My post the other day on the PhD Posse at Ford drew quite a bit of mixed reaction both in blog comments, and in my email in box. Look – I have no problem with PhD's – wish I were smart enough to be one, in fact. The problem, as one commenter so eloquently pointed out, is theoretical genius with absolutely no base in reality. When the academic elite take on business problems with no real knowledge or experience, very little good is going to come of it.
The same is true with the Ivy League MBA's. There is nothing wrong with an MBA from Harvard, but it is only worthwhile if it is layered on top of solid experience in the business and the product to be managed. All by itself, it is nothing more than a lot of peripheral theory with virtually no practical value. Guys like Mark Graban, who worked and got a deep dose of reality, then layered an MBA from MIT on top of it; and guys like long time reader Costikyan Jarvis who worked at Jarvis Cutting Tool long enough to really know the cutting tool business then went on to get an MBA from Harvard, are much better for having the MBAs. The kid who goes straight from undergrad school to Harvard and gets an MBA , on the other hand, knows nothing about any business and cannot possibly do anyone any good with that MBA. The most important thing about the widget business is widgets. Ideally you know about both widgets and business, but if you are only going to know about one of the two, then the widgets are the one to know.
They just gave the Nobel Prize for economics to two PhD's for figuring out what the lowest level, least educated lean practitioner who reads Evolving Excellence already knows – that vertically integrated manufacturers work better than those who outsource everything; and that supplier partnerships work. What took the intelligentsia so long to get an overwhelming grasp of the obvious? "Economists had largely ignored the importance of such networks, said Yale University environmental economist Matthew Kotchen, in part, because they couldn't come up with elegant models to describe them." If they cannot describe something in mathematical terms, it does not exist. Kevin has been hammering Boeing for the insanity of the Dreamliner outsourcing debacle since day one. They just gave the Nobel Prize to two people for figuring out what you read in Evolving Excellence over three years ago, and then again today – and a number of times in between in posts written here by Kevin, and by Jon Miller and Mark Graban on their blogs. Where are our Nobel Prizes?
I guess what it boils down to is this: Management – good management, lean management – requires equal parts head heart and gut in every decision. Brains; as well as empathy and compassion; and common sense and experience. The PhD's and MBA's certainly have the head part down cold. But if you have to be able to model something for it to be true, and all you know came from books, then the heart and gut elements are not going to a part your recommendations. The fact that they have a lot of heart and gut – and enough head, too – is why guys like Kevin, Mark and Jon make points casually in blog posts that PhD's treat as Nobel Prize winning revelations.
Tom Southworth says
“What is takes to do a job will not be learned from management courses. It is principally a matter of experience, the proper attitude, and common sense – none of which can be taught in a classroom.” Admiral Hyman G. Rickover
Emmer says
Hence the Japanese education / training system, which places little to no importance on the university education but loads of effort, time, and expense on teaching the business to employees, particularly management recruits.
adaptateur secteur says
I really agree with your point.It does not matter if you topped in Harvard university but you don’t have any practical knowledge.Often top ranked MBA students even remain unemployed because they have just got theoretical knowledge but no practical knowledge.
Jeffrey J Davis says
Nice Post. A solid education grooves analytical thinking and critical decision processes. But only experience learned from multiple successes and failures helps a seasoned leader identify the patterns in their environment and associate apparently un-related factors to make solid decisions, often in the absence of solid, accurate data.
@JeffreyJDavis
Kevin says
I’ll always remember what one of my last instructors said as my class prepared to graduate from a very expensive engineering school: “The name of this school will get you your first job, but after that it’s basically irrelevant and up to you.” How true that was. The problem then becomes that the “first job” for a top MBA, even with no real experience, can now be a position of real power and influence… destructive if there’s no real experience.
He also said “as a chemical engineer you now have the power to be among the richest in the world if you move to Colombia” but that’s another story.
I’d say something about how the Waddell Prize presumably requires more than 12 days of experience and having actually done something real, but I better not go there…
Bill Waddell says
Kevin, I am sure you can imagine how difficult it was to write this post without making reference or comparison to the “12 day Wonder” Prize Winner, but as tempting as it was I knew it would serve no useful purpose in making this point.
The most surprising aspect of these two folks winning was that the Nobel Prize for Economics went to Americans at all. Brazilian President Lula blamed the global economic collapse on “Blue-eyed white people” and I am pretty sure he meant us. I am also pretty sure he was right. And I am pretty sure he spoke for just about everyone in the world except Americans when he said it.
Ron Pereira says
Nice post, Bill. Here’s my two cents.
I do think education plays an important role in our world. My Dad (a PhD and University prof for 30+ years) used to always tell me, “You have to get the stupid piece of paper” which I did two times in undergrad and grad.
But he also taught me that to really succeed in life you have to bust your ass and make things happen.
With 4 kids of my own this is likely the advice I will pass onto them… unless they continue to watch their Dad make Gemba Academy videos and decide to rule the lean world one day!
John says
While I agree that most folks with advanced degrees don’t help business much unless they also have practical experience, I do have to disagree with the statements about the Nobel Prize winners.
The Nobel Prize in all areas except Peace are not based on recent works, but an entire body of work over many years, if not decades. In the case of this years Economics Prize Williamson’s work dates back to the 70’s and Ostrom’s to the early 90’s. So neither one of them suddenly came up with their ideas in the past year or so.
