Did MBAs Contribute to the Credit Crisis?
As the financial crisis finger-pointing continues, eyes are turning to the business schools. What part did they play in the meltdown? And is now the time to re-think their own assumptions? As Simon Caulkin observes, it's not just the economics-dominated MBA that's now seen as unsustainable.
Business schools have become sausage machines -- they all preach the same orthodoxies. Years later, greed and groupthink has come back to haunt us.
This is the first global crisis to have been created at leading business schools. Several of the meltdown's major players, from Merrill Lynch's Stan O'Neill to Hank Paulson to Andy Hornby of HBOS, are Harvard graduates. Dick Fuld, who ran Lehman Brothers, went to Columbia Business School (perhaps that's why his bank wasn't bailed out).
The bankers were advised by the brightest brains at McKinsey and other consulting companies, which are more or less outplacement firms for newly minted MBAs. The brilliant insight of these great brains led all the banks to the same failed strategies which is costing the world a few trillion dollars.
Contrast this with some of the richest entrepreneurs in the world -- Mittal, Branson, Abramovich, Gates and Buffet are all MBA-free.
If you're aiming to be an entrepreneur, an MBA cannot teach you any of the important lessons of success: leadership, the art of the hustle, personal bravery, resilience and risk taking. They cannot teach creativity, daring, inspiration and real insight. They can teach none of the things that matter to a successful entrepreneur.
Doubtless business schools are now writing case studies about the crisis in order to show how regulation failed, individual banks made poor choices and how economic conditions failed everyone. They'd do better to write a case study on how avoid creating a generation of corporate clones who are imprisoned by greed and orthodox thinking.