I’ve been muttering about where things were headed since the late 80s, when getting an MBA and starting out in middle-management replaced rising through the ranks from the factory floor to eventually land in the executive suite as the primary model for success. And now, well…here we all are, staring at the pluperfect example of that lamentable development: Boeing.
Boeing was once a well-run engineering company that became very profitable from its well-engineered products. It is now a poorly-run manufacturing company being managed in the manner taught in elite MBA programs, placing an emphasis above all else on cost control and expense reduction.
It is also a company whose current version of its workhorse product, the 737 Max, continues to have catastrophic in-flight failures.
Part of the 737 Max fleet has been grounded, again, this time after a door plug came off the fuselage of an Alaska Airlines airplane while in flight. Back in 2018 and 2019, there were two fatal 737 Max crashes, both apparently related to poorly designed and programmed flight stabilizer systems.
There is so much more that needs to be said about the toxicity of the “slash and cut your way to increased profit” culture that is learned at business schools, but I’ll briefly summarize that putting the “Chief Cost Cutter” at the helm of a corporation is just as ridiculous as putting the Accounts Payable Manager or Facilities Manager in charge of all operations. They’re all important roles, but you would not have the entire company focus almost exclusively on just one of those facets. Yet too many modern executives have a monomaniacal obsession with cutting costs and expenses, which causes neglect of innovation, quality, safety, and new product development, if not outright hostility toward those critical areas. It also causes a loss of important talent whose legacy knowledge has a value that can’t be quantified on a financial statement.
Throckmorton goes on to cite, at length, a seminal Atlantic piece which appeared in the wake of the 2019 crash, to wind up thusly:
If I can make a quick side note, the only people more destructive in corporate C-suites than Ivy League business school graduates are General Electric alums. They tend to bring a cult-like fanaticism for the idiotic business fads that ultimately destroyed GE, never understanding that the success of GE in the 1990s was despite those awful gimmicks, not because of them, and that the subsequent destruction of GE as a successful company in the 21st century was largely because of all the gimmicks that came to define GE’s culture.
Right now, there is much well-deserved mockery of Boeing and Alaska Airlines for how their focus on DEI and LGBTQ has distracted them from manufacturing and operating airplanes that don’t fall apart mid-flight. I have no doubt that if Alaska Airlines spent more time inspecting its airplanes rather than decorating them in rainbow colors and putting on drag shows, this latest incident would not have happened.
But neither would it have happened if Boeing was still a company run by engineers, rather than being a company run by MBAs who will gladly sacrifice quality and safety to temporarily goose the bottom line.
Quelle surprise, that a communist-run nation should lose touch so completely with its capitalist roots.
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Having had a near 50 year career to date, I concur 100%.
When I first started, working for my father, and educated, most of the factory managers had started at some low level job in the company, usually on the factory floor. I can count several that started out sweeping the floor itself. Many were not college educated, some were. I’m not sure what the percentage was back in say, the early 70’s, but I would bet that at least a third were HS level only, maybe half.
I have nothing against the business school or an MBA, but they are worthless without engineering skills or factory floor experience. And that is what we have now, people with nothing but paperwork trying to manufacture complicated products. It doesn’t work well, no surprise.
I have an MBA and no way I would hire myself.to.run a company.
An MBA is a specialization. A CEO and other Top Management must have experience in all aspects of the company, but ESPECIALLY a great working knowledge of the product being produced. About the only position that might work is CFO and even then a good working knowledge of what is being produced would enhance their performance.