Many moons ago, I spent about two years of evenings and weekends getting an MBA. I had a conversation about the degree back then with a neighbor. He had retired as the CEO of a family business. He didn’t have a business degree; his degree was in math. He’d married into the ceramic tile industry and worked his way up from entry level. His only other work experience was as an RAF navigator dropping depth charges on U boats from B-25 bombers.
Obviously, his lack of formal business training hadn’t hurt his career. And he was a bit bemused by my MBA curriculum. For example, he couldn’t see why there were multiple courses in marketing. “You can pick up everything you need to know about marketing in a day,” he said.
I recalled this exchange recently when Bloomberg Businessweek published a piece suggesting that high-tech Silicon Valley firms don’t think much of the MBA degree. One reason: Several prominent tech firms are headed by CEOs having science or engineering degrees rather than MBAs, or no degree at all. Examples include IBM, Oracle, Intel, Uber, Amazon, Yahoo!, Facebook, Twitter and Ebay. Businessweek found a number of tech firm mangers, even a few with MBAs themselves, willing to trash-talk the degree.
Typical of the comments are those of Facebook COO Sheryl Sandberg, herself a Harvard MBA, who said “I don’t believe they (MBAs) are important for working in the tech industry.” A venture capitalist claimed people with MBAs “tend to get hired after the company is already successful and it becomes a very bureaucratic organization….They will probably keep you out of trouble, but they won’t create any value.”
One of the few positive comments in the Businessweek piece came from an academic rather than from someone running a tech business. Sri Zaheer, dean of the University of Minnesota’s business school said, “I don’t buy into the argument that entrepreneurs don’t need an MBA. If they were a little more clued up about how to make money in their businesses, we wouldn’t see these tech bubbles and the craziness that happens every few years.”
Well, speaking as someone who holds an MBA, I’d say the process of getting the degree teaches you a number of things, but how to “make money” in a business isn’t necessarily one of them. I suspect most engineers don’t embark on the MBA route specifically to learn that skill.
After all, the basics of making money are pretty simple—sell a product for a lot more than it costs to make. Duh.
The real motivation for the degree is more likely a lack of opportunity for advancement in the ranks of most engineering departments. Perhaps with the notable exception of some high-profile startups, engineering operations often have a low ceiling when it comes to career potential.
It looks as though U.S. engineers aren’t the only ones trying to do something about career limitations. U.S. News & World Report says people from outside the U.S. make up more than 60% of the student body at several well-known MBA schools, including those at Syracuse, Hofstra, U. Calif.-Riverside, and R.I.T.
But to the points raised by Businessweek, it’s debatable whether business school classes actually impart the smarts needed to succeed in business. Many would say business success takes vision, a quality in short supply even among experienced managers.
Consider the words of former Facebook engineer turned venture capitalist Chamath Palihapitiya. When commenting on business acumen to Vanity Fair Magazine, this is what he said: “I think what we’ve had is a handful of investors who have extreme vision who make great investments in things that are amazing businesses: Facebook, Google, Uber. And then everybody else reacts to that success by trying to do the thing that most approximates the thing that’s working. As a result, most of those businesses are fundamentally not good, they’re poorly run, and they never should have been invested in in the first place.”
Not said, but worth betting on, is that many of those specious investments were probably made by individuals with MBA credentials.
Leland Teschler – Executive Editor
Filed Under: Commentary • expert insight
Thank you for a very well written article. Trying to answer that question an old joke came in my mind. When God was making engineers and ran out of brain had to give some only diplomas. 🙂
Joking aside, I think this issue is common these days in many places (not only in engineering) where universities are trying to diversify and attract people with fancy certifications and diplomas that rarely mean something in a productive business, be it engineering, healthcare or business. It’s a good business for them and attracts lots of people from other countries outside US, but it rarely means something. To achieve this, in fact most of the regular curriculum is diluted and all the important parts are added as certifications or in a MS/MBA program. Just look online at the offers of any community college and you will see lots of things that may make no sense. It’s visible that those that are real managers or engineers are already busy.
Probably a very small segment really needs an MBA but some companies are paying for it, so why not?
This relates perhaps with your earlier article about the reviews that are meaningless but give the false impression that the company management knows about what people are really doing. Usually if the management team simulates management, people trend to simulate work. And that doesn’t accomplish anything for anybody but seems common practice these days.
Boris Bulatovic says
Hey Lee Teschler, thanks for sharing your experience With the importance of MBA in tech industry. I also believe MBA is very helpful to get success in any industry. After the MBA, we have ability to think critically, deal with ambiguity and solve complex problems and most its impact on salary. According to employers report MBA holder people are extremely confident and able to influence other workers.