of the graduates. Woe to the school with a student who goes to a nongovernmental organization in a developing country or, for that matter, a student from such a country who takes a job with a company back home.
Maybe the real problem is the very notion of a top line, the idea of measuring things instead of judging them. Just as it is in managing itself.
The bigger problem is that the rankings have distracted them from the most important issue—namely, how effectively they are developing responsible managers, businesspeople, and citizens. To get to that will require something beyond top and bottom lines, beyond numbers, toward values, beliefs, judgments.
“Unhappy is the land that has no heroes.” “No, unhappy is the land that needs heroes.” —BERTOLT BRECHT, LIFE OF GALILEO
Do an MBA and, in a good year, you might double your salary—at least if you are willing to change employers and industries, especially to consulting or investment banking. In other words, ignore any experience you might have, and forget about learning the practice of management. That can come later, when you run a company.
The Oxford Dictionary defines mercenary as “working merely for money or reward.” Does the MBA promote a mercenary approach to management?
Most telling of all is a Business Week survey of six hundred senior executives that “revealed that the majority felt an MBA has little to do with job performance and makes little difference in employee merit or ability. However, these same executives admitted that their companies interviewed only MBAs for their management-trainee position”
In a 2002 journal article entitled “The End of Business Schools? Less Success Than Meets the Eye,” Jeffrey Pfeffer and Christina Fong of the Stanford Business School draw some interesting conclusions. In sharp contrast to those return-on-investment figures cited earlier, which were based on reported salaries for the first job, Pfeffer and Fong found “almost no economic gains for an MBA degree unless one graduates from a top-ranked program” (82).
But if this is true, then why bother with the expensive education? Why don’t companies just pay the business schools to screen people? As Samuelson (1990) has mused in Newsweek, imagine if “all MBA programs vanished. Companies would have to be more thoughtful about how they recruit and train future managers” (49).
In practice … the only thing we immediately expect from Japanese graduates of American MBA programs is that they be able to speak English because we often have our MBAs interpret for foreign businessmen visiting the company. These employees don’t return to Nissay with significantly better business skills—they don’t generally learn much in an MBA program that they couldn’t learn on the job. (in Linder and Smith 1992:30)
To be a leader means to think for yourself, to break away from the crowd, and entice it to follow, in other words, to lead. Leaders don’t imitate. People who hop onto moving bandwagons are not leaders. Nor are the schools that cater to them.1 “So where do MBAs want to work?” Fortune asked in 2001 (Koudsi 2001:408). Its survey put the “internet/e-commerce sector” down to third place (tied with consumer goods, to be discussed later), behind— did you guess?—management consulting and investment banking!
But there is worse news for the business schools: Consulting firms are educating their non-MBA hires themselves—in BCG’s case, for example, in just three weeks. Leonhardt (2000c) reports on this—what some firms call their “mini-MBA”—in his New York Times article: There was a doctor from Boston and a lawyer from Chicago, a philosopher from Australia and an engineer from France. There were people who had Ph.D.’s in mathematics, sociology and astronautics. In fact, in the tiered classroom filled with 50 clean-cut, casually dressed people in their 20’s and 30’s, there seemed to be just about every graduate degree imaginable, except one: the M.B.A. Yet within a few weeks, this hyper-educated crowd would go forth as certified management consultants, advising the executives of multibillion-dollar companies… . To prepare, the neophyte consultants had come to the campus of Babson College here in this western Boston suburb for a three-week crash course in the basics of business. It was run by their new employer, the Boston Consulting Group… . “This,” said one student … “allows me to get a business education without getting a degree.” … 89 All of this raises an interesting and disquieting question: What is the point of an M.B.A., anyway?
It can thus be said without great overstatement that MBA programs take people who have hardly ever made anything or sold anything and then make damn sure they never will.
MBAs haven’t been trained to manage, and many don’t have the will for it. But they are determined to lead. So a trajectory has been developed to take them around management into leadership. The trouble, as we shall discuss later, is that many of these people make dreadful leaders, precisely because their hands are off the business. In fact, the landscape of the economy is now littered with the corpses of companies run by headstrong individuals who never learned their businesses.
Imagine a chief executive saying to the board, “We have talked a lot about the long-term health of this company. Why, then, am I being rewarded for short-term gains in the stock price? And why just me? How can I foster teamwork when a disproportionate share of the benefits comes to me? Why not reward all of us equally?” That would be leadership. How much of it do we see in large American corporations today?
Doing an MBA hardly makes someone a mercenary. But these programs do attract a disproportionate share of people with these characteristics— impatient, aggressive, self-serving—and then launch them on fast tracks to positions of influence in society.
MBA education is unbalanced. It is devoid of craft; indeed, it denigrates experience in favor of analysis. The students themselves have little experience, or else they are not able to make use of the experience they do have in a classroom disconnected from practice. And MBA education is weak on art as well. Not that it denies art—indeed, many of the cases glorify visionary leadership—just that it can do little with it. Insight, vision, and creativity come alive in action, not in admiration. Art and craft are based largely on the tacit, while the MBA classroom focuses on the explicit, in the form of analysis and technique as well as formal theory.
THE CALCULATING MANAGER In his book Voltaire’s Bastards: The Dictatorship of Reason in the West, John Ralson Saul (1992) describes vividly what he calls the “new man of reason,” the calculating manager who places all his faith in the “system”—in technique and the obsessive numerical calculations required to support it. But “when he ventures outside the protective defenses of the system,” into the real world of “common sense,” this new man is lost
High tech is no more a strategy than is profitability (which is a number). And global is not a vision any more than are restructuring and downsizing (which are often cop-outs). Visions do not follow the crowd; they take companies to unique places. Warren Bennis has remarked that when a company truly has a vision, the first time you are exposed to it, you will never forget it. (Recall the first time you visited IKEA, the novel furniture store.) Compare this with all the eminently forgettable strategies of the calculating managers
Some managers came to believe they had to produce optimistic projections or lose their jobs. Says a high-ranking MK official: “Four years ago I watched Agee pressing on a strategic planner. Bill kept chewing on him to produce better numbers. The guy said, ‘Bill, you can make what numbers you want. Here’s what we can do.’ Bill got mad and walked out of the meeting, and the next day the planner was gone”
Agee’s fatal flaw was his weakness as a manager. A CFO at heart, … he relied on buying and selling assets so much that he obscured MK’s problems… . “He was a dealmaker, not a manager,” says one Wall street analyst. “He never thrived in a line business.” Agee didn’t understand the construction business [74].
NOTHING BUT THE FACTS: NOTHING BUT THE PRESENT An obsession with “facts” blinds the calculating manager to everything but the present. It is certainly true that calculation derives from “hard data” of the past. But such data tend to be categorical more than nuanced, often reducing complex realities to simple measures, mostly recent.
Hard information is often limited in scope, lacking richness and often failing to encompass important noneconomic and nonquantitative factors. Much important information never becomes hard fact. The expression on a customer’s face, the mood in the factory, the tone of voice of a government official—all of this can be information for the manager but not for the formal system. Hence, while hard information may inform the intellect, it is largely soft information that builds wisdom.
many such managers “fail because their affinity with other people is almost entirely intellectual or cognitive… . They are emotionblind just as some [people] are color-blind” (87). Of course, people smarts are honed as managers work closely with others, cooperatively on teams and in projects. But does the trajectory of MBAs that we have been tracing in this chapter encourage that?
Asked whether the members of the Harvard class of 1974 were “team players,” John Kotter remarked, “I think it fair to say that these people want to create the team and lead it to some glory as opposed to being a member of a team that’s being driven by somebody else” (Vogel 1995:30). But that is the very antithesis of teamwork and underlines the central problem with the MBA: its self-centered individuality.
Pitcher was interested in the three poles of managing discussed earlier but, unlike our Figure 4.1, saw only one as negative. She labeled managers at our science pole “technocrats” and described them with rather cold words (“no-nonsense,” “controlled,” “serious,”etc.), in contrast with the exciting words she used for the “artists” (“bold,” “daring,” “volatile,” etc.), and the warm words for the “craftsmen” (“helpful,” “wise,” “reasonable,” etc.). As she tells the story, the company was built by an artist, who surrounded himself with other artists as well as craftsmen and technocrats. It was “outward looking.” But when a technocrat took over, he drove out the other artists and marginalized the craftsmen, surrounding himself instead with other technocrats. In other words, calculation took over, and imbalance. “The by-product … was centralization [which in turn produced] demoralization.”
balance in the managerial team is critical—that others with different styles can compensate for the weaknesses of a chief executive. But only if the chief executive respects other styles.
THE RISE OF THE HEROIC MANAGER
Under shareholder value, publicly traded companies have had to perform better, dramatically better. But performance has taken on a special meaning—not about producing better products or improving customer service or doing more innovative research; no, just about raising the price of the stock. Of course, the assumption continues to be made that doing all these things raises the price of the stock. It is just that many companies have been doing opposite things to raise the price of the stock, at least temporarily. To make the immediate numbers look good, so as to catch the attention of journalists, analysts, and ultimately stockholders, products have been rushed to market, brands have been depreciated, customers have been exploited, research has been curtailed, employees have been fired—many, many employees—and financials have been manipulated. In other words, many companies have been driven to superficiality, sometimes in the form of spin and drama, sometimes outright theft, at the expense of honest substance. 105 Accompanying this—in fact, driving it within the corporations—has been another shift, in a sense away from hard analysis but not away from calculating management. On our Figure 4.1, chief executives have been encouraged to move up the right side of the triangle, toward the artistic pole, along the line labeled disconnected managing. But most did not get very far: Their lack of imagination stopped them in the place labeled the heroic style.
