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Have American Businesses Been Stranded By the MBAs?

timothy posted about 3 years ago | from the I've-got-people-skills dept.

Businesses 487

theodp writes "In his new book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business, legendary car-guy Bob Lutz says to get the U.S. economy growing again, we need to fire the MBAs and let engineers run the show. The auto industry, writes TIME's Rana Foroohar, is actually a terrific proxy for a trend toward short-term, myopically balance-sheet-driven management that has infected American business. In the first half of the 20th century, industrial giants like Ford, GE, AT&T and others used new technologies to create the best possible products and services with the idea that if you build it better, the customers will come. But by the late '70s, if-you-can-measure-it-you-can-manage-it MBAs were flourishing, and engineers were relegated to the geek back rooms. 'Shoemakers should be run by shoe guys,' argues Lutz, 'and software firms by software guys.' Learning that China plans to open 40 new graduate schools of business in the next few years, Lutz quipped, 'That's the best news I've heard in years.'"

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You need different kinds of people (1, Insightful)

cgeys (2240696) | about 3 years ago | (#36710804)

Shoemakers most likely can run their business good.. but really, the usual geek.. no, and I'm one as well. Most of the geeks are truly hard to do business with or make witty comments about "how could this person possible know this thing?". There are exceptions, but geeks usually lack that kind of people skills. They also usually lack the knowledge of what people really need. Good example of this is the linux usability and GUI. It's far from good and mostly unfinished with most software because geeks just aren't interested in that kind of thing.

People work best together. You mix the best attributes from several different kinds of people. Hell, if you want a good geeky example look at different classes in multiplayer games. No one can do or master everything. That's why it's best to do what you know yourself and let other people handle the other parts.

Re:You need different kinds of people (5, Insightful)

Joce640k (829181) | about 3 years ago | (#36710876)

The problem appears when the managers don't understand what the geeks are doing and give orders based on unrealistic (or completely wrong) understanding of what's happening downstairs.

A percentage of geeks have people skills, they should be the ones in charge.

Re:You need different kinds of people (5, Insightful)

Midnight Thunder (17205) | about 3 years ago | (#36710950)

The problem are pure business guys who understand everything the MBA tought them, but don't have a true appreciation for the type if business they are running.

Re:You need different kinds of people (5, Interesting)

yourmommycalled (2280728) | about 3 years ago | (#36711292)

Indeed you need many different kinds of people to manage/run any organization. In any well run organization, every one understands they have a role to play in keeping the organization working AND that they responsibility is shared. In a well run organization an engineer/programmer/scientist is not sneered at and verbally abused, nor are the sales/accounting/IT people. The problem that has occurred as Lutz keeps repeating is that because of B-schools MBA's specifically and B-school graduates in general have been told/taught that ONLY a B-school graduate knows anything about how to manage a company. They are TAUGHT that only this quarters results are important, that research and IT support is a waste of money and if you don't have an MBA you are a waste of company resources. A long time ago people started at a low level in a company and worked their way through the company learning along the way what works and what doesn't in that company Now B-school graduates learn real garbage, move into middle management and drag a company down. From my own experience as a scientist managing a successful company, I no longer hire B-school graduates. The last one I hired told me I don't know how to run my own company and that they could increase my profits several hundred fold if I would just stop wasting resources on taking care of the staff and coddling the other scientists. When he came into my lab I laughed at him and then showed him the door

Re:You need different kinds of people (0)

BrokenHalo (565198) | about 3 years ago | (#36710968)

Exactly. Generic managers are often (or usually) incapable of accomplishing anything other than generating buzzwords and KPIs, while having very little understanding of the real products or processes. More often than not, they actually get in the way of getting the real work with their strutting around and fluffing their plumage, interfering just to make themselves feel important.

Different skills are needed. MBAs have no skills. (3, Insightful)

Anonymous Coward | about 3 years ago | (#36710886)

Indeed, people with different beneficial skills are essential in any organization. The key idea there isn't "different", however; it's "beneficial skills".

MBAs typically have absolutely no helpful skills or abilities. They are often people who tried engineering, but couldn't cut it. They are people who tried accounting or finance, but couldn't cut it. They are people who tried marketing, but couldn't cut it. They are, in essence, the rejects of the business world.

For many of them, their only "skill" (if we can even call it that) is forcing bullshit down the throats of productive, useful people. They do this by holding wasteful meetings, by putting in place absolutely stupid and counterproductive workplace policies, by making decisions about stuff they know absolutely nothing about, and by hiring in a way that protects them from any negative repercussions.

They've been successful at this, and that's why America is as economically and socially fucked as it is today. The rejects are leading the operation, and it shows. Thankfully, it's only a temporary "success". It inherently can't be sustained. It's a so-called "race to the bottom", and the bottom is going to be met very quickly. "Free trade", off-shoring, outsourcing and other popular MBA techniques are the best way to destroy not only individual companies, but entire economies.

I don't think that anyone is suggesting that a software business, for example, should consist only of software developers. Rather, it should merely be led by people who understand how to properly build and provide on-time, on-budget, functioning software systems, rather than by some MBA who can spew out this month's buzzwords in order to fool some other idiot MBA at some other company into buying a shitty software system. Different kinds of people will still be needed, of course, but they should be useful workers, not MBAs.

Re:Different skills are needed. MBAs have no skill (1)

Anonymous Coward | about 3 years ago | (#36710954)

Your idea lacks an important component. If the MBA doesn't spew out this months buzzwords in order to fool idiot MBAs at other companies, then who will?

Re:Different skills are needed. MBAs have no skill (0)

Anonymous Coward | about 3 years ago | (#36711062)

Maybe you're too young to remember this, but in America in the 1950s and 1960s engineers and scientists did run the show. They discussed technical matters with each other, and they all knew when bullshit was being spewed. They'd call one another out on such bullshit, and it was often enough to ruin business dealings by trying to bullshit the other party.

Business dealings then were being conducted by parties who were equally knowledgeable, rather than today, where business dealings are between parties who are completely ignorant.

Re:You need different kinds of people (0)

Anonymous Coward | about 3 years ago | (#36710898)

Most of the geeks are truly hard to do business with or make witty comments about "how could this person possible know this thing?". There are exceptions, but geeks usually lack that kind of people skills. They also usually lack the knowledge of what people really need.

You don't need to hire every geek there is, only the good ones.

Good example of this is the linux usability and GUI. It's far from good and mostly unfinished with most software because geeks just aren't interested in that kind of thing.

Well, I've seen worse in other operating systems.

Re:You need different kinds of people (0)

Anonymous Coward | about 3 years ago | (#36710966)

Well, I've seen worse in other operating systems.

Not any modern mainstream OS's.

Re:You need different kinds of people (2)

realxmp (518717) | about 3 years ago | (#36711232)

Well, I've seen worse in other operating systems.

Not any modern mainstream OS's.

Windows ME, Vista's UAC. Bad UI design happens and it happens mainstream.

Re:You need different kinds of people (2)

stewbacca (1033764) | about 3 years ago | (#36710902)

Yes geeks often lack people skills, but MBAs aren't the fix.

I've always done well because I have a geek streak (but not truly geeky, relative to the geeks that work for me) and people skills. Without my geeks, however, I am nothing. I'd probably be in sales.

