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.