Michael Skapinker has a column in the Financial Times Tuesday discussing an oath, hatched at Harvard Business School, that's been getting publicity of late. The oath, apparently signed by 1,100 business school graduates -- we're counting! -- promises the usual oath shtick: Be good, be true, mentor effectively. Skapinker likes the oath, though he admits that some of the strictures are "bromides," particularly because it sideswipes the fixation on shareholder value, cavils at "short-term bonuses" and -- egads! -- promises not to chase personal ambition.
So what's left? More practically, how can I pay off the damn student loan if I can't indulge in my personal ambition of accumulating great wealth?
Skapinker realizes you can make fun of this. Nonetheless, he believes that this could be the start of something big -- a kind of professionalization of the M.B.A. akin to what the doctors and the lawyers have, with their oaths, guidelines, professional organizations and ethics bodies. This at least makes a modicum of sense, until he offers up journalism as a model. Now I have been employed in journalism for a number of years, mostly in places that would not be described as the "gutter press," and I have never really had to take an oath on a "professional code." True, accuracy is an important part of the job, which, like any craft, from plumbing to engineering, requires certain basic skills. But in a profession gripped by often-divergent idealisms, I've never detected much more than an inchoate (and personal) attempt to formalize what's right and what's wrong except don't lie, cheat or make up crap.
But there are deeper problems with this crusade, besides the recurring thought that taking this oath might be a form of ambition. The oath argues against the shareholder-centric orthodoxy that has held Anglo-American capitalism in its grip since the '80s. Are there problems with this model? Absolutely, but its reign is essentially unchecked; it is an embodiment of the conventional wisdom, no matter what Jack Welch mutters in retirement. With every crisis, from Enron to the current mess, the reflexive response from the governance establishment, which includes the Securities and Exchange Commission and the folks at Harvard Law School, is for more shareholder power; not less. In these precincts, the power of the shareholder is viewed as a great and unitary virtue -- and as the only cudgel short of direct regulation over that contemporary evil, runaway compensation dominated by short-term bonuses, and its evil twin, entrenched boards and managers.
How exactly would a spanking-new M.B.A. begin to overturn that? And in doing so, wouldn't that empower boards and managers? Besides, in actively attempting to live that clause in the oath, wouldn't that mean your climb up the ladder might be delayed, thus reducing your influence to make real changes? Have the two HBS progenitors of the oath turned on shareholders? Have they written an effective critique of the system that -- and this is no coincidence -- has grown in power and influence in line with the M.B.A. itself? Just wondering, but if we're going to spread the wealth around here to nondegree holders, wouldn't the value of the M.B.A. decline?
This brings us to a second point. The comparison to law and medicine suggests that "management" is based on a corpus of knowledge and techniques that has been empirically tested, and that that body of knowledge somehow represents a shining moral ideal. Delving too deeply into this, even in the case of law and medicine, leads you into perilous waters where the pragmatism of professionalization and status meets practical ethics. "Business" does not involve written texts and tested facts; it's relative, changeable, elusive. If that's the case in business, why are we assaulted every year by new management tomes claiming new approaches and new ideas for every new generation of managers? It's a sign of how hazy all this is in business that the moral vision is based on whether shareholders own companies or whether the wealth gets more equitably shared by workers, communities, customers or Uncle Joe: that is between two competing ideas, dressed up in moral robes, about who gets the loot and who calls the shots.
But "management" as a set of skills lacks the "scientific" credentials of either the law or medicine. The real-life goal of management is to create wealth. Management lacks the distilled moral clarity of the law, serve the client (while hopefully not lying and cheating to do so), or medicine: treat the patient or at least don't harm him. Most business school grads will attempt to fulfill this oath in large corporations where their connection to whatever common good exists is attenuated and diffuse at best. Who's the client? Who's the patient? The notion that every Wall Streeter -- even those at the top -- knew that whatever they were doing with mortgages or credit default swaps was wrong and would lead to disaster is simply wrong. Corporations are large bureaucracies. Most folks in finance, even those earning large amounts of money, had limited views of complex situations. Their sense of responsibility extended to colleagues and immediate supervisors; even the notion that they could extrapolate their own situation across a firm of, say, 40,000 employees and thousands of shareholders, is a joke.
Given those limitations, the only oath that makes sense should resemble the doctors: do no harm. Don't lie, don't cheat, do no harm. Of course, those moral structures can be written on a matchbook cover and won't get you into any club worth joining.
Robert Teitelman is editor in chief of The Deal.
Follow Robert Teitelman on Twitter: www.twitter.com/@newsgirlmw
Certainly management is not a science in the same sense as physics or engineering. But precisely the comparison to medicine and law shows in my view that the oath or professional accredidation (or both) makes perfect sense. And there is no shortage at all of measurable abilities and skills that are known to make up the quality of a manager.
The argument that it 'stifles' innovation is a non-starter. Similarly with the hint at the Bill Gateses and the Warren Buffetts of this world. But I don't think you would go there.
Like New Coke, an oath will fizzle away when the economy rebounds and fall flat when greenbacks come a calling. Newly minted MBAs face the worst job market in decades and thus needing new sales “hook.” It sounds like HBS is trying to repackage its product offering.
To put it mildly, MBAs, including Ivy Leaguers, are corporate “technicians.” Quant jockeys and net present value wizards that manage production queues; or consult Fortune 500 firms; or are brand managers making sure we have a steady supply of Fruit Loops and Twinkies. Not greedy corporate thugs and villains.
The real test of a manager’s ("leaders" in MBA speak) worth is to get them licensed. To force upon them a state sponsored exam like medical boards or bar exams. The dumb irony is that the test exists and is offered on a voluntary basis. But, alas few takers.
The harsh truth is that a “bar-like” exam would be dismal for a majority of MBAs. Most would not pass, including Ivy Leaguers. The $150K tuition and fees paid for these degrees would put into question the business sense behind the degree.
A simple spreadsheet using GM's numbers could have told them immediately that what they were doing was NOT working. In my personal experience MBAs are NOT capable of quantitative calculations. I have seen more than one example of trivial financial failure where a simple back of the envelope calculation could have told the CEO and the CFO that they had absolutely no chance of succeeding with the kind of strategy they were running. And instead of taking EARLY measure, in all cases these people seem to ignore numerical reality and bet their companies on something, some time coming up that will magically save them. And it never happens.
MBAs, in my personal experience, are not wizards with numbers, quite the opposite, they usually act as if they had failed long division in third grade.
How about teaching a little computational skills, NPVs and spreadsheets. It's a sick joke that illiteracy in these skills is not a deathknell for CEOs or CFOs.