Regardless of what you think of HBS, I find this to be impressive....
> Even in Silicon Valley, where HBS is relatively weak, about 10% of “Unicorns”—private startups worth over $1bn—have at least one HBS MBA as a founder.
As to the article, Not really sure what the content is. Evidently HBS has
> become a breeding ground for toxic behaviour, with conflicts of interests rife within the school, and its alumni responsible for pushing a rapacious form of capitalism that explains many of the ills of the world’s biggest economy.
but they don't really provide any evidence to back up that claim or to disprove it.
What's the number of actually profitable startups vs pump and dump "Unicorns"? Because the second group benefits from credentials far more than the first.
>>but they don't really provide any evidence to back up that claim or to disprove it.
Duff McDonald did a live interview on CNBC a few weeks back and cited examples. This economist article was weak.
Mr. McDonald's primary argument is that HBS teaches students to focus on Financials and not the Business, thus creating weak companies.
The article reads to me a little bit like a promotion for the book that it references.
No doubt in my mind HBS has been widely influential. Their book on strategy (simply called "Strategy") is an excellent collection of articles any startup founder would do well by reading.
I find it interesting however that the task of building a new business is really very different from the art of making a business profitable and sustaining. Most schools still concentrate on the latter part, assuming their job is to get their students placed in a Fortune 500 company.
To be fair, the article says the book makes that claim. I don't know what's in the book. The article is definitely short on content other than announcing the book though, I'm not sure why I read it.
That said, I'd love to hear the discussion about the topic, because in my experience it's true.
>> become a breeding ground for toxic behaviour, with conflicts of interests rife within the school, and its alumni responsible for pushing a rapacious form of capitalism that explains many of the ills of the world’s biggest economy.
> but they don't really provide any evidence to back up that claim or to disprove it.
They are paraphrasing a book by Duff McDonald - I'm guessing the book goes into the meat of it. There is a NYT review of the book[1] that offers a bit more detail into the allegations, including the paragraph below:
> In virtually every instance, McDonald contends, Harvard has obsessively pursued money, sending a disproportionate number of its graduates to consulting firms beginning in the 1950s (it was all but synonymous with McKinsey), to Wall Street in the 1980s and to entrepreneurial start-ups once initial public offerings became the rage in the 1990s — and provided intellectual justifications for its actions. Much of that wealth found its way back to the school itself. Its professors earn enormous sums as consultants to businesses populated by their former students, who also give generously to their alma mater...
> In virtually every instance, McDonald contends, Harvard has obsessively pursued money, sending a disproportionate number of its graduates to consulting firms beginning in the 1950s (it was all but synonymous with McKinsey), to Wall Street in the 1980s and to entrepreneurial start-ups once initial public offerings became the rage in the 1990s — and provided intellectual justifications for its actions.
Is this Harvard pursuing money, or its students pursuing money and prestige (presumably the reasons they went to HBS in the first place--hardly anyone goes to business school primarily because of an intellectual curiosity about management theory)?
I wonder how much of the issue is an admissions problem and not a curricular problem. By virtue of HBS "being the best" they are going to select people that will do what it takes to get into "the best". This trait will continue right into a business world where "the best" is measured by short-term quarterly earnings.
As an HBS alum and investor, I think you have the incorrect impression of why people are admitted to HBS and also what people who matter define as a "good" corporate leader.
Lol, "Harvard Business School churns out MBAs who do really well and are involved in a lot of businesses hurr Capitalism is bad"...I don't see the problem here. All this article makes me want to do is get a Harvard MBA.
This is great, and confirms a lot of what i've seen.
Some of the best content I've read has come from HBR. Articles on leadership, communication, resiliency... some really great stuff. I was getting close to a membership because of how frequent I visited.
But that was a bit ago. Now... it's definitely gone downhill. I made the mistake of following them on twitter, and WOW do they peddle some bullshit.
> its alumni responsible for pushing a rapacious form of capitalism that explains many of the ills of the world’s biggest economy
Yup. One I saw recently was on why companies should defer profits till next year and focus on growth instead. Straight out of SV playbook.
HBR is essentially a pop-business publication with little connection to the school. In 2009 they brought in the editor of Time to shift to a more mainstream publishing style and hence why the content is no different from the type you can read on any generic "business" publication.
Also, deferring profits for growth has been a valid strategy since the beginning of commerce itself. SV didn't invent it, nor is it a "bad" thing. It's typically how all companies grow. Do you think Ford Motor Company was profitable from Day 1?
> Yup. One I saw recently was on why companies should defer profits till next year and focus on growth instead. Straight out of SV playbook.
Which is not a bad thing in itself - just look how absolutely magnificent Amazon has become in the last few years. AWS has revolutionized hosting and to be honest shopping on Amazon is way better than what was before it: shopping on ebay and getting scammed left and right.
The critique of the moral underpinnings of the faculty, teachers and students seems legit and a a noticeable break off from earlier times, like when Harvard Business School (HBS) was founded. The critique in its essens is basically accusations of decadece. This "post-modern decadence" is in reality a much wider phenomenon that not only has affected the globalised business schools, but also the humanities and social sciences. If business schools have contributed to the weakening of business morals, then humanities and social sciences have weaken the social cohesion by pursuing cultural nihilism that rejects the national community and responsibility that for long was an essential part of citizenship. I hope these new realisations critiques will be used constructively.
It goes further than that. There's a school of thought, stemming from an 1970 article by Milton Friedman, which claims that the only responsibility of corporate management is maximizing shareholder value.
Forbes has a good analysis of that article, its influence, and aftermath.[1] The Harvard Business School creates leaders who believe that statement. This is a problem. A big problem.
