Fire the MBAs, hire the engineers

From here:

Maximum Bob [Lutz], who could double as a character on Mad Men, is less an éminence grise than a pithy self-promoter who has a tendency to go off corporate message. That said, his new book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business, has a message worth hearing.

To get the U.S. economy growing again, Lutz says, we need to fire the M.B.A.s and let engineers run the show.  Lutz’s main argument is that companies, shareholders and consumers are best served by product-driven executives.

The auto industry is actually a terrific proxy for a trend toward short-term, myopically balance-sheet-driven management that has infected American business. In the first half of the 20th century, industrial giants like Ford, General Electric, AT&T and many others were extremely consumer-focused. They spent most of their time and money using new technologies to create the best possible products and services, regardless of development cost. The idea was, if you build it better, the customers will come. And they did.

The pendulum began to swing in the postwar era, when Harvard Business School grad Robert McNamara and his “whiz kids” became famous for using mathematical modeling, game theory and complex statistical analysis for the Army Air Corps, doing things like improving fuel-transport times and scheduling more-efficient bombing raids. McNamara, who later became president of Ford, brought extreme number crunching to the business world, and soon the idea that “if you can measure it, you can manage it” took hold — and no wonder. By the late 1970s, M.B.A.s were flourishing, and engineers were relegated to the geek back rooms.

Read the whole thing.

4 comments for “Fire the MBAs, hire the engineers

  1. July 18, 2011 at 07:14

    My experience of MBAs is limited but wholly negative. The guys I’ve known with an MBA were pleasant enough, but acquiring an MBA was purely a career move.

    One was a civil-engineer who had been encouraged to move into management – to effectively forget his engineering background. He specialized in flood-defence and most people would think that was an engineer’s job rather than an MBA, wouldn’t they?

  2. July 18, 2011 at 09:05

    I was helping a chap already working within the financial sector to get a Spanish MBA. Much of the material was quite good – case studies etc. – and it did help with looking at management models.

    However, it had zero to do with his everyday work.

  3. Lord T
    July 18, 2011 at 13:00

    My experiences are pretty similar. When it comes down to it bean counters don’t like innovation. However, they are well sought after in our society where profit is king.

    I wonder if the coming recession will sort out the innovators from those that prize profit over innovation. I hope so, although the aftermath is likely to be MBAs going cheap in these firms.

  4. JD
    July 18, 2011 at 13:20

    McNamara and his ‘whiz kids’ produced the Edsel, the biggest flop in motoring history – until another ‘whiz kid’ called John De Lorean produced another disaster called, guess what, The DeLorean!

    (‘bean counters’ is not a good enough insult, I prefer to call these people ‘scorekeepers’ because that is their only contribution to the game)

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