Well, TQM and quality control was taught for a class or two in my operations and some strategy classes in undergrad and grad and I would be surprised if it’s not covered in every curriculum at some point. I think the disconnect is that MBAs need to be taught a wide variety of courses and lengthy specializations in specific areas come at the expense of other subjects that may or may not be more valuable (like multi-server queuing theory:p). The purpose of getting an MBA is not to become TQM or Six Sigma certified. MBAs go into all sorts of fields, so they’re expected to be generalists even when they’ve specifically chosen to focus in a specific field like operations/supply chain. Their employers will teach the specifics of their industries and work flows. But seriously, I could count the number of supply-chain specialists in my graduating class (100+) on one hand.
And of course the MBA catch-all is if you need something like TQM done perfectly then hire a specialist (read “consultant, preferably a buddy from b-school so he/she will owe you a favor”) and move on to the business of making money for the shareholder.
To the OP, I think one thing they don’t teach you is that right out of B-school you’re still just going to be a grunt for a while. Granted, a grunt with higher pay and better prospects, but still a grunt. Also, econ and finance professors like to say the market is efficient and everyone operates optimally. That is frankly untrue. The market tolerates mediocrity in a lot of businesses, which is good, but it means MBAs can add value by doing a lot of things that have been drilled in as “basics.”
This (and similar statements from FasterThanMeerkats) is spot on. B-school is a generalist craft school. Expecting it to be more than that is unrealistic - most B-Schools offer a few types of specializations - e.g., non-profit management; industrial Ops mgmt; MBA/JD; etc. - but even those are just a bit less general (as opposed to being super-specific).
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It might be an NYC thing, but I also feel that an MBA doesn’t really teach you to be a “manager”. It’s basically a pipeline for getting into Wall Street as a trader, I-banking analyst or hedge fund manager.
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To the OP, I think one thing they don’t teach you is that right out of B-school you’re still just going to be a grunt for a while. Granted, a grunt with higher pay and better prospects, but still a grunt.
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Both of these speak to life in a Capitalist global economy, not Business Schools, per se. If you are at Kellogg, it is generally understood that you may have interest in Brand Management; if you are at Stanford, then dot.com/Silicon Valley start-ups are likely an interest; NY Schools and Wharton are known for Finance; and so on. Different top schools have reps for different concentrations, and if a certain industry is always looking for “fresh meat” to add to the bottom of their management pyramid to do the grunt work, the local well-regarded b-school is a good place to find folks with more ambition than sense who are willing to burn themselves out for you. The fact that only a few actually rise to the top of that particular company/industry is just how it goes.
But it can be a wake-up call to the newly-minted MBAs who think they can run everything upon graduation. In this economy, I suspect most graduates are more appreciative of any job they can get…
I have an MBA from University of Texas at Austin and can tell you that back in the late 90s when I graduated, we were exposed to TQM in Operations and they had a much greater emphasis on it in Service Management.
‘Negotiations’ was probably the single best class I had, and most prepared me for the real business world, both in terms of business itself, and stupid office politics.
I do government contracting, so an understanding of the processes involved would have been useful to me had I known that was what I was going into.
A class I would like to see that doesn’t exist would be a combination of management best practices, negotiations, and business law called “Barriers to Business”. The class curriculum would cover:
Legal requirements for doing business across industries (including import/export laws)
Ideal ways to set up businesses for maximum advantage (when small business gets special consideration)
Employee issues (lawsuit potential and issues with unions)
Non-obvious trends in business that historically indicate success or problems
Methods to create intellectual property to differentiate your business and how to prevent your employees from stealing it
Creating teaming relationships with other businesses (both from a position of power and weakness)
Strategic hiring (not all engineers are the same and here’s what every HR person should know)
The importance of quality and repeatable processes so that employees don’t take knowledge with them when they leave
Building trust with employees, especially during bad times when you may be laying off their co-worker friends
Every company I have ever worked in has had to learn these lessons through trial and (painful) error. I would think you could teach it.
I would add a class on the discipline of Project Management.
I would also add the discipline of Storyline Construction throughout classes. All business cases - financial, strategic, PPT, written - are all about persuasion. Writing persuasively is a craft. It is the single most important skill I picked up in consulting.
I would teach the technique of Active Listening alongside Negotiations.
I think what they’re trying to say is that while quality control is definitely important, it’s really secondary to what helps companies make money.
Look at it this way:
There are 2 companies:
One who makes a product whose market share is growing, they’re posting profits, and they’re doing very well. They also see about 5% of their products come back, and their production is somewhat inefficient.
