John Stossel from ABC doesn’t have an MBA. His got a psychology degree from Princeton, but he seems to think like an MBA holder. So does Neil Cavuto, the big thinker behind FOX business news, even though Cavuto doesn’t have an MBA either. His degree is in journalism, with a Masters in Public Administration from American University. When these two heavyweights got together for a chat last Fall, here is some of what came out of it:
Cavuto asked Stossel, "People say manufacturing jobs are leaving. What do you say?"
"Bye!" said Stossel, waving at the camera. "There’s nothing wonderful about manufacturing jobs. I think if you look at what we want for our kids, that should answer the question. We don’t want them working in a factory where the work is underpaid, I mean, is very hard, it may be uncomfortable. … We want them taking jobs as engineers, as biologists. We think the services jobs are good for our kids. I think it’s great if people in other countries want to manufacture things and we can just import it and pay for it with our service jobs."
I can understand his thinking. Stossel has found a way to know nothing about anything, yet make a very good living criticizing everything – especially people who actually work for a living. I imagine he would hope his kids can find a similarly lucrative, easy gig.
What that has to do with MBAs can be seen in the results of a recent Fortune Magazine poll of MBA candidates concerning where they most wanted to take their sheepskins once they leave the hallowed halls of academia. Over 70% of them hope to go straight into consulting. In their work imparting the wisdom of their education to the rest of us, they expect to pull down about $88 grand the first year, doubling that within five years.
The few ‘manufacturers’ on the list are mostly a "Who’s Who" of ‘global thinkers’ who have outsourced as much manufacturing as they can. The notable exception is Toyota, which came in 31st, behind such companies as Starbucks and Disney in their attraction to the MBA holders.
It strikes me as rather curious that people expect, and probably will, go straight from the big time MBA programs into consulting, without ever having spent a day actually working in the industries to whom they will provide expensive advice. I would have thought that to get paid big bucks to tell people in the widget business how to do a better job, it would help to know a little something about the widget business. Apparently not.
To get a better understanding of just what these folks will know – since they won’t have any experience at anything – when they get out of school, I thought up the dream business education, and came up with an undergraduate business degree from the University of Michigan, followed by an MBA from the MIT/Sloan program. Along the way, I expected my dream wizard to major in or focus on operations management. I wanted to know just what these folks will know about manufacturing when they leave their offices at McKinsey and the Boston Consulting Group, and head out on the road to tell American manufacturers what to do. So I dug into the curriculum at both places and, guess what? I found out that it is not necessary to know much about manufacturing at all!
At Michigan, our wizard will learn all about "Behavioral Theory in Management", " Corporate Strategy" and "Personal Productivity with Information Technology". For the most part, it is management by the numbers with enough accounting and finance to crush any semblance of a personality the students have upon arrival in Ann Arbor. They will learn non-financial management by the numbers through such courses as " Business Statistics and Management Science". There is nothing in the plan called or having anything to do with Lean Manufacturing, or much of anything else about manufacturing. There are a couple of interesting sounding manufacturing courses offered, but they are electives – strictly optional.
When we go off to MIT, it gets worse. Courses in "Economic Analysis for Business Decisions" and "Data, Models, and Decisions" are followed by courses in "Marketing Strategy". When our young thinker finally gets to the manufacturing content, courses called "Manufacturing System and Supply Chain Design" and " Proseminar in Manufacturing" turn out to be a tad weak.
The ‘Manufacturing System’, it turns out is a pretty much a computer system. The course description includes, "Presents and discusses new opportunities, issues and concepts introduced by the internet and e-commerce. Introduces various models, methods and software tools for logistics network design, capacity planning and flexibility, make-buy, and integration with product development."
The ‘Proseminar’ description includes, "Provides an integrative forum for operations and manufacturing students and is the focus for projects in leadership, service, and improvement. Covers a set of integrative manufacturing topics or issues such as leadership and related topics, and includes presentations by guest speakers such as senior level managers of manufacturing companies." So the young folks jump right to the top job to start telling CEOs how to do their jobs before they even start drawing a paycheck from McKinsey.
