5 ms·

A trend I've noticed often among "business managers" (MBAs or wannabes) is to assume they can manage something they don't understand, then simply shift to the l

by g_p 5y ago

A trend I've noticed often among "business managers" (MBAs or wannabes) is to assume they can manage something they don't understand, then simply shift to the lowest common denominator of dollars and cents (or your local equivalent). Rather than actually manage anything, they then just demand others find ways to reduce the number of dollars in the cost line, and raise the number of dollars in the profit or revenue line. The end result tends to be foreseeable and in line with most other comments here - short-term thinking outcomes, like asset stripping, selling things to free up capital (that isn't needed) and leasing them back (to make the business look more profitable as it spirals into the ground by burning up all that capital pile, after paying a large dividend), etc. I wonder - is there an argument in favor of this, beyond the usual "shareholder value" or "shareholder return"? Is this something that's taught or expected as part of the doctrine? Is the idea of turning complex things you don't understand into revenue a taught principle? (As in my experience, it ends up with very obvious catastrophic issues, caused by the business manager not understanding or believing the impact that will arise from the change they make, followed by them changing job before the foreseen and inevitable negative outcome arrives). Could companies get better business managers by releasing their bonus over a period of years, so that people's true ability to perform is factored in? Aka the principle of being around for long enough to get found out, which in theory ought to get you better managers, since those who would get "found out" will avoid the opportunity?