Re:You need different kinds of people (1)

Hatta (162192) | about 3 years ago | (#36710958)

Yeah, it takes all types. Good people and evil people. Wait, on second thought, let's do without the evil people.

Re:You need different kinds of people (1)

dadioflex (854298) | about 3 years ago | (#36711086)

Historically, we'd still be coaxing marmots to eat from trees with rotten fruit if we hadn't developed more efficient, evil ways of harvesting meat.

I guess the main advantage of good people being in charge is that now, or a thousand years from now, we'd see little difference.

No-evil people Earth, and its population of 60,000 humans, welcomes your attention.

Re:You need different kinds of people (3, Insightful)

Mindcontrolled (1388007) | about 3 years ago | (#36711000)

You got a point there - but this point highlights the key failure of the MBA crowd - they are trapped within their own echo chamber. A good manager needs to be a translator in the first place, he needs to translate between his engineers, his designers, his sales people, his financial people and the customers, all of which are using different languages. If this kind of communication fails at any level, you end up fucked. To stay within your RPG example, a good manager is the raid leader in your picture, who, without micromanaging, keeps the communication up between his dps, healing and tank class leaders while learning a new, tough raid. And that's where the TFA's point fails - you wouldn't want to put the main tank (engineer) in charge of that, because he rightfully views everything from the tanking perspective, thereby neglecting the needs of the dps and healers, which are secondary to him.

Re:You need different kinds of people (0)

Anonymous Coward | about 3 years ago | (#36711306)

Well said.

Exactly (3, Interesting)

definate (876684) | about 3 years ago | (#36711028)

Company problems are like people problems, sometimes there's a systematic reason, other times it's completely down to the individual and the circumstance.

While you've focused more on the personal skills that many geeks lack, you're also missing that many geeks don't seem to understand how difficult running a business, really is. Even small businesses. There's so many things going on, so many things out of your control, so many people you rely on, and so many unintuitive "systems", which are really hard to get a grasp on.

The worst companies I personally know of, that I have worked for, or with, are run by engineers/scientists.

While there is something to be said for the executives having been in that industry, there's also a lot to be said for people with outside perspective, and a fuck load to be said for people who understand how businesses run. The article has said MBA's, but I take that more to mean accounting/management/finance/economics professionals, so MBA's/CA/CPA/CFA/* all in one bag. It's condescending to suggest that this is due to "MBA's", and the real discussion seems to be one of "short-term balance sheet driven management" versus "long-term" and or "non-balance sheet driven management".

Well, short-term versus long-term versus some mix of both, has and continues to be, one of the most debated topics amogst "MBA's". To suggest that somehow they don't understand this, is absurd. Hell, the very fact that Bob Lutz is writing about it, shows this is absurd, since he is in fact one of those "MBA" people.

Oh well, for those who haven't read the the Business Week [] article, I recommend it. It really gets to the heart of his story. The TIME one, not so much.

Re:You need different kinds of people (2)

iamhassi (659463) | about 3 years ago | (#36711068)

This isn't about people skills, it's about MBAs telling the engineers how to build a car. The software analogy is correct, managers with no programming background typically think a computer is magic and will make unrealistic requests or ask for things they really don't need but think they do. For example a project i was recently involved with where the manager wanted to plot some points on a map and take a screenshot of google maps. Plotting the points was easy but the screenshot in browser would have been difficult since its javascript and violated Google's TOS. Wasted a lot of time trying to come up with a screenshot solution in browser and finally just explained to the manager it would be easier to store the coordinates and create a link that could place those coordinates back onto the map. Turns out that was perfectly acceptable because they just needed to show the map to a third party, it didn't need to be saved as a screenshot image at all. A programmer would have realized the limitations of javascript and the Google TOs and the project would have been done much faster with the proper directions in the first place.

Put the engineers back in charge and let the MBAs worry about marketing.

Re:You need different kinds of people (0)

perryizgr8 (1370173) | about 3 years ago | (#36711174)

Wasted a lot of time trying to come up with a screenshot solution in browser

or you could just have used the snipping tool. is this some kind of joke?

Re:You need different kinds of people (1)

phunster (701222) | about 3 years ago | (#36711246)

The original post is about how the bean counters have taken over businesses and are doing a bad job. Linux is not a business, Linux is the kernel, everything else is an add on, INCLUDING the GUI. Your comparison of businesses with employees to a project built by volunteers doesn't hold water. You then bring up game players, huh?

Bill Gates (geek) started and built Microsoft into what it was when Steve Ballmer ( bean counter) was handed the reins. That is more to the point of the article.

Larry Ellison (geek) whatever else you might think about Oracle, he has built it into quite a business.

Let's compare apples to apples.

Lutz is dead wrong (5, Insightful)

brunes69 (86786) | about 3 years ago | (#36710826)

Most engineers know next to nothing about marketing and sales... to the degree that they actually despise interacting with customers. You can have the best product in the world, but if no one knows about it, your business will fail. Consistently in this world, inferior products with better marketing win over superior products. You have to know how to get your name out there, and how to get people to buy your stuff.

Lutz is partially wrong (4, Insightful)

nurb432 (527695) | about 3 years ago | (#36710872)

I agree your average engineer has zero business skills, but moving them to the back room and having MBAs run the show is still bad.

Get rid of the MBAs and let the engineers have business input, but not run front office.

Oh, and get rid of the lawyers, they are even worse than an MBA.

Re:Lutz is partially wrong (3, Interesting)

Anonymous Coward | about 3 years ago | (#36710980)

I didn't read the article, but the summary sure makes it sound to me it's more of a "a guy who KNOWS cars" should be in charge of a car company (CEO, President, something along those lines) vs someone who doesn't have a clue about cars. It's not that you'd get rid of the sales, marketing, HR and other teams, just that a HR person wouldn't be cailling all the shots.. someone who knows cars would be.

And I agree 100%. I've worked in a variety of business sectors over my years (some part time fillers during internship(s) and others as a living between gaps in taking school, etc).

I've worked grocery store retail in produce, in a kitchen for a few months, an auto parts store, two different electronics retail stores (I was the car audio/video/security installation manager at the bigger, national store, and just an installer/sales of car stuff at the 2-owner ma & pa type shop).

I've seen it across the board. At the national retailer level, the car install area use to be it's own "location", where the chain was installer -> assistant manager -> install manager -> District manager -> regional manager. Almost every single one of the guys in the install manager up had experience installing and selling mobile electronics. But then the bean counters noticed it was one of departments with the highest sales and revenues at the time... so what did they do? They got rid of the mobile district managers and regional managers and merged the install bay into the same location as the store... which meant the DM and RM of the install bay were now the DM and RM that were in charge of TV's, camera's, etc... and stuff went down hill pretty quickly in the bay.

I know it may be one example, and some may consider it a poor example, but it *IS* an example none the less. I have perfect examples for most of the places I've worked where someone who didn't/doesn't know anything about what they are in charge of get in the way and hurt sales and all that more than they do anything to help them. A monkey that sat there flinging poo at the wall all day would cause less issue than the higher ups who have no knowledge and real experience with the field or products who always tend to try to change things the way they think it should be based on a totally different field or experience (and which hardly ever ends up working)

Re:Lutz is dead wrong (5, Insightful)

Bing Tsher E (943915) | about 3 years ago | (#36710906)

Most engineers know next to nothing about marketing and sales...

Conversely, most marketing types know next to nothing about proper engineering design.