The Forbes article makes the argument that this approach is not only bad for society, but is responsible for the decline on return on capital since 1970. Despite the focus on the pursuit of shareholder value within each company, the overall result has been a decline in shareholder returns.
Think about that for a moment. The only point of this form of capitalism is high shareholder returns, and it's not delivering even that.
That thinking seems to be much more prevalent among (for example) HN users than it actually is within the upper echelons of business.
All those Fortune 500 CEOs probably know it's wrong. Otherwise they'd be thinking twice before implementing "Corporate Social Responsibility" programs.
It's catnip to the intellectually lazy because it's completely unfalsifiable. Any action a company takes driven by anything but profit is dismissed as a PR move. Actions that aren't publicized but made it out anyway (since you wouldn't be discussing them otherwise) are dismissed as intentionally leaked.
That isn't to say that a narrow view of a company's stakeholders isn't a problem, perhaps even a pervasive one. But most threads I've come across on HN et al on the topic have elevated it to the status of a religion, where people are utterly convinced that it's not possible for a company to be anything but blindly profit-driven.
But can't it be argued that even social responsibility programs by companies are profit driven? Does it hurt or enhance Apple's image that they care about the disable, the environment or security against state actors? In the short term, likely not, but I weigh all of those things carefully when thinking about which phone I'm going to buy.
Yes, indeed–but that's actually part of the argument against: it allows to define basically anything "profit-driven" and makes the idea meaningless.
The unfortunate part is where this supposed doctrine is used repeatedly to excuse companies' worst behaviours: "Amazon cannot install air conditioning in warehouses that have people fainting in the summer, because that would clearly cost money and Bezos would be criminally liable for leaving money on the table".
That's what I mean. It absolutely can be argued, but an unfalsifiable[1] claim is worse than useless. My complaint here is not against those who claim that seemingly-altruistic moves are sometimes profit-driven, but rather those who are convinced that _every_ action taken by a corporation is solely and only profit-driven. People who believe this (or talk like they do) are far, far more common than you'd think. As I said, as far as I can tell, it's likely due to the fact that trying to intuit the culture of a company through its actions over time is very difficult and it's far easier for lazy or small minds to decide that there are no actions beyond profit-seeking ever taken.
[1] For those who don't know precisely what I mean by this, it essentially means that there's literally no possible action the accused could take to prove otherwise.
You don't need to point to social responsibility programs to show that it's falsifiable.
Simply point to CEOs outrageous self-serving compensation and other perks, and numerous conflicts between active investors and management. https://en.wikipedia.org/wiki/Proxy_fight is a well known thing.
What are you talking about? I'm describing people who think that it's _literally impossible_ for a company as an entity to do anything but ultimately maximize shareholder value. Just because your rebuttal has the word "CEO" in it doesn't make it relevant to the conversation, and it certainly doesn't do anything to show that this phenomenon is universal (which, again, is the main and only thing we are talking about).
Friedman won the Nobel Prize for his work on the theory of the consumption function, and was well regarded for monetarism. It's a little bit of a stretch that a whole "school of thought" of corporate management stems from some guest op-ed he had in the NYTimes.
The very first paragraph of the linked article notes exactly this:
"No popular idea ever has a single origin. But the idea that the sole purpose of a firm is to make money for its shareholders got going in a major way with an article by Milton Friedman in the New York Times on September 13, 1970."
What's gone is corporate fear of labor. Of unions. Of strikes. Of your company being nationalized, as in the UK in the 1950s. Of communism winning economically, something business people worried about from 1930 to 1970. At last, oppression of workers is back!
For about forty years, capitalism had ideological competition. There was a competitor, and capitalism had to deliver a better standard of living to compete. With the competition defeated, capitalism has a monopoly, and acts like a monopolist.
"If you want a vision of the future, imagine a boot stamping on a human face--forever." - Orwell
By the way, that is a fake Nobel Prize as it is not associated with the Nobel Foundation. It is actually the Bank of Sweden Prize in Economic Sciences in MEMORY of Alfred Nobel.
It has a decidedly political slant pushing for exclusively pro free-market policies and only awarding it those studies.
Thanks, that's a much better article that focuses on the book.
The linked Economist article is a bit strange, it starts with an interesting opening discussion on the books topic, then dismisses the entire thesis of the book in a sentence and gives a quickly put together comparison of HBS to a business, and some recommendations with little analysis to support the changes.
...They should have just focused on the book and critiquing that.
On paper, I'm a poster child for the above-described "cultural nihilism" with respect to national identity: my grandparents are Indian but spent a good chunk of their life in France, my parents moved to the US in their 20s 40+ years ago, and I was born and raised in an impossibly diverse environment, to the point that I was shocked when I came to college and discovered (e.g.) East Asians who only hung out with other East Asians or white people who only had white friends. The upshot of my background is that my family hasn't slotted easily into a given national culture for a few generations, and my personality developed around the concept of building one's identity around other (IMHO more rewarding) things. The accelerating trend towards universalist, fluid cultural identities built around mobility and big cities is practically tailor-made for a person like me.
That being said, it's either very dishonest or extremely narrow-minded to claim that racism is the only reason someone could care about a cohesive national identity. Just because it doesn't suit my view of the world doesn't mean no one gets value out of it, and in fact I'm acutely aware of the extra work required to connect with someone without a shared cultural background (I just happen to think it's more than worth the benefits of such a philosophy).
On top of that, this belief in a cohesive national identity is entirely possible without going anywhere near racism. "Blood n' soil" nationalism doesn't have much claim to relevance in a nation of immigrants like America, so our identity as a country is ideally built around people choosing to voluntarily join a society based on shared core values instead of the historically-common form of national identity built around ethnicity. It's possible to hold this view while having absolutely no opinion about someone's race: one could consider an ethnic nationalist (e.g.) Norwegian refusing to accept our values to be just as unfit as anyone else.