Paul Todd says
I work for a large engineering school and can vouch for the disconnect at the PhD level, particularly in the Industrial Engineering field. The first step to any process improvement is apparently to spend several months constructing a computer simulation model. Next, apply automation, outsource what’s left, and model the resulting supply chain. I wish I were joking.
david foster says
Top-ranked business schools these days usually do require that a person have a couple of years or more experience before being admitted. But this experience will usually be at pretty low levels and may not give adequate appreciation for how a business really works..also, if the individual gets a job with the attitude “this is something I have to do before I get my MBA,” then he is likely viewing it as part of his educational process rather than as a *real* job in which he needs to make a contribution to something other than his own career path.
Jim Fernandez says
I think the key element that is missing in this discussing is “humility”. What could be more valuable than a person with a PhD who is wanting to gain practical experience. And a person who is humble enough to recognize that they do not know the answers without learning how things actually work.
I was an Electrical Instrumentation Technician for 35 years. Most engineers would design things that had problems operating in the field because they would design systems using information from books and from salesmen. But a few engineers, very few, would come out and talk to us. They would gather lots of information from us before they would design their systems. What set these few engineers apart from the others was humility. They recognized that even with many years of school, they did not know everything that was needed to do their job. They wanted to gain practical experience from the field.
Humility is extremely important in Lean. After all, aren’t we PhD’s in Lean? And don’t we go to Gemba to learn? Aren’t we supposed to involve the workers in the process? Don’t we ask those who know how a particular company works as we try to help them apply Lean principles? That’s how Lean is supposed to work. Knowledge plus humility.
This should be how everyone works in every endeavor. Especially if they lack experience.
There ought to be a class taught in every school centered on humility and how to communicate with others. And make it the last class that is taught before they graduate as PhDs’, MBAs’, BAs’, Doctors, Lawyers and Indian Chiefs.
Bill Waddell says
Great point, Jim. Especially the part about the need for humility applying to everyone (including consultants and bloggers).
Jason Morin says
“When the academic elite take on business problems with no real knowledge or experience, very little good is going to come of it.”
That type of thinking shuts the door on a lot of inchoate ideas that, when mixed with practical business knowledge from others, will never evolve into practical applications.
Bill Waddell says
Karthik – I agree that blindly following Ohno is a mistake, but I would say that the lack of understanding of the original intent and principles of Six Sigma at Motorola is even worse than the lack of understanding of the original Toyota principles at current Toyota, and the complete dismissal of lean at the leading B-Schools is unforgivable.
Kathleen says
Did you catch the sour grapes over at Harvard?
Adam M. Guren ’08, a current economics Ph.D. student and former Crimson editorial chair, wrote in an e-mail to the Crimson that, “Bottom Line: Everyone here at Harvard thought that Oliver Hart, who is at Harvard, would and should win with Oliver Williamson, and people are really disappointed that he was not recognized.”
This will be the twelfth consecutive year that Harvard has not been represented among the Economic Sciences category winners of the Nobel Prize since Professor Robert C. Merton won the prize in 1997.”
Considering the source, it’s not surprising they felt compelled to add this caveat:
“Some of the more recent winners undertook their research at Harvard before receiving their prize while at other institutions.”
Michael F. Martin says
Lots of people get themselves into trouble by throwing labels around. There is no such person as a “Ph.D.” there are only people who get Ph.D.s Some of them have the characteristics you object to, some don’t. But the objectionable characteristics are only loosely correlated with having a Ph.D., and you lose that part of your audience by treating the correlation as a causation.
At bottom, your problem is that you don’t know enough Ph.D.s Get out there and meet some more of them, and you won’t make the same mistake again.
Bill Waddell says
Michaael, I think you are missing my point. There is nothing wrong with PhD’s or the people who hold them. The probelm stems from entrusting real-life problems to people whose only knowledge of the problem is a theoretical, academic understanding of it.
I do know quite a few people who hold advanced degrees and I am all for education. In fact, my daughter is currently pursuing a PhD and I give her all the support I possibly can in that noble endeavor. To the point of the blog post, however, she went to work after she received her bachelor’s degree, then went back for her masters. Now after working for a few years with her masters degree, she is going back to pursue her PhD. It is the balance of practical knowledge and academic knowledge that has value.
david foster says
Part of the problem is the heavy breathing by so many of the media in the presence of anything “scientific.” To far too many journalists, even business journalists, simple calculus and statistics might as well be black magic taught by Mephistopheles to Faust under a full moon. Hence, it’s easier to be impressed by degrees than to actually look at the substance of a project.
Martin B says
You need production expertise to be in charge of production. Similarly, you need statistical expertise to be in charge of statistics. When you’re selling a million or so cars you’re generating a lot of data. Sure, you can use ‘seat of the pants’ methods to decide what cars to produce with what options, but good data mining should enable you to optimize your choices.
As far as I know the Whiz Kids don’t have line authority. They assist executives to make better decisions, based on data the executive doesn’t have the time or the skills to process with exactitude.
Michael F. Martin says
Not many of the Ph.D.s I know would disagree with you about the need for practical knowledge, Bill. In fact, I don’t know a single theorist in the physical sciences who isn’t completely dependent on his or her experimentalist colleagues. I guess the problem gets worse as one progresses into the social sciences, but even there I don’t know anybody who has been able to get away with pure poetry.
Let’s just not forget that there are some insights that come only after long years of study. Some skills, especially those that require fluency in a set of symbols and procedures like math, take time to learn, and that time must compete with time spent observing.
For the lean field, I think of Deming and Shewhart as exemplary.