How can a large corporation get its people to respond to something as abstract as the maximization of shareholder value? Who is supposed to get excited about making money for people they have never met, some of whom are buying the stock in the morning and selling it in the afternoon? The answer has been to concentrate power in the hands of a single individual who can act rather arbitrarily to bring everyone else in line—someone who can order them to improve numerical performance and fire them when they do not. The CEO has thus become king.
Sometimes the schools just said it: the Harvard General Manager Program (1997– 1998) “looks at leaders ‘in action’ to see how they develop a vision of the future, align the organization behind that vision, and motivate people to achieve it. It examines how leaders design effective organizations and change them to achieve superior performance.” All by themselves!
To chiefs in executive offices (not to mention students in classrooms), “the day-to-day running of a business is difficult, grudgingly hard work and often very boring. By contrast, a takeover is exciting and glamorous, promising even the dullest managers their brief moment in The Sun” (Hilton 2003).
With so many MBAs being produced, doesn’t the relationship between the classroom and the boardroom deserve careful attention? It has not had it, not from business school researchers who spend so much time studying every other form of performance. “I’ve seen no serious studies that have attempted to link an investment in management education to shareholder value or a company’s share price,” commented the recently departed dean of the London Business School.
Charan and Colvin offered two key explanations as to why the CEOs failed: “bad execution” and “people problems”—exactly where we have seen MBA selection and training to be the weakest. About bad execution, Charan and Colvin made a telling comment in light of our discussion of heroic management: Keeping track of all critical assignments, following up on them, evaluating them—isn’t that kind of … boring? We may as well say it: Yes. It’s boring. It’s a grind. At least, plenty of really intelligent, accomplished, failed CEOs have found it so, and you can’t blame them. They just shouldn’t have been CEOs.
How, then, did Harvard’s presumably best alumni perform, not in getting there but in being there? In a word, badly. Looking at the record as of late 2003 (see Table 4.2), ten of the nineteen seem clearly to have failed (meaning that the company went bankrupt, they were forced out of the CEO chair, a major merger backfired, etc.). The performance of another four could be called questionable at least. Some of these fourteen CEOs built up or turned around businesses, prominently and dramatically, only to see them weaken or collapse just as dramatically. None of the fourteen left behind solid sustainable businesses.
Joseph Lampel, who joined me in this assessment of the performance of these nineteen CEOs, noted an often-fatal tendency to pursue a formula—some kind of generic technique—in disregard of nuance and in spite of … well, those people and execution problems again. As someone named Berger once remarked, “In science, as in love, a concentration on technique is likely to lead to impotence.” Inexperienced students who seek “practical” applications in the classroom seem to become disconnected managers who seek easy answers on the job—especially financial ones that make the company look good, for a time.
Reengineering with a human face was in the end just reengineering— and badly done at that (Munk, 1999). Haas learned in business school about human resources and marketing; did he learn on the job about human beings who make and buy jeans? What we seem to have here is the manager who knows better rather than learns better and so is more controlling than facilitating.
So what do we conclude from all this? Again, not that the MBA is a dysfunctional degree that ruins everyone who gets it. There are graduates of these programs who are doing fine,7just as there are those MBAs who have failed miserably. The evidence presented here is not definitive. But it should make us all highly suspicious about this influential degree. Having an MBA should no more qualify people to manage than it should disqualify them. But the data provided here should certainly sound some warning bells: that the MBA confers important advantages on many of the wrong people. Put differently, people should be earning their managerial stripes on the job; their progress should not be speeded up by their having spent time in any classroom. No company should tolerate that “fast track.”
For exploration, getting there is the hard part: doing something different, something interesting. Exploitation, on the other hand, thrives on being there—on extracting gains from what already exists, climbing aboard existing bandwagons to ride them to greater fortune. This is a lot easier, and so there is no shortage of people prepared to do it. The trouble is that you can’t be there unless somebody got you there. Without exploration, there is nothing to exploit. Is that where we are headed as a society?
ROBERT LOCKE ON MBAS IN THE ECONOMY Several studies by historian Robert Locke over two decades on what seem like the “old” and the “new” economies shed further light on this issue. In one paper (1996b; see also his book, 1984), Locke addresses three questions. First, “Did American graduate schools of management and their MBAs have anything to do with the creation of the reputation of American management?” His short answer: “not much” (4). Locke points out that America’s prowess in management was established by the 1940s, long before MBA education was prevalent—indeed, when business schools were widely regarded as weak. It was, he argues, engineers and the like who built American business, thanks to their logistics abilities. Indeed, Locke points out that while the MBA programs expanded in the 1960s and 1970s, “the reputation of American management went into eclipse,” as the German and Japanese economies surged ahead. He describes “management” in this sense as “a cultural peculiarity” of America that “never played the role in economic success that managers believed” (1). And that leads to Locke’s second question: “Did the most successful rival capitalist economies to the American after the war, namely the German and the Japanese, base their success to any extent on a copied American-style system of management education?” Despite both being “eager pupils” of management, and America a particularly “enthusiastic teacher of management” (6), neither country developed any MBA education to speak of (to be discussed in Chapter 7). As Locke (1989) has noted elsewhere, the innovativeness of many high-technology German manufacturing firms, in contrast to Scherer’s conclusion about American ones at the time, may have derived from the fact that “German managers willingly participate in the work of the technical and scientific community” (276). 124 Locke’s third question is “Could American-inspired form of graduate management education in fact be said to have done more harm to management than good?” Here his answer is more suggestive than definitive. He points out, for example, that “American business school research and teaching have contributed almost nothing to the most significant development in the business world during the past half-century— the quality revolution” (1996b:17). He also argues that the creation of a managerial “elite is detrimental to the sort of unit cohesion that … is critical to success at the operational level,” precisely where he claims American practice to have excelled earlier.
Locke concludes, much like Scherer, that “start-up entrepreneurs in interactive IT could not have gained their entrepreneurial insight in some MBA program. Consciousness about the market possibility of a technology or a product depended on a thorough grasp of IT acquired on-the-job” (9).
The problem today, increasingly, is that we have two cultures— specifically, two very different approaches to the process of managing. This is the important message from Scherer and Locke, and it has also been articulated in an article by Fallows (1985), who wrote about “a war between two quite different cultures of achievement”: one the entrepreneurial, “informal, outside-normal-channels, no-guarantee” and the other professional, representing “security, dignity, and order” (50).
An overemphasis on any one function can send any company out of balance. Steve Jobs did it with development, and then John Sculley did it with marketing. Other chief executives have done it with finance. Marketing and finance are hands-off functions. An obsession with finance has been described as playing tennis by watching the scoreboard instead of the ball. An obsession with marketing might thus be described as watching the crowd instead of the ball. But being too hands-on can be no better: an obsession with development, for example, can be described as watching the design of the ball more than its trajectory. Business needs all of these functions, but focused on hitting the ball.
If entrepreneurs have long prided themselves on attending the “school of hard knocks”—namely, learning from hard experience on their way to creating new enterprises—then MBA entrepreneurship courses might be seen as the school of soft knocks, not necessarily to circumvent the hard knocks of experience so much as to soften them. Harvard’s Web site (2003) describes its Entrepreneurship curriculum as enabling “students to test their business ideas in a risk-free environment.” But is it entrepreneurship if it is risk-free?
- this is what we could offer in helping with start up beauracracy
THE ENTREPRENEURIAL RECORD True entrepreneurs often have an artistic bent—they are visionaries with frequent insights. As such, as we shall see, many ignore MBA programs. These are individualists intent on breaking away from the crowd, while MBAs more commonly want to be in the middle of it. So how do MBAs do as entrepreneurs? Crainer and Dearlove (1999) write in their book on the MBA, “If business schools were supposed to turn out entrepreneurs who would go forth and multiply—creating jobs and adding to GDP—then they have not succeeded. When it comes to successful business start-ups, with a few notable exceptions … business school graduates are conspicuous by their absence” (27). These authors cite a survey of Britain’s top one hundred entrepreneurs, chosen on the basis of job creation and sales growth over five years as well as personal wealth. Only three among them had MBAs, two from the same company. 132 In the United States, Harvard claims that “about one-third of graduates who have been out … for at least 15 years own their own businesses” (Leonhardt 2000a:8). But there are all kinds of ways of owning your own business, from incorporating as a management consultant to building a major corporation. Some earlier data from Harvard suggest a significant amount of the former (Stevenson 1983). While the proportion of “self-employed” went up over time (from 11 percent for those who graduated in 1977 to 36 percent for those from 1942), most of this involved very small ventures: almost three-quarters had under fifty employees. In fact, almost half of it involved the industries of consulting (highest, with 16.7 percent of the self-employed alumni reports), real estate (12.2 percent), retailing (5.7 percent), investment banking (5.1 percent), and diversified financial services (4.8 percent). Stevenson in fact describes the first three industries as “at least as hospitable to self-employment as working for others” (3). There was no listing for high technology, but many of the remaining categories seem likewise low-technology (e.g., agribusiness, wholesale trade, consumer products; the latter, incidentally, came in at only 2.5 percent, suggesting that MBAs rarely start up the companies they often run). A
“HBS self-employed” are “attracted to fragmented industries with low capital requirements … 25% to 30% have gone into consulting or other advisory services that require little investment in fixed assets” (71).