You'll find that the world gets a lot more interesting if you don't desperately rush to pattern-match everything you hear into one of a few trite buckets that comprise an overly-simpleminded model of the world and its people.
Yeah, that's one of the tropes of such discussion: Nobody can disagree with that definition of "national identity", i. e. "America is altruism, tolerance, and cute puppies".
Then, when people demand some women shouldn't be wearing this or that piece of clothing, the definition of "national identity" seems to have shifted somewhat.
> Nobody can disagree with that definition of "national identity", i. e. "America is altruism, tolerance, and cute puppies".
Did you even read my comment? The whole point I was arguing against was the impulse to tar every person who feels positively about nationalism with the same brush. Saying things like "nobody can disagree" and "the definition seems to have shifted" means you clearly haven't understood a word I said.
Since you're having such trouble with these pretty basic concepts, I'll lay it out even more clearly.
1) We're talking about a group of people that has more than one person in it.
2) You made a blanket statement about this group of people presumably based entirely on reading the comment section of Daily Kos.
3) I provided a counterexample that I have happened to come across that doesn't fit your criteria: there is a subgroup within the group we're discussing that has principled support for nationalism without touching any of the negative things you're describing (particularly racism).
Even though I disagree with these people and in some ways their philosophy on society is diametrically opposed to my own, I'm not simple-minded enough to think "hurr durr any group of people I disagree with hold the same set of beliefs as any other group of people I disagree with" (which in this case, means that it's possible to hold these views _without_ being racist).
4) You failed to actually read my comment, pattern-matched a couple buzzwords and decided to respond by....doing the exact same thing and lumping in every person who might think that a national culture has advantages into a much-larger and more specific set of views. Against my fading hope for your reading comprehension, I'll repeat again: the fact that some people believe in both a national identity and racism doesn't mean that all people who believe in a national identity are racist. I'm not saying this like it's some mathematical proof, I'm thinking of multiple specific people, either whose writings I've read or whom I know personally.
> Then, when people demand some women shouldn't be wearing this or that piece of clothing, the definition of "national identity" seems to have shifted somewhat.
What on _earth_ are you talking about? I suspect this topic is hopelessly beyond your comprehension. _Nothing about the point I made and the people I'm describing include the views that you're talking about_.
Cultures without a national community tend to be conquered by those with. The Arabic word for this is Asabiyyah and was coined by the historian Ibn Khaldun.
Making inference from past experiences with a low n, and no relevance to the interconnected modern world, isn't adequate to dress up racism as rational. The English word for this was coined by the physicist Richard Feynman, and it's "Bullshit".
Have you ever wondered why these irrational behaviors are so common? It's not just racism but also overconfidence, aggression, jingoism, ultranationalism, fundamentalism and any number of similar modes of thought. Clearly the fact that they are widespread instincts indicates that while it is irrational at an individual level and is the cause a lot of suffering and injustice, there is a trade-off at the societal level.
These trade-offs are also the reason why more liberal Western societies are plagued by a new generation of social ills and inefficiencies. I happen to be an very liberal person but it's easy to see that people sometimes respond poorly to the absence of value or things to believe in, no matter what these values themselves might be.
Although the person you replied to did cite a medieval concept, it's still very much relevant in the modern world since we now have to deal with anomie on a large scale. I do hope the liberal modes of thought will prevail however! But if there were no trade-offs they would have won out a long time ago.
> Have you ever wondered why these irrational behaviors are so common?
Yes, it's because we have tribal roots: we have spent 99% of our evolutionary lifetime in groups of countable quantities and competing with similar-sized groups.
> Clearly the fact that they are widespread instincts indicates [..] there is a trade-off at the societal level.
No, it merely indicates that there may have been a positive trade-off for this trait. Assuming that every trait is a net positive now or must have once been a net positive is a naturalistic fallacy.
> people sometimes respond poorly to the absence of value or things to believe in
Since there are narratives out there that do not paint artificial boundaries (and some do, but do not pursue confrontation because of it), this in no way excuses racism, jingoism, or nationalism.
So HBS, I believe, is responsible for spreading a strange phenomenon: that management is a separate craft and someone who can manage a company selling beverages can sell computers just as well. We know how that worked out.
There's also the case when a private equity firm takes over a company and in the name of profit makes it hell on earth.
I think that your post really sums things up nicely. Yes, a generic business expert will have a leg up on things that apply universally to the running of an organization, such as financials. However, I can't possibly see how they would be better than someone that has been in the applicable industry for 20-30 years and knows the industry inside and out. Furthermore, hasn't it been demonstrated that MBAs tend to take actions that revolve around their generic business expertise, such as mergers and acquisitions, cost-cutting in the form of layoffs, etc. ?
Don't founders in their 20s claim the same? That they understand a certain industry better than the incumbents?
You basically argue that managers have their strength in certain areas (e.g., financials) but not in others. So what? That's the same with any other profession :-)
I think it's perhaps more accurate to say that young founders see a particular leverage point to change the industry, not that they fully understand the current state of the industry.
Sometimes they're right; often they aren't.
I think the point is that managers/executives whose only strength is business/financials tend to make poor leaders.
Founders, like those discussing startups on YCombinator, typically don't claim to understand the existing industry better than a veteran. They claim to understand the power of the Internet and computers to change that industry better than veterans stuck in old ways of doing things. They may naively and incorrectly believe that the industry is not that complicated, but in practice the leverage of technology often is enough to overcome that underestimation.
