Wednesday, March 03, 2004

An Interview

An Interview : A different point of view ....

Interview: Henry Mintzberg,
Don't Hire MBAs for Management Jobs
by David Creelman

Henry Mintzberg is among the world's most revered management thinkers. His most recent book, Managers Not MBAs looks at what it takes to develop managers and why MBAs don't generally make good ones.
David Creelman (who has an MBA) met with Dr. Mintzberg to explore these ideas.

DC- We're coming up to the end of the graduate recruiting cycle and it's a good time for managers to look back on their hiring strategy. Having read your book, I've got to think that if we're hiring MBAs, we're making a mistake.

HM- Hiring MBAs as analysts is OK, but if you are hiring them as managers, you are playing Russian roulette.

DC- Even if I hire them as analysts, I see them as being the source of my future management talent, so the problems with MBAs are a real concern. What is it that makes MBAs bad managers?

HM – It's two things. One is the kind of people attracted to MBA—although some of them make perfectly fine managers. The people who take MBAs are in too much of a hurry to get to the top. This doesn’t make for good management.
The other point is that people in MBA programs are trained to believe management is something generic rather than something rooted in an understanding of the business. They get a very distorted view of what management is. Again, that doesn't lead to effective management in the real world of business.

DC- What else goes wrong with MBAs when they take on managerial jobs?

HM- The people skills of MBAs are often very weak. This is because the kind of people an MBA program appeals to tend to be strong on analysis and weak on people. Secondly, MBA programs are notoriously poor at developing people skills. They may teach human resources, but even the term human resources is problematic. It was about the time we started using this term that we started firing people rather casually because you can fire resources. I'd rather your website was called – human

DC- How does an MBA differ from the kind of person you think would make good management material?

HM- MBAs are people who are in a hurry and who tend to be detached from context. I think those two go together. Being in a hurry means you are prepared to bounce around between different companies and industries. This stands in contrast to people who are deeply engaged with their company and their industry, and expect to have to earn their stripes.

DC- Most HR professionals probably know someone who fits that second profile; someone who has worked their way up, maybe not from the shop floor, but certainly someone who has spent a long time in the company. This kind of person is more likely noted for his or her knowledge of the business and ability to get things done rather than verbal skills or analytical brilliance.

HM- Someone asked John Kotter, who wrote about the 1974 class of Harvard MBAs, whether those MBAs were team players. He said, “I think it's fair to say that these people want to create the team and lead it to some glory as opposed to being a member of a team that’s being driven by somebody else.” In a nutshell, that is the problem.
The most dramatic data I have on the problems with MBAs comes from a 1990 book by David Ewing, who was at Harvard for 35 years. In his book, Inside the Harvard Business School, he had a list of the superstar managers who have emerged from Harvard. I looked at that list and there were some curious names, like Frank Lorenzo, who ruined more than one airline.

Another name was William Agee, who after problematic performance at Bendix went on to lead Morrison Knudsen down the road to bankruptcy. Of the 19 people on the list, by our analysis, over the past 13 years 10 of them failed decisively (meaning the company went bankrupt, they were forced out of their job, a major merger backfired, and the like), four had questionable records, and only five had solid records of success.

DC- While MBAs may make lousy managers, I suppose that one career the MBA really does prepare you for is management consulting.

HM- Are you aware that even management consulting firms are hiring fewer and fewer MBAs? Someone from McKinsey told me that in a few years, less than half their staff will be MBAs.
There's some evidence the same thing is happening in the financial industries. There was a wonderful interview with Henry Kravis in the Financial Times. Kravis was the financial manipulator with KKR, a company made famous in the book Barbarians at the Gate. He praises his MBA program at the start but finishes the interview saying, by the way, we don't hire MBAs anymore.

DC- If consultancies are not hiring MBAs, who are they hiring?