Bhidé also reports on one hundred founders of the fastest-growing American companies identified by Inc. magazine. While 81 percent had college degrees, only 10 percent were MBAs (1; see also Bhidé 2000:94). A more recent study in Inc. of its full five hundred company list put the proportion of MBA founders at 15 percent (Greco 2001; a 2001 Fortune report on the forty richest Americans under forty had only one with an MBA—and he was a vice president, not a founder [Dash 2001]). So while there are certainly prominent MBA entrepreneurs, they are far less…
Entrepreneurs tend to be highly dedicated to their companies and their industries, often to “their”people as well, in many cases obsessively so. It takes that kind of dedication—emotional, involved, intense—to see something through to its solid establishment. 134 Yet we have seen that many MBAs tend to be fickle in precisely these respects: not dedicated to particular companies or industries or even to the notion of startup.
An entrepreneurial friend of mine in India put it this way about one of his marketing people from a business school: “He doesn’t have the fire in his belly!” Perhaps people with fires in their bellies don’t have the patience to sit still in a business school through two years of analysis. Said a highly successful American entrepreneur, “I went to night school to get an MBA. I should have utilized that time to set up more businesses. True entrepreneurs get out of school as fast as they can and get on with life”
Sure, entrepreneurs exploit, but not before they have explored, because they have to build companies to get there in order to be there. And sure, they have to calculate on the way, but often in their heads, informally, or on the back of that proverbial envelope; scheme might be a better word for what they do. Many are, in fact, attracted to industries too new or fragmented to generate the numbers required for fancy calculations. So they need the courage to act without the data, and MBA education hardly encourages that. How do you do industry analysis without industry data? Who can calculate the potential return on investment for a product that has never been to market?
the explorers can easily find exploiters, but the exploiters cannot simply hire explorers.
Now, where to put management in these different perceptions of organizations? In the chain, that’s easy: on top, removed. As shown in Figure 5.1a, over each link is a manager, and over each manager is another manager. A manager for each and a manager for all! In other words, naturally laid over the horizontal chain of operations is the vertical chain of command. No wonder Porter’s chains are so popular in MBA programs: The manager is on top. Of course, this is how management has been seen for a century, on top. But that has been a century significantly dedicated to mass production. (Joseph Lampel [in Lampel and Mintzberg 1996] tabulated all the industries used as examples in Porter’s [1980] book Competitive Strategy. He found that 176 of the 196 were dominated by the “logic of aggregation,” meaning mass production or the mass provision of services.)
Now, where to put management with regard to the web? Stop and take a good look at Figure 5.1c, and ask yourself that question. When I ask it of people, they hesitate. On top? Obviously not on top—any manager on top of a web would be “out of it.” At the center? There is no center in a web; creating one would “centralize” it and so undermine its free flow of information. 141 Then the answer becomes obvious: In the web, management has to be everywhere. It has to flow with the activity, which itself cannot be predicted or formalized. But there is an additional answer, less obvious but perhaps more profound: Management also has to be potentially everyone. In a network, authority for making decisions and developing strategic initiatives has to be distributed, so that responsibility can flow to whoever is best able to deal with the issue at hand.
Sure, webs need formally designated managers. But to connect and contribute more than to command and control. And that means the managers have to get inside those networks. Not be parachuted in, without knowledge, yet intent on leading the team. No, they must be deeply involved, to earn any leadership they can provide.
To exercise effective management in a web, therefore, is to appreciate its own special structure. Of course, business schools can teach about this. But will it be appreciated by students who want to be on top? The implications of this are profound. For here we find the main reason why MBA education, as well as the associated calculating and heroic styles of managing, are so antithetical to the important industries dependent on knowledge workers, teamwork, networks, and the like. What sense does it make to parachute onto webs bosses trained in management but ignorant of its context, all ready to make decisions and formulate strategies? That is as silly as it is common, saddest of all in high-technology organizations. Here is where bureaucracy needs to be bashed! And that means bashing conventional management education, which continues to go one way while much of the economy goes another. If the business schools really do believe in change, then they should be changing who and how they educate for management.
Perfection of means and confusion of goals sees in my opinion to characterize our age. —ALBERT EINSTEIN
This seemingly innocent degree, to prepare people for the practice of management, actually does no such thing and in fact has a corrupting effect where it does have influence. This begins in the educational process and passes into the practice of managing and the organizations where that happens.
Do we stop to consider seriously the kind of leadership we need in our most important social institutions, including businesses? Do we give enough attention to the role of judgment, commitment, humility, generosity— and legitimacy? Do we consider what effect the prevalent form of educating managers, and consequently selecting them, has on all of this? Leadership is not about making clever decisions and doing bigger deals, least of all for personal gain. It is about energizing other people to make good decisions and do better things. In other words, it is about helping release the positive energy that exists naturally within people. Effective leadership inspires more than empowers; it connects more than controls; it demonstrates more than decides. It does all this by engaging—itself above all, and consequently others. To do so, leadership has to be legitimate, meaning that it has to be not only accepted but also respected by those subjected to it. Above the will to manage must be the right to manage. Abraham Lincoln said, “No man is good enough to govern another man without that man’s consent.” He was speaking about government, of course, but increasingly today people govern each other in organizations. If democracy is to have real meaning, it must extend to the organizations where most of us function every day. I maintain that the leadership promoted by our business schools violates this spirit by encouraging a separate, privileged elite—that culture of professionalism discussed earlier—usually imposed on people without their consent.
A two-tiered system based on educational attainment definitely exists… . [However, in such a system, where] educational attainment is more valued than experience and is rewarded accordingly with higher wages and responsibility, the rational response of the recent college graduate is to pursue the advanced degree, foregoing the needed experience. Many companies, even those who claim to value experience, still perpetuate the problem … [making] it impossible for a non-MBA or second-tier employee ever to earn management responsibility by performance alone, even when company policy dictated promotion from within… .
The most important rules in any company never appear in the employee handbook.
I hope you will counsel any undergraduate who asks to get an advanced degree. And if the system suffers as a result, do not blame MBA training, blame instead the employers who do not sufficiently recognize and reward homegrown talent—the fault is theirs.
In recent years, we have been experiencing a glorification of self-interest perhaps unequaled since the 1920s. Greed has been raised to some sort of high calling; corporations are urged to ignore broader social responsibilities in favor of narrow shareholder value; chief executives are regarded as if they alone create economic performance. A society devoid of selfishness may be difficult to imagine, but a society that glorifies selfishness can be imagined only as cynical and corrupt.
“Like it or not, individuals are willing to sacrifice a little of almost anything we care to name, even reputation or morality, for a sufficiently large quantity of other desired things.”
This, then, is the message untold numbers of MBA students carried away from their studies, alongside, of course, whatever corrective materials were supplied in that course in ethics. And the result is what we saw earlier in reports that the values of MBA students harden over the course of their studies, even compared with executives, away from social responsibility and toward “shareholder value”—in other words, toward “more” for the owners, and everyone else be damned.
“Listen, boss, do you want me to treat people well or meet the targets?” Ackerman published his book in 1975, before the advent of shareholder value. Think of the situation now!
ECONOMIC IMMORALITY There is another response to this problem, which has had far more influence because it so justifies self-serving behavior. This is the one long promoted by economists such as Milton Friedman (1962, 1970): that business simply has no business attending to social goals. These are for government. Let each stick to its own sphere of responsibility. How convenient would be a world as black and white as this bit of economic theory. It does not exist. In the real world of decision making, the economic and the social get all tangled up. Find me an economist who would argue that social decisions have no economic consequences. Every economist knows that all social decisions cost resources. Well, then, how can any economist argue for economic decisions that have no social consequences? They all impact socially. So businesspeople who take this separation seriously create havoc with the social consequences of their actions. They do as they wish for economic gain while conveniently slipping the social consequences off their ledgers, as what economists call “externalitities,” meaning that the corporations create the costs while society pays the bills.
Business may not exist to serve social needs, but it cannot exist if it ignores them.
Enron was loaded with MBAs. “During the nineties, Enron was bringing in two hundred and fifty newly minted MBAs a year,” notes Malcolm Gladwell (2002) in a New Yorker article entitled “The Talent Myth.” Here he takes apart the “star system,” which he calls “the new orthodoxy of American management”—hiring supersmart people with bonuses and the like, “fawning over them,” giving them rather free rein, and promoting them “without regard for seniority or experience.” This led to precisely the problem discussed earlier in the selection of managers. These stars moved so fast that “performance evaluations [weren’t] based on performance.” People got ahead based on their charm, energy, and self-confidence. As a result, Enron ended up with narcissistic leaders, even though “narcissists are terrible managers” who “resist accepting suggestions” and tend to “‘take more credit for success than is legitimate’” (quoting Hogan et al. 1990:29, 30, 31).
Skinny is a synonym for lean. Are we, therefore, creating bulimic economies, so “productive” that they will eventually collapse under the weight of their burned-out managers, angry employees, and used-up technologies? And are we creating a society that is just plain mean? If so, for what purpose? So that some of us can be economically rich while all of us are socially miserable? In a democratic society, we do not exist for our social and economic institutions; they exist for us.
The Business Roundtable, a hitherto socially responsible group of chief executives of America’s largest corporations, concluded in a “Statement on Corporate Governance” issued in 1997 that “the paramount duty of management and of boards is to the corporation’s stockholders: the interests of other stakeholders are relevant as a derivative of the duty to stockholders” (3). The customer may be “king” and the employees may be the corporation’s “greatest assets,” but when it comes down to it, nothing matters except “value” to the shareholder (meaning price of the stock). 154 An earlier report of this group, issued in 1981, and then labeled “Statement on Corporate Responsibility,” was rather different: “The shareholder must receive a good return but the legitimate concerns of other constituencies also must have the appropriate attention” (9).4 That report went on to discuss “balancing the legitimate claims of all [these] constituents.” But the 1997 report dismissed “the notion that the board must somehow balance” these interests as “fundamentally misconstru[ ing]” its role. It referred to this as “an unworkable notion because it would leave the board with no criterion for resolving conflicts”among the different interests (3–4). How about judgment? Somehow between 1981 and 1997 the chief executives of America’s largest corporations lost their sense of judgment. And that speaks legions about the shift in “leadership” in American corporations, accompanied by the scandals in executive compensation.5Out with the social and in with the economic, the chief executives deemed. Out with responsibility and in with greed, is what they meant. The chief executives who signed that Business Roundtable document were followers, not leaders.