What is sorely missing in the entire six or seven year path to telling the CEOs what to do with the world’s factories is anything remotely connected to what the people who actually work in factories do all day long. There is no MRP or SPC. There is nothing about push versus pull. There is not a single course dealing with kanban, kaizen, poka yoke or lean accounting. There seem to be two areas of competence required to graduate: Numbers and Strategy. The manufacturing executive sits in a big office poring over numbers – especially numbers with "$" in front of them – and makes grand strategic decisions – like outsourcing. Knowledge of factories, the people in them or the work done there, has no part in the equation. Like Stossel said about our kids, "We don’t want them working in a factory where the work is underpaid, I mean, is very hard, it may be uncomfortable." Heaven forbid our kids work very hard!
In this regard, I agree with President Bush when he said, "You know, I’m an MBA, but I got to tell you, the most instructive part of my understanding about how the economy works — when I was trying to meet a payroll." He was repeating the words of Frank Gilbreth, the Cheaper By The Dozen efficiency expert, who said that, "No man can understand management until he has stared making a payroll every week in the eye for a couple of years." But such realities are beneath the thought level of our MBA grads. Making widgets and making payrolls are the concerns of people wihout degrees from MIT and Michigan.
There certainly are many MBA programs out there that are much more relevant than the elite ones. The problem seems to be that the publicly held manufacturers rely more and more on the increasingly irrelevant elite schools for both executive talent and business advice. I mean, what manufacturing executive in their right mind would pay McKinsey or the Boston Consulting Group their astronomical fees to have people so ignorant of manufacturing give them advice? Only equally ignorant executives who find themselves in charge of manufacturing organizations without the basic tools to do the job.
The height of irony is that the University of Michigan runs some pretty high powered lean manufacturing research and education programs, as does MIT (which spawned Jim Womack). Neither has taken that knowledge and driven it into its academic programs.
Somewhere along the way, American manufacturing has been hijacked. Neil Cavuto hosts the most widely watched business show on television, armed with his degree in Public Administration. He puts best selling author and ‘newsguy’ John Stossel into American living rooms explaining the manufacturing economy armed with his degree in Psychology. The manufacturing companies are led by people with neither experience nor education in how factories work, and they pay ridiculous salaries to our brightest young people for worthless advice. Few of them have ever actually spent a day in a factory.
And we wonder why we are losing manufacturing competitiveness.
Micheal Gardner says
I’m not surprised that MBA students and commentators alike disregard manufacturing as good career choices for themselves or for their children. I’m spoiled by the plants I work with now, but in the past I had the “opportunity” to visit some real horror show operations. These were hot, cold, dark, dirty, and dangerous places that I wouldn’t want my worst enemy to have to work in, let alone my children. Unfortunately, this is the stereotype manufacturing operation and is what people usually think of when they picture manufacturing. Or, they see the common picture of people walking out a factory gate “for the last time,” which has become a staple photo-op of the drive-by media. Good, successful manufacturing operations in this country are clean, bright, organized, and generally good places to work. The CEOs of these companies understand what manufacturing is about and how important it is to the enterprise as a whole. And–they don’t hire wet-behind-the-ears consultants to tell them what they already know. There really are successful manufacturers in this country, it’s just that they don’t get the same kind of press as the disastrous ones do.
Kevin says
The comment on not truly understanding management until you have to meet a payroll is spot on. I thought I wa pretty good at manufacturing management until I started my own company a few years ago… and got whacked on the side of the head by my first payroll… plus all the assorted taxes and insurance. Later, during the really difficult times, it hit home again when I had to cover payroll out of my personal bank account. You never think the same way about cash flow again… it changes your perspective forever. And from that point on, even when you go into large multi-million dollar companies, you always look at cash flow and cash velocity first. You realize the reality and power of Toyota’s cash-based accounting vs Sloan’s smoke and mirrors.
Bill Waddell says
Mike, while I agree that today’s manufacturing is much improved and radically different from the old stereotype, I’m so addicted to this stuff that I even liked – and still do – the cavernous old brick places with noisy machines, hard nosed machinists, beeping fork trucks and noisy overhead cranes. They just had the feel of real things being created by real people doing real work.
I wouldn’t want my kids in one of them either, I guess, and I am glad things have changed, although I have a touch of nostalgia for the old factory atmosphere.
I see a real and growing dicotemy between the public companies and the private ones. The private ones are run by great people such as those you describe and they are becoming leaner. The public ones placate Wall Street with the product of the MBA programs and they are outsourcing.
Mr. Cranky says
Jeez, do you like anything Bill?
