MBA: The Modern Finishing School

What is a Masters of Business Administration all about? In a nutshell, the MBA is a finishing school.

Finishing for what you ask?

"Work is of two kinds: first, altering the position of matter at or near the earth's surface relative to other such matter; second, telling other people to do so. The first kind is unpleasant and ill paid; the second is pleasant and highly paid." -- Bertrand Russell

To "lead"; to tell others what to do. Why? As Mr. Russell points out - this is pleasant and highly paid, and the other option (to "follow") is unpleasant and lowly paid. This is not fully true of course - this is only true in command-and-control economies, e.g. the former Soviet Union or a large company. If you work in a command-and-control structure, you likely want to get your MBA. The MBA itself is essentially "speak and spell", i.e. how to communicate, combined with learning some knowledge of the levers of power within a standard command/control infrastructure. The degree itself appears fairly simple, fun, and gets you networked up and ready to rake in the big bucks.

However, for your right to boss people around and get compensation packages that are well above what your value is to the corporation (or other infrastructure [0]) you have to give up a few things: self respect, the ability to create, and the ability to speak your mind. Don't get me wrong - you can lose these things on the other end in a command/control situation also - but it seems that the commanders are worse off as they are giving up their character, the one thing we have control of in this short life of ours. Sure, you can have a terrible boss and feel the pressure to give up character as a minion, just to ease life in the moment, but there is still an option of not doing so.

Listen to an MBAer speak - have you ever heard such whitewashed PC drivel in your life? Listen to the MBA elite versus others and you will hear a huge difference - that difference is what we commonly call a "soul". The constraints on the MBA elite is essentially equivalent to the removal of your soul - you represent the corp, and you cannot speak the obvious truth, or, well, say almost anything interesting at all. This is not true of all MBA elites, but look around - it is the rare MBAer who speaks truth, or anything remotely approximating truth.

So you can't speak your mind. So what? Well, you are not creating either. That is what humans need to do to feel and enjoy life. Either this statement resonates with you, or not. If not, you might not yet be human [1]. Sure, some MBAers might actually lead and actively engage in creative efforts. Again, this appears a rarity.

Now for self respect - you can't create, you cannot speak. You are a slave, who voluntarily gives up your character in exchange for money. The respect for your degree depends on people not realizing that it is a glorified finishing school [2], and this respect is eroding in the current economic climate where people are outright angry that MBAers as a class appear to have looted money in a parasitic manner without providing value and good decisions in exchange for it.

For a long time it seemed that getting an MBA has a good deal, but could that be shifting now? If a society follows command-and-control for means of production, organization, and governing, then yes it does (at least financially). Aristocrats are needed in such a world. But in a society where creative work, craftsmanship, small companies, flattened hierarchies - "Whole New Mind" stuff - and other productive work can be done without inefficient and highly segmented and hierarchical structures characteristic of classic command-and-control.... well, what role does a MBA play there? There, in a creative world populated by makers respect and the few leading roles will go to those who have proven themselves were it counts - in creating and communication.

That world is not here just yet - but it may be poised to come. As computers make the boring paper shuffling "operating system" stuff of corporations more and more automatic we will see first a collapse of middle management [3], which will be accelerated by the need to save money paving the way for going through with this change [4], and then as the buffer layer between producers and commanders is thinned the top level will need to be able to actually display a soul and ability to retain respect and ability to lead. Those with MBAs now, or soon, will be able to reap the command-control gravy train for their careers, but we may be living in the end of the command-control economy.

The Soviet Union collapsed under the weight of the nature of command-and-control, the means of running corporations under this same approach may now be undergoing a similar fate: competition with more free, distributed, and creative entities (USA! USA! US... er, I mean, "the small and nimble business' guided by cheap and ingenious computing") that can now overcome, even surpass, the economy of scale in many situations is fierce. "Restructuring" is naturally occurring, and the current mess we are in may be in part be aggravated by the command-and-control nature still largely held by many large corporations, and in turn the hard times may accelerate and force the evolution [5].

There will always be a role for leaders, for people with charisma, for those with couth. But the MBA may not be the de facto route to this role any longer. The MBA is predicated on command-and-control, if we are lucky the evolution towards small, free, and creative will continue and move more and more out of computer science and arts into other areas [6]. Currently the public has some bad taste in their mouths regarding MBAers - judging the herd is difficult, but here structural changes seem to be ultimately leading to the conclusion that the MBA is irrelevant and a badge of shame and not one of honor that entitles one to (others) riches [7].