I argued in Chapter 2 that the MBA prepares people to manage nothing. But at least it imparts knowledge about business (marketing, financing, accounting, etc.) and may also enhance a zest for business, at least established big business. But how that carries over to government and the social sector constitutes a leap of faith that business schools have yet to explain. Instead, they conveniently assume that they have ”magically metamorphosed into management schools. They don’t teach much management, but somehow their graduates can manage anything. Learning how to market fast-moving consumer goods, how to conduct competitive analyses of industries, how to use algorithms for the raising of capital in financial markets, and so forth, somehow prepares young people to manage embassies, churches, and hospitals. It would be dismissed as ridiculous if not for all the government and social sector organizations that have taken it seriously (not to mention those MPA and MHA programs [in the public sector and health] that have copied the MBA).
(Anyone who needs a mission statement to understand a hospital should find work somewhere else.)
Such behavior is particularly devastating in the social sector, which should not be relying, like business and government, on hierarchy so much as on the engagement of the people involved. In cooperatives, for example, those most involved—the workers— can be the owners; in so-called voluntary organizations, some of the people may be volunteering their time. So a two-tier system promoted by MBA education, which separates managers from others, is particularly antithetical to much of this sector.
Government is not business; treating it as such demeans it.
In summary, beyond the earlier critiques, the MBA carries a lot of tacit baggage that has no business outside business. MBA graduates who believe that they can manage anything are quite simply a menace to society.
Getting Past Smith and Marx: Toward a Balanced Society, in which I attribute the problem to a mistaken belief that capitalism “triumphed” in the fall of communism. I argue that by failing to recognize that it was balance that triumphed, across government, business, and the social sector, compared with communist countries fully tilted to the power of government, we are now going out of balance the other way.
Those in the business schools tended to be the least adapted to the social sector and most like conventional MBA programs, albeit with some additions. (For example, only 7 percent of the MBA programs for nonprofit organizations had courses in “Philanthropy and the Third Sector,” compared with about twice that number in MBA programs for nonprofit organizations and MNO programs [Masters of Nonprofit Organizations in Social Work].
Change the environment; do not try to change man. —R. BUCKMINSTER FULLER
There are certainly people in business schools aware of many of the consequences discussed in the last four chapters. And they have promoted changes in MBA programs in recent years to deal with them. Have these changes made major differences? That is the issue to which we now turn. The automobile you drive has had many improvements over the years, probably hundreds in the last year alone. Yet it is fundamentally a Model T, the vehicle built by the Ford Motor Company starting in 1908. It does more or less the same thing in more or less the same way, carrying a few people on rubber tires propelled by a four-cycle internal combustion engine
In its EMBA brochure of 1998, the University of Southern California wrote proudly of a curriculum that “closely simulates the business environment,” with “case analyses, computer simulations, industrial and group projects, field research,” and so forth. But why the need to “simulate” that environment when it is sitting right there in the class— in the students’ own experiences? Why take the right people and repeat the wrong ways?
An MBA program can be international in at least four respects: The students can be international (meaning rooted in various cultures, not drawn to one). The faculty can be international (in their heads, not just their origins). The context, philosophy, and culture can be international (i.e.,eclectic, which is the opposite of global). The location and control can be international (which means dispersed, not dominated by one country). 171 In these respects, so far as I know there is no international MBA program.
“There is a very aggressive social schedule here [at Stanford], and that is something most of the East Asian crowd stays out of.” Another student at Berkeley claimed, “Domestic students made all the contributions to class discussion … so you don’t know how business is conducted in Europe or the Pacific Rim” (108).
Some Europeans—certainly a section of the British business community— still see academia as remote and irrelevant to the business world. The attitude is reflected in the use of the dismissive British phrase “that’s just academic”— a pejorative meaning you would never hear in the US.
A few years ago, I did a video hookup with a Buenos Aires MBA class. At one point I asked the director whether his program teaches an Argentinean style of managing. No, he answered proudly, “we teach the universal style of managing.” I suggested he meant the American style of managing.
The great places of education, from ancient Greece to contemporary Cambridge, have always functioned best as geographically tight communities of dedicated thinkers—students and teachers on a log, as someone once put it. Collegiality is a form of community, in place; it doesn’t work the same way across space.
Gabino Mendoza (1990) of the Asian Institute of Institute of Management in Manila said, “For forty years or so, teachers of graduate management education in the developing world have wandered in the academic desert, starved, parched, mesmerized by mirages that have invariably faded in the sand. In their sojourn in the desert, three temptations have bedeviled them” (13). 177 The first, to which “most teachers of management in the developing world have succumbed,” has been simply to “uncritically pass on to their students … [what has] been found to work in the industrialized developed countries of the west.” But much of this, in Mendoza’s opinion, has “little relevance” to their developing countries. Thus, Sturdy and Gabriel (2000), in a paper on “MBA Teaching in Malaysia,” have described the visiting academics from the west as equivalent to the religious missionaries and military mercenaries of earlier times: “Knowledge became a major export industry for industrialized countries” (980). Old products are “sold in new markets through the franchising of ideas,” using advertisements in the Malaysian press that “compete for space with advertisement for cars, watches, and cosmetics” (983, 986), with about as little differentiation for local consumption. Mendoza’s (1990) second temptation, which he calls “an invitation to despair,” is to forget the whole business of business education. After all, [t]he Japanese, the Koreans, the Taiwanese, among others, formed their own unique management systems, educated and trained competent corps of managers, developed their economies, successfully competed with the industrialized West, and enriched their countries with little or no help from modern graduate schools for would-be managers. Why do your poor countries need such expensive, resource-intensive institutions? Why not just close them down and save some money? (13) Mendoza’s third temptation is for people in these nations to develop their own solutions. He cites as examples a Central American management institute that encouraged meaningful dialogue between the key institutions of business, government, labor, the military, and the church, and African schools that helped the revival of the local agricultural sector. His message is that every country has something to learn from its own managerial and business behaviors, and to teach it to other countries.
A 1995 survey of the Keio alumni (Ishida 1997) found that “the exchange of views and friendship with other students greatly exceeded what they had expected [upon entering], while learning advanced professional/specialized knowledge did not come anywhere near expectations”
Much like Japan, “the locus of German management is in the firm, not in the management profession itself” (Locke 1989:100).10But while Japanese companies have tended to move their best new recruits around so they can get to know different parts of the company, German companies have tended to promote them up single functional ladders. In fact, Locke (1989:276) suggests this may help explain the innovativeness of many high-technology German firms, since their line managers actively participate in the work of the technical and scientific community.
DIFFERENTIATION IN EUROPE I have argued that MBA education could be the right way for the right people with the right consequences if it was recognized as specialized education for specialized jobs in business. That, in fact, is how much graduate business education is viewed in Europe (increasingly but not always labeled MBA)—specialized by function but also sometimes by industry, as discussed in turn. THE MBF (IN FINANCE), MBC (IN CHANGE), MBA (IN ACCOUNTING), ETC. While an MBA student in the United States will typically complete a set of core courses in the first year and then select elective courses with some functional major in the second year, a student in, for example, the business school in Aix-en-Provence, France, can do a full masters-level degree in Internal Auditing, Quantitative Marketing, Management of Logistics Systems, Finance, International Business Law, or Project Management. Likewise, at Warwick, one of England’s better schools, one can do a masters degree in Economics and Finance, European Industrial Relations, Organization Studies, and others. Less conventional but still functionally specialized are masters degrees in Design Management at Westminster, Organizational Change at Hertfordshire, and Management Learning (“for management developers”) at Lancaster University. Think of these as MBA programs without the A—unless, of course, it stands for Accounting! 183 Such specialized programs allow the entire design to be tailored to the function in question, not only in the obvious ways of curriculum and materials but also in linking the studies to practice. For example, the students can be sent out to do serious apprenticeships in their field; some of the French programs which usually run for a year, include several months of in-company training. Also, practitioners can be brought into the classroom and even into the design of the curriculum. Moreover, such programs send a clear signal to both the graduates and their employers that these people have been trained as functional specialists, not general managers. So what is negative when claimed to be managerial—such as an emphasis on analysis—can become positive in specialized application. Of course, specialized masters degrees are fairly widespread on the other side of the ocean too, but heavily focused on a few rather hard disciplines and not nearly as well known as the conventional MBA.12European practice, appears to be more varied and advanced on this front,13 more widely recognized at home, and more inclined to break away from the dominant MBA design.
CRITICAL MANAGEMENT FOR MANAGERS The University of Lancaster offers a masters of philosophy in critical management, aimed at practicing managers but not at their managerial skills. The purpose is to “question conventional wisdom” about management practice, writes Julia Davis, the program director: “it is less about quick fixes than about ways of thinking… . The principal aim of the programme is to provide a forum for informed reflection, debate and decision for those in positions of responsibility.” The brochure describes the program as a “part-time research”degree. Modules during the first eighteen months include Insight for Ecology, Ethics and Values, Change and Renewal, and so on, followed by “a rigorous piece of research” that also lasts eighteen months on a part-time basis. “We are offering” this program, claims the brochure, “because management is vital to the survival of organisations, yet we need to be critical of it in order to improve practise in an uncertain future.” 186 Perhaps this is not practical in the conventional sense for the company, but it is most practical for a society that is so inundated with management!
