Wednesday, 6 May 2009

How to Fix Business Schools

Article by Paul Hemp

Scrap the MBA

"How do we fix business schools? Scrap the MBA If you believe that MBAs and the education they receive are at least partly to blame for the current economic mess, what changes must we make to management education to prevent something like this from happening again?" 

A conversation with Henry Mintzberg a long time detractor of MBA's

Article and Audio here: Scrap MBA

Ric's Comment to Harvard (also published on site)

Mintzberg is correct, "most of the things a manager needs to know-whether that's how to motivate [inspire] people or assess a balance sheet-are context-specific and not universally applicable".

As an ex financier I learnt how to lend money by being sent to collect it from delinquent borrowers for six years. Only late in the process was I able (and permitted) to renegotiate and rewrite existing loans. During this period I learnt how to assess what we called the five C's of Credit particularly the character component. Standing alone in front of shot gun armed and distressed farmer teaches you a lot about character ...and quickly. We didn't have mobile phones in those days so you also learnt a little self reliance as well and of course the all important, how to close a very critical sale... don't shoot me I'm only twenty one. The last couple of years I also supervised (under supervision of a manager) the activities of others, the beginnings of my 'management' training. What ever happened to "supervisors"?

Finally into lending. I wrote loan submissions with no approval rights for two years while the financial controller taught me financial analysis and my direct manager sent back my lending proposals with words "so what" in red pen after each unsubstantiated or illogical statement. If I didn't know how to answer to the "so what" I was curtly told "go and ask the customer". From this I learnt how businesses operate across a broad range of industries and how to deal with senior executives of large companies and find out what I needed to know, diplomatically. What did I learn... everything from the complications and tax implications of shifting income to overseas divisions and why and how my customer did it to... how an injection moulding machine works. My customers taught me business and how it works (or doesn't for that matter). Of course at the same time I was studying the legal and technical aspect of the financial products we offered.

I also of course learnt from my 'allowed' mistakes. Lending limits were finally granted and I was a supervisor (again), this was in a lending department. Early on in my new role I released a forklift under pressure from a 'good' existing customer without getting the deposit cheque cleared, which was of course was a "cardinal sin". The factory and the forklift burnt... it was arson... no insurance recovery. I was requested to tell my story which was then published nation wide (supposedly anonymously) as a learning bulletin. I was also asked "what did you learn Richard". Well I did a dumb thing however I wasn't stupid so I replied "expletive I'll never do that again". The company's response.. money well spent then.

I say it again Mintzberg is correct, management learning is "context specific".

p.s. Please if you get to talk to Mr Mintzberg again can you explain to him that "you can't motivate staff, because all motivation comes from within". You may however be able buy understanding and using their motivations "inspire" them.

Richard Townsend (

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