The other company makes the modern-day equivalent of buggy whips- let’s say telephone modems. They make them with full-tilt six-sigma quality control, etc… and very, very few return. They also have driven costs down to about the minimum that can realistically be achieved. But..they’re not growing, they’re seeing a larger share of a shrinking pie, and profits are inconsistent, if present at all.
Which company would you rather invest in? Which company would you rather work for long-term?
The answer should be the first one, because they have obviously aligned the corporate strategy in such a way that they’re growing and making money. The operational efficiencies and quality issues can now be worked on to make MORE money.
The second company may have flawless products and extraordinary efficiencies on the production floor, but nobody wants to buy their products… because the strategy is flawed.
That’s the difference between strategy and operational efficiency, and likely why MBA curricula don’t really concentrate on it beyond acknowledging that quality is a good thing to have. There are people who specialize in that stuff, and the idea is that you should hire some.
It frustrates me, too. Humanity’s two survival strategies are Adaptation and Self-Preservation. Those strategies, translated into today’s world, lead to big, sloppy human communities that yield progress on a macro level (arguably), but gross inequalities and even atrocities on a micro/local level. Given that I-Banks are sitting at the nexus of a number of systems coming together (Corporate M&A, Financial Markets, Investors, Municipalities/Governments, etc.) - it is easy to see how the slop is at its maximum, along with the inequalities and atrocities. Regulation can react when a loophole gets exploited too much - but there will always be an escalation, with new loopholes emerging and getting exploited.
A B-School can make sure you get your Ethics merit badge (and absolutely should), but is not really close to the real forces at work that lead to poor business behavior.
A lot of business theory only really applies to established businesses. From what I’ve seen both in my personal life and in general is that any business, regardless of its market or what type of business it is, will typically need to do “something” to get past that initial “pre-business” stage. A pre-business is essentially a collection of invested capital and human resources that has not realized any actual returns or prospects at continual business operation. For a software company shipping that first piece of software that “hits” might be the “hurdle” that a company needs to clear to become legitimate. For a restaurant I would say it’s the first back-to-back weeks of profitability (and many, many restaurants never get to that point), and you could probably identify such things for all types of businesses.
Things they teach at business school are very good about helping people understand how established businesses work, how they are ran, how to get into the field of management in such a business and etc. Unfortunately there is no school that can teach you how to realistically succeed at getting past that “first hurdle” in establishing your own business. I personally think it’s often heavily based on luck (right place, right time) and much theorizing is done because people aren’t happy with that answer.
Did you actually go to a business school? Many good schools do, in fact, teach their students about entrepreneurship and how to go from taking an idea, raising capital, marketing your product and becomming a profitable going concern. Yes, luck plays a part. And no, business school does not guarantee success. But I will guarantee if you don’t go to business school and sit on your ass doing jack shit waiting for luck to strike you, you won’t be a success either.
One of the advantages of business school is that you are surrounded by like-minded people who are looking to start companies and otherwise become a financial success. Those people will be a lot more supportive of success and far liklier to succeed than your middle aged coworkers bitching about the boss.
My background is retiring after a career in the Army and finding that even an O-6 pension actually isn’t very much money and supplementing it with a job in State government doesn’t dramatically improve your finances either. I invested essentially everything into a business and am now fairly prosperous I will openly admit a huge part of the reason I was willing to do this is my guaranteed military pension meant that even if things became as bad as possible I’d never be truly destitute or homeless or anything.
I’m in commercial property management (some residential development/management as well) and just based on other outfits in this area that haven’t made it I will say that in the beginning pretty much any misstep and you will not be able to keep things going and you go under. A big thing is permits getting messed up, running afoul of local authorities and things of that nature. A family run firm in this area that had been in business for 40 years went under because a major residential building they invested a huge amount of money into had serious problems and ended up getting condemned and it was such a hit to their cash flow they couldn’t survive. That wasn’t a case of bad luck, though, they hired incompetent people to do important jobs and were not invested enough in maintaining their buildings, so that was bad decision making. However on the flip side I’m familiar with people who have developed small size commercial plazas who pretty much everyone thought would be popular and then the economy tanked and no businesses moved in and they went bankrupt–that was truly bad luck.
A restaurant can be broken because a waitress gets dumped by her boyfriend before her shift and she does a shitty job and is rude to a customer who ends up being the local food critic. There isn’t any way to guarantee against that and even the best hiring practices won’t totally eliminate the chance that you have an employee just go over the edge at a key moment.