Consortium programs are usually offered by one business school in partnership with a set of companies that take responsibility for filling the class. Warwick, Henley, and Lancaster, among others, have offered such masters programs.16How the Warwick program developed might come as a surprise in some of the better American schools, which have traditionally insisted on strict academic control: “The initiative came from three original consortium members: National Westminster Bank, BP, and Coopers and Lybrand.” They wanted an MBA “focusing on practical applications and integrating their respective corporate management development programs,” which they felt could not be done in traditional programs. “After the corporations made their needs known, several universities submitted applications. The Warwick proposal to be the academic member of the consortium was accepted”
The University of Capetown offers a fascinating EMBA in South Africa, which seeks to synthesize systems thinking with action learning. Managers focus on issues in the field while learning from each other in the classroom. Managerial activities are seen in three domains: value adding (using resources and capabilities efficiently), innovative, or strategic (sustaining the capacity to create value), and normative (long-term legitimacy, identity, and viability), developed in six modules.
The importance of these thematic reconceptions is that they see the world from the practitioners’ perspective, rather than imposing a structure that suits the academics. There are two dangers, however. On one hand, the themes can be too general (e.g., Investigating the Future): it is easy enough, especially for academics, to come up with nicely labeled themes.18On the other hand, the themes can be too applied (e.g., total quality management), too close to practice to encourage the necessary probing beyond the obvious.
PARTICIPANT ENGAGEMENT It is when the educational process shifts from the teaching of the instructor to the learning of the student that real change happens. This requires a radical shift in pedagogy, beyond the “participation” of students in case discussions and field projects, and in a direction opposite that of the new technologies discussed earlier. The pedagogy has to become more engaging, more personal, and especially more customized.
The first uses some kind of Action Learning assignments on the job. We have already seen examples of this in the British Airways MBA projects and the University of Bath company studies. The participants choose what to do, perhaps in consultation with their managers, and do it in their companies. But as Thirunarayana (1992) has pointed out, they needn’t make an actual change; they can also learn through investigation of some live issues.
Second, under what is sometimes called self-managed learning , responsibility for much of the learning is turned over to the participants themselves, beyond just selecting assignments or projects. In its “Management MBA” (the title of which says something), the City University of London some years ago took customization rather far. “The workplace is the center of focus,” said the brochure (1994), “not the campus,” and so “the course is as mobile as the participants.” First, “each student undergoes a rigorous process of assessment … to suit [the training to] the individual’s needs.” Then a few projects, “usually three,”serve as the “central core” of the program, by which the knowledge and skills learned “are immediately put into practice.” With the brochure’s claim that “academics do not have the monopoly in business acumen” but that practitioners are often “the best people to help develop” the necessary skills, we find ourselves quite a long way from those game theory courses at Stanford, let alone the five hundred cases at Harvard!
This chapter in general, and these two stories in particular, indicate that there is a kind of knife-edge in graduate MB/A education. On one side is B: specialization in the business functions, mostly for younger people with little experience, whether recognized as such in the specialized European programs or not in the conventional MBA programs. And on the other side is A, for administration, meaning management: programs designed to educate practicing managers in context, and so adopting a wholly different approach. Not only does there not seem to be a middle ground between the two, but the recent “innovations” described in the chapter seem to have driven them farther apart. On one side have been the new technological pedagogies, the efforts at internationalization, and the teaching of soft skills that, if anything, have taken the conventional programs even deeper into their analytical orientations and further away from managerial practice. And on the other side are the serious innovations of the programs for experienced managers, which show the way toward authentic management education.
if companies that become international evolve through four stages—“(1) domestic firm, (2) import and/or exporting, (3) joint ventures and direct foreign investment, and (4) a truly networked global organization”—then “most business schools are at stage 1” (10, 11). Some import and export students and faculty, and a few have gone farther. Wind’s conclusion: “The world is global, but most B-schools are domestic” (5).
Even the best-known business schools—or perhaps I should say especially the best-known ones—tend to tone down their academic materials rather than rethinking them for a different audience, offering them generically to whoever enrolls. Many schools certainly make claims about customization, but all too often that means the selection of components from a generic pool.
while management development may rarely educate, management education rarely develops. That
All managers certainly have to function in a world of sink or swim. But there are ways to help the swimming. We look at four in particular, concerning on-the-job development, course work, action learning, and more intensive formal development in corporate academies.
MOVING, MENTORING, AND MONITORING If management is a practice, then some sort of apprenticeship has to figure prominently in how it is learned. In other words, some formal learning should happen significantly on the job.
In many of their significant learning experiences, managers came into the situation with at least one missing trump. They routinely faced unfamiliar functions, businesses, products, or technologies, sometimes they were too young, had the “wrong” background, or had to master computerese or financialese or legalese. Some found themselves in foreign countries, unable to speak the language or communicate with the people they managed. In all these cases, the challenge was not to let the missing trumps do them in; the development was in learning how to work around a significant disadvantage. (5) “Meeting these challenges left little choice but to learn and develop new abilities.” Accordingly, “development came from the inside,”which led McCall to state his “first rule”: “Development is not something you can do to or for someone. Development is something people do for themselves” (5). But his “second rule” is that challenge can be provided to encourage this self-development, notably by rotating people through a series of challenging jobs that stretch their abilities: from managing a start-up to learn about “providing strong direction in the face of ambiguity,” to managing the turnaround of an existing business to learn about “overcoming resistance and incompetence” (9). Likewise, “small strategic assignments” can “shock” people “out of a parochial point of view by requiring them to go from an operational to a strategic perspective”
“Intuition alone is insufficient for even amateur performance in the conventional arts,” he claimed. Proficiency takes years of developing, through “methods … handed down from teacher to pupil … virtually never arrived at instinctively or without practice” (55). And “only someone who can actually perform or can act is qualified to teach it,”
“When the tools and materials of an art are inanimate, as in sculpture … development is a personal activity,” whereas in management, where the “personalities, talents, and efforts” of others are at stake, “the education of its members becomes a social responsibility of the institution itself” (57). As Raelin (2000) puts it, in support of Boettinger’s position, moving alone leaves the learning to the individual, whereas moving with mentoring turns it into a social process, which can make it more effective. He points out, for example, that stretch assignments, however challenging, do not necessarily give the manager much chance to reflect with others on the learning. “Experience, in other words, tends to teach in private, reinforcing the notion that learning [in organizations] is done individually, not collectively”
While mentoring has long existed as an informal process, more formalized “coaching” has become popular in recent years. At least the word has become popular, and programs to encourage it. As Cappelli (2000:22) notes in an excellent review article on employee commitment, there has been a decline in internal mentoring accompanied by an “exploding” rise in coaches and mentors for hire, by the managers personally.
MENTORING, RED CROSS STYLE Some years ago, we held a meeting of management development people from companies involved in our masters program. We started with a go-around, and people from various large corporations described their elaborate efforts to develop managers. Then it came the turn of the representative from the International Federation of Red Cross and Red Crescent Societies (which sends teams into disaster areas for relief work). She apologized for what seemed to be their rather meager effort—not many courses, not much headquarters activity. As it happened, I had recently spent time at one of their refugee camps in Tanzania, and I disagreed. The Red Cross was probably the most active developer of managers in that room, I suggested; it just took a very different form. Attached to each of its own “delegate” managers, in Tanzania and often elsewhere, was a “counterpart” member of the local Red Cross Society who worked alongside these more experienced managers to be trained by them. The delegates I observed spent a great deal of time working with their counterparts. This mentoring arrangement may have been somewhat informal, but it was personal and powerful. (See Mintzberg 2001, also Depressing is hardly the word under stories, on mintzberg.org.)
As Handy et al. (1988) point out, on-the-job training (OJT) “is a Japanese maxim.” Managing, the Japanese believe, can “only be learnt by watching, listening to, and practicing under one’s older and more experienced colleagues.” Accordingly, “Japan has elevated the mentoring role into a formal requirement of every manager,” aided by open office seating that “allows potential managers to observe their superiors, especially under stress” (5, 14, 33). More important still is the whole practice by which people commonly grow into managers in Japan. The “Japanese firm hires people right out of school, trains all of them in various jobs through a carefully worked out system of job rotation, supplementing this on-the-job training with short in-firm or extra-mural courses” (Locke 1996a:140).
The great zaibatsu firms had in fact been recruiting their key managers straight from the university into lifetime employment since the late nineteenth century, but aside from rotation, these people were left to themselves to acquire the necessary skills (18).
Elegant formal systems do not guarantee effective executive development practice. Rigid career paths, forced mentoring and coaching programs, lock-step rotation plans, catalogs of training programs, and elaborate succession planning tables may actually be counter-productive. Our studies suggest that the development of executive talent is highly individualized. (11)
The “entertainment factor” has skyrocketed in the world of work over the course of my career, but I don’t think it has enhanced the quality of what is being presented very much. In fact, I would say that as we have sought to make our graphics more “professional”and our “platform skills” more stylish, we have had to trivialize content. I wonder if participants realize the shallowness of the content they’re getting in the midst of all this glitzy instrumentation. Or let me put it a little more fairly: the trouble with some carefully crafted slide presentation, or an elaborate computer-based interactive exercise, or a book that is really an indoctrination machine even though it looks like a book, is that participants can’t have a conversation about it or with it. They can’t modify it. They can’t affect it, teach IT anything. All they can do is experience it from the outside as a closed system … they are no longer participants— they are passive consumers even if the system is interactive!
