do MBA’s actually become good managers?
Henry Mintzberg raises the hypothesis that business schools aren’t terribly good at training managers:
This is one question these centers of research do not study. We made an exception. A decade after its publication in 1990, I looked at a book called Inside the Harvard Business School, by David Ewing. (The first line was “The Harvard Business School is probably the most powerful private institution in the world.” Unfortunately he might have been right.) The book listed 19 Harvard alumni who “had made it to the top”—the school’s superstars as of 1990. My attention was drawn to a few people who would not have been on that list after 1990.
So Joseph Lampel and I studied the subsequent records of all 19. How did they do? In a word, badly. A majority, 10, seemed clearly to have failed, meaning that the company went bankrupt, they were forced out of the CEO chair, a major merger backfired, and so on. The performance of another 4 we found to be questionable at least. Some of these 14 CEOs built up or turned around businesses, prominently and dramatically, only to see them weaken or collapse just as dramatically.
Mintzberg also notes that few people seemed interested in his analysis. It’s like a medical school ignoring a study showing that all their graduates kills their patients.
My view on these findings is (a) I need some counter factuals – do non-MBA holders do any better? and (b) an assessment of selection effects – maybe at risk companies tend to over-recruit MBA’s in a desperate attempt to save the ship. Mintzberg is definitely onto something important. It is not entirely clear how a lot MBA training translates into making the tough decisions that CEO’s are often faced with.