Consider, for example, AirBNB - not exactly experts in the hospitality industry: https://www.airbnb.com/about/founders. A hotel chain, with all their issues of real estate, zoning, construction, maintenance, room service, reservations, and so on is very complicated. Just running a bed-and-breakfast is a full-time job. AirBNB founders didn't think that they were better at hotels or B&Bs than existing veterans, they said "Why not use the Internet to connect people with living space at destinations with people who want to go there?" and wrote a website for that. In practice, they had some trouble with zoning regulations, subletting agreements, and destructive tenants - "Who could possibly have known it was so complicated?" - but in the end the appeal of just renting out personal space has proven to be a powerful idea.
The problem with HBS is that they seem to claim that applying generic business skills like financials and cost-cutting to an existing industry have a similar effect. The problem is that they don't.
> The problem with HBS is that they seem to claim that applying generic business skills like financials and cost-cutting to an existing industry have a similar effect. The problem is that they don't.
I think you just helped me to make a connection. I think what we are seeing is that technology skills with some business acumen out-competes pure business skill in generating efficiency.
This lines up with a book I just read[0], which recommends that developers become independent "efficiency consultants".
[0]https://leanpub.com/developerhegemony
> I think what we are seeing is that technology skills with some business acumen out-competes pure business skill in generating efficiency.
I wouldn't say "out-competes" globally, but rather "in the context of disruption." (Which the tech industry has largely been in for the past 80 years)
The problem with MBAs is that they're not (generally) suited for the CEO role in an innovative company. A CEO is making strategic, long-term decisions, and those are vastly improved by deep, subject matter expertise.
Some MBA CEOs manage to cultivate that (I'd say in spite of HBS-alike), but generally they focus on the things they already know and were taught in school. Which are exactly the wrong things to chase when you're trying to disruptively innovate.
Plus HBS and the like have 100% incentive to sell their expertise as applying to as broad and high a market as possible. Rather than saying "Your MBA qualifies you for upper middle management, not leadership."
> "Who could possibly have known it was so complicated?"
It really wasn't that complicated, until they got to a few million users. Before that they just spread through friends and word-of-mouth, so the user population was relatively nice and very similar to the couch-surfing community.
Maybe nobody actually knew what specific complications would arise, but at least the VC's should have known that generic complications would arise when they tried to scale the company...
I think that people that are running established businesses have a different set of required knowledge and responsibilities then startup founders in their 20s.
If a startup fails, then the effects are primarily only negative for a very small number of people, most, if not all, of which were more than prepared for the prospect that the startup would fail.
Indeed. Business isn't really a subject unto itself, because running a business is deeply linked upon the market it serves.
I would say that an MBA prepares one to be a CFO, or maybe even a COO, but by itself it probably only prepares one to be a CEO in the financial industry.
"and someone who can manage a company selling beverages can sell computers just as well. We know how that worked out."
In case some people need context, this is referring to John Scully (previously president of Pepsi-Cola) then CEO of Apple during Steve Jobs' ousting in 1985.
Edit: updated to clarify that John Scully was previously president of Pepsi.
Jobs is said to have lured Sculley to Apple by asking, “Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?”
Heh, how much world-changing did Sculley end up doing after all? One always need to keep one's wits when making decisions influenced by charismatic personalities.
Someone ought to write a comparative study of Scully's time at Apple with the successful turnaround of IBM led by Lou Gerstner, whose prior experience was at RJR Nabisco.
Conveniently, a comparison of two companies such as that can ignore all counter-examples. After all, it's a case study, not a boring statistical survey.
Speaking of case study, Louis Gerstner's account of the turn-around is a great read [1]. I read when it was published, so not sure it has aged well; need to check it again someday.
Lou had 1993 until 2002. Scully had 1983–1993. I think Lou had the .com boom on his side. Scully not so much. There's definitely a deflection point around 1994 where everyone did a lot better. I guess the question is how did IBM and Apple perform relative to some benchmark under those leaders and even that could be just luck. Microsoft certainly outperformed both thees companies by a huge amount of this time period: https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...
So compared to MSFT both were huge failures.
[EDIT: it's interesting that at least during some Scully's tenure APPL tracks MSFT fairly closely... So at least during those years he was as good as Bill Gates? :) ]
Not just apple, running computer companies seems to have been somewhat of a hobby for pepsi executives. I forget the names but the pop up a few times in the history of amiga/atari and the other competitors of the era.
HBS in effect introduced the Western capitalist version of what in the USSR was called an "apparatchik." This was precisely what you say: a party functionary and professional administrator who knew little else and had little real world experience with how anything they were managing actually worked.
It turns out that to manage things effectively you need to understand them. Who knew?
I used to live in Boston and a friend (who went to Harvard) once related to me his view that the point of this was to ensure high earning employment for the otherwise inexperienced and overly sheltered children of the wealthy.
The other contribution of HBS was to deeply entrench the cult of "presence," extroversion, and alpha signaling as the single most important quality for leadership. There's an excellent book whose title is escaping me that gives a great history of the "extrovert ideal" in the West.
But the Central Planning committee of Economic Think Tank has computed that all available 5-year corporate plans will be a success and a great victory for the People in precice accordance with the scientific principles of Smithism-Keynsianism!
The honorable People of the Corporation would never dream of altering their annual reports to the Market by overstating production in order to recieve the Good Capitalist award and gain foreign travel privileges from the Corporation Planning Committee - you sir are certainly an imperialist spy for suggesting otherwise and should be sent for Reeducation!
I used to call this "Kapitalism." It's a very different thing from entrepreneur-maker capitalism.
I've lived on the East and now the West coasts, and the manager caste ideology of the East is clearly why the West has completely dominated in innovative business sectors. Boston and Cambridge should be Silicon Valley and almost was, but the mentality killed it. Being a maker and a doer actually pegs you as a lower class, or at least that's the mentality I ran into.
I actually had people there tell me I should not "do." "Executives don't do anything." Direct quote.