Uninformed sharing, for example, is hardly an improvement over passive listening. There is one program that restricted invited experts to seven minutes on their given topic, so that the senior executives could get on with their own comments. The fact that some professors are inclined to talk too much does not excuse the fact that some executives are not inclined to listen enough. At least on complex issues, as, for example, in this program “the evolution of the world economy,” the purpose of getting people together for development is neither to fill them full of concepts nor to provide them with an opportunity to talk; it is to stimulate learning at the interface of these two: where concepts, seriously presented, meet experiences, deeply lived.
Experimental exercises are used and feedback given, informally by peers or through formal instruments; psychologists may also observe behaviors and comment. Conger found that such programs “can indeed produce very positive outcomes for some participants.” But people can also be “overwhelmed”with information and may “gravitate to changes that require little or no fundamental shift in our character.” To Conger the “greatest shortcoming” of these programs is “the lack of opportunity to shore up weaker skills” and also that sincere desires to change ineffective behaviors “dissipated soon after the program ended,” in many cases due to “lack of support and coaching back on the job” (1996:58).
Skill building. Conger found skill-building courses to be the most common yet the least up-to-date on leadership. Here some skill believed to be teachable (e.g., shaping vision, communicating, etc.) is identified in the classroom, perhaps through a case study, and then practiced with feedback. This approach is practical and fast; the question is whether the skill in question can really be taught. For example, “visioning is learned largely through important work experiences, not through a day’s exposure in a workshop” (1996:56). Conger argues that people need considerable time to learn a skill, in management as in sports— time to study it, experience it, experiment with it, get coached, and then make improvements. In other words, the setting has to be authentic, tied to the practice of managing. Congercalls these skills-building programs “the nouvelle cuisine of learning”—a little taste of this and that.
Plato may have needed fifty years to train a good leader, but Harvard promises on its Web site that “you will leave the program as a global visionary” after nine weeks. Of course, Plato did not expect anyone to take off fifty years, but Harvard does require managers to be off the job for the nine weeks.
any professor who cares to do something novel can have remarkable freedom. Anything goes, so long as the market responds favorably—no pedantic committees to get past, just budgets. The same tends to be true, of course, for providers outside the business schools.
AVIRA AND ASPEN SEMINARS AVIRA (for Awareness, Vision, Imagination, Responsibility, and Action) is offered several times a year, over five days, by Henri-Claude de Bettignies at Insead for up to twenty senior managers. This is run mostly as a discussion of broad issues around a table. “There are no lectures or case studies. The issues discussed are the current concerns of today’s business leaders and specific problems brought by participants” (Web site, 2003). The aim, which seems especially suited to managers at this level, is not to transfer knowledge or develop skills so much as develop self-awareness and explore alternate logics, especially about leadership—also to “unlearn,” which de Bettignies has described to me as a “painful process.”
Emphasized throughout the management development literature is the importance of getting the support of top management. But rarely is there recognition of the other edge of that sword: that programs dependent on the support of particular godfathers become vulnerable when they leave. Time and again I have seen wonderful initiatives, like that of the CCMD, ended because of a changing of the managerial guard, or because of the departure of the program’s own directors: “It’s not my program” is the all-too-common attitude of those who follow, rather than “Is this a worthwhile program?” The management development landscape is littered with the remains of wonderful programs that new people simply did not bother to continue. We don’t lack for good ideas in management development so much as people open enough to use them.
He wanted improvements in productivity and thought that the people closest to the operations had a key role to play in this, given a chance to speak up. So in 1988 he and Jim Baughman, who headed GE’s Crotonville management development center, created Work-Out, “to convey the idea of getting the nonsense ‘worked-out’ of General Electric, of the ‘workout’ people engaged in to make themselves lean and agile, and of the problems that needed to be ‘worked out’” (Slater and Welch 1993:214).
THE EVOLUTION OF WORK-OUT In its original form, conceived as a kind of “New England town meeting” where citizens dialogued with the town fathers, managers came together with workers of a business in groups of forty or fifty. They divided into three or four subgroups, which were facilitated by outside consultants and academics. Over the course of three days, they figured out how to streamline the business— “getting rid of the bureaucratic red tape and minutia,” in the words of Steve Kerr (interviewed in Hodgetts 1996:70), who also ran Crotonville. They started with “the low hanging fruit,” those things easy to change, such as “How can the number of reports be reduced?” After each group identified its list of improvements, action plans would be developed and a champion assigned for each plan. Then, on the last half day of the session, the manager of the business would come in with four or six lieutenants, and they would listen for three hours to these ideas. They would then have to say yes or no on the spot regarding each proposed change. As a result of these sessions, GE was able to downsize and increase productivity at the same time. (70) In their book on Work-Out—a kind of handbook as to how to do it—Ulrich, Kerr, and Ashkenas (2002) describe it as more than problem solving and bureaucracy reducing: “It is also a catalyst for creating an empowered workforce” to challenge bureaucratic growth, and it “can help create a culture that is fast-moving, innovative, and without boundaries.” Work-Out can also “become a vehicle for developing managers and leaders who make quick decisions in an energizing dialogue with employees— instead of hiding in their office making decisions by fiat” (xiv).
These “must be designed so that participants are convinced that attendance is integral to getting their real work accomplished, rather than simply an escape or time off for reflection” (40). Simply time off for reflection. What a curious statement! It is dead wrong, and antithetical to learning, no matter how fashionable it may be in management development practice today. That is because learning is not doing; it is reflecting on doing. And reflecting is not an escape but an essential part of the management process—and probably its weakest component in today’s hyper world.
One paper on Action Learning (Pedler 1997) reproduces a cartoon of a hot air balloon with weights hanging down labeled “task” and “self-development.” The line below reads, “If we want to keep going, one of them will have to go.” Revans reportedly saw this and commented, “Don’t [they] know [they] have to do both!” But can organizations have their action cake and eat the learning, too? Does what MiL calls “Earning while learning” work as easily as they would like to believe? Or does earning eventually drive out learning, and results eventually co-opt reflection?
CORPORATE ACADEMIES
While staff colleges continue to exist in the military, elsewhere the concept seems dated. Yet recent developments in the corporate sector, especially in the United States, suggest a resurgence of the idea. During the 1990s, many corporations created extensive inside units to focus on the development of their managers and other personnel. They used a variety of labels for these, the most fashionable of which became “corporate university.” To my mind, this has been an encouraging development, not only because it recognizes management development as a complex process in need of care and customization, but also because it has countered the trend in courses of distancing managers from their companies, including the belief that managers are responsible for their own development. (Less encouraging, however, is the label “university,” which only serves to camouflage interesting ideas that have nothing to do with universities. These units are intended to develop people, not to do research and grant degrees.7How sad, then, that corporate units are pretending to be universities just as business schools are pretending to serve customers— both to the distraction of their basic purposes. The label “academy,” “institute,” or “center,” used, respectively, by LG, GE, and Boeing, would seem to be more appropriate.8) 230 In her book Corporate Quality Universities, Meister (1994) describes this new trend in management development as based on lifelong learning for employees at all levels, from hourly workers to senior executives and beyond, into the supplier/customer chain. Attention is placed on the development of job-related competencies and the instilling of a sense of the corporate culture, linked to the strategic needs of the business. And so, like those old staff colleges, the programs tend to be developed for the corporation. “Corporate classrooms are moving away from offering a cafeteria curriculum of hundreds of courses to concentrate on” programs to develop “the organization’s core competencies” (21). Some, for example, make “deliberate and consistent use of storytelling within the training function” to communicate “aspects of the company’s history, traditions, successes, and failures” (110).
The Boeing Leadership Center offers a good example of the interesting things that these institutions can do.9It has a large campus near St. Louis, which can house 120 guests. Between February 28, 1999, and May 1, 2000, the Center graduated 2,920 people in its core programs and received 17,143 day guests. The Boeing people consider the Center a “crossroads,” where managers of all levels of the company come together for purposes of “strategic alignment, company-wide cultural integration, networking, and best practices sharing.” 231 In 2000, the center was offering seven programs, systematically laid out along managerial levels, from entry to executive, in the domains of business leadership, operational leadership, people leadership, and personal leadership. Mostly, these programs were tailor-made for Boeing’s needs and offered at the Center, although the design and/or delivery of some were done with the help of outside experts. These programs were intended to come at transition points in a manager’s career, to focus on the competencies needed then. The program for new middle managers enabled them to practice “new roles as steward of the business, leader of change, and bridge between strategy and executive,” while a program for executives gave them a “whole system” perspective. The elaborate program for new first-line supervisors (not common, as noted in this chapter’s introduction), called “Transition to Management,” included three components: “basics,” about topics such as compensation, union relations, and ethics; “working effectively with people” and “managing the business”; and “leadership,” to define “the role of the manager” and “link leadership behavior to business results.” In 2000, the center was giving this program to groups of twenty-four people sixty times annually! More customized, and less, are corporate academies that focus development on the individual manager. Assessment centers are sometimes used to determine specific needs, and then courses as well as career counseling and job rotations are arranged accordingly. Here customization is for the individual but not for the corporation. And then there are companies that let particular business schools take the lead in developing and delivering their programs, but under contract and according to their own specifications.
Has this aspect of management development run its course? As noted in an earlier footnote, the place that gave rise to the flurry of these activities, Motorola University (see Wiggenhorn 1990), has almost disappeared as I write this. And a recent article in the Financial Times claims, “Our corporate survey shows that most big companies are now lukewarm on the subject of corporate universities” (Bradshaw 2003a). If so, that would be a shame—a throwing out of the baby with the bathwater— because while corporations may not need “universities,” the message of this chapter is that they do need comprehensively thought-out activities to develop their mangers.