And this book isn't about a 'Marketing vs. Engineering' conflict in the first place. It's about the bean counters who wedge themselves in the middle of everything.

It's about 'cost reduction engineering' which is where purchasing gets involved in product engineering. Mature products exist, but 'cost can be driven out of them' by degrading the materials used for their construction.

To an MBA, the fact that a product lasts on average 2 years beyond it's warranty period is a problem to be solved.

It's also all about Taylorism taken to it's furthest degree. In the vision of the MBA dudes, everybody within a company is an expendable plug-in component. Company policy is that Work Instructions must be written, and followed for each task. Once the complete set of work instructions has been captured, the whole 'Employee Expertise' of the company is captured into a file cabinet. They can then put the cabinet on a skid and move it anywhere in the world. That's how those people think. High performing employees with unique skills are a problem, a company liability, to that form of management.

Re:Lutz is dead wrong (4, Insightful)

vlm (69642) | about 3 years ago | (#36710992)

It's about the bean counters who wedge themselves in the middle of everything.

The word to google for here is intermediation. The opposite, disintermediation, has a tolerable wikipedia article. []

The problem is people understand what it means WRT obscure corners of the banking industry or supply chain, but do not realize it is a general business management topic, applicable to almost all organizations and systems.

Re:Lutz is dead wrong (4, Interesting)

mattcsn (1592281) | about 3 years ago | (#36710944)

MBAs are useful, but not in leadership roles. Give the top jobs to engineers who understand what their company is building, and have competent accountants and marketers working as advisers to the engineers. (And no, I'm not an engineer looking out for number one. I'm actually an accounting student.)

Re:Lutz is dead wrong (1)

marcosdumay (620877) | about 3 years ago | (#36711158)

And what function exactly are you proposing for the MBAs? You just enumerated accountants and marketers. MBAs are a bad fit for both tasks. In fact, MBAs are a bad fit for the tasks they are "prepared" to fit what makes their course at best a nice extension for people that already know something.

"Give the top jobs to engineers..."

An egineering or production company should be administrated by an engineer, and accounting company should be administrated by an accountant, a marketing company... You probably meant that very same thing, so I'm probably not disagreeing.

Re:Lutz is dead wrong (3, Insightful)

michaelmalak (91262) | about 3 years ago | (#36710960)

Most engineers know next to nothing about marketing and sales... to the degree that they actually despise interacting with customers.

Agree. Putting the engineers in charge would just lead to gold-plating, as the reward for engineers is a "job well done" rather than maximizing profits.

The problem with MBA's isn't that they maximize profits, it's that they maximize next quarter's profits. And that isn't the MBA's fault -- it's usually the fault of being a publicly traded corporation, which leads to separation of ownership and control [] .

Just as anti-corporatists bemoan the immortality and geographical reach of corporations, to add to that it is worth considering limiting the number of owners of a corporation and perhaps also setting a minimum period of ownership.

Re:Lutz is dead wrong (2)

jpapon (1877296) | about 3 years ago | (#36711184)

the reward for engineers is a "job well done" rather than maximizing profits

It really bothers me that maximizing profits is the goal of publicly traded corporations. With privately owned companies it can be a combination of healthy profits and a job-well-done. With public companies things have become so short sighted; it's all about each shareholder "getting theirs".

You must be an MBA. (2, Insightful)

Anonymous Coward | about 3 years ago | (#36710978)

Only an MBA could be as ignorant as you are, and publicly display so much blatant misunderstanding of reality.

Engineers and technicians are often the best at dealing with customers. Hell, many of them enjoy it, too. They just don't like to bullshit the customers, though. They want to provide them with the best service and the best products. True, this may not be in the best short-term interests of the company, but it often works much better for everyone in the long run.

Engineers and technicians are good at thinking for the long term. They can think beyond the next quarter's results. They realize that maybe they can't please the customer today with the current offerings, but they'll be able to provide the customer with what the customer needs in the future. Sure, the company could sell them some shit today and make a little bit of money now, or we could be truthful with them and make a far bigger and more significant sale in the future.

When this happens on a large scale, the whole economy benefits. Resources end up being allocated far better, and the resulting systems actually do help improve productivity. Contrast this to America today, however. With MBAs running the show, we end up with trickery being used to sell useless products that don't provide any tangible benefits. That's why we see the daily Slashdot stories of some software system implementation project being millions upon millions of dollars over budget, and then often just discarded in the end. This misuse of resources harms the entire economy, and is what allows third-world nations like India and China to pull ahead of America.

Re:You must be an MBA. (2)

jpapon (1877296) | about 3 years ago | (#36711220)

Why would you post something so well written as AC? You clearly point out the great fallacy of modern capitalism; that maximizing short-term profits allocates resources in the most efficient way. People have been told for so long that the free market finds the most efficient way to allocate resources that they fail to see how going after short term gains results in massive waste in the economy.

Re:Lutz is dead wrong (3, Insightful)

Jahava (946858) | about 3 years ago | (#36711020)

Most engineers know next to nothing about marketing and sales... to the degree that they actually despise interacting with customers. You can have the best product in the world, but if no one knows about it, your business will fail. Consistently in this world, inferior products with better marketing win over superior products. You have to know how to get your name out there, and how to get people to buy your stuff.

You're absolutely correct. Most engineers want to focus on ... well, engineering. Once in a while, you get an engineer with good business skills, and there's your industry leader.

Stocks, politics, money, marketing, sales... those are all critical things in any business. The argument isn't that an engineer should be put in charge of all of those; it's that the priorities, direction, and approach a technical company makes should be entirely governed by a (suitable) technologist. They will obviously delegate to specialists as-needed.

Re:Lutz is dead wrong (0)

Anonymous Coward | about 3 years ago | (#36711042)

It is something of a stereotype that engineers are bad "people people." As engineers progress in their careers, many of them end up as very capable managers. Yes, managing a business is a different skill set. However, in many cases the engineers can be taught those skills much easier than the MBAs can be taught the technical details necessary to make wise business decisions. The way this used to work, and to some extent still does, is that companies will offer management training to those engineers who are being groomed for management positions.

Re:Lutz is dead wrong (0)

Anonymous Coward | about 3 years ago | (#36711036)

Most engineers know next to nothing about marketing and sales... to the degree that they actually despise interacting with customers.

True, but contrarily to MBA, engineers tend to be able to learn.

Not true (2)

t'mbert (301531) | about 3 years ago | (#36711060)

Yeah right dude, Steve Jobbs certainly knows nothing about marketing.

Let's face it, the best tech companies out there are run by tech guys.

Bob Lutz is dead-on. Several companies I've worked for were run by the sales guys, and they ran the businesses into the ground by focusing on short-term profits and allowing their products to languish and eventually become irrelevant. They failed to see that investing in good technology and having a vision would ultimately give you an even larger market share. Just like Apple and John Sculley. Sure he got the company back on solid ground, but he couldn't maintain it because he wasn't a visionary tech guy. When they brought Jobbs back again, we all got iPods, iPhones, Macbook Airs and iPads. The PC world has been transformed, and Apple's market cap exceeds Microsoft's.

Re:Not true (1)

Bing Tsher E (943915) | about 3 years ago | (#36711104)

Yeah right dude, Steve Jobbs certainly knows nothing about marketing.

Let's face it, the best tech companies out there are run by tech guys.

