Numerous industry innovators have publicly stated that they consider MBAs pretty much pointless. Peter Thiel once said, ‘never ever hire an MBA; they will ruin your company’. Elon Musk has also famously stated that he rarely sees the value of those who went to business school he is on record as saying ‘As much as possible, avoid hiring MBA’s. MBA programs don’t teach people how to create companies … our position is that we hire someone in spite of an MBA, not because of one’. Guy Kawasaki once said ‘For every full-time engineer, add $500,000 [in company value]. For every full-time MBA, subtract $250,000’. Even Mark Cuban has said ‘I think an MBA is a complete waste of money. If you have a hole in your knowledge base, there is a ton of online courses you can take. I don’t give any advantage to someone in hiring because they have an MBA’. The reason for this is that they feel as business leaders there is a lot of practical advice missing from MBA courses. Mark McCormack’s book ‘What They Don’t Teach You at Harvard Business School’ attempts to plug this gap. But what can we learn from it?
Business is not about numbers it’s about people
One of the reasons why many business founders are against MBAs is because they simply teach everyone how to follow a formula and do things exactly like everyone else. This teaching is almost entirely theoretical as well and often misses a key element of any business – people! For example, you may be able to write the best business plan in the world, read a balance sheet statement and design a great business model but you then have to make the plan a reality. In order to do this, you have to be able to deal with people and this is a missing element of pretty much every MBA programme. It doesn’t teach you how to identify and hire the right talent or how to build relationships with customers and sell your product or services. Without this missing ingredient the rest of the knowledge is pointless. You can have the best business plan in the world, but if you can’t hire good talent or sell it then it doesn’t matter and to do that you have to be able to deal with people.
The ability to sell beats everything else
As Mark Cuban has said previously said ‘sales cure all’ and is without a doubt the most important quality in any organisation. Selling takes multiple shapes and forms, whether influencing others and getting them to buy in to an idea internally, convincing an awesome talent to join your organisation or closing a business deal. It is all sales. The ability to sell is also a trait that is consistently missing from most MBA graduates, they know the technicalities of running a business but many lack the ability to sell. This is because one of the most important nuances of selling is also to know when to sell. Timing is critical in any deal and most salespeople will hear no 99% of the time. However, in most of these cases the no is actually a ‘not right now’ as opposed to a ‘no, I will never do this’. Failure to differentiate between the two can kill an organisation.