“On 1 April most firms hold a special ceremony to welcome new recruits. The President gives a welcoming speech outlining the corporate vision and the philosophy and ideals of the company.” There follows “an initial course of training, to engender … a sense of group identity,” which can be very extensive (244). This can last up to a year or more and generally includes hands-on experience (OJT) and other temporary assignments, such as working on the floor of a factory, supported by the mentoring of an “older brother” assigned to work closely with the recruit (246–47). The “solid middle” period of the career follows, with more serious supervisory postings as these people gradually rise in the organization over about ten years, while “they cultivate a problem-seeking habit of mind” (248). An article in The Economist (1991:23) noted that “[f]ormal assessments take place as often as three times a year.” Alongside this come “development exercises”—for example, working out a plan for achieving some objective in consultation with a superior— as well as projects requiring more initiative, all to develop a holistic point of view. This is supplemented by specific training in functional skills, such as accounting, with attendance at outside courses on the rise (313). The sum total of all this is rather remarkable in its extensiveness, also for how it combines the various practices of management development discussed in this chapter: extensive moving, mentoring, and monitoring; courses along the way; some equivalent of action learning (long before it became fashionable in the West); all integrated into careful management of the career (as in the corporate academies). Only “sink or swim” seems absent—perhaps! 233 I do not know whether Japanese corporations have used the term “staff college” or even thought about the concept, yet theirs may well be the ultimate example of it, at least in business. A manager from Toshiba who was visiting the London Business School, upon being told that most of the students had quit their jobs to do the MBA, exclaimed, “Toshiba is the school, then!” Contrast this with the American reliance on courses—for example, the claim in a 1997 Harvard brochure that its Program for Management Development “teaches executives in eleven intensive weeks what could otherwise take years of experience to attain, even with the best on-the-job training.” It continued: “Learn how to gain sustainable competitive advantage through building and nurturing critical capabilities,” how to “create a learning organization,” and how to “re-engineer the supply chain.” All in eleven weeks in a classroom! The newer corporate academies notwithstanding, the conclusion reached by Handy et al. (1988) in their report on management development practices probably still stands: “formal education forms the backbone of America’s approach to the development of her managers” (52). Likewise in England: “Certainly a functional career, an appraisal scheme and a three-week…
Obviously, not everyone in America shares Boyatzis’s view. Indeed, not everyone at the Harvard Business School would agree with the quoted claims about how much can be learned in a management development program. For example, Harvard professor John Kotter commented on how “growing a general manager takes 10 to 20 years and there are no shortcuts” (McGill 1988).
My conclusion to this chapter should now be evident. Some approaches to management development focus on experience and the job, others on education and the person, still others on results and the corporation. Each has advantages and limitations. They make the most sense when taken together—not added together, but combined judiciously, according to specific need. Short courses can provide key inputs; they convey articulated knowledge and can develop certain competencies. Degree courses for practicing managers are described in the following chapters as powerful boosts to management development. Systematic career movements, reinforced by coaching and periodic assessing of progress, foster learning from experience. Action Learning, with adequate reflection, strengthens the capacity to do this. And bringing much of this together in a corporate academy, better still in the kind of practice common in Japan, offers powerful possibilities for integration. Even sink or swim has its place: it is sometimes good to sink, just a little, in order to better appreciate swimming.
As noted earlier, Americans lean to the left, with an emphasis on outside education and training to develop the individual independent of his or her context. Here exists the prevailing attitude that “it is primarily an individual’s responsibility to acquire this grounding, although benevolent corporations should do what they can to help” (Handy et al. 1988:59). And the Japanese lean to the right, especially in favor of moving and mentoring. This side treats management as more of a natural practice rooted in context, while the other sees it as more of a “profession,”even an unnatural act, and so relatively context-free. 236 Of course, the growth of the corporate academies has shifted American practice toward the right, but perhaps not so far as might be expected, given the residual reliance on courses. Systematic moving is not all that common, although mentoring in the form of coaching is becoming more popular in the United States. Telling, however, is that this is being done increasingly by consultants engaged by the managers themselves.
But culture should not be the determining factor here. Specific needs within countries vary by industries and companies. For example, mass producers may have greater need for educating in the conventional business functions, since that is how they tend to be organized, whereas high-technology firms, with more fluidity in their structures, may benefit from more flexible educating as well as more on-the-job mentoring and moving. As Raelin (2000:11) has pointed out, in these more volatile contexts, “learning how to learn” may have to replace learning specific skills, for managers and workers alike.
Likewise, the most appropriate form of development will vary with the stage of a manager’s career. Hill (1992) writes in her book Becoming a Manager that the “current emphasis on the acquisition of managerial competencies (especially managerial knowledge as distinguished from skill) and on classroom learning may be misplaced” for new managers (265). They need to learn “how to seek information and solve problems in semi-structured situations,” “how to observe and diagnose interpersonal problems,” “what it means to be and what it feels like to be a manager,” and to deal with the anxiety that managing entails (266). True enough, but they also need some grounding in the basic business functions—the language of business—without this giving a false impression of managing. Hill also notes that new managers “crave … feedback on performance”; they need to “learn their strengths and weaknesses” (269), which suggests the importance of on-the-job development, especially though mentoring.
Later in the career, for those who have moved into senior management positions, short courses on broader social and economic issues, more concerned with wisdom than technique, may make the most sense. Management, always a craft that uses some science, may become more of an art as a manager progresses in his or he career.
8Meister’s (1994) book on corporate universities lists thirty units, only half of which used the label “University” (and one “U”). Four are called “Institute”; four, “Center”; and three, “College.” It is worth bearing in mind that this first use of the term -university was meant as a joke. McDonald’s created “Hamburger University” in the 1960s and offered a bachelor’s degree in “Hamburgerology” (Web site, 2003). And the corporate unit that later popularized the serious use of the term, namely Motorola University, has almost disappeared at the time of this writing. In a 1990 article in the Harvard Business Review, its founder, Bill Wiggenhorn, was quite candid about the use of the term, noting that “I was afraid the name university was too pretentious. This wasn’t to be a seat of free and open inquiry. This was to be training and education for work force and managers” (80). But the “chief executive liked the label; he thought it would create an expectation we’d grow into” (81). Wiggenhorn made clear how his unit differed from a university—for example, that the teachers tended to be “recently retired Motorola employees” and “married women with college degrees whose children have left home” (82). Nonetheless, the label stuck, and there followed the Ford Heavy Truck University and many others (Meister 1994). “Peter Huston, the director of Hart Schaffner & Marx University, believes the university theme has been successful … because the target audience . . is not [the com-pany’s] employees, but rather the retail salespeople who sell … [the] suits in retail stores … [and get] a status and cachet they do not have in their current jobs on the sales floor of Macys’s or Dillard’s” (46). 9
A CURIOUS PLAN: MANAGING ON THE TWELFTH (extracted from an article by Patricia Clifford and Sharon L. Friesen [1993] in the Harvard Educational Review, reprinted with permission) The Mock Turtle went on: “We had the best of educations—in fact, we went to school every day.” “And how many hours a day did you do lessons?” said Alice, in a hurry to change the subject. “Ten hours the first day,” said the Mock Turtle, “Nine the next, and so on.” “What a curious plan!” exclaimed Alice. “That’s the reason they’re called lessons,” the Gryphon remarked, “because they lessen from day to day.” This was quite a new idea to Alice, and she thought it over a little before she made her next remark. “Then the eleventh day must have been a holiday?” “Of course it was,” said the Mock Turtle. “And how did you manage on the twelfth?” (from Lewis Carroll, Alice’s Adventures in Wonderland) Every September, teachers and students gather together in our classroom to learn. Each of us, teacher and child alike, walks through the door bringing experiences and understandings that are ours alone. Yet, each person is also embarking on a journey that he or she will come to share with others. This journey is made anew every year with every class… . We are committed to developing a classroom where teachers and children are passionate, robust learners… . We are searching for school curriculum that acknowledges the importance of the lived experience of children and teachers; that understands growth as more than an interior, private, individual matter of unfolding development… . We met David and his parents on the first day of school. They had just returned to Canada after spending seven years in Africa, where they had lived and worked among the Masai. Although he was of European descent, David had been born in Africa. He went to a village kindergarten, and played and tended cattle with the Masai children… . [A]s we watched David take his first tentative steps in school, we often forgot that the life David had been living until the end of August was radically different from the one he now had to negotiate in our large, complicated, noisy Canadian classroom. 240 Throughout September and into October, David spoke very little… . One day in early October, [he] arrived at school with a huge book about the Masai and asked if he could show his book to the other children. This was the first time David had ever offered to share part of his life experiences with the whole class, to teach us all what he knew best—life among the Masai. David stood in front of the class with his book. He flipped to a few pages and spoke softly … the children were entranced. They had so many questions to ask David, so much they wanted to know… . Here was the perfect chance to bring David into the full life of the classroom. That afternoon, David’s mother came to volunteer in the classroom. We asked her if she would speak to us about the Masai. She agreed, took her place in a small chair…
But it begins in a very different place: that it is not “individuals” who should be developed, but members of a social system in which leadership is embedded; that only those who already have managerial responsibility can be educated and developed as managers; and that international and global are empty words when the purpose is to educate “as a nation.”