Lowdown:
- If you are thinking about getting an MBA think twice: is it actually what an uncritical glance says it is? Will you get what you want from it? The MBA depends on command-and-control working as it has in the past, there is reason to suspect this style of organization is and is going to continue to be shaken up.
- A stoic would say an MBAer is a sell out. Sure, those guys died out about 2000 years ago but they rocked and had some interesting things to say. Consider if an MBA actually gives you freedom, or not.
- We live in interesting times. It would be interesting to see if the death of the MBA as status symbol could be sped up by pointing out the emperor has no clothes: you went to finishing school?

Notes:
[0] The difference between a typical leader of a corporation and a typical politician is one of degree. No pun intended. As in everything, I'm speaking generalities here - there are a handful of politicians who are of high character and intelligence, as there are business leaders, but the question is one of the general class and environmental pressures.
[1] "Let us say I suggest you may be human. Your awareness may be powerful enough to control your instincts." - quote from Dune. The struggle to become free is a difficult one - we are borne among many who are enslaved to their natural animal instincts, and thus most of our social environment consists of non-humans in the Dune sense. In our society it is easy to grow and obtain the view that consumption is sufficient for a good life.
[2] An MBA means you are signaling that you want to "succeed" in the business world and that you pass a minimum threshold of IQ and work ethic and that you have, post MBA, proper manners. i.e. you will take certain actions, you will respond to certain incentives, you will behave in a certain way. You have been properly vetted and neutered.
[3] Middle management is basically the operating system of a company. You handle the basic processes, shuffle paper around, pass stuff up/down, make reports, distill information, etc. etc. etc. i.e. you can/should be replaced by a script.
[4] Traditionally we see this - every recession pushed out bloated middle management. But as the workers can be replaced by internal databases, Google engines, filters, wikis, etc. and other aspects outsourced to Indians with crisp accents, strong work ethic, and smaller paychecks we should see the re-inflating of the middle management become increasingly less. Has the computer - which can take care of so much of the logistics needed to run a company - replaced the middle manager, with only some time needed to finish the process?
[5] Bail out plans may be simply prolonging the agony - if some corps, say GM, were notorious for command-and-control failures sending them money to prop them up will prevent their evolution to the new standard processes required to survive. As a secondary significant forcing will soon be on us - the retirement of the boomers - it might be wise to let evolution happen quickly to better handle the shifts that will be occurring.
[6] Hey, if Apple can outsource the iPod what is to stop a small design shop from doing the same? Consumer hardware is cheap, as is clothing, software, jewelry - the list of places where design and the small can rule is large - the question is if the domain of the small is significantly increasing and what will remain limited to huge budgets.
[7] It will be interesting to see how MBA programs react to changes, if the public will be back on board with the MBA elite symbol soon, and if devolution from command-and-control happens relatively quickly or if the change drags on for decades.

Risk

Risk. How best to understand & take on appropriate amounts?

The first thing to do is to discriminate between risk tolerance and risk capacity. Many people who take on risk do so because they can tolerate risk, e.g. they either enjoy it or at least can stomach it, and as they do not realize that they do not have the capacity to sustain losses. Compulsive gamblers are like this - if you are a billionaire you can have a large poker allowance and not endanger or risk anything really. You have capacity. If you are holding down a normal 9-5 job, and are barely making your bills, and you have a family to support, well, you do not have the capacity. You may have a high tolerance for risk, but you cannot afford this. Do not delude yourself that you will win and buy your family a good life. Do not mistake a need to win with an ability to win.

What you want to do is overcome fear and increase your tolerance for risk if you cannot confront it, or if you have a high tolerance you will actually want to reduce this and realize that feeding the feeling of risk may not be worth the entry cost. Either way, you must calibrate in a way that accounts for your (perhaps small) capacity. The key to managing risk is capacity.

One thing we should realize is we often have more capacity than we assume - we live in the richest time in history, so "risking" things to take on a career path you love but may not pay much is not much of a real risk - as long as you are prudent and can accept the relative "poverty". You may be relatively poor to others, but on an absolute level you will most likely be fine in terms of finances.