Is that a legitimate call for HBS to do an IPO? How would that work? Would the market seriously invest in an academic institution? Even with it's quality/legitimacy in question now?
There were concerns in the article about companies having some control over which case studies HBS taught from. Wouldn't making the school public in this way hand industry even more control over these things? Who would control it? Who are the Harvard board of regents, and would the public be able to hold them accountable for their decisions?
A great Steve Ballmer quote comes to mind (paraphrased from memory): "Business school is the reset button for when you hate what you are doing, but you can only push the button once."
I think you are correct. The game has changed in a significant way. The only thing a C-corp executive can defend is increasing shareholder value. Everything else she does must be a driver of this value.
This represents a change in the way of thinking of the executive team. It used to be you could buy a share of a company like Google and be paid out (in dividends) a portion of profits. The stock, in and of itself, was valuable. Now that's no longer the case. The stock only makes you money if you can find some schmuck to give you more than you paid for it. So the primary pressure is not on the CEO to make more profits, but to make the stock price go up. Correlated we would hope, but not the same.
My feeling is that this is what happened to Yahoo. It was, by all accounts, a decent company. But an activist investor got involved, started running negative PR on the CEO and it became "groupthink" that he was incompetent, and he was finally ousted.
So the t->infinity result is that the drive is to increase stock prices. In the board room, the question is always, "how can we increase the price of our stock?" Anything that is not illegal is on the table. If you don't take those actions, the board will find somebody who will.
That's why, when bad things happen, it's really a strawman argument to blame "greed" and "lack of ethics." Anything that shouldn't occur needs to be regulated against, or it will occur. Call it the many-worlds hypothesis of evil.
> In the board room, the question is always, "how can we increase the price of our stock?" Anything that is not illegal is on the table. If you don't take those actions, the board will find somebody who will.
A rising tide floats all boats, though. The problem that the board has is the same problem that any large company has - when you can't familiarize yourself with everyone and every part of your business, you tend to replace them with abstractions, and when you replace them with abstractions, you tend to emotionally disengage from the faceless abstractions and make decisions affecting those abstractions without a real understanding of how it affects emotional change on the ground.
This is why, let's call it activist management, is important. When management cares about its direct reports, and pushes their interests up the hierarchy, it leads to longer-term thinking. When people at the top of the hierarchy replace voice-listening with number-reading, they start to make shorter-term decisions.
> Blaming Harvard for this enables us to ignore that there is a fundamental issue with the structure of our society.
True, although HBS serves as incubator and training ground for the next-generation of management consultants and bankers, many of whom will eventually become Fortune 500 executives, politicians, government consultants, etc. These are people who have an undue influence on the system.
The structure of society is like that because of the choices made by previous players. I don't think we can let these players off the hook just yet as they will form the fabric of the game in a few years.
I think it would be good if more people questioned where newly created central bank money has flown. Who has benefited most of the new money. In the past there was a concept such as banks crashing and going bankrupt free banking. There is also an issue of banks assuming ownership of the clients money according to Peals bank act. Bitcoin and crypto currencies will bring back the free bank again.
How does newly printed money that flows to robots affect prices of goods?
HBS and ilk define as fungible things that aren't. Time vs. money vs. opportunity. (People have limited lifespans, fertility, health, windows of opportunity.) Domestic labor vs. foreign. (Divesting from domestic labor hollows out your own society.)
Everything a number on a spreadsheet.
It's like trying to live your life based upon the rules of a game. At one time, a board game. These days, a computer game.
A very thin abstraction of real-world experience and the latter's diversity and complexity of values and relationships.
> t has failed to manage conflicts of interest adequately: for example it gives companies a veto over case studies written about them and academics can be paid by the companies they teach about.
These are textbook conflicts of interest. What respectable academic institution gives corporations veto power over what's written about them?!
As a graduate of one of them, I'd like to think that there is a bit of self-selection by personality / philosophy into each school. If I meet someone in a meeting that went to one of those three, I can usually determine which one they attended based upon their general demeanor.
That said, I wouldn't say there are large philosophical differences between them.
Well, this would be playing a bit on stereotypes. But HBS students tend to be very management focused, Wharton students more quantitative / financial, and Stanford students more tech focused / creative (for an MBA). There are obviously tons of counter examples to each of those stereotypes, but they've held largely true in my ~9 years of experience in those circles.
It's more a comment on the perception that HBS grads are behind the curve due to their unwillingness to innovate on their own, but perfectly willingness to enter (and exhaust) a field with parasitic behavior once it has proven to be fruitful.
They are trained to game systems. [Take tests, do better than peers, out think superiors, etc]. But they just need a path to follow. They will follow anything that makes the most money the fastest.
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[ 4.8 ms ] story [ 168 ms ] thread> Even in Silicon Valley, where HBS is relatively weak, about 10% of “Unicorns”—private startups worth over $1bn—have at least one HBS MBA as a founder.
As to the article, Not really sure what the content is. Evidently HBS has
> become a breeding ground for toxic behaviour, with conflicts of interests rife within the school, and its alumni responsible for pushing a rapacious form of capitalism that explains many of the ills of the world’s biggest economy.
but they don't really provide any evidence to back up that claim or to disprove it.
Duff McDonald did a live interview on CNBC a few weeks back and cited examples. This economist article was weak. Mr. McDonald's primary argument is that HBS teaches students to focus on Financials and not the Business, thus creating weak companies.
No doubt in my mind HBS has been widely influential. Their book on strategy (simply called "Strategy") is an excellent collection of articles any startup founder would do well by reading.
I find it interesting however that the task of building a new business is really very different from the art of making a business profitable and sustaining. Most schools still concentrate on the latter part, assuming their job is to get their students placed in a Fortune 500 company.
Here is a link to the one I was talking about:
https://www.amazon.com/Strategy-Seeking-Securing-Competitive...