WHO TO SELECT, AND BY WHOM? Who should get into that classroom? Who can best judge leadership potential? Certainly not the person himor herself, and hardly some disconnected selection committee in a university. The obvious answer is those who have witnessed that potential in action—namely, people who have worked with particular candidates. Certainly managers must be intelligent, and test scores provide one basis for measuring that. But demonstrated performance on the managerial job provides a far more effective basis for selection—and far more appropriate for a society in need of leadership. Management education, in other words, should be a privilege earned by performance as a manager, not a right granted by the score on a test.
Shouldn’t we be reversing this order by requiring that people who have proven themselves, in an industry and an organization, be selected accordingly? That would also help ensure that people come to the classroom with a certain humility—an appreciation of what they don’t know and need to know. Are these not, after all, the prerequisites for serious learning? In response to that old question about leaders being made or born, MBA programs are designed to make them. Proposed here is to enhance the making of those who are born and made.
Why invest in people who might leave? I reverse this: If that is the organization’s attitude, then its people will be inclined to leave! In other words, this attitude, too, should be seen as a problem in the organization, not in the educational process proposed here. Any organization that balks at investing less than half a year’s salary to improve the practice of its managers through education deserves the turnover of managers it probably gets. My advice to good managers in such situations is to find an employer who respects their talent.
On the other hand, new managers can benefit more from such learning: their habits have yet to form, they have their full careers ahead of them, and they may have more energy and inclination to study.
classroom modules of one to two weeks every few months allow for deep learning without undue disruption of the practice.
This is not to deny the usefulness of created experience during study, such as engaging in a drama workshop to bring out concerns or visiting a cottage industry to gain another perspective on business. When such activities are authentic, they can be powerful, adding something visual and visceral to so much of educating that is verbal. In my opinion, however, created experience, including action learning and other project work, should be viewed as supplementary, not central, to the educational process. The most powerful learning comes from reflecting on experiences that have been lived naturally. Indeed, because every practicing manager is loaded with such experiences, a classroom full of such managers makes for a most remarkable learning situation.
It would obviously be prohibitively expensive to design a program for a particular manager the way an architect designs a house for a particular family. That is not what I am suggesting—not quite. The metaphor is inappropriate in two respects: first, the architect does the designing, albeit in consultation with the family; second, the house is completed before the family moves in. 248 Extend the metaphor to what happens afterward and it gets closer. When the house is completed, the family moves in, and, as mentioned in the last chapter, furnishes it. In other words, it customizes the interior to its own needs. In fact, that process often stretches over a considerable period of time—in a sense, it never stops. This is the case even with families that move into perfectly standardized houses. That standardization reduces the cost of construction, yet it allows the inhabitants to customize the interior. The interior of programs that truly develop managers needs to be customized in the same way. The classroom equivalent of the house, therefore, is an overall structure provided by subject matter that is filled in by the needs and experiences of the managers who inhabit it. In such a classroom, it is not just a question of when the class will be studying marketing with what cases and so forth but how Alan can engage the class with his concerns about the tunnel vision he finds in his company’s marketing channels.
the point of this book is that management education is wasted on people who have no experience of their own. As for people who do, the closest the classroom can get to practical experience is their practical experience!
learning takes place where the push of the teacher meets the pull of the learners. The push of theory and cases dominates the full-time programs; the pull of practice dominates many of the short courses. Management education belongs where the two meet.
Education is hands-off; otherwise it is not education. It has to provide something different—conceptual ideas that are quite literally unrealistic and impractical, at least seemingly so in conventional terms. People learn when they suspend their disbeliefs, to entertain provocative ideas that can reshape their thinking. That is what education is all about.
John Maynard Keynes once quipped, “Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.” In other words, we use theory whether we realize it or not. So our choice is not between theory and practice so much as between different theories that can inform our practice. For managers, that is where serious education comes in. What kinds of theories best inform practice?
“The test of a first-rate intellect is the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function.” If only managers could keep it to two! Perhaps the best advice for managers comes from Whitehead: “Seek simplicity and distrust it.”Karl Weick captures this sentiment perfectly in his claim that education can simplify or it can complicate, in order to make people comfortable or uncomfortable. Worst of all for managers, and sadly probably most common, are programs that simplify to make them comfortable. Of course, programs that complicate for discomfort may not be much better.
To reinforce this, Basu showed a classic Japanese film called Rashomon, about a couple who are attacked by a bandit in a forest near Kyoto. The film tells the story several times—by the husband, wife, bandit, and a witness. Each describes that one reality in a different way, to put themselves in the best possible light. The class used all of this material to engage in lively debate about the nature of human behavior, the need for multiple perspectives on it, and whether it can be modeled at all. One group of managers in the class, on their own initiative, later drew a map depicting all the models, and asked their colleagues to locate their own companies on it. That took the discussion further.
Managers certainly don’t need a country club atmosphere for their development, but neither do they need boot camp. Not more boot camp, thank you; too many live it every day! Boot camps train soldiers to march and obey, not to stop and think. Managers today desperately need to stop and think. They need to step back from the action and reflect thoughtfully on the experience they live all too pervasively.
Most people do not accumulate a body of experience. Most people go through life undergoing a series of happenings, which pass through their systems undigested. Happenings become experiences when they are digested, when they are reflected on, related to general patterns, and synthesized. (68–69)
“Managerial learning is a social exchange,” according to Revans (1983); “the job [is] the syllabus and the colleague [is] the teacher” (15, 53).
THE COMPETENCY OF DESIGNING IN MANAGEMENT EDUCATION In an intriguing little book called The Sciences of the Artificial, Herbert Simon (1969) made the point that designing is central to what he calls the “artificial sciences”—his label for people practices such as medicine, engineering, architecture, even music, as well as management. Designing is human intervention to create or change something: build a bridge, write a symphony, cure a disease. Managers design structures and strategies, and they oversee processes by which these as well as products, buildings, and processes get designed. 259 For Simon, design is the key to training in these fields. Yet attention to it varies enormously: Architecture teaches it centrally and formally; medicine focuses attention on a narrow form of it called diagnosis; and business schools, despite Simon’s towering presence in the field, have not explicitly recognized designing skills, although they certainly make prominent use of expressions such as “organization design.”
I believe that in management education we can do more than we think even if less than some believe. Beyond the notion of training lies a role well suited to the academic classroom: We can call it competency sharing. Identify a managerial competency, such as negotiating or managing projects—better still, a particular application of one, such as negotiating with partners in a joint venture or dealing with a time delay on a project— and you can usually find enormous experience about it in a classroom of practicing managers. (There can be almost half a millennium of managerial experience in a class of forty middle managers.) Give them a chance to share it in an atmosphere of thoughtful reflection, and watch what happens. The first time we tried this in our program, asking the participants, “How do you reflect in a busy job?” the ideas poured out spontaneously for about forty minutes, filling up several flip chart sheets. Managers love the opportunity to share their experience and to be opened up to the experiences of others. And they can learn a great deal in the process.
This approach can work even for the many competencies that don’t lend themselves to formal training. Consider strategic thinking. It is difficult to imagine any adult being turned into a strategic thinker in a classroom. But competency sharing can certainly make a manager more aware of strategic thinking—what it is, how it works, who does it, when it is necessary—and so improve his or her use of it.
The MBA is personal learning, with the intention of offering better talent at a higher price. This has helped breed a culture of self-serving managers.
Managers usually go away to programs alone, so they come back feeling isolated. They have learned new things and wish to make changes. But no one seems to care. So they get frustrated. This is a widely recognized problem, addressed in programs as well as in print. But rarely does it get addressed in practice. With a little effort, sponsoring organizations can turn the problem into an opportunity. While schools should be managing the educational process less, organizations should be managing the consequences of it more. For example, they can send people to programs in cohorts so that they can work together during the program. Back at work, arrangements can be set up to enable them to share their learning, and encourage natural changes that grow out of it.
the managers bring their experience to the classroom, where the faculty introduce various concepts, theories, models. We can say that the managers live in the territory while the faculty provide the maps. Reflection takes place where these meet: experience considered in the light of conceptual ideas. The resultant learning is carried back to the job, where it impacts behavior, providing further experience for reflection on the job and back to the classroom. This constitutes a recurring cycle, from tacit understanding on the job to explicit learning in the classroom back to tacit application on the job, and on to the next educational module. Experienced reflection in the classroom confronts new ideas with established beliefs, individually, in small groups, and across a whole class. Because this is a pedagogy of sharing and adapting, the learners have to be significantly self-organizing, with considerable time free, sometimes spontaneously, to follow the natural patterns of discovery.
All of this, it should be repeated, is decidedly low-tech, because the human brain is a low-tech device. It absorbs and processes information exactly as it always has, no matter how fancy the input device. Once those inputs hit the eyes and the ears, that’s it: The same old human processes take over. So the bottleneck is in the human brain, as it is in all true education. But so is the power—to synthesize and to create. No computer comes close.
Experienced reflection can also blend the pedagogies of business education—lectures, cases, exercises, projects—but around the learning of the manager rather than the teaching of the professor. Each approach, in other words, can be used to provide inputs on which managers can reflect, according to their own personal experience. Consider these different pedagogies in terms of four basic dimensions of learning, from shallow to deep: absorption (internalizing knowledge), application (using it in some limited way—for example, to solve a problem), execution (gaining experience with the knowledge, as in role playing), and reflection (finding the meaning in experience).
Stories, it should be emphasized, can be key learning devices. Sims et al. (1994:281) have pointed out that “managers prefer the analogue” to the digital. So do all sophisticated learners, including schoolchildren in Calgary. That is why stories are so powerful: They “convey analogue knowledge,” blending experiences with ideas.

Key Takeaways

Interconnections

Highlights

Get in touch