Bill Waddell says
As a matter of fact I do like a few things. If you have been keeping up with the blog, you will notice that I like Norm Bodek and his new book by Hiroyuki Hirano. I like the cows in Wisconsin and the effort to make the dairy industry lean, and I like GM’s safety record. I like the slave that invented the reaper and the simple method I learned about using ever shorter time increments of performance to drive lean. I like Michael Dell and Toyota, but I do not like the affact Toyota is having on American manufacturing although I don’t blame them for that. I like Joseh Horber from Stuttgart. I like the Mexican workers in US factories. And that is just what I have told you I like in the blog pages this month.
I don’t like people who manage by the numbers and think outsourcing is a good idea – especially when they haven’t tried to become lean. I don’t care for NAM or Business Week too much, or the faculties of the elite business schools. I don’t like Carlos Gutierrez or John Stossel (professionally, that is, personally I imagine we would get along just fine.) I don’t particularly care for old school accountants, the way GM is doing things, CBS, and how Toyota only allows Japanese folks on their board. I especially don’t like the many false prophets of lean who are out to make a quick buck without doing the hard work of learning manufacturing.
Mark Graban says
Bill – you say John Stossel talks about things he knows nothing about. I’d argue you know nothing about the MIT/Sloan MBA program, in particular the Leaders for Manufacturing program, whose “proseminar” you found through a google search, I’m sure.
I went to this LFM program, graduated in 1999. I *did* have classes that talked about lean and MRP, how MRP/ERP weren’t the answer to the world’s problems. We had an entire course on lean manufacturing. I did a pro-bono lean project in a group with a local job shop factory, the type of factory you would love.
The pro-seminar and related classes had good, ethical CEO’s, including Don Davis, the former CEO of Stanley Tool Works. We discussed business ethics and the power of doing things the right way.
I could go on and on about the GOOD things that were taught there. I agree there are weaknesses in your typical strategy and finance focused MBA program, including that of the normal Sloan MBA program. Dr. W. Edwards Deming railed against MBA programs and I re-read Out of the Crisis and his negative comments about MBA programs… and mostly agreed.
But, Bill…. you’re entitled to your opinions. If you want to spout uninformed opinions maybe you should do some better research first… such as actually talking to a graduate of MIT or Michigan before you use your blog soapbox to unfairly disparage those programs. You make good points about Stossel. But, as usual, your good points are outweighed by ridiculous claims. Next you’ll claim MIT is as racist as you think Toyota is.
Bill Waddell says
Mark,
I’m simply stating the facts. I went through the entire MIT MBA curriculum and looked at every course description. Manufacturing simply wasn’t there. If you say it was in your day, I am sure you are right, but it isn’t there now.
It was not a ‘Google Search’ that gave me the course description for the manufacturing proseminar, or any other facts concerning the curriculum at Michigan or MIT. It was the curriculum pages and course desriptions at the two universities. What you read in the post is a ‘copy and paste’ from MIT’s web site.
Nothing wrong with learning about business ethics, as you were taught, and the leadership issues MIT states they are teaching now. The thrust of my post was that there is no MRP, SPC, Lean Tools, or manufacturing fundamentals anywhere in the mix. I challenged the good in having knowledge of ethics and leadership if the graduate has no idea what goes on the factory?
As far as Toyota is concerned, the Toyota board of directors is 100% Japanese, and it always has been. That’s a fact. Not from Google, but from the Toyota annual report. I used direct quotes from Toyota stating that they are aware of the weakness – namely, their unwillingness to let go and allow people from other cultures to have a say.
You are well qualified to speak on what MIT’s curriculum may have once been; and you may see greater value in the current curriculum than I do; and you may hold a different interpretation of Toyota’s etnhic bias in determining who gets power, but Mark, my posts state the facts, and usually the source. The curriculum information was not linked to anything simply because it was compiled from dozens of pages on the MIT and Michigan web sites. I base my opinions on those facts.
Please do not assume that facts that do not support your views must be the product of some baseless Google search. Please do not call me “uninformed” simply because you draw a different conclusion from those facts.
Incidentally, Mark, I could have picked any of the big name MBA schools and come up with about the same. I have nothing in particular against MIT. I’m just tired of beating up Wharton. The academic community recognizes the serious problem they have with their MBA programs, and there is a lot written on the subject. The crux of the problem is the tenure system. Manufacturing is changing fast, as you well know. People with relevant experience cannot afford the cut in pay it would take to start at the bottom of the faculty tenure heap. Those with tenure have been out of the loop of reality – if they were ever in it in the first place – for so long they don’t know what’s going on.