That said, I'd love to hear the discussion about the topic, because in my experience it's true.
> but they don't really provide any evidence to back up that claim or to disprove it.
They are paraphrasing a book by Duff McDonald - I'm guessing the book goes into the meat of it. There is a NYT review of the book[1] that offers a bit more detail into the allegations, including the paragraph below:
> In virtually every instance, McDonald contends, Harvard has obsessively pursued money, sending a disproportionate number of its graduates to consulting firms beginning in the 1950s (it was all but synonymous with McKinsey), to Wall Street in the 1980s and to entrepreneurial start-ups once initial public offerings became the rage in the 1990s — and provided intellectual justifications for its actions. Much of that wealth found its way back to the school itself. Its professors earn enormous sums as consultants to businesses populated by their former students, who also give generously to their alma mater...
1. https://www.nytimes.com/2017/04/24/books/review/golden-passp...
Is this Harvard pursuing money, or its students pursuing money and prestige (presumably the reasons they went to HBS in the first place--hardly anyone goes to business school primarily because of an intellectual curiosity about management theory)?
http://www.imdb.com/title/tt0256408/
We all know that access to capital is a huge advantage when starting a business.
Look at Musk. He was going around to his social circle begging for money to make payroll right before the government contract to SpaceX came in.
That's going to be far more effective if your social circle includes HBS or Stanford MBA grads as a founder.
https://news.ycombinator.com/newswelcome.html
https://news.ycombinator.com/newsguidelines.html
Some of the best content I've read has come from HBR. Articles on leadership, communication, resiliency... some really great stuff. I was getting close to a membership because of how frequent I visited.
But that was a bit ago. Now... it's definitely gone downhill. I made the mistake of following them on twitter, and WOW do they peddle some bullshit.
> its alumni responsible for pushing a rapacious form of capitalism that explains many of the ills of the world’s biggest economy
Yup. One I saw recently was on why companies should defer profits till next year and focus on growth instead. Straight out of SV playbook.
Also, deferring profits for growth has been a valid strategy since the beginning of commerce itself. SV didn't invent it, nor is it a "bad" thing. It's typically how all companies grow. Do you think Ford Motor Company was profitable from Day 1?
it gives companies a veto over case studies written about them
Which is not a bad thing in itself - just look how absolutely magnificent Amazon has become in the last few years. AWS has revolutionized hosting and to be honest shopping on Amazon is way better than what was before it: shopping on ebay and getting scammed left and right.
The critique of the moral underpinnings of the faculty, teachers and students seems legit and a a noticeable break off from earlier times, like when Harvard Business School (HBS) was founded. The critique in its essens is basically accusations of decadece. This "post-modern decadence" is in reality a much wider phenomenon that not only has affected the globalised business schools, but also the humanities and social sciences. If business schools have contributed to the weakening of business morals, then humanities and social sciences have weaken the social cohesion by pursuing cultural nihilism that rejects the national community and responsibility that for long was an essential part of citizenship. I hope these new realisations critiques will be used constructively.
The Forbes article makes the argument that this approach is not only bad for society, but is responsible for the decline on return on capital since 1970. Despite the focus on the pursuit of shareholder value within each company, the overall result has been a decline in shareholder returns.
Think about that for a moment. The only point of this form of capitalism is high shareholder returns, and it's not delivering even that.
[1] https://www.forbes.com/sites/stevedenning/2013/06/26/the-ori...
All those Fortune 500 CEOs probably know it's wrong. Otherwise they'd be thinking twice before implementing "Corporate Social Responsibility" programs.
That isn't to say that a narrow view of a company's stakeholders isn't a problem, perhaps even a pervasive one. But most threads I've come across on HN et al on the topic have elevated it to the status of a religion, where people are utterly convinced that it's not possible for a company to be anything but blindly profit-driven.
The unfortunate part is where this supposed doctrine is used repeatedly to excuse companies' worst behaviours: "Amazon cannot install air conditioning in warehouses that have people fainting in the summer, because that would clearly cost money and Bezos would be criminally liable for leaving money on the table".
[1] For those who don't know precisely what I mean by this, it essentially means that there's literally no possible action the accused could take to prove otherwise.
Simply point to CEOs outrageous self-serving compensation and other perks, and numerous conflicts between active investors and management. https://en.wikipedia.org/wiki/Proxy_fight is a well known thing.
"No popular idea ever has a single origin. But the idea that the sole purpose of a firm is to make money for its shareholders got going in a major way with an article by Milton Friedman in the New York Times on September 13, 1970."
Not that there's any way to test that claim bet.
For about forty years, capitalism had ideological competition. There was a competitor, and capitalism had to deliver a better standard of living to compete. With the competition defeated, capitalism has a monopoly, and acts like a monopolist.
"If you want a vision of the future, imagine a boot stamping on a human face--forever." - Orwell
I mean, going off of Friedman's nonsense deriving a feeling of accomplishment from your business would be meaningless.
[1] https://unlearningeconomics.wordpress.com/2013/02/08/against...
It has a decidedly political slant pushing for exclusively pro free-market policies and only awarding it those studies.
The linked Economist article is a bit strange, it starts with an interesting opening discussion on the books topic, then dismisses the entire thesis of the book in a sentence and gives a quickly put together comparison of HBS to a business, and some recommendations with little analysis to support the changes.
...They should have just focused on the book and critiquing that.
It did reject that, after noticing that it's just fancy language for 'racism'.
Because it sounds like a strawman or throwing the baby out with the bathwater, depending on how you mean it.
That being said, it's either very dishonest or extremely narrow-minded to claim that racism is the only reason someone could care about a cohesive national identity. Just because it doesn't suit my view of the world doesn't mean no one gets value out of it, and in fact I'm acutely aware of the extra work required to connect with someone without a shared cultural background (I just happen to think it's more than worth the benefits of such a philosophy).
