4 ms·

Obviously, they don't prefer them in that sense. But if the derailments are <X% of the trains, and the rest of the trains are more cost-effective enough to mak

by jerf 5y ago

Obviously, they don't prefer them in that sense. But if the derailments are <X% of the trains, and the rest of the trains are more cost-effective enough to make up for those, especially if the costs of the derailment to the environment, communities, and employees and such are externalized away from the MBA making these decisions, then they may decide it is worthwhile. This is one of the reasons so many people have varying levels of distaste aimed at "MBAs"... it's not that hard to train people to push numbers around in any number of industries. It's easy to equip somebody with an MBA capable of doing that. Heck, based on what I've seen of MBA training, it's trivial compared to an engineering degree, no offense particularly intended, but it really isn't that hard to tell whether this number is bigger than that number, even with some statistics thrown in. The problem is that there is no way to scale up understanding all the details that are not and perhaps even can not be in the numbers, and that's where the MBAs can go trampling over companies. I'm sure the numbers on these jumbo trains look great, even accounting for the derailments. I'm sure of that because the fact they're running them is pretty much proof of that. If the numbers weren't good, they never would have become popular enough to be worth writing about in the first place. The question is, what about the things not in the numbers? That I can't speak to and must defer to people with experience in the industry. So must the MBAs, but they are trained, deliberately or otherwise, not to.

mschuster91 5y ago
> This is one of the reasons so many people have varying levels of distaste aimed at "MBAs" And the other is that a lot of the decisions that bring up anti-MBA shitstorms and flamewars make it more than obvious that ethics were not much of a part of the MBA program the offenders attended. The most obvious example of ethics getting railroaded was Boeing, and look where it got them to.
- pbourke 5y ago
  Liability is the other side of the ethics coin. Professional Engineers have liability and carry insurance as a result. MBAs? Not so much. Look at the Boeing MCAS and VW emissions scandals. Individual engineers and test pilots were named and faced repercussions. The MBAs that sustained the environment where this poor decision making happened? Aside from the very senior executives, we have no clue who they are. They were able to stay in role or slink off to another opportunity. They might not even think they had any culpability.
  - astrange 5y ago
    I remember a VW executive going to prison, but the news reported him as an engineer, and so everyone thought the execs got away with it.
  - nmeagent 5y ago
    Note that most engineers in the US are not licensed (IIRC about ~20% are), are not liable for things like this, and do not carry such insurance.
- dralley 5y ago
  And the fact that nearly every company that has ever been lauded by the MBA industrial complex has collapsed (or was seriously damaged, or caused serious damage to society) as a direct result of the very same management practices and fads that the MBA industrial complex spent years or decades trying to cram down the throats of the rest of the country. * Enron * General Electric and the lord and savior of MBAs, Jack Welch * Valeant Pharmaceuticals * Sears * IBM * McDonnell-Douglas (and later Boeing) * Intel * Stock buybacks in the airline and retail industries
  - mschuster91 5y ago
    Or how many companies got broken up into small, stock-sized chunks to be profitably sold... and then once covid and the delivery chain issues hit, they were too small to survive on their own without government assistance.
listenallyall 5y ago
> f the derailments are <X% of the trains, and the rest of the trains are more cost-effective enough to make up for those You managed to figure it out, so why blame unknown, unseen, unnamed "MBAs" when virtually anyone of modest competency can realize that achieving 100% perfection is not cost-effective? And certainly not isolated to rail transportation. Do FAANG (or any software companies) produce 100% bug-free software? Do stores attempt to achieve 100% theft reduction? Virtually everyone knows that going from 98% success to 99% is very expensive, to 99.9% even more so, and 99.99% ridiculously so. 3, 4, 5, 6-sigma, and all that. If lives are at risk in these derailments, that's an issue. But these are freight trains.
- np- 5y ago
  I think that’s the point of the article. If you just look at the numbers like an MBA would then maybe it makes sense. But all of the negative externalities are being bore by the local communities where the derailments are happening, and those don’t show up in the balance sheets. So if they’re not in the balance sheets then why would someone in the corporate big city office care about it at all? That is now totally someone else’s problem. The numbers still look great.
  - AnIdiotOnTheNet 5y ago
    “Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders.”
  - listenallyall 5y ago
    Are you claiming any other company does things differently? Even the greenest of companies have externalities that end up as someone else's problem. Wind farms kill tons of birds, electric cars require lithium mines, etc etc. Was it MBAs who failed to deliver clean water in Flint? I'm not defending destroying the planet or ignoring health and safety concerns -- I'm pointing out that everybody, from financiers to yes, engineers, tends to dismiss the negatives in whatever industry they derive a living from.
- chefandy 5y ago
lordnacho 5y ago
I studied both engineering and management as part of the same degree. I can tell you everything the techies think about MBAs is correct. (The undergrad management degree overlapped with the MBA quite a bit, esp as the MBA was only one year). Somehow if you take two thirds of an engineering degree and two thirds of an econ/mgt degree, two thirds of the work is the engineering degree. Most of the reading in management is discovery channel style: lots of interesting things, there's no doubting that, but not real skills. They raise simple ideas to a level of respect that is not warranted by the content. Eg Porter's Five Forces can only really be a superficial checklist for strategy, it doesn't actually tell you anything about what matters in some industry, and you might come across some business where those five items are not so clear cut. Same with SWOT analysis and various other acronyms, they are simply trivial things that cannot stand next to the content of a technical degree. There's also an inherent problem with MBA training: it assumes that there's a general training that is useful to every business. If you're going to apply the material, every grad will end up putting a round peg in a square hole. Fortunately there's not really anything to apply, you get the cool jobs because you're showing that you're smart and ambitious, not because you are qualified technically to do it. Engineering on the other hand is quite hard to BS. We built a crappy radio in the first term, but it was a radio and it played the radio when you turned it on. You had to understand how radio spectrum worked and how to solder the little RLC components together to make it work.
gsibble 5y ago
I have an MBA and a computer engineering degree, both from Vanderbilt University. I had never thought to compare the difficulty of achieving either for some reason. Looking at both......the MBA is indeed trivially easy compared to my engineering degree. By an order of magnitude. Thanks for opening my eyes to that.
Karrot_Kream 5y ago
I'm curious what changed recently to make this worse. I appreciated the article, an insider's ideas on what is going wrong (and somewhat nuanced), but what change is causing this newer race-to-the-bottom? Labor shortages? Fuel costs?
- bobthepanda 5y ago
  To be fair, there was probably a fair bit to cut or optimise in the very beginning of it all; but Jack Welch, the prototypical MBA CEO, started being CEO of GE in 1981. 41 years later, we are probably now cutting bone instead of fat.
- supergauntlet 5y ago
  Presumably the same forces that cause the rate of profit to decline everywhere. It's not anything new, it's just the latest step along the cut-costs-at-all-costs staircase.

