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Among Harvard’s Most Famous MBA Degree Graduates

• Rick Wagoner, former Chairman and CEO of General Motors
• John Thain, former CEO of Merrill Lynch and former CEO of the New York Stock Exchange
• Jeffrey Skilling, former CEO of Enron, sentenced to 24 years in prison for fraud
• Henry M. Paulson, Jr., Secretary of the Treasury and former Chairman and CEO of Goldman Sachs
• Jeffrey R Immelt, Chairman and CEO of General Electric
• Fritz Henderson, Chairman and CEO of General Motors
• Chris Cox, Chairman of the U.S. Securities and Exchange Commission and former U.S. Congressman
• George W. Bush, 43rd President of the United States

Source: WikiPedia

We all failed to understand how much had changed in the past 15 years or so, and how fragile it might be because of increased leverage, decreased transparency and decreased liquidity: three of the crucial things in the world of financial markets.

Jay Light
Dean, Harvard Business School

Boston

The Misdirection Of Higher Education

In June, 2009, Newsroom Magazine addressed the massive failures in American education that either enabled, encouraged or ignored intellectual lawlessness. In that article, MBA Degree: License To Lawfully Steal?, we spoke of the ongoing failures of higher education to turn out responsible, informed and educated students. That article addressed the Fisher School of Business at The Ohio State University. In reality, Ohio State’s school of business is not the cause of our nation’s financial, ethical, managerial and institutional collapse, but it is one of many microcosms reflective of the failure of higher education to further public interests over private gain.

Rethinking The MBA

• Mediocre But Arrogant
• Mighty Big Attitude
• Me Before Anyone
• Management By Accident
• Masters of the Business Apocalypse

Philip Broughton

For some, our coverage of the problems at The Fisher College of business seemed out of bounds — for everyone who knows anything about business schools knows that Ohio State, no matter its sparkling facilities and faculty resources is the major trend-setter in business education.

Why did we pick on Ohio State? some wondered aloud, when everyone knows that the standards of excellence ( of which we can find little in today’s business schools ) are set by the top tier business schools at Pennsylvania, Columbia, Harvard, Northwestern and Dartmouth.

The Ohio State University, and its Fisher College of Business are important to understanding the failures and problems of higher education because the university and its colleges have been contaminated by the same anti-intellectual values, leadership and management systems that afflict most of today’s major universities. In the last three decades, higher education in the United States ( and most other western nations ) has become business oriented. Attracting students is big business today — especially at state supported institutions such as Ohio State where state support has been on the wane for many years.

Education Corrupted By Business Values

At nearly every major university, the CEO’s are no longer distinguished academics, or persons with long connections to the university. They are public figures, spokesmen and fundraisers hired by boards of trustees who represent wealth, power, political connections and business values.

You can draw up a list of the greatest entrepreneurs of recent history, from Larry Page and Sergey Brin of Google and Bill Gates of Microsoft, to Michael Dell, Richard Branson, Lak-shmi Mittal – and there’s not an MBA between them.

Philip Broughton

The outcome has been transformative for American universities in the sense that they are more prosperous and powerful than ever before. They raise more money, pay higher salaries, constantly upgrade and expand their physical facilities. The NCAA Division 1 schools, like Ohio State, operate highly profitable professional sports subsidiaries in which the university and its coaching staff earn very large benefits based on the performance of indentured athletes whose aspirations are not education, but elevation to the instant riches of corporate sports.

If the MBA degree has lost its luster today, it is not the school or the curriculum that is ultimately to blame. It is the management and oversight boards responsible for our nation’s immensely rich higher education businesses. They may be called universities, colleges or schools, but today, everything in higher education seems to be for sale to the highest bidder.  It is this attitude, that money matters over all other values that has corrupted us as a nation.

America’s colleges and universities have been the spawning grounds for the massive changes in our national culture, values and attitudes toward one another. It was our profits over responsibility media helped to inculcate us by constant repetition of the same themes: get rich, be famous, opt out, give little.

