Before you go further, a warning may be in order. This is another bashing article along the lines of “Enterprise Computer Marketing Sucks”. Lest you think that I am merely ratcheting up my ranting to elicit a response (given that the marketing bashing article didn’t get a single comment), let me say in my defense that’s not the case. But then I would say that, wouldn’t I?
No, seriously, this post is triggered by an article in the latest McKinsey Quarterly. The article is lovingly titled: The halo effect, and other managerial delusions. It’s by Phil Rosenzweig, a professor of strategy and international management at IMD, Switzerland. He writes:
In the quest to achieve superior performance, executives often rely on advice in business books, articles, and business school case studies that claim to reveal a blueprint for gaining lasting competitive advantage.
The research underpinning this advice, however, is often deeply flawed and, worse, obscures the basic truth that success in the business world is based on decisions made under uncertainty and in the face of factors executives cannot control.
How true. I don’t think success in business comes from a formula. It comes from making good choices using powers of critical thinking. It comes from execution based on hustle and energy.
Phil is scathing in his attack…
At first glance, many of the pronouncements in such works look entirely credible. They are based on extensive data and appear to be the result of rigorous analysis. Millions of managers read them, eager to apply these keys to success to their own companies. Unfortunately, many of the studies are deeply flawed and based on questionable data that can lead to erroneous conclusions. Worse, they give rise to the especially grievous notion that business success follows predictably from implementing a few key steps. In promoting this idea, authors obscure a more basic truth—namely, that in the business world success is the result of decisions made under conditions of uncertainty and shaped in part by factors outside our control. In the real world, given the flux of competitive dynamics, even seemingly good choices do not always lead to favorable outcomes.
I encourage you to read the commentary. One reason it resonated with me is because I have been reading “The Running of the Bulls: Inside the Cutthroat race from Wharton to Wall Street”. Nicole Ridgway, the author, tracks the students of the Wharton Class of 2004 going through the gyrations of trying to secure a Wall Street career. Instead of being impressed, I am disappointed. I am reminded of what Matthew Stewart wrote in an article (in The Atlantic Monthly, subscription required) way back in June’06…
What they don’t seem to teach you in business school is that “the five forces” and “the seven Cs” and every other generic framework for problem solving are heuristics: they can lead you to solutions, but they cannot make you think. Case studies may provide an effective way to think business problems through, but the point is rather lost if students come away imagining that you can go home once you’ve put all of your eggs into a two-by-two growth-share matrix.
…
M.B.A.s have taken obfuscatory jargon—otherwise known as bullshit—to a level that would have made even the Scholastics blanch. As students of philosophy know, Descartes dismantled the edifice of medieval thought by writing clearly and showing that knowledge, by its nature, is intelligible, not obscure.
Well, some of you will be dismissing my rant on the grounds of sour grapes (since I don’t have any MBA). Hmm… I anticipated that attack. Why do you think I am firing at management theory and its education from the shoulders of respectable insiders like Phil Rosenzweig and Matthew Stewart. My view is that “just as most people are able to lead fulfilling lives without consulting Deepak Chopra, most managers can probably spare themselves an education in management theory”. All they need is a capacity of critical thinking. May the attacks begin!
A Majority of situations we face revolve around people, culture and a unique eco-system of circumstances that surround an organization. Most management courses or books propogate “solutions or concepts” based either by experience of particular circumstances, situations etc. or propagation of theory.
I think the fault lies not in these propogators of knowledge/theory or best practices, but in ourselves who read them and want to apply them as is to situations that might seem similar. It is akin to searching for a problem to solve based on a technology you have, and not identifying a problem and then choosing the right technology.
Management courses and books could be thought of as classes you take when you learn martial arts - there are various moves and techniques you learn (kattas ?). When you go into a fight, you don’t use those kattas as practiced, but sub-samples of them where relevant and adapt them based on what your opponent or the current situation demands. Theories therefore should not be applied as kattas, but kept in the back of the mind as knowledge and learnings and parts of it adapted or reused based on real life situations..
Dear Sharad,
The whole debate here (many other places also) is because of the high expectations of Management Education.
Management Education as the word suggests involves educating a student on different aspects of business and management. Period. It doesn’t say that the student would hit the ground running and would be able to make decisions real-time based on whatever is taught to him. Since course content need to be structured in a definite way, the course is based on facts and experiences. Just like a computer engineer fresh out of college may not be able to write solid flawless code, a management student would learn in the long run to make critical decisions on intuition based on his experience (education at its best acts as tool here). He should be then able to leverage whatever he has learnt during his management classes and see things in the right perspective.
Thanks,
Arun.PC
Hi Sharad,
You have stirred a hornet’s nest,but yes
Most of the Business books,articles and Case-studies are the distilled output of critical thinking of the author for a given scenario,market etc… this should help us to THINK and get better out of things and conditions. When you replace thinking with Marketing techiques or rather with jargon therin lies the problem.In this age of “Instant Everything” majority of us subsitute thinking with ready made knowledge available as paperback.
- Subodha
I like Ranga Raj’s analogy of martial arts. What if you are really good with all the martial art techniques but can’t really win any real-world fights because they are very different from the classroom? My grouse is that business schools don’t impact enough real-world practitioner skills. They are not like medical schools which pass out surgeons. Or like pilot training academies.
Don’t misunderstand me. Most business schools do hope to impart skills – the most important one is probably the ability to think (i.e. problem solving). But in most cases they don’t succeed. The reason is to do with management education. It is, as Phil Rosenzweig has argued, shallow and limited.
What business schools do really well is nothing to do with management education. They harvest the smartest and most ambitious individuals through their grueling entrance procedure and coursework. In a sense, they test for commitment to a career in management. This serves an important function for companies; it allows them to outsource recruiting to these schools. The business schools also help the students by providing them with a valuable alumni network. These benefits matter and this is why the business schools will not disappear. But, don’t forget that the benefits are extrinsic to the content of the education. So a healthy skepticism about management education is a valid disposition to have.
Sharad,
I agree with you on decision-making/problem-solving skills. There is too much context knowledge - knowledge that comes from rolling your sleeves and actually solving problems in the specific domain - required to be able to distill it to a generic methodology.
One of the things the management schools could add definite value is in teaching about capital allocation. A surprising number of CEOs (I am told) and VPs (I have seen) do not have basic understanding of finances and balance sheets and such matters. They fritter away precious capital on ill conceived plans.
Here is from Warren Buffett’s 1987 shareholder letter:
” … because the heads of many companies are not skilled in capital allocation. Their inadequacy is not surprising. Most bosses rise to the top because they have excelled in an area such as marketing, production, engineering, administration, or, sometimes, institutional politics.
Once they become CEOs, they face new responsibilities. They now must make capital allocation decisions, a critical job that they may have never tackled and that is not easily mastered. To stretch the point, it’s as if the final step for a highly talented musician was not to perform at Carnegie Hall but, instead, to be named Chairman of Federal Reserve.
…
CEOs who recognize their lack of capital-allocation skills (which not all do_ will often try to compensate by turning to their staffs, management consultants, or investment bankers. Charlie and I have frequently observed the consequences of such ‘help’. On balance, we feel it is more likely to accentuate the capital-allocation problem than to solve it …”