by jerf 5y ago

mschuster91 5y ago

> This is one of the reasons so many people have varying levels of distaste aimed at "MBAs" And the other is that a lot of the decisions that bring up anti-MBA shitstorms and flamewars make it more than obvious that ethics were not much of a part of the MBA program the offenders attended. The most obvious example of ethics getting railroaded was Boeing, and look where it got them to.

pbourke 5y ago
Liability is the other side of the ethics coin. Professional Engineers have liability and carry insurance as a result. MBAs? Not so much. Look at the Boeing MCAS and VW emissions scandals. Individual engineers and test pilots were named and faced repercussions. The MBAs that sustained the environment where this poor decision making happened? Aside from the very senior executives, we have no clue who they are. They were able to stay in role or slink off to another opportunity. They might not even think they had any culpability.
- astrange 5y ago
  I remember a VW executive going to prison, but the news reported him as an engineer, and so everyone thought the execs got away with it.
- nmeagent 5y ago
  Note that most engineers in the US are not licensed (IIRC about ~20% are), are not liable for things like this, and do not carry such insurance.
dralley 5y ago
And the fact that nearly every company that has ever been lauded by the MBA industrial complex has collapsed (or was seriously damaged, or caused serious damage to society) as a direct result of the very same management practices and fads that the MBA industrial complex spent years or decades trying to cram down the throats of the rest of the country. * Enron * General Electric and the lord and savior of MBAs, Jack Welch * Valeant Pharmaceuticals * Sears * IBM * McDonnell-Douglas (and later Boeing) * Intel * Stock buybacks in the airline and retail industries
- mschuster91 5y ago
  Or how many companies got broken up into small, stock-sized chunks to be profitably sold... and then once covid and the delivery chain issues hit, they were too small to survive on their own without government assistance.