HM- The consultants are hiring all sorts of people: everyone from physicists, PhDs to lawyers. They put them through three-week programs in basic management to get grounding in the business disciplines. Consulting firms are finding they can hire people who are just as smart as, or smarter than, business school graduates and ones who are not on that mindless kick that ‘I'm going to succeed because I have an MBA.’

DC – Can I go back for a moment to the issue of what is wrong with MBA programs themselves. Are they teaching the wrong kind of material?

HM- One of the fundamental problems is that everything is taught in the abstract. I contend that management takes place in context. Cases are out of context because no one in the class has experienced them first hand. Even in the executive MBA programs where the students have real managerial jobs, business schools don't use the context that the students bring with them.

People are forced to make decisions about a company they had never even heard of 24 hours earlier. They have never met a customer, never been in the factory, and never used the products. They read 20 pages the night before and have to pronounce on what that company should do. If they refuse on the grounds that it's a ridiculous and unprofessional thing to do, they fail the course. They are taught to make decisions when they have no basis for making them.

DC- This criticism applies most to Harvard, which thrives on the case-study method. What about other business schools?

HM- It doesn't matter any more. It used to be that Harvard used cases and other schools used theory, but now everyone does both. It's very much the same from school to school. These days the biggest difference between Harvard and Stanford is geography: both focus on decision-making, both take a very functional approach, and neither have any context.

DC- If I don’t bring in MBAs to be my managers, where do I find managerial talent?

HM- Grow it. If you want good managers hire smart people and put them into operating jobs. See which ones earn the respect of their colleagues then promote them to a managerial position. Simply look for smart, devoted, sensible people.

DC- MBAs may be in too much of a hurry and not committed to a company, but we also see the same thing in investors, customers and perhaps the employee population at large. If no one, including the leadership, is in it for the long term, what does it do to the concept of the organization?

HM- It undermines it and eventually destroys it. These firms can only hope to compete with companies doing the same thing. America is working very hard to export the notion of shareholder value so that everyone else will be reduced to the same level. The short-term focus is destroying American companies.

DC- All the academic evidence shows that what we think of as Japanese management--high commitment between people and their organizations over a long period of time--is the best way to run companies. But America has, by far, the strongest economy in the world. How do you argue with success?

HM- The current success of American companies may be masking weakness. They have been depreciating their assets. I think this great powerhouse of an economy is in dreadful shape. They've been destroying companies for years. And I don't think the Japanese approach to management has been discredited at all. If there is one company that epitomises Japanese management, it's Toyota--and no one can touch them. The Japanese economy may be weak because of the mess in government and banking systems but that doesn't mean the enterprises are weak.

DC – Let's move on to my second problem as an HR leader. If I've hired the right kind of people to be managers, what kind of development programs should I send them on if not to an Executive MBA?

HM – There is nothing wrong with short courses on the functional stuff, but you develop your management skills in programs that build on your intrinsic experience as a manager, like our IMPM. However, there are not a lot of programs that do this.

DC- Everyday I get lots of brochures in the mail advertising leadership development programs. How do I distinguish the good ones?

HM- First of all, I'd be very suspicious of anyone who claims to be creating leaders. You don't create leaders in a classroom. You also have to look at the people who come out of the program; do they come out with hubris or do they come out with some kind of humility?

The test of a good program is one that doesn’t just draw on experiences of other people—although some of that is fine—but keeps coming back to the learning and experience of the managers being developed.

That is what really drives learning. People who take the IMPM come out saying, not just that it was good, but that it was a life-changing experience and they come out with increased humility.

There are some novel and valuable approaches in management development. It's a pity firms keep sending people to MBA or advanced management programs (AMP), which are very conventional.

DC- Do you have any parting words for HR leaders?

HM- MBA programs attract the wrong people and teach them the wrong things. These are not the right people to hire to be your managers. If you want to develop your existing managers, don't send them to traditional MBA programs. Send them someplace that will draw on their experience and help them address the real issues they face.