In the software world most software of the 1980s for PCs was being written to do things that software for mainframes did. There were many many companies pumping out similar “ports” of mainframe software, and the best quality didn’t always win, the first to market didn’t always win, and the most marketed didn’t always win. A lot of things had to come together in that time to sort out winners and losers and a great many of them were not directly controllable by the management of those companies. Perhaps a company other than AutoDesk would have won the battle to get the most successful CAD software to the market but some freak accident screwed them up during development and they weren’t able to get to market in time.
Anyway I’m not saying that business school doesn’t help you know how to run a successful business or even start a business, but I’m also saying that you can do everything right and still get fucked, and it has happened many, many times. Further, with a nascent business your ability to manage risk is tightly constrained due to your small size and limited capital. A large company is just as susceptible to bad risk as a small, new company, but a properly run large company can adequately manage risk so that they do not go under if one thing goes wrong for them. As an example I’m familiar with large players in the real estate game who own high rise office buildings down town and they tend to incorporate each building as its own corporation so that if it they have trouble keeping occupancy up or any number of other things happen the whole organization will not fall because the one property fails.
A business like ours, our first development we were all pretty much 100% in, so there was no way to insulate us from complete financial ruin if that first development went under. Even as we’ve grown we cannot get as insulated as the people who have $100m+ in real assets because at levels smaller than that you pretty much have to use profitable property as collateral to get capital to develop more property, and that unfortunately means the bad can take out the good if something happens. We’re at a point now where new projects in themselves wouldn’t be able to totally ruin us if they did not pan out. The goal in such a venture is always to have a portfolio of properties so we aren’t necessarily in a bad way when some properties have low occupancy rates. You have to go through a period in which minor problems expose you to complete ruin to get there, unless you come into it with massive amounts of capital (if I had enough capital laying around to get where I am now back when I started it would have been in an index fund and I’d have not worked a day in my life after that point, so that’s neither here nor there.)
Now that being said I’m not totally uneducated in the business world, I did take some business classes while in the Army but not towards a degree of any sort (I have both a B.S. and M.S. but they are related to the military), and one thing that always stuck with me is a class in which we were doing business case studies. The professor had us answering questions about why a certain business in the case study had succeeded or why it had outperformed its competitors or in the relevant case why it did poorly despite its management taking the correct actions. Hands went up around the room and the students answered various things based on theories the professor had taught throughout the year, but the right answer that no one answered correctly was “in this case the business did not perform well because of bad luck.”
I actually made it through that post - and near as I can tell, this is your main point - in which case, I agree. Sounds like you have had some solid success - good on ya - and are really aware of the risk management challenges that any business faces.
So true - understanding how to identify, monitor and manage risk on an ongoing basis is an incredibly sobering experience as a business executive. There are very few ways to get things right - with “right” a dynamically-moving target - and an infinite variety of ways to get things wrong.
That wasn’t what I was trying to imply. But many of the topics you raise in your post are raised in business school.
And business school is not meant to be a proof against your business ever failing. It is merely an opportunity for you to learn some of the ways businesses can fail which will help you either avoid them or incorporate an exit strategy into your business plan so you aren’t financially ruined.
I was in b-school during the tail end of the dot-com boom/bust. What was funny was my first few semesters, we had former student speakers who had started dot-coms and were all like "it’s a difficult decision to decide if you want to finish school or go out and try and create the next big thing. My last semester, many of them came back and their speeches were like “we learned a lot before our company went under”.
The time right after the dot-com bust - maybe 2002 - 2005 - was pretty funny; I would hear stories about folks looking for their next job with “CEO, Failed-Company.com” prominently featured on their resume. I mean, if they can spin how losing $35million of VC funding helped them be better leaders, then more power to them.
Hah! I was in b-school right after the big crash (started Fall 2002), and a few of our courses were pre-bust - “Internet Marketing” was one that was a howler. It was even more entertaining to pester our straight-out-of-doctoral-school professor about the book and how absurd it was in spring 2003 with its parts on startup dot-coms, and how to get venture capital, etc…
OTOH, Information Economics was a great course, internet boom or bust. It wasn’t so much calculating things as it was thinking about things in an economics perspective. Stan Liebowitz taught it, so even if he’s kind of polarizing, he’s definitely an expert in the field.
- and near as I can tell, this is your main point - in which case, I agree. Sounds like you have had some solid success - good on ya - and are really aware of the risk management challenges that any business faces.