The problem with your premise is that Steve Jobs is not a tech guy. He's one of those management types who practices 'disruptive management' and regularly throws wrenches in the development cycle. Which has worked out for Jobs because he's good at it, and stays fairly close to the people who are the actual tech types.

Re:Not true (1)

whisper_jeff (680366) | about 3 years ago | (#36711140)

More specifically (in my opinion), Apple is a company that lets people do their jobs. Business people run the business; engineers design the products; marketers make people want to buy the products. From the outside looking in, at least, Apple does not appear to be a company where one group has power over the other. They each do their specialized role and trust the other parts to do theirs, all towards the visions (as you discuss) that's laid out by upper management. In my opinion, when a company has the balance of those three facets of a company shift towards one of them, the company is doomed to fail. Bean counters in power will slowly result in products that suck that people don't want. Engineers in power will slowly result in products consumers don't care about and bad business. Marketers in power will result in shitty "design by focus group" products. In the short term, any one of those approaches may be good (which is why so many companies think the business people should make the decisions - because, on paper, it seems to be a great idea for the next business quarter) but, in the long term, the way to make an exceptionally successful company, it requires a balance between the three facets where each allows the other to do their thing. Apple, in my opinion, is a great example of a company doing that.

Re:Not true (1)

lucm (889690) | about 3 years ago | (#36711240)

> The PC world has been transformed, and Apple's market cap exceeds Microsoft's.

Of course market capitalization is an indicator of success and sound business value based on product quality and nothing else. Ask anyone who invested in Enron, Nortel or Bre-X.

Re:Not true (0)

Anonymous Coward | about 3 years ago | (#36711286)

Once you institutionalize the approach with either engineering or MBAism you are dead. Use both but focus on neither.

Lutz more right than wrong (0)

Anonymous Coward | about 3 years ago | (#36711064)

"Consistently in this world, inferior products with better marketing win over superior products." So how did Japan's superior quality autos displace Detroit crap in the 1970s and 1980s -- sometimes even at higher prices? And, don't tell us that a competent MBA can sell an inferior product. "(GM CEO from 1981 to 1990, Roger) Smith spent virtually his entire professional career working for General Motors. Born in Columbus, Ohio, USA, Smith earned his bachelor degree in business administration at the University of Michigan in 1947, and his MBA at the University of Michigan Business School in 1953." Undoubtedly Smith was held in high regard by the other MBA on the GM board. Yet, "Smith's tenure is commonly viewed as a failure, as GM's share of the US market fell from 46% to 35%, and as it took on considerable debt causing it to lapse close to bankruptcy in the early 1990s.[1][2] As a result, CNBC has called Smith one of the "Worst American CEOs of All Time".[3] (from Roger Smith entry in Wikipedia).

Re:Lutz is dead wrong (1)

RogueWarrior65 (678876) | about 3 years ago | (#36711098)

True, but companies shouldn't become totally marketing-driven or bottom-line. I used to work for a major toy company that was totally marketing driven. The toy designers would come up with some really cool toys but they would never see the light of day because if it wasn't 11.5 inches tall and had blond hair, the marketing flakes didn't want to know about it.

By contrast, you take a company like 3M that specifically encourages their brain-trust to try new product concepts and you have the solution for not only rescuing a company but for moving it forward and in new directions.

An MBA bean-counter is far more likely to look at a product concept and say "You'll never sell more than X of these" because they can't see beyond the numbers. While that may be true for a large company with tremendous overhead, that's not the case for a small company or a start-up.

All this being said, why Econ and Marketing 101 isn't part of freshman engineering is beyond me.

Re:Lutz is dead wrong (5, Insightful)

IceNinjaNine (2026774) | about 3 years ago | (#36711106)

Most engineers know next to nothing about marketing and sales..

You know, I get uncomfortable when people make assertions using words like "most". I've worked with engineers (both brilliant and mediocre) who are the worst of the worst when it comes to social skills, and I've worked with some who made it through engineering school with a paltry 3.0 and are a blast as people. Some of the most well compensated engineers I know of are sales engineers working in areas like biomedical equipment and robotics (before anybody trounces out the IT stereotype). There *are* people who can do both; I know a lot of them. I know one kid in aerospace is who very gregarious, walked into a new job, solved a vibration problem on a jet engine within his first year, and ended up with his masters (aerospace engineering) paid for by the company. He worked as an engineer for five more years, they sent him back for an MBA, and now he runs a department. Bottom line is, he's geeky, smart on both interpersonal and quantitative matters, has walked the walk, and will be CEO material by the time he's 40.

In my line of work (yes, one of the legions of software drones) I'm a generalist who writes code and takes care of some other technical issues. When my organization needs to send out a technical liaison they send me, because I can grok the tech stuff (oh noes, he knows what Big-O is and can profile! LOL), but I know how to look good in a suit (not a good looking lad, but keeping yourself in shape along with a trip to a tailor makes all the difference), can speak publicly without issue, and I know how to generally not piss people off. There are scads of people here on Slashdot (and a few where I work) who can code rings around me, and that's fine. At the end of the day I can play both sides of the card.

The bottom line is: there are people with both skill sets, and it's my hypothesis that they're actively excluded by MBA types from managerial roles in many cases because they are a threat. In addition, boards want profit, so those that show quarter-to-quarter myopia get the nod.

This whole thing reminds me of a video I saw once of a smokin' hot female Phd who said "you know, I can make this widget last four times as long if they'd let me add 10% to the price".. of course that didn't happen. Said company has a mediocre reputation in its sector as a result.

Re:Lutz is dead wrong (0)

Anonymous Coward | about 3 years ago | (#36711138)

Yes, most engineers and researchers do fit that profile, but that's because they were taught to work only one field. Lutz is right about what happened, but doesn't say anything about how it all started, nor does he offer a valid solution. Putting the current engineers right now to work in marketing would kill businesses even fast.

The devil is in the details, and that's where schools and business go wrong.

Going in circles (1)

trackmeifyoucan (2232396) | about 3 years ago | (#36711164)

Your sentiment is exactly what's seen as the *problem* with American businesses, that Lutz is proposing a solution to.

You can have the best product in the world, but if no one knows about it, your business will fail.

Having the best product in the world seemed to have worked well for American businesses in the past.

+5, Obvious (0)

Anonymous Coward | about 3 years ago | (#36711228)

insight n. - clear or deep perception of a situation

Most engineers know next to nothing about marketing and sales

Perhaps +5 Flamebait/troll would work as well.

Re:Lutz is dead wrong (1)

Megane (129182) | about 3 years ago | (#36711248)

Most engineers know next to nothing about marketing and sales

...and they don't need to. If even 5% of them did, that would probably be enough. But the MBA types are in charge and won't let those 5% into their country-club society.

Hollywood Science (0)

Anonymous Coward | about 3 years ago | (#36710834)

Engineers have a superiority complex. Who knows more about how space movies should be made, an engineer or nonengineer? Invisible lasers, never miss guidence, no sound in space, no fire burning without oxygen.

Re:Hollywood Science (2)

stewbacca (1033764) | about 3 years ago | (#36710912)

Hey, I'm glad engineers exist, because without their inability to convey complex concepts to average people, tech writers and trainers wouldn't be needed. I rose through the ranks very quickly because I could translate Engineereze to Usereze on the fly.

Re:Hollywood Science (2)

Charcharodon (611187) | about 3 years ago | (#36711012)

That's because we are smarter than everyone else.