hkt 5y ago
It feels like having management as a specialism in its own right is a result of the financialisation of business. It is inconceivable that business schools can equip people to innovate: innovation will come from founders who have technical skills, and the teams they lead. As soon as career managers are involved, the game begins to be about playing the numbers rather than focusing on the product. It seems absurd to think business schools are capable of producing anyone who would do anything else.
- g_p 5y ago
  Playing the numbers really does seem to be the root of the issue - I've definitely seen occasions with too much focus on mantra-driven accountings practices (playing around shuffling beans from capex to opex), rather than on what actually mattered... In one case, they wanted to just shuffle numbers between columns in Excel, and there wouldn't have been a business in a few months, as they'd have trimmed all the spend that meant there was a viable and competitive product to sell, and made the monthly outgoings higher than takings, all to make the spreadsheet look nice... Maybe business managers need to be taught more about innovation and how to get out the way and enable it as a value creator? Or maybe we need to better condense what really matters into a single college class - cutting all the bean counting and financial tricks and focusing on the useful lessons instead?
- ceeplusplus 5y ago
  Eh, you definitely need to understand the business aspects of a space to innovate in it. SaaS was a huge change in the business model but not really the underlying technical stuff. But I think it's a lot easier for someone technical to learn these things than for a business person to learn the tech.
  - lumost 5y ago
    > But I think it's a lot easier for someone technical to learn these things than for a business person to learn the tech. That's the rub, people have been running businesses for millenia without requiring specialized education for it. SaaS was a huge change in the business model, but did it require an MBA to come up with the idea? Or was it someone who figured that their customers didn't want to wait for "vN" of the product?
  - xphos 5y ago
    I don't think you can just claim that MBA generated the idea of SaaS nor that MBA (or tech staff)in general generate that type of novel idea constantly. Now you different can argue that one of those two groups is absolutely required to produce a SaaS product and I think its obivous which one of the two groups is optional. I don't think MBA's are useless but its happens to be my experience. That very often where a non-technical manager is attached to the project and they are kinda useless because they lack the insight to contribute but a given more authority that the people that actually know whats going on. I've found non-manager assistants are often way more productive at getting the actual adminstrative tasks required done as well.
- Schroedingersat 5y ago
  I can see someone trained in mediation, finance, accounting, philosophy, game theory, and some basic general technical skills (statistics, maths foundations, general tool and workshop proficiency, foundations of CS/IT) being a massive boon to any organizational structure. Technical people often lack communication skills and can lose the forest for the trees. But their voice needs to be equal with people who specialise in what is actually done on the ground. Basically real management specialization, not 'make line go up, you in charge everyone else is a peon to be exploited' training.
  - g_p 5y ago
    > Technical people often lack communication skills and can lose the forest for the trees. This is definitely an issue in my experience. There's some who can communicate well. In cases where you don't have one of them though, the solution seems like it would be a same-level or one-level-junior "PR" type individual, who helps them to hone and delivery a message. It seems incongruous that in this one (?) context, we look for general enabling skills further up the chain, rather than down the chain.
    - Schroedingersat 5y ago
      Down the chain is good for communicating to the outside world. But an equal team member would imo be best for helping the team achieve their goals.
k__ 5y ago
Reminds me of a company where I was in the talks of becoming a manager for R&D. They took a business dude for that role instead, I left, and the company went bankrupt. But it was a good thing, my life got so much better when I finally quit emplyoment for good.
- jnsie 5y ago
  > when I finally quit emplyoment for good. Tell me more...seriously
  - k__ 5y ago
    It's boring. I'm just a freelancer. But I only work 10h a week, so in relation to a 9-5 job it could be considered part time retirement.
  - kQq9oHeAz6wLLS 5y ago
    Now he does employment for evil
    - jnsie 5y ago
      Oh, so FAANG... (just kidding, just kidding)
  - gruez 5y ago
    probably FIRE (financial independence, retire early)
    - leaflets2 5y ago
      I thought he's now running his own business Edit: yes, "Author and Consultant" says the profile. (Hi Kay :-))
      - k__ 5y ago
        Yes, I'm freelancing since 2015.
dmead 5y ago
isn't that the whole point of business school? it's highly tied to the idea that you can run a company without understanding what the business actually does. I'm pretty sure you're seeing it that way because it's designed that way, unfortunately.
- g_p 5y ago
  > it's highly tied to the idea that you can run a company without understanding what the business actually does. I find this notion really interesting actually, as intuitively it makes no sense, yet it's clear this is what people believe. I guess if you consider all businesses as generic machines that work the same way, you could argue it is theoretically possible, but that should always leave open a huge opportunity for the ones that ignore this practice to push on ahead and win... If your rivals all behave in a relatively predictable way, that ought to give you a usable edge. > I'm pretty sure you're seeing it that way because it's designed that way, unfortunately. That seems to be the case. It's an incredible situation, and one which I hope in future we will reflect on, laugh at, and chalk up as a massive long-term failure in Western business practice.
willcipriano 5y ago
When I was younger I had a career in restaurants. One Friday I ran a sloppy joe special and a crew of construction workers ordered 15 or so of them. The next Friday they came back and asked about it again and so began a regular thing of making sloppy joes on Friday. This went on for the better part of a year until we got a new manager. When the staff was packing up the order he screamed "you are putting in way too many napkins!", the waitress objected and ended up putting a pathetic number of them in the order. The guy who picks up the order asks for more napkins, the waitstaff inform him that we can't give him more due to this new policy. That was the last time they came in for sloppy joes. We lost a $200 a week order over fifty cents of napkins. This plays out slower in large companies with more complicated products but I always think back to that guy when I see stuff like that.
- cammikebrown 5y ago
  While I completely agree the manager was an idiot, it’s also stupid to come in for almost a year and then never come in again because… you got less napkins? Reminds me of the 1-star Yelp reviews where people say “This was my favorite place for years and years, and then one time this little thing happened and now I’m never coming again. One star!”
  - OneLeggedCat 5y ago
    Retribution is a thing many of us humans practice regularly, regardless of whether it's logical. It feels good.
  - mping 5y ago
    Your comment suggests that you think people are entirely rational in their decisions and do not have emotional contamination. Think of it as having a girlfriend or boyfriend, and then one small cheating incident and it's the end of the relationship.
  - lobocinza 5y ago
    It's not. It's a strong signal of things going downhill.
  - 5y ago
nonrandomstring 5y ago
If you want to understand how to use an MBA just look at the syllabus to see what skillsets you're working with. From Harvard to London they're the same; "Basic accounting and economics, simple finance and business law, organisational behaviour, HR and PR, fundamentals of marketing, technology and information systems management, risk management and corporate strategy." This is a highly useful broad but necessarily thin body of knowledge. When I was at uni we had to do a basic law and business for engineers module - and that at least taught me how much there is I don't know and could hire expert advice on. The problem is that people see the word "management" and then do something dumb like put an MBA in charge of things, or worse, people (that seldom goes with the territory). The MBA certificate became mystified and given far too much clout in the late 90s when the weak idea of generalised management of financialised business flourished. Today we better understand the pitfalls of that whole way of thinking. It's also possible for someone with existing domain skills, perhaps even a PhD or lifetime in the MD seat, to go and do a MBA just to learn to speak modern business language. Again, these are useful skills, but don't just put them randomly in charge of things because you see an Ivy League brand and the letters M.B.A.
JackFr 5y ago
But the point of this article it seems, is not that CEOs with MBAs are worse managers, short sighted, greedy or foolish. The enterprise consists of assets, both tangible and intangible, also called capital, and workers who provide labor. We call returns to capital “profit” and returns to labor “wages”. If I understand this paper correctly, MBAs in aggregate neither grow the pie nor shrink the pie compared to non-MBAs. What they do well is increase the share that goes to capital rather than labor.