In fact, the number of CEOs with MBAs is at its lowest in decades, and companies are hiring fewer MBAs than they have in the past for the simple reasons I stated. Finally, there is too much competition amng the MBA programs. There are too many schools for too few qualified candidates. Perhaps Deming saw all of this coming, but the decreasing value of an MBA – particularly in the manufacturing community – is a fact of life.
Mark Graban says
Fine, let your readers decide who has more direct knowledge about MIT, someone who went there vs. someone who researches them online.
Mark Graban says
Anyone who wants to know the truth about the Leaders for Manufacturing program, go here:
http://lfm.mit.edu/index.php?cat=academic&fileName=curriculum.html
Mark Graban says
Bill, is this CURRENT class to your liking? It’s a core part of the LFM MBA curriculum:
http://ocw.mit.edu/OcwWeb/Engineering-Systems-Division/ESD-60Summer-2004/Syllabus/index.htm
Syllabus
Overall Course Goals
*
Develop a broad understanding of Lean/Six Sigma principles and practices
*
Build capability to implement Lean/Six Sigma initiatives in manufacturing operations
*
Operate with awareness of Lean/Six Sigma at the enterprise level
Course Structure
All course materials are organized around a common “single-point lesson” (SPL) format, with some of the SPLs provided by the instructor and guests and with some developed and delivered by student teams. The student teams will be working with LFM alums who will serve as coaches/mentors in this and other aspects of the course. The overall organization of the course is around the following framework:
*
Part I: Foundations
*
Part II: Stability
*
Part III: Flow
*
Part IV: Pull
*
Part V: Enterprise
Mark Graban says
“There is not a single course dealing with kanban, kaizen, poka yoke or lean accounting.”
This is clearly not a factual statement, see above.
Bill Waddell says
Mark,
The Leaders For Manufacturing Program is undoubdtedy a fine eductaional opportunity. See the note in my blog post in which I noted “The height of irony is that the University of Michigan runs some pretty high powered lean manufacturing research and education programs, as does MIT” The Leaders for Manufacturing Program at MIT is a fine example of this, as is the Japan Study Program at the U of M.
You seem to have left out the fact that Leaders for Manufacturing is a small, unique program, aimed at people who have graduated and have been out in the workplace for a while, then decide to go back to school. According to MIT, the average student in the LFM program is 28 and has been working for 5-6 years. Many of the students in the LFM program are there on their employers’ tab. Less than 25 people per year enter the program.
You know perfectly well that this is not the same as what most people know and understand as an MBA from MIT – namely, an MBA from the Sloan Business School. Whie I readily acknowledged the existence of special programs like LFM at MIT and elsewhere, it seems a bit misleading for you to represent to the Superfactory readers that the courses you took through LFM are proof of the manufacturing curriculum for an MIT MBA graduate.
Instead of devoting so much energy to assailing my knowledge and integrity, why don’t you devote some of it to putting pressure on MIT to start sharing the information they pass on to a handful of students in LFM to the great number of students getting standard Sloan school MBAs?
Mark Graban says
I said above that the regular MBA program has its weaknesses. But when you say “I’m just stating facts” and you state there is “not a single class” on these lean topics… you’re wrong. I’m assailing your facts, not you personally.
Most MBA programs are very weak on manufacturing and operations. I didn’t argue with you there.
Mark Graban says
Again, you are sloppy with your facts…. the LFM program has about 50 students per year. My point in nit-picking is that it’s irritating that you stand so firmly behind your “facts” that I think you are doing a disservice to MIT and your readers.
“There is not a single course dealing with kanban, kaizen, poka yoke or lean accounting” …. wrong
“Less than 25 people per year enter the program.”….. wrong
Karen Wilhelm says
Regarding careers – in the distant past, one of the first things I did at SME was to read a book on welding SME was about to publish so I could do the marketing plan. The question that went to some welders was, “Would you rather your kid grew up to be a welder, or a welding robot programmer?” Sadly, these “observers” don’t know those rewarding high-skilled jobs are out there with an undersupply of skilled workers to do them.
Confused says
Enough said…Is our purpose to bicker over the details or move Lean forward examples and training. I have not seen broad examples of true lean in American industry and wonder why? I don’t believe it is caused by the “new” graduates lack of knowledge or desire nor do I think it’s caused by the experienced leaders within the companies who have the desire but may not fully understand the direction. I see our job as the conduit to bridge the gap. So lets move on and fulfill our mission.
