The last module of my MBA at a leading European business school was hijacked by a visiting professor - Dave Snowden. After making some derogatory (and I later understood, customary) comments about English rugby fans, he announced, ‘forget everything you’ve been taught on this MBA - it’s not going to help you in a complex world’. A surprising statement in that context.
Humans are subject to cognitive biases - we have tendencies to unknowingly think in certain ways, sometimes steering us far from the sound judgement we all think we possess (another bias). The ‘availability cascade’ is a bias that gains plausibility through repetition. In other words, repeat something long enough and it will seem true - hence the alternative name for this bias the ‘illusion of truth effect’.
Business is not a science. It’s barely an art form - it’s improvisation. When a business gets results consultants discern patterns between cause and effect, showing how specific actions led to certain results (unless the results are negative and we’re responsible for them, in which case it’s due to outside forces - another bias, the fundamental attribution error). There is human ingenuity in wanting to learn short-cuts to success and avoid pitfalls from others. And in the business world this has become the moneymaker MBA.
Case-based insights are the heart of the MBA method. They are dependent on hindsight: showing the relationship between cause and effect. The creation of new cases are also subject to (choice-support) bias, as all other incidences where the same choices led to less stellar results are ignored. Further, we mistakenly discount any role of chance in the original story of success or context in our hope of repeating it.
Henry Mitzberg tells a wonderful story of the BCG-Honda case study. This case will be familiar to anyone who has completed an MBA marketing module, despite being taken apart by the Honda guys themselves. Far from being experts in market entry and the differentiation strategies beloved by Porter-aficionados the Honda guys admitted they were just in the right place at the right time (with not an especially good strategy to boot). In short, they got lucky - but serendipity is currently far less profitable for business schools to teach.
Nevertheless, anyone tasked with new market entry today will probably have spent time working through the insights from the Honda case (especially if they’re an MBA). Power points will have been presented highlighting the importance of exploiting niches in disrupting macro-economic environments and final investment decisions will have been rationally made. But the real lessons of Honda’s success is that faced with uncertainty (e.g. new market entry) probe - sense - respond repeatedly, in loops quicker loops than rivals, until you discover your serendipitous break through.
You may eventually get there with MBA analysis, but the costs are higher and the risks no less uncertain.
My own particular journey pre and post MBA has been an eventful one. I had been a general manager (with not inconsiderable success) for some years before coming to the conclusion that I couldn’t just keep muddling through, that I needed something more scientific - I needed an MBA. This last year I have finally succeeded, after 6 years, in unlearning all that I was taught. Snowden, it appears, was right. Not only does an MBA not help you manage in a complex world but it positively hinders; loading you up with tactical analysis instead of seeing and thinking strategically. The MBA worships at the altar of analysis to anticipate what might happen, rather than encourage of awareness of what is happening - then acting accordingly.
How many departments and organisations are being held back by MBA case-based restraints today?