by g_p 5y ago

hkt 5y ago

It feels like having management as a specialism in its own right is a result of the financialisation of business. It is inconceivable that business schools can equip people to innovate: innovation will come from founders who have technical skills, and the teams they lead. As soon as career managers are involved, the game begins to be about playing the numbers rather than focusing on the product. It seems absurd to think business schools are capable of producing anyone who would do anything else.

g_p 5y ago
Playing the numbers really does seem to be the root of the issue - I've definitely seen occasions with too much focus on mantra-driven accountings practices (playing around shuffling beans from capex to opex), rather than on what actually mattered... In one case, they wanted to just shuffle numbers between columns in Excel, and there wouldn't have been a business in a few months, as they'd have trimmed all the spend that meant there was a viable and competitive product to sell, and made the monthly outgoings higher than takings, all to make the spreadsheet look nice... Maybe business managers need to be taught more about innovation and how to get out the way and enable it as a value creator? Or maybe we need to better condense what really matters into a single college class - cutting all the bean counting and financial tricks and focusing on the useful lessons instead?
ceeplusplus 5y ago
Eh, you definitely need to understand the business aspects of a space to innovate in it. SaaS was a huge change in the business model but not really the underlying technical stuff. But I think it's a lot easier for someone technical to learn these things than for a business person to learn the tech.
- lumost 5y ago
  > But I think it's a lot easier for someone technical to learn these things than for a business person to learn the tech. That's the rub, people have been running businesses for millenia without requiring specialized education for it. SaaS was a huge change in the business model, but did it require an MBA to come up with the idea? Or was it someone who figured that their customers didn't want to wait for "vN" of the product?
- xphos 5y ago
  I don't think you can just claim that MBA generated the idea of SaaS nor that MBA (or tech staff)in general generate that type of novel idea constantly. Now you different can argue that one of those two groups is absolutely required to produce a SaaS product and I think its obivous which one of the two groups is optional. I don't think MBA's are useless but its happens to be my experience. That very often where a non-technical manager is attached to the project and they are kinda useless because they lack the insight to contribute but a given more authority that the people that actually know whats going on. I've found non-manager assistants are often way more productive at getting the actual adminstrative tasks required done as well.
Schroedingersat 5y ago
I can see someone trained in mediation, finance, accounting, philosophy, game theory, and some basic general technical skills (statistics, maths foundations, general tool and workshop proficiency, foundations of CS/IT) being a massive boon to any organizational structure. Technical people often lack communication skills and can lose the forest for the trees. But their voice needs to be equal with people who specialise in what is actually done on the ground. Basically real management specialization, not 'make line go up, you in charge everyone else is a peon to be exploited' training.
- g_p 5y ago
  > Technical people often lack communication skills and can lose the forest for the trees. This is definitely an issue in my experience. There's some who can communicate well. In cases where you don't have one of them though, the solution seems like it would be a same-level or one-level-junior "PR" type individual, who helps them to hone and delivery a message. It seems incongruous that in this one (?) context, we look for general enabling skills further up the chain, rather than down the chain.
  - Schroedingersat 5y ago
    Down the chain is good for communicating to the outside world. But an equal team member would imo be best for helping the team achieve their goals.

k__ 5y ago

Reminds me of a company where I was in the talks of becoming a manager for R&D. They took a business dude for that role instead, I left, and the company went bankrupt. But it was a good thing, my life got so much better when I finally quit emplyoment for good.