While I was attending University of Missouri, Columbia we had to take accessment exams and every year the engineering department would stomp on everyone else in EVERY catagory including the ones they were supposed to be good at.

And yes it drives me nuts to watch movies. Almost to the point where to enjoy a movie, with a lot of technical elements I need to have a beer or five so I don't nit pick.

The only things smarter than an engineer is a technician (I happen to be both). Engineers may know all the math, but they usually have no practical hand on and have a nasty habit of designing things that are half impossible to repair.

"WHY would it every break I'm a very smart engineer"

To which the tech responds: "You are a fucking moron. You put the part (that "never" breaks every 6-18months) behind three other parts and an access panel for absolutley no reason, when there was plenty of space to mount it where I could fix it in five minutes instead of 6 hours.

I has nothing to do with a degree (1)

JamesP (688957) | about 3 years ago | (#36710838)

But with the person, his/her creativity, technical vision, soft skills, etc

"If you can measure you can manage" is something a geek could say. And many say it and do it (with other words, and in similar situations)

In a related note, both Bill Gates and Ray Ozzie are geeks.

Geeks created all those mp3 players that were forgotten in favor of iPod.

Re:I has nothing to do with a degree (1)

stewbacca (1033764) | about 3 years ago | (#36710926)

A little secret: a lot of geeks (very talented ones at that) made the iPod.

Re:I has nothing to do with a degree (1)

JamesP (688957) | about 3 years ago | (#36711002)

Creating a product is much more than creating the circuits (and you can certainly buy an OEM mp3 player and change the sw if you want and sell it as your brand - done by geeks, of course)

That's what geeks don't get and then they are amazed as why the iPod sells much more than the others (and before you say 'marketing' remember how much money MS put in marketing Zune). And to be honest, the 'mp3 player' I bought that played OGG files was so riddled with bugs it was not even funny.

Re:I has nothing to do with a degree (1)

Bing Tsher E (943915) | about 3 years ago | (#36711128)

(and before you say 'marketing' remember how much money MS put in marketing Zune)

Microsoft poured all that money into the Zune after Apple had already established themselves as the market leader.

And Apple established themselves as the market leader by a combination of good technical design and the kind of slick marketing that Jobs is a pro at. It would be wrong to make the claim that the ascendancy of the iPod was due to technical excellence. And doing so would pretty much cut Jobs out of the equation anyway, because he's not a tech guy, he's a management/marketing guy.

Re:I has nothing to do with a degree (1)

lucm (889690) | about 3 years ago | (#36711260)

Marketing made the iPod, not geeks.

Re:I has nothing to do with a degree (0)

Anonymous Coward | about 3 years ago | (#36710942)

Geeks created the iPod too.

Re:I has nothing to do with a degree (0)

Anonymous Coward | about 3 years ago | (#36710982)

Geeks created all those mp3 players that were forgotten in favor of iPod.

"If you build it better, the customers will come."

Re:I has nothing to do with a degree (1)

91degrees (207121) | about 3 years ago | (#36711072)

How is the iPod better though?

Doesn't seem to be much in it between a nano and the far cheaper Sansa Fuze.

... Or Both (0)

Anonymous Coward | about 3 years ago | (#36710860)

Go find a software engineer who has an MBA.

Re:... Or Both (1)

BrokenHalo (565198) | about 3 years ago | (#36711070)

Go find a software engineer who has an MBA.

From my own experience, I know two such people. Both are reasonably competent as software engineers, but the process of studying for their MBAs seems to have done something to their perceptive skills. They both suddenly arrived at a conception of themselves as expert managers and embarked on startups of business projects that, ten years later, they are still referring to as "startups", soaking up vast quantities of venture capitalists' funds, while showing absolutely no sign of providing any return.

From their point of view, I suppose this is a great lurk, but from anyone else's viewpoint these ventures simply represent good money thrown after bad. I'm just glad that I was never in a position where I might have been asked to invest in these schemes.

Re:... Or Both (1)

Nursie (632944) | about 3 years ago | (#36711100)

I know one of those.

He was a failure as a software engineer, and had behavioural problems. So he went to do an MBA.

He now sucks ass with an MBA.


Anonymous Coward | about 3 years ago | (#36710900)

Spoiler alert !!

Not an Army of One. (1)

CrazyDuke (529195) | about 3 years ago | (#36710914)

Well, I started to write something along the lines of engineers do not see eye to eye with their customers sort of deal. But, then I thought, just because you have logical people running the show does not mean there will be no marketing, sales, customer service, managers, or what not. Those do not disappear, they just would not dominate the internal corporate structure.

Much of their objectives would remain the same, albeit tweaked and re-prioritized, simply because the overwhelming majority of both coworkers and potential customers still utilize irrational forms of decision making. People do not magically lose the ability to communicate normally because someone somewhat rational is making decisions.

So, what's with the panicky "nerds are dumb at business" meme, anyway? (Checks glass for kool-aid.)

Re:Not an Army of One. (1)

gtall (79522) | about 3 years ago | (#36711048)

Bingo, the issue isn't that companies are run by Business School Product, it is that companies are being run solely by Business School Product. The ethos of engineers and their craft is lost. One can see this by the amount of jobs shifted out of the U.S. solely on cheaper labor. The whole idea of producing a well-engineered product with proper after the sale support is meaningless to people who would gladly sell widget B over widget A even though their company really only has expertise in widget A.

We recently bought an HP fax machine. That model turns out to have a recurring problem where it screws up the print modules and you are forced to buy new ones. The problem has been out there for awhile but HP has no way of fixing the problem. They've lost control of their own manufacturing. And they've lost any chance of new sales to us.

Good managers are good managers (2)

SpankingNotions (2288438) | about 3 years ago | (#36710916)

According to executive bios at apple ( 4/10 of them have MBA's. Additionally of the top positions, legal, hardware engineering, industrial design, and software are not traditionally associated with an MBA anyway.

I dunno about MBAs but (2)

Dyinobal (1427207) | about 3 years ago | (#36710948)

I dunno about MBAs but but I agree that most businesses focus to much on short term gain, often at the cost of their long term success. It's part of the mind set, of high powered business, and perhaps even Americans in general.

Re:I dunno about MBAs but (2)

the eric conspiracy (20178) | about 3 years ago | (#36711110)

A lot of that has to do with the quarterly reports that go to Wall Street. The stock prices of high price to earnings ratio companies are mercilessly punished on the stock market if they put out a bad quarterly report, and many types of mutual funds that actively trade stocks depend on rapid trend following so they too are punished when one of their holdings does poorly.

CEO wealth is heavily tied to their stock option values, and with the tenure of many CEOs being relatively short it makes for a very short term business orientation.

Ultimately the problem is about the way compensation happens. I don't think engineers running companies will be immune to it.

I also don't think the average American has this mind-set. Most have become so disgusted with the volatility of the stock market, or have the attitude that it is rigged against the small guy that they don't invest in stocks any more.

And you know what? There is a lot of truth to the idea that the market is rigged, It isn't so much the values of the stocks are manipulated, but rather that most investment industry products are set up so it is the company offering the product that profits rather than the investor.

There is a famous book about the investment industry written in the 1940s titled "Where are the customer's yachts?"