Bill Waddell says
Keep your eye on the post today about Rittal. It is positive and informative, and will probably elicit no reaction whatsoever. Go figure.
Seems like the only thing readers enjoy more than the negative, bomb throwing posts is complaining about the negative, bomb throwing posts.
Alex says
Bill,
What would you consider essential learning in the ideal operations-focused MBA?
Bill Waddell says
Good question, Alex. Without giving it a lot of thought, my immediate answer would be a curriculum that includes:
A class on Quality Control – including SPC, defect mapping and the principles of Six Sigma including Cp and Cpk, poka yoke, and the various analytical and problem solving techniques espoused by Jurand, Ishakawa, Deming, etc…, and the principles of jidoka.
A class on Basic Industrial/Process engineering – including labor standards, takt time, plant layout – straight lines versus cells, material handling principles, machine capacity – TOC, value stream mapping, TPM, OEE and SMED
A class on Production Planning and Control – including MRP/ERP, pull systems/kanban, capacity planning, inventory planning – including lot size theory and statistical methods for balancing inventory over lead times, and heijunka/mixed model scheduling.
A class on Manufacturing Accounting (that goes far beyond regular Managerial/Cost Accounting they would have already had) including Lean Accounting, Direct Costing, the unique problems full absorption accounting presents to manufacturing, the significance of cycle time and other non-financial metrics, and life cycle costing.
A class that pulls all of these together on Hoshin Kanri/Policy Deployment that takes students from determination of strategic plans through the development of the deployment plan, to the follow through utilizing all of the above.
There is probably more, and some of these will probably take more than a couple of hours a week for a semester to really cover, but I would think that someone who wants to make $88K a year coming out of an MBA program ought to know these things before they are in a position to enter manufacturing at that sort of pay grade.
Josef Horber says
Coming back to Bill´s starting point: The problem is not only leaders in manufacturing companies not knowing manufacturing… it is any leaders in any business not knowing the gemba. And it is not only, that the unexperienced take on the leading positions… it is, that they also surround themselves with people who are like them.
Here is an real example (note, we are only talking about facts here):
My former bosses boss was proud of having gone through all silos of administrative departments during his long carreer, ending up in warehouse and logistics planning, where I used to work. He did not seem to have ever paid much attention to the gemba.
If success is the result of a series of good decisions, then lack of success can be achieved by just a few wrong decisions. In my view, this guy made two wrong ones:
If You have to develop a logistics service proposal to a new client, You can either (A) go to the gemba, see the operations, talk to the clients, their clients, touch and feel the parts and sniffle around to get the right overall picture before You propose how to do it better or (B) You can read an 80 page tendering document prepared by a consultant, copy&paste the numbers into a standard cost calculation spreadsheet, plug in the standard productivities, standard space requirement ratios, etc. and come up with a “unique and taylor-suited logistics solution”, that will hit the bin 2 hours after being received by the client. I did Plan A, and most of my collegues did Plan B, although they were more senior = better paid then me. When I asked to be paid the same, they turned me down. So I left, just like some others too… but that was the smaller mistake: # 1.
Then, most of the B-guys were promoted to Six Sigma Black Belts (yes, looking lean vs. being lean). The remaining B-guys still had not much to do, so they launched a huge project, in which all of this B-experience was written into a few hundred pages of a Planning Bible, telling the A-guys, how to do their jobs…. that´s the real mistake: # 2.
This all made perfect sense inside the office walls… as long as You assume, that all Your resources have the same skills and the more senior ones should tell the junior ones how to do it better. You only see the truth, when You go to the gemba: see, how each one works, ask the client for feedback and look at the results closely. But most leaders don´t have the time to do that… too busy with the strategic things. And the protective wall of ignorant B-guys around them gets only thicker.
So, the real issue is not the wrong course or curriculum, it´s the attitude of staying in the airconditioned office instead of going to ghe gemba… Genchi Gembutsu.
Bill Waddell says
As usual, you are right, Josef. It did not take long for the little bit I learned in college that was relevant to become irrelevant. It all changes too fast for the colleges to keep up.
The problem with the MBA programs lack of manufacturing shop floor curriculum is not in the content. The bright young folks can pick that up soon enough, I imagine. Instead, the problem is that by failing to include it, the schools convey the message that it is not important.