B-schools under fire - business schools - CE Roundtable - Panel Discussion

Chief Executive, The, April, 1993

There is a communication problem between business and academia. We need to know how to get more MBA students trained to be interested in making things, and we need to find out how to ensure that you hire these people.

Robert W. Lear (Columbia Business School): In the past, none of the students wanted to be a horse. They all wanted to be jockeys and bookies. They wanted to finance the racetrack.

This situation is slowly starting to change. Some students want to be horses. We are trying to change the curriculum to accommodate them, but it's difficult. The curriculum cannot change as fast as the students would like it to.

William J. White (Bell & Howell): That may be so, but my experience has been that many MBAs don't want to work as salespeople or factory people. When we do find one who wants to do so, we can't afford to bring him into our system, because he will screw up our compensation program if we try to match his other offers.

So we fall back on hiring people with bachelor's degrees, seeing if they have people skills, and sending them to MBA programs. We probably send more employees to Kellogg-sponsored programs than we hire MBAs coming out of graduate schools.

If we could be sure the MBAs from full-time programs had the people, management, and motivational skills--instead of just the financial and analytical skills--we could take more chances. If you make a mistake with a high-priced MBA, you're in the hole. The economic risk-reward ratio always comes back to haunt us.

Reichert: This problem never goes away--not today and not tomorrow. In addition, companies must worry about loyalties and leadership. There are advantages to developing your own people and instilling in them a sense of company loyalty instead of hiring MBAs. When you recruit an MBA, you have to ask if his loyalties are more to himself than to your company.

William S. Wire II (Genesco): Here's the other side of the coin. About 20 years ago, we decentralized and had a unit that was headed by a young MBA graduate. We encouraged him to interview and recruit hard to get a lot of business school people into the boot sales business. He hired five business school people. They got their sales and marketing experience through the business. It's our fastest growing business now, and it will be about a $100 million business this year.

All of a sudden, in the other parts of my shoe business, the guys are looking around and saying, "These people can help. Maybe we should go hire some."

Reichert: At my company, Brunswick Corp., we create more MBAs by sending our employees to Northwestern University in Evanston than by hiring them. We take people we think are qualified, give them tuition, and send them to school. They have a sense of loyalty, and they develop a specific set of skills we know we will be able to use.

This doesn't mean we don't recruit MBAs. But I think the private sector and the education sector have to work more closely together to push the movement in the right direction.

Arnold Pollard (CE): Even though you send your employees to school rather than hiring newly minted MBAs, you still must get something you like out of the production system, otherwise you wouldn't send your managers to an MBA school. What are you getting back that you like?