The title refers to an ancient story (which the author finds is probably at least 100 years old by now) about a visitor to New York who admired the yachts that the bankers and brokers had in the harbor. Naively, he then asked where the customers' yachts were. Naturally, there were no customers' yachts.

One very important thing to realize if you do start investing in the stock market is that a stock broker receives far more training as a salesman than he does as an investor, His job is commission based, and not based on the success of your investments.

Have American Businesses Been Stranded By the MBAs (4, Informative)

omar.sahal (687649) | about 3 years ago | (#36710970)

Its going to be very hard for the US, UK etc to be competitive. Even if you could build a factory in Europe or America and sustain a strong business (using Henry Ford principles lets say) bankers would not give you the money, you'd have to build in china to get the funding. Andrew Grove former Intel exec and John L. Hennessy, MIPS chip inventor, said the same thing. Economists are also turning against the way modern business is outsourcing to developing countries for a short term gain, Paul Craig Roberts and Michael Hudson to name but a few. Outsource to Asia, you'll impoverish us all, we'll in turn have less purchasing power, and not be able to buy the goods produced. No ones listening there is only attention paid to shareholder value, not even the customer, and who are the largest shareholders in a publicly listed company the BANKS. The MBA's may have the same problem that the economists profession, if we can call it that, has. That is to say a corrupted syllabus, designed to serve the needs of a few moneyed interests.

There are MBAs and MBAs (0)

Anonymous Coward | about 3 years ago | (#36710974)

Some MBA programs are specifically targeted at people coming out of college with science and engineering degrees - geeks. I'd think graduates of those programs would be more attractive than graduates of Ye Olde Online MBA Mill.

CAPTCHA: overseer

^ lol, internet

But We Were Told MBAs Could Do Everything... (0)

damn_registrars (1103043) | about 3 years ago | (#36710976)

After all, our previous POTUS was an MBA, and things worked out awesome under him! Why wouldn't we want MBAs to run everything else, too?

Re:But We Were Told MBAs Could Do Everything... (0)

Anonymous Coward | about 3 years ago | (#36711040)

Right! We should elect more lawyers, like the current POTUS, because things are going just swimmingly now.

Re:But We Were Told MBAs Could Do Everything... (0)

Anonymous Coward | about 3 years ago | (#36711312)

We should elect an engineer! I've heard really good things about Jimmy Carter's 4 years!

Re:But We Were Told MBAs Could Do Everything... (1)

Opportunist (166417) | about 3 years ago | (#36711314)

Lawyer, MBA... hard decision if you only have one bullet...

Hewlett Packard (4, Informative)

Bloodwine77 (913355) | about 3 years ago | (#36711024)

HP is a great example of a company founded by engineers and later ran in to the ground by MBAs.

Re:Hewlett Packard (0)

Anonymous Coward | about 3 years ago | (#36711244)

hear, hear

Re:Hewlett Packard (5, Insightful)

Anonymous Coward | about 3 years ago | (#36711266)

Agreed. They had a great model, "The HP Way", which was based on the way the founders like to treat people and be treated. Bill and Dave were both engineers and built the company up to be a major international by encouraging everyone in the company to both co-operate and work for self-improvement - exactly as they had done themselves. They recognised the importance of their management in knowing the product field they were involved in and understanding the culture of creativity and job security needed for long term success. The company's slide began when they started to appoint to senior positions from outside the company - and outside the engineering field - resulting in the dilution of the HP ethic and outsourcing the engineering and manufacturing functions which had driven their innovation and growth historically. Sadly this has happened with so many western companies that we have a deficit of home-grown talent in anything other than managerialism (of which we have a surfeit). Sadly, "management" has been the real growth business of the last 30 years. The Chinese are welcome to all the MBA graduates they want.

The real problem with business school (2)

Z8 (1602647) | about 3 years ago | (#36711034)

Most of the posts will probably be "yeah MBAs don't contribute anything" versus "engineers are geeks who can't communicate". In reality MBAs working for companies usually know what the company does in detail, and there are plenty of engineers who can communicate.

It's still an issue though, because the opportunity cost of learning about "business" is less learning about something else. According to this article [] ,

Business majors spend less time preparing for class than do students in any other broad field, according to the most recent National Survey of Student Engagement: Nearly half of seniors majoring in business say they spend fewer than 11 hours a week studying outside class. In their new book, Academically Adrift: Limited Learning on College Campuses, the sociologists Richard Arum and Josipa Roksa report that on a national test of writing and reasoning skills, business majors had the weakest gains during the first two years of college. And when business students take the GMAT, the entry examination for M.B.A. programs, they score lower than do students in every other major.

The rise of MBAs is also tied to the rise of finance. Most people agree that the US funneled too many resources into the finance sector, which then just destroyed them. Instead of designing more complicated mortgage securities, those physicists could have been doing physics. Although "managing" doesn't necessarily have to be about finance, most business schools spent a lot of time teaching their students about CAPM and Black-Scholes. (If you don't know what these mean, good for you!)

But of course business schools are not a fixed target. Most have reacted to the financial crisis and are now, for instance, emphasizing globalization and how to work in multiple countries [] . Time will tell I guess if this path is any better.

Personally, I think the biggest damage is done by the outlook that most MBA programs teach. Instead of thinking that your company's goal is to build the best vacuum or whatever, you learn that the goal is to maximize shareholder value, and that gaming the system is what everyone is doing. Over the long run, countries probably don't want too many of those people in charge.

Firing the MBAs... (1)

ehynes (617617) | about 3 years ago | (#36711038)

is interesting advice coming from and MBA [] .

MBA Solutions (1)

Anonymous Coward | about 3 years ago | (#36711056)

This is just my take on things, my opinion. The way things used to be, one joined a company, gave 30 years to it, and retired in peace. Thanks to the MBA Mentality, that doesn't happen anymore. People have always hungered for security in life; secure marriage (or relationship), stability, and secure careers. That went out the window back in the 70's, when Managers with MBA's decided the 'little people' were interchangeable/disposable. Take a loyal good employee with two months left to retire, and boot him out the door. The company saves money, it's more for the shareholders, the Manager who conceived that gets a huge bonus. The guy who got let go? (shrug) Hey, it's a tough world out there. Survival of the fittest.

The so-called Cult of Management (I'm Management, you're expendable) has crippled more businesses and employees than anything else.

Re:MBA Solutions (1)

Opportunist (166417) | about 3 years ago | (#36711290)

Maybe that's why I celebrated when I heard my boss died?

What about..... (0)

Anonymous Coward | about 3 years ago | (#36711078)

Dropping the entire anglo-saxon model ?
Attack the problem at it's root i say.

Biz management is a skill, but not only one (1)

swb (14022) | about 3 years ago | (#36711080)

Business management is a worthy set of knowledge and skills, but I think we've reached an unfortunate situation where it's become considered the only skill necessary -- just as Lutz says, the notion that if "if you can measure it, you can manage it" and knowledge and experience of an organization's core specialties are considered unnecessary except at the most superficial level (usually in the 20 minutes or less PowerPoint presentation).

Worse, it's also badly distracted by the opportunity costs of profit maximization through technical manipulation -- which is really no surprise considering that so many MBAs got an undergrad degree in "business" with its relentless focus on technical details like balance sheets and finance mechanisms and measurements of marketing success. The MBA itself with its even greater technical focus on areas like finance and accounting seems to breed legions of people who think that given the data, they can understand anything.