listenallyall 5y ago

> f the derailments are <X% of the trains, and the rest of the trains are more cost-effective enough to make up for those You managed to figure it out, so why blame unknown, unseen, unnamed "MBAs" when virtually anyone of modest competency can realize that achieving 100% perfection is not cost-effective? And certainly not isolated to rail transportation. Do FAANG (or any software companies) produce 100% bug-free software? Do stores attempt to achieve 100% theft reduction? Virtually everyone knows that going from 98% success to 99% is very expensive, to 99.9% even more so, and 99.99% ridiculously so. 3, 4, 5, 6-sigma, and all that. If lives are at risk in these derailments, that's an issue. But these are freight trains.

np- 5y ago
I think that’s the point of the article. If you just look at the numbers like an MBA would then maybe it makes sense. But all of the negative externalities are being bore by the local communities where the derailments are happening, and those don’t show up in the balance sheets. So if they’re not in the balance sheets then why would someone in the corporate big city office care about it at all? That is now totally someone else’s problem. The numbers still look great.
- AnIdiotOnTheNet 5y ago
  “Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders.”
- listenallyall 5y ago
  Are you claiming any other company does things differently? Even the greenest of companies have externalities that end up as someone else's problem. Wind farms kill tons of birds, electric cars require lithium mines, etc etc. Was it MBAs who failed to deliver clean water in Flint? I'm not defending destroying the planet or ignoring health and safety concerns -- I'm pointing out that everybody, from financiers to yes, engineers, tends to dismiss the negatives in whatever industry they derive a living from.
chefandy 5y ago

lordnacho 5y ago

I studied both engineering and management as part of the same degree. I can tell you everything the techies think about MBAs is correct. (The undergrad management degree overlapped with the MBA quite a bit, esp as the MBA was only one year). Somehow if you take two thirds of an engineering degree and two thirds of an econ/mgt degree, two thirds of the work is the engineering degree. Most of the reading in management is discovery channel style: lots of interesting things, there's no doubting that, but not real skills. They raise simple ideas to a level of respect that is not warranted by the content. Eg Porter's Five Forces can only really be a superficial checklist for strategy, it doesn't actually tell you anything about what matters in some industry, and you might come across some business where those five items are not so clear cut. Same with SWOT analysis and various other acronyms, they are simply trivial things that cannot stand next to the content of a technical degree. There's also an inherent problem with MBA training: it assumes that there's a general training that is useful to every business. If you're going to apply the material, every grad will end up putting a round peg in a square hole. Fortunately there's not really anything to apply, you get the cool jobs because you're showing that you're smart and ambitious, not because you are qualified technically to do it. Engineering on the other hand is quite hard to BS. We built a crappy radio in the first term, but it was a radio and it played the radio when you turned it on. You had to understand how radio spectrum worked and how to solder the little RLC components together to make it work.

gsibble 5y ago

I have an MBA and a computer engineering degree, both from Vanderbilt University. I had never thought to compare the difficulty of achieving either for some reason. Looking at both......the MBA is indeed trivially easy compared to my engineering degree. By an order of magnitude. Thanks for opening my eyes to that.

Karrot_Kream 5y ago

I'm curious what changed recently to make this worse. I appreciated the article, an insider's ideas on what is going wrong (and somewhat nuanced), but what change is causing this newer race-to-the-bottom? Labor shortages? Fuel costs?

bobthepanda 5y ago
To be fair, there was probably a fair bit to cut or optimise in the very beginning of it all; but Jack Welch, the prototypical MBA CEO, started being CEO of GE in 1981. 41 years later, we are probably now cutting bone instead of fat.
supergauntlet 5y ago
Presumably the same forces that cause the rate of profit to decline everywhere. It's not anything new, it's just the latest step along the cut-costs-at-all-costs staircase.