Another thing we must learn is that there are two ways we can risk, let us say that we feel we can stomach a 80% chance that things will turn out well. We can either do this:

(A) Bet everything on something that we judge to have 80% odds.

Or we can do this:

(B) Bet 80% of our stuff (money, time, etc) on something we judge to have 100% odds, and 20% of our stuff on super long shots.

There are a couple of advantages to (B). First of all, it is more secure. No matter what we have 80% of our wealth protected. Betting everything on a 80% chance is foolish, as you have bet away your capacity so you are screwed if you lose; option B takes capacity into account and makes sure we keep the capacity. Secondly, the long odds pay much more if they work out - and can really engage us either way, win or lose, by having us really live risk and put ourselves to the line or try things that are difficult yet rewarding. It is doubtful you will become a great author and write a book that will change lives. But you can spend a chunk of your day working on your book, and without risking your livelihood you will become a better writer and have a shot at making the tome that changes the world. Perhaps 20% of your time is worth this to you.

By accurately judging your capacity for risk you can proportion how much you want to risk on long shots - if I'm a billionaire I can risk millions and millions of my finances, and all of my time, on super long shots. If I'm working myself out of debt or struggling to feed my kids I can risk little finances, and need to keep my job, but can spend some of my time on long shots. Maybe all you have is 10 or 5% of your time you can do this in, after all you want to play with your kids, put food on the table, etc. But I can likely demarcate 5% of my time to writing that script - at the very least you are engaging life, growing, and showing your kid a great lesson (hard work, growth, risk, the idea of capacity, engaging life, struggle, blah blah blah). Yes, it will be hard to scrape up the time, to sit down and do the work. Or to scrape up the courage of doing your all and (most likely) not measuring up the first few (many, every?) times and failing. But it is likely worth it - you will gain in proportion to the difficulty. And maybe you will sell your script and make a difference in the world and get some coin also, or at least have a story worth telling about how your script was turned down in {insert cruel manner here}, or have the ability to tell more compelling and interesting stories to your friends.

Finally, there is risk and there is uncertainty. I used the term risk, but risk is boring and using the term here is somewhat misleading. Risk is known - if I flip a regular coin I have about 50% chance of getting heads. Uncertainty is what is really rewarding. If I have two doors, "write a book" and "do a normal job" I don't know what is behind them - but I can guess that I am most likely going to do OK doing a normal job and will have food on the table, at the cost of an exciting life perhaps. For many of us, e.g. those without rich parents, we do not really have the capacity to have any other realistic choice. It is dangerous and stupid to operate otherwise - especially if others rely on you. Uncertainty is the super long odds - we can't accurately measure the risk, we simply know the odds are against us - way against us. But taking the uncertain path is when we engage life, grow as people, and can really find and create wealth. Many people like the feeling of risk - they gamble a lot, even though the odds are slightly against them (and therefor they will eventually get fleeced of their money); or perhaps they just want to live an engaged and fulfilling life. For some they go in knowing they are paying for the feeling, for others they think they actually will win. But the important thing to know is this - you can usually go through both doors, you can hold down a normal & secure (and perhaps somewhat unengaged) job, and you can spend some time going through the second door of "write that damn book". It is not either/or like in option A - oh, my parents are rich so I can risk a life that has 50% odds, or oh my family is poor so I must take a 90% career. You can pick a very stable job and take super long shots that allow you to grow, find adventure, and live a real life.

Uncertainty is where life is at. Many of us do not have the capacity to afford exploring uncertainty with all of our time, but almost everyone has the capacity to spend some time exploring life. Figure out how much capacity you have, and start spending what you can on living and exploring.

Finally, whatever you do, do not resent your family for "tying you down". You chose your family with your actions, and you choose your life every day. Blaming them for what you do is a feeble excuse, and one that will limit both your and your families joy. Many people seem to fall into this trap, and waste their lives in an unhappy state with an unfulfilling job. You do not have the binary choice of "fun and fulfilling life" versus "terrible and grueling life", if you are anything like most people you have a small capacity so you must toil but you can also live and explore uncertainty with what capacity you do have. Putting blame on your wife or kids will just undercut your joy and undercut your life, you are simply using your family as an excuse for not confronting life - an easy, yet awful, out. As far as excuses go it is pretty poor - you gain nothing but negative feelings and wasted life from it - and yet it seems surprisingly common. Your family is a gift, don't sabotage yourself and resent one of the most important things you can obtain in life.