That being said, those are worthy skills -- but how can you manage an organization that makes widgets if you don't understand widgets? I'd like to see an MBA program that won't admit anyone who doesn't have an undergrad degree in *something else*.

Pharmaceutical Industry Next (3, Interesting)

methano (519830) | about 3 years ago | (#36711090)

For 25 years I've watched as the same thing has happened to the pharmaceutical industry. It's just a few years behind the automobile industry. We've largely blamed the MBA's but maybe it's just the natural order of things.

1) Start an industry
2) Grow an industry
3) Get rich (profit)
4) Get greedy
5) Collapse

Re:Pharmaceutical Industry Next (1)

Opportunist (166417) | about 3 years ago | (#36711280)

Oh, then we should get ready to watch the collapse of the content industry?

Because Lutz knows how to run a business... (0)

Anonymous Coward | about 3 years ago | (#36711122)

I mean, what person could actually turn around a behemoth like GM from the brink of disaster... oh wait, billions of dollars from the Federal government helped to decide who the winners and losers should be. Sorry Lutz, you don't know the first thing about running a business... let's try the underpants gnomes theory for GM:

1. Failing car company
2. Government bailout
3. Off-load pension obligation to the public
5. Profit

You're a genius!

Understands the problem not the solution... (2)

fooslacker (961470) | about 3 years ago | (#36711144)

The idea that current management is broken is correct. It's broken because it's not focused on managing companies it's focused on managing stock prices. Unfortunately, IMO, there is so much value in the equity market that major businesses no longer care what they produce or how they produce it as long as they produce stock value along side it. This attitude is a result of a couple of things. First the short term value from investments is worth many times the actual value of the company can produce from real assets/production/sales/fees/etc. Second we've tied executive compensation to stock price through options, grants, incentives, etc. It's not a problem of who is managing the companies it's a problem of incentives and motivations.

Fixing the problem doesn't necessarily mean putting a geek in charge but instead means altering incentives so they favor long-term profit and sustainable growth (20, 30, 50 years or more) beyond short-term stock bumps. Often engineer personalities get in the way and make them harder to incentivize than the bean counter personalities. Too often the geek only cares about the purity of a solution or the optimization of a process and that makes it difficult to incentivize him to put long-term profit first. Additionally, if the geek you select is flexible enough to not be stuck in the optimization mode then he is going to game the system just like the MBA in favor of stock indicators for his personal compensation. It's not dishonest or wrong it's human nature. You tell your manager what you care about by how you pay them. They in turn work to maximize those items to which their variable compensation is tied.

The best thing you can do is find good managers (MBAs or Geeks not withstanding) and incentivize them to run the company with the primary goal being long-term sustainable profits. I think more often than not you're going to find this is an MBA type with a compensation package not tied to stock but a smart board will look for the right personality traits, coupled with the right skills, coupled with the right compensation package. The answer is definitely not "just give it to the engineers" however.

Not MBAs.. (1)

MaerD (954222) | about 3 years ago | (#36711166)

It's not MBAs that are the particular problem here. It's more Dodge v. Ford Motor company and the legacy of that decision. The only goal most corporations have at this point is short term stock price increases or selling the company. Until more focus is placed on long-term outlooks, bad (and sometimes purely unethical) practices will rule corporate america.

No connection to bussiness (3, Interesting)

fermion (181285) | about 3 years ago | (#36711178)

I think one issue is that the business people have no long term connection to the firm they hired to run. MBAs are often hired guns, there to generate profit for a few years, get compensated, and then they are off. In the best case scenario, they will be there for twenty years, which means all they have to do is push problems back, not solve them. This is what happened to the car industry. The focus, as the incentive generally create in a firm, is this quarters profit and executive pay. This means that worker pay was deferred through outrageous retirement packages. Such things were reasonable because the management that created the problem would be gone by the time the problem was realized. And future management never blames past management becuase they makes them all look incompetatnt. Better to blame the workers that have no real control over anything.

The other is changing market conditions. In the case of ATT, consumers simply rebeled against the price they had to pay for what became a commodity. It is hard to explain to a young person how much the rate for phone service has fallen. Using a cell phone I can call from anywhere in the continental US to anywhere in the continental US basically for what my parents paid for local calls, inflation adjusted. With Skype out of country calls fell from maybe fifty cents a minute or so to a less than a dime a minute(the countries I call are not on the unlimited plan). ATT revenues has been more than decimated by market forces.

One thing that did happen in the 70s and 80s, particularly 80s, was the concept that profit was a right and that firms when they employed a certain number of people needed to ongoing bussiness, even if the management was incompentant. This, in effect, removed the incentive for compentant MBAs. As long as a manager has a piece of paper, the firm had done due diligence, and the financial sector, backed by tax payer money, would insure that funding for the incompetent and inefficient firms would be ongoing. The primary negative consequences was that compentent and creative individuals found it harder to get funding, and employess.

Re:No connection to bussiness (1)

wonkavader (605434) | about 3 years ago | (#36711298)

The reason AT&T's profits have gone down is that their business model (employ a vast number of people, keep them busy doing work computers and equipment could be doing, then threaten to lay them off unless law-makers continually pass the legislation you write to protect your current revenue streams) falls down in the face other systems which perform the same service for hundreds of a cent on the dollar. It's amazing and a tribute to their selfish nastiness that they've managed to keep things going this long. You could replace their whole company (doing what it does today -- no change in products/services) with a much smaller company after just a short round of automation work. After they modernize the switches (which they'll have to do at some point -- Qwest did it years ago and laid off a huge proportion of their wires guys) they'll be able to reduce even more headcount. Just in time for their business to completely disappear. Nice work, AT&T.

It's not one or the other. (1)

91degrees (207121) | about 3 years ago | (#36711198)

So, who's hiring the MBAs in the first place?

And why hasn't a company considered hiring geeks to do this sort of stuff? If it's such a good idea then surely someone somewhere would have experimented and seen how hugely successful this has been.

I've been involved in companies run by geeks. They don't always understand business. They're very eager to play with new toys but are rubbish at business plans. You need people who understand business *and* innovation.

A lot of MBAs are engineers! (0)

Anonymous Coward | about 3 years ago | (#36711206)


We're actually looking at a false dochotomy here, when it's actually a mixed set. I'm an MBA but I started out as a software engineer with a master's in science and about 50% of the people I studied on my MBA course with had a background in engineering. It just happens to be fashionable to blame MBAs at the moment because of the financial crash, so a lot of people are jumping on the bandwagon.

You can't fix stupid. (0)

Anonymous Coward | about 3 years ago | (#36711212)

The problem isn't that one skill set is overused. Its that people in general are no longer willing to take responsibility for their actions. Any one especially those with high skill sets are prone to mistakes. Admit them and learn from them. Any degree or training someone may get does not liberate them from stupidity.The universal affliction that affects every rational person no mater race, standing, political stance, etc. The problem is that companies have made an environment of hide your mistakes. So what happens is that the person who, may be dumber than a bag of hammers ends up leading the way. They are stupid, but rewarded because they can hide their mistakes better. Rather the guys that make the big blunders, but figure out how to survive are the ones that should be in charge.

In other words... (4, Funny)

FatLittleMonkey (1341387) | about 3 years ago | (#36711216)

David Brin put it like this in the early '90s:

"Want to help Russia and America at the same time?
Send half our lawyers (freedom in both countries will go up.)
Send half our MBAs (both our economy and theirs will boom.)
And send half of NASA's managers (America gets a great space program and Russia some good farm labor.)"