On top of that, this belief in a cohesive national identity is entirely possible without going anywhere near racism. "Blood n' soil" nationalism doesn't have much claim to relevance in a nation of immigrants like America, so our identity as a country is ideally built around people choosing to voluntarily join a society based on shared core values instead of the historically-common form of national identity built around ethnicity. It's possible to hold this view while having absolutely no opinion about someone's race: one could consider an ethnic nationalist (e.g.) Norwegian refusing to accept our values to be just as unfit as anyone else.
You'll find that the world gets a lot more interesting if you don't desperately rush to pattern-match everything you hear into one of a few trite buckets that comprise an overly-simpleminded model of the world and its people.
Then, when people demand some women shouldn't be wearing this or that piece of clothing, the definition of "national identity" seems to have shifted somewhat.
Did you even read my comment? The whole point I was arguing against was the impulse to tar every person who feels positively about nationalism with the same brush. Saying things like "nobody can disagree" and "the definition seems to have shifted" means you clearly haven't understood a word I said.
Since you're having such trouble with these pretty basic concepts, I'll lay it out even more clearly.
1) We're talking about a group of people that has more than one person in it.
2) You made a blanket statement about this group of people presumably based entirely on reading the comment section of Daily Kos.
3) I provided a counterexample that I have happened to come across that doesn't fit your criteria: there is a subgroup within the group we're discussing that has principled support for nationalism without touching any of the negative things you're describing (particularly racism). Even though I disagree with these people and in some ways their philosophy on society is diametrically opposed to my own, I'm not simple-minded enough to think "hurr durr any group of people I disagree with hold the same set of beliefs as any other group of people I disagree with" (which in this case, means that it's possible to hold these views _without_ being racist).
4) You failed to actually read my comment, pattern-matched a couple buzzwords and decided to respond by....doing the exact same thing and lumping in every person who might think that a national culture has advantages into a much-larger and more specific set of views. Against my fading hope for your reading comprehension, I'll repeat again: the fact that some people believe in both a national identity and racism doesn't mean that all people who believe in a national identity are racist. I'm not saying this like it's some mathematical proof, I'm thinking of multiple specific people, either whose writings I've read or whom I know personally.
> Then, when people demand some women shouldn't be wearing this or that piece of clothing, the definition of "national identity" seems to have shifted somewhat.
What on _earth_ are you talking about? I suspect this topic is hopelessly beyond your comprehension. _Nothing about the point I made and the people I'm describing include the views that you're talking about_.
These trade-offs are also the reason why more liberal Western societies are plagued by a new generation of social ills and inefficiencies. I happen to be an very liberal person but it's easy to see that people sometimes respond poorly to the absence of value or things to believe in, no matter what these values themselves might be.
Although the person you replied to did cite a medieval concept, it's still very much relevant in the modern world since we now have to deal with anomie on a large scale. I do hope the liberal modes of thought will prevail however! But if there were no trade-offs they would have won out a long time ago.
Yes, it's because we have tribal roots: we have spent 99% of our evolutionary lifetime in groups of countable quantities and competing with similar-sized groups.
> Clearly the fact that they are widespread instincts indicates [..] there is a trade-off at the societal level.
No, it merely indicates that there may have been a positive trade-off for this trait. Assuming that every trait is a net positive now or must have once been a net positive is a naturalistic fallacy.
> people sometimes respond poorly to the absence of value or things to believe in
Since there are narratives out there that do not paint artificial boundaries (and some do, but do not pursue confrontation because of it), this in no way excuses racism, jingoism, or nationalism.
There's also the case when a private equity firm takes over a company and in the name of profit makes it hell on earth.
You basically argue that managers have their strength in certain areas (e.g., financials) but not in others. So what? That's the same with any other profession :-)
Sometimes they're right; often they aren't.
I think the point is that managers/executives whose only strength is business/financials tend to make poor leaders.
Consider, for example, AirBNB - not exactly experts in the hospitality industry: https://www.airbnb.com/about/founders. A hotel chain, with all their issues of real estate, zoning, construction, maintenance, room service, reservations, and so on is very complicated. Just running a bed-and-breakfast is a full-time job. AirBNB founders didn't think that they were better at hotels or B&Bs than existing veterans, they said "Why not use the Internet to connect people with living space at destinations with people who want to go there?" and wrote a website for that. In practice, they had some trouble with zoning regulations, subletting agreements, and destructive tenants - "Who could possibly have known it was so complicated?" - but in the end the appeal of just renting out personal space has proven to be a powerful idea.
The problem with HBS is that they seem to claim that applying generic business skills like financials and cost-cutting to an existing industry have a similar effect. The problem is that they don't.
I think you just helped me to make a connection. I think what we are seeing is that technology skills with some business acumen out-competes pure business skill in generating efficiency.
This lines up with a book I just read[0], which recommends that developers become independent "efficiency consultants". [0]https://leanpub.com/developerhegemony
I wouldn't say "out-competes" globally, but rather "in the context of disruption." (Which the tech industry has largely been in for the past 80 years)
The problem with MBAs is that they're not (generally) suited for the CEO role in an innovative company. A CEO is making strategic, long-term decisions, and those are vastly improved by deep, subject matter expertise.
Some MBA CEOs manage to cultivate that (I'd say in spite of HBS-alike), but generally they focus on the things they already know and were taught in school. Which are exactly the wrong things to chase when you're trying to disruptively innovate.
Plus HBS and the like have 100% incentive to sell their expertise as applying to as broad and high a market as possible. Rather than saying "Your MBA qualifies you for upper middle management, not leadership."