Insider Insight

While few are speaking to the broader issues of higher education, there has been excellent coverage of the specific problems confronting business schools — especially those who grant MBA degrees. We found one of those articles in the March 1, 2009 Sunday Times  ( London ) authored by a former Harvard Business School graduate, Philip Delves Broughton, entitled Harvard’s Masters Of The Apocalypse. In that article, Mr. Broughton speaks to his recent experiences earning his  Harvard MBA. There were several statements in his Sunday Times article that lept out as much for their clarity as their probity. For example, Mr. Broughton asked his Times readers,

Given the present chaos, shouldn’t we be asking if business education is not just a waste of time, but actually damaging to our economic health?

His question is clearly on point. Closer analysis, however, reveals that his focus may be too specific, for the problems  he addresses are are neither specific failures of business schools, nor universities. In the last three decades Western nations fell in love with wealth, easy money, endless credit and instant gratification. Colleges and universities were impacted by our  frenzied obsession over money and wealth. No wonder, so many colleges and universities adopted business thinking and values and adopted those qualities in their academic programs.

Today, business values, ethics, thinking, management styles and focus on outcomes have infected our institutions of higher education. At most institutions, some believe that the most fertile and receptive academic programs were business related. In the decades that followed, the master’s degree in business — with specializations in accounting, marketing, finance, management and insurance — transformed themselves away from intellectual foundations to those of combat methods and ideologies.

MBA Programs Reflect Public Attitudes

Old ideas about being accountable managers, accurate and honest accountants, and responsible citizens were soon washed away by outcomes-driven decision making based on only a single metric — earnings per share attainment and growth. While we find Mr. Broughton’s criticism of his own education both reasonable and probative, what he misses is that neither the MBA degree, nor business schools are isolated aberrations. To the contrary they were impacted by massive shifts in public attitudes that largely rejected notions of responsibility, accountability and shared burden.

Large changes took place in American society over the affluent era following world war II. In our national rush to affluence, modernization of our institutions, extension of opportunities to ever increasing segments of society, and wealth accumulation, most but not all American institutions changed. While we focused on the things we like best, the rule of unintended consequences was not repealed. Our changes, progress and developing affluence came at the cost of changes we did not want or had not sought to secure.

Politics became more partisan, the  distribution of wealth between middle class and elite class shifted to favor the wealthy over the affluent, and long held ideas about the role of government in commerce shifted toward less government and more market-driven decision making.

Business Schools Not Alone

Philip Delves Broughton’s indictment of business schools and the failures of MBA education bear a commanding ring of truth.

The Masters of Business Administration, that swollen class of jargon-spewing, value-destroying financiers and consultants have done more than any other group of people to create the economic misery we find ourselves in.

Mr. Broughton’s points strike home, but they are not, in our opinion, definitive of culpability. Among his points are:

• Business schools have shown a remarkable ability to miss the economic catastrophes unfolding before their eyes.
• Every trendy business school idea was being implemented, it seemed, while what really mattered – the bank’s risk assessment, cash flow and capital structure – was going to hell.
• You would think after failing on so many levels, the school that provides more business leaders than any other might feel some remorse. Not in the least. It’s onwards and upwards, with the very people who blew apart the world’s financial plumbing now demanding to fix the leak.
• Yet the MBA industry continues to grow, and business schools provide vital income to academic institutions: 500,000 people around the world now graduate each year with an MBA, 150,000 of those in the United States, creating their own management class within global business.
• If doctors or lawyers wreaked such havoc in their own professions, we would certainly reconsider what is being taught at medical and law schools.
• A group of people unable to see their actions in the broader context of the society they inhabit have no business being self-regulating. Yet in the financial services industry this is pretty much what they demanded and to a large extent got – with catastrophic consequences.

Harvard May Be Guilty, But Not Alone

Our own analysis of MBA schooling and values supports Mr. Broughton’s assertions about the failures of MBA education and the defects in Business School curriculum and degree programs. We even share his belief that the major MBA degree granting schools, including his Alma Mater, Harvard Business School, have been negligent in providing their students a wider perspective on the role of business in 21st century society.

Jeffrey Slee contributed ideas to this essay