jnsie 5y ago
> when I finally quit emplyoment for good. Tell me more...seriously
- k__ 5y ago
  It's boring. I'm just a freelancer. But I only work 10h a week, so in relation to a 9-5 job it could be considered part time retirement.
- kQq9oHeAz6wLLS 5y ago
  Now he does employment for evil
  - jnsie 5y ago
    Oh, so FAANG... (just kidding, just kidding)
- gruez 5y ago
  probably FIRE (financial independence, retire early)
  - leaflets2 5y ago
    I thought he's now running his own business Edit: yes, "Author and Consultant" says the profile. (Hi Kay :-))
    - k__ 5y ago
      Yes, I'm freelancing since 2015.

dmead 5y ago

isn't that the whole point of business school? it's highly tied to the idea that you can run a company without understanding what the business actually does. I'm pretty sure you're seeing it that way because it's designed that way, unfortunately.

g_p 5y ago
> it's highly tied to the idea that you can run a company without understanding what the business actually does. I find this notion really interesting actually, as intuitively it makes no sense, yet it's clear this is what people believe. I guess if you consider all businesses as generic machines that work the same way, you could argue it is theoretically possible, but that should always leave open a huge opportunity for the ones that ignore this practice to push on ahead and win... If your rivals all behave in a relatively predictable way, that ought to give you a usable edge. > I'm pretty sure you're seeing it that way because it's designed that way, unfortunately. That seems to be the case. It's an incredible situation, and one which I hope in future we will reflect on, laugh at, and chalk up as a massive long-term failure in Western business practice.

willcipriano 5y ago

When I was younger I had a career in restaurants. One Friday I ran a sloppy joe special and a crew of construction workers ordered 15 or so of them. The next Friday they came back and asked about it again and so began a regular thing of making sloppy joes on Friday. This went on for the better part of a year until we got a new manager. When the staff was packing up the order he screamed "you are putting in way too many napkins!", the waitress objected and ended up putting a pathetic number of them in the order. The guy who picks up the order asks for more napkins, the waitstaff inform him that we can't give him more due to this new policy. That was the last time they came in for sloppy joes. We lost a $200 a week order over fifty cents of napkins. This plays out slower in large companies with more complicated products but I always think back to that guy when I see stuff like that.

cammikebrown 5y ago
While I completely agree the manager was an idiot, it’s also stupid to come in for almost a year and then never come in again because… you got less napkins? Reminds me of the 1-star Yelp reviews where people say “This was my favorite place for years and years, and then one time this little thing happened and now I’m never coming again. One star!”
- OneLeggedCat 5y ago
  Retribution is a thing many of us humans practice regularly, regardless of whether it's logical. It feels good.
- mping 5y ago
  Your comment suggests that you think people are entirely rational in their decisions and do not have emotional contamination. Think of it as having a girlfriend or boyfriend, and then one small cheating incident and it's the end of the relationship.
- lobocinza 5y ago
  It's not. It's a strong signal of things going downhill.
- 5y ago

nonrandomstring 5y ago

If you want to understand how to use an MBA just look at the syllabus to see what skillsets you're working with. From Harvard to London they're the same; "Basic accounting and economics, simple finance and business law, organisational behaviour, HR and PR, fundamentals of marketing, technology and information systems management, risk management and corporate strategy." This is a highly useful broad but necessarily thin body of knowledge. When I was at uni we had to do a basic law and business for engineers module - and that at least taught me how much there is I don't know and could hire expert advice on. The problem is that people see the word "management" and then do something dumb like put an MBA in charge of things, or worse, people (that seldom goes with the territory). The MBA certificate became mystified and given far too much clout in the late 90s when the weak idea of generalised management of financialised business flourished. Today we better understand the pitfalls of that whole way of thinking. It's also possible for someone with existing domain skills, perhaps even a PhD or lifetime in the MD seat, to go and do a MBA just to learn to speak modern business language. Again, these are useful skills, but don't just put them randomly in charge of things because you see an Ivy League brand and the letters M.B.A.

JackFr 5y ago

But the point of this article it seems, is not that CEOs with MBAs are worse managers, short sighted, greedy or foolish. The enterprise consists of assets, both tangible and intangible, also called capital, and workers who provide labor. We call returns to capital “profit” and returns to labor “wages”. If I understand this paper correctly, MBAs in aggregate neither grow the pie nor shrink the pie compared to non-MBAs. What they do well is increase the share that goes to capital rather than labor.