Engineer + MBA combination (2)

mikewas (119762) | about 3 years ago | (#36711224)

There are a lot of engineers out there who have business credentials too. At my company, a large aerospace company, "working level" engineers mostly have a BS in engineering/science & 2 advanced degrees -- a technical degree and an MBA.

Engineers still know something that is no longer taught to business majors -- that you have to make decisions for the long term. When you're building systems that cost many millions & must perform for decades you must keep this in mind at every stage of the process -- both business & engineering functions.

Decades ago this was a part of business majors' education. In management courses, accounting, every course you were taught to always make decisions assuming your firm is an on-going concern. Now business students are taught to extract as much money as possible in the least amount of time and get out. Think short term and eventually you'll destroy enough companies that that you no longer have anyplace to invest ... and the "wealth" that you have amassed is worthless. This same thinking has spread to government & investors.

Lutz was correct on something? (1)

wonkavader (605434) | about 3 years ago | (#36711252)

Lutz drove GM into the ground, though it was headed that way anyhow. So it's a colossal surprise to hear him say something right. But then again, he's only half right. He's not identifying what MBAs actually do to help (which is formidable -- the shoe-maker can't make the right decisions about consumer desires or about management choices on human levels), and he's not pointing to the right areas where they're destroyed American businesses -- the quest for short-term growth over long and even mid-term gain.

Thus is is said that even a blind squirrel finds half a nut some days.

Short Term Obsession (0)

Anonymous Coward | about 3 years ago | (#36711254)

As an MBA engineer, I have seen too many MBA graduates drive down corporations, tiny one and huge ones. Yet, I cannot blame them alone. The root of the problem is the short term focus of the investors. Capitalism is failing. Enterprises that are controlled or subsidized by heavy, inefficient government are winning because they are forced to consider the long term. I see it in Europe, Canada, and China. It pisses me off, but raw capitalism does NOT work.

The problem is shortsightedness (2)

Opportunist (166417) | about 3 years ago | (#36711258)

And the allmighty shareholder value.

And as long as execs only have this in their mind, companies will be bled dry and wasted. I wouldn't say that engineers should run companies. I'm an engineer and I would probably not be much more successful at running a business than the locust MBAs that run them today, just for different reasons. I would probably fail to produce a profitable product, striving for the perfect tool rather than keeping my eye on the cost.

Execs today have a different problem with the way they run a company. They don't even care what gets produced, or even whether something gets produced. Their eye is on the stock market and how to push the shareholder value up. And the perversion is that this is easiest done by doing exactly the opposite of producing: Firing people. Lay off half your staff and your SHV goes through the roof. And for good reason, it does actually push your revenue in the short term since you save on staff expenses (and for most companies this is a really big cost position). The drawback is that with fewer people you can usually also only produce less, or at least of lower quality. The times when you could save on staff by automatizing or streamlining production are past. We're automated and streamlined nearly perfectly in most areas. Firing people today means that certain work simply will not get done.

But this will not show until later, and for now it is beneficial for the shareholder value. The perversion is that it is the sensible thing to do if you want your company to survive. Because if you don't, your stock price will drop and it will become trivial for a "slimmer" company (that did fire its staff) to swallow you. This is, btw, the way a lot of these companies survived until today. They laid off their productive staff, pumped their value and swallowed up companies that actually did produce (and hence didn't lay off stafff, and hence were "cheap" to get because their stocks accordingly dropped). And that game got repeated, the productive staff was fired, the shareholder value went up, another productive company was devoured. And so on.

The problem is that today almost only the locusts are left over. And it's quite useless if they ate one another, since they're all just husks and shells, filled with administrative staff that don't really produce much anymore.

It's happenng to healthcare (1)

Anonymous Coward | about 3 years ago | (#36711264)

I see the same thing in healthcare. A hot stroke intervention is considered the same as flipping a burger. Add in the new Health (whatever) Management degrees which are pumping out armies of people who don't really understand IT, facility operations, clinical needs, etc. and yet are hailed as the coming saviours, and you have a recipe for disaster. Advice is being sought from the likes of Accenture (formerly known as Arthur Andersen, the people who said Enron was a-okay), zealous kanban is applied to the supply chain (in spite of the recent earthquake/tsunami's proof of what it could do to a nursing unit with an interrupted supply of syringes, etc), everything is being LEANed (without any concern for the lost redundancies that lead to the new efficiencies), etc.

But, one of the greatest tools that these types have is the ability to make the numbers say whatever they want. No matter how badly they screw up, they can produce a spreadsheet or chart that screams success. And when it all falls down, they are already gone to another "project" (or organization). Their success is on file, and it's considered a question of competency for the sustainment teams that they can't take a gold plated turd and crank out the savings promised by their vendor pals.

Do I sound disgusted? I am.

I have an MBA, and highly question its value (1)

bstarrfield (761726) | about 3 years ago | (#36711274)

Let me first admit that I have an MBA from Michigan. I went to business school as it had been quite apparent in my tech career that the folks in finance, operations, and sales were absolutely clobbering the IT staff in terms of salary, work conditions, and being able to work more-or-less safely past age 40. Yes, I know a few very wealthy tech personnel who made it from stock options, but I know far, far more wealthy people who made their fortunes producing nothing of value, shuffling imaginary wealth from system to system.

In business school you don't really learn about business administration - you don't learn how to lead people, how to innovate, how to manage. You primarily learn about how to extract as much money as possible from every single process. You learn about how to shift inventory allocation systems to minimize taxes, you learn how to maximize bonuses to executives by playing with the balance sheet, you learn the glories of outsourcing jobs to enhance the all-holy shareholder value. Yes, there are exceptions in the coursework - namely operations and economics - but most of the time you simply learn how to become one of the poetical Hollow Men.

MBAs have done such enormous damage to the Western world that its a wonder that the business schools haven't been burned to the ground. Outsourcing, fees for baggage on planes, value meals, all sorts of nonsense dreamt up to earn a last bit of profit, damn the effects as those won't show up on your balance sheet. MBAs are taught to be amoral, to basically ignore anything other than shuffling money around. Business school needs to return to teaching students that businesses are part of the community, that business leaders have a responsibility to their customers, employees, and countries. MBAs need to focus on managing people and businesses, not just learning how to play accounting games. Compensation for MBAs needs to be tied to long-term corporate performance, not quarterly results. And business school faculty should be forced to work in a factory, or a store, or an airplane, whatever, for a few weeks a year to understand how businesses actually make money - not through games, but through the actions of the line employees who get the work done.

Balance and selection bias (1)

belthize (990217) | about 3 years ago | (#36711278)

The problem isn't engineer vs MBA, the problem is where they end up in the corporate structure. A health company will have a mix of MBA's and engineers throughout their management structure, the two play off each ether to achieve a good balance of technically and financially sound decisions.

Sadly there's a selection bias towards MBA's for upper management positions so over time older organizations become MBA top heavy and they fail as they're out competed by technically superior companies.

Younger start up type organizations have an inverse distribution and tend to be engineer top heavy, they frequently make technically superior products that still fail for financial reasons.

If you let the engineers run the show... (3, Funny)

Paul Slocum (598127) | about 3 years ago | (#36711304) end up with GIMP
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