It really wasn't that complicated, until they got to a few million users. Before that they just spread through friends and word-of-mouth, so the user population was relatively nice and very similar to the couch-surfing community.
Maybe nobody actually knew what specific complications would arise, but at least the VC's should have known that generic complications would arise when they tried to scale the company...
If a startup fails, then the effects are primarily only negative for a very small number of people, most, if not all, of which were more than prepared for the prospect that the startup would fail.
I would say that an MBA prepares one to be a CFO, or maybe even a COO, but by itself it probably only prepares one to be a CEO in the financial industry.
Huh. I never heard it summed up so succinctly. I think you've hit the nail on the head - ignoring technical expertise in the field.
In case some people need context, this is referring to John Scully (previously president of Pepsi-Cola) then CEO of Apple during Steve Jobs' ousting in 1985.
Edit: updated to clarify that John Scully was previously president of Pepsi.
Jobs is said to have lured Sculley to Apple by asking, “Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?”
[1] https://www.amazon.com/Who-Says-Elephants-Cant-Dance/dp/0060...
Lou had 1993 until 2002. Scully had 1983–1993. I think Lou had the .com boom on his side. Scully not so much. There's definitely a deflection point around 1994 where everyone did a lot better. I guess the question is how did IBM and Apple perform relative to some benchmark under those leaders and even that could be just luck. Microsoft certainly outperformed both thees companies by a huge amount of this time period: https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...
So compared to MSFT both were huge failures.
[EDIT: it's interesting that at least during some Scully's tenure APPL tracks MSFT fairly closely... So at least during those years he was as good as Bill Gates? :) ]
It turns out that to manage things effectively you need to understand them. Who knew?
I used to live in Boston and a friend (who went to Harvard) once related to me his view that the point of this was to ensure high earning employment for the otherwise inexperienced and overly sheltered children of the wealthy.
The other contribution of HBS was to deeply entrench the cult of "presence," extroversion, and alpha signaling as the single most important quality for leadership. There's an excellent book whose title is escaping me that gives a great history of the "extrovert ideal" in the West.
https://www.amazon.com/Quiet-Power-Introverts-World-Talking-...
The honorable People of the Corporation would never dream of altering their annual reports to the Market by overstating production in order to recieve the Good Capitalist award and gain foreign travel privileges from the Corporation Planning Committee - you sir are certainly an imperialist spy for suggesting otherwise and should be sent for Reeducation!
I've lived on the East and now the West coasts, and the manager caste ideology of the East is clearly why the West has completely dominated in innovative business sectors. Boston and Cambridge should be Silicon Valley and almost was, but the mentality killed it. Being a maker and a doer actually pegs you as a lower class, or at least that's the mentality I ran into.
I actually had people there tell me I should not "do." "Executives don't do anything." Direct quote.
There were concerns in the article about companies having some control over which case studies HBS taught from. Wouldn't making the school public in this way hand industry even more control over these things? Who would control it? Who are the Harvard board of regents, and would the public be able to hold them accountable for their decisions?
2/2 of BS = BS
Blaming Harvard for this enables us to ignore that there is a fundamental issue with the structure of our society.
This represents a change in the way of thinking of the executive team. It used to be you could buy a share of a company like Google and be paid out (in dividends) a portion of profits. The stock, in and of itself, was valuable. Now that's no longer the case. The stock only makes you money if you can find some schmuck to give you more than you paid for it. So the primary pressure is not on the CEO to make more profits, but to make the stock price go up. Correlated we would hope, but not the same.
My feeling is that this is what happened to Yahoo. It was, by all accounts, a decent company. But an activist investor got involved, started running negative PR on the CEO and it became "groupthink" that he was incompetent, and he was finally ousted.
So the t->infinity result is that the drive is to increase stock prices. In the board room, the question is always, "how can we increase the price of our stock?" Anything that is not illegal is on the table. If you don't take those actions, the board will find somebody who will.
That's why, when bad things happen, it's really a strawman argument to blame "greed" and "lack of ethics." Anything that shouldn't occur needs to be regulated against, or it will occur. Call it the many-worlds hypothesis of evil.
I think your conclusion applies equally to boosting stock value and boosting stock returns/company value.
The key difference being that boosting stock market value includes a PR component, in addition to any core value creation the company may do.
A rising tide floats all boats, though. The problem that the board has is the same problem that any large company has - when you can't familiarize yourself with everyone and every part of your business, you tend to replace them with abstractions, and when you replace them with abstractions, you tend to emotionally disengage from the faceless abstractions and make decisions affecting those abstractions without a real understanding of how it affects emotional change on the ground.
This is why, let's call it activist management, is important. When management cares about its direct reports, and pushes their interests up the hierarchy, it leads to longer-term thinking. When people at the top of the hierarchy replace voice-listening with number-reading, they start to make shorter-term decisions.
True, although HBS serves as incubator and training ground for the next-generation of management consultants and bankers, many of whom will eventually become Fortune 500 executives, politicians, government consultants, etc. These are people who have an undue influence on the system.
How does newly printed money that flows to robots affect prices of goods?
Everything a number on a spreadsheet.
It's like trying to live your life based upon the rules of a game. At one time, a board game. These days, a computer game.
A very thin abstraction of real-world experience and the latter's diversity and complexity of values and relationships.
[1] https://www.youtube.com/watch?v=4eBmyttcfU4 [2] https://www.youtube.com/watch?v=_cMXWcME_vQ
These are textbook conflicts of interest. What respectable academic institution gives corporations veto power over what's written about them?!
I'm not familiar with Business Schools so this is a genuine question.
That said, I wouldn't say there are large philosophical differences between them.
It turns out a lot of HBS grads were going to work structuring mortgage securities back in 2005-8. They're all going to Silicon Valley now.
You have been warned.
A leading indicator of saturation, if you will.