Wednesday, June 03, 2009

The anti-business school

Yeah, yeah, yeah ... I never tire of writing about Apple; but when one company does so many things right when it comes to innovation, it takes on the character of a School for Innovation. Quoth Apple COO Tim Cook:

"One traditional management philosophy that's taught in many business schools is diversification. Well, that's not us," says [COO] Cook. "We are the anti-business school."
Is this a criticism of business-schools-as-usual? It very well might be -- with once successful corporations such as General Motors managed according to the principles traditionally taught at business falling by the wayside, it very well might be the case that business schools have gone out-of-sync with reality. One of the world's most prestigious business schools - MIT's Sloan School - is named for General Motor's most famous chief: Alfred P Sloan. Does MIT wish to be saddled with his name anymore? More from Wikipedia:
The world's first university-based executive education program—the Sloan Fellows—was created in 1931 at MIT under the sponsorship of Sloan. A Sloan Foundation grant established the MIT School of Industrial Management in 1952 with the charge of educating the "ideal manager", and the school was renamed in Sloan's honor as the Alfred P. Sloan School of Management, one of the world's premier business schools. A second grant established a Sloan Fellows Program at Stanford Graduate School of Business in 1957, and at London Business School in 1965.[2] They became degree programmes in 1976, awarding the degree of Master of Science in Management.
It gets worse:
In 2005, Sloan's work at GM had come under criticism for creating a complicated accounting system that prevents the implementation of lean manufacturing methods. In a nutshell, the criticism is that by using Sloan's methods a company will value inventory just the same as cash and thus there is no penalty for building up inventory. This system seems to have been widely adopted because of its significant advancement over previous methods.[3] However, carrying excessive inventory is detrimental to a company's operation and induces significant hidden costs. Sloan's system was implemented by other major companies, especially in the United States, and eventually undermined their ability to compete with companies that did not use it. (Waddell & Bodek 2005)

During Alfred P. Sloan's leadership of GM, many public transport systems of trams in the US were replaced by buses. Some critics claim that Sloan was also instrumental in the demise of public city transport throughout the United States; see General Motors streetcar conspiracy for details. GM was found guilty of violating anti-trust laws, but the penalties imposed were nugatory: a $5,000 fine for the company and $1 fines for each convicted executive.
The very principles that Sloan championed seem to have become, well, obsolescent. Maybe it is time to reboot business schools, in the way Stanford, Rotman's (Toronto) and Weatherhead (CWRU) are trying to do, with a focus on design thinking. Here's some insight into what it takes to succeed at Apple:
Apple requires a special kind of workforce. The place is divided by product but also by function along what COO Tim Cook calls "very faint lines." Collaboration is key. So is a degree of perfectionism. Apple hires people who are never satisfied. A designer has to be a borderline fanatic to care about the curve of a screw on the underside of a MacBook Air or the apparent weightlessness of the tiny door that hides its connectors. You don't get a foot in the door here unless your eyes light up when you talk about your Mac. (Head designer Jonathan Ive referred to a new MacBook Air as "this guy" as he pointed out features in a recent interview.) The place is loaded with engineers, but it's not just the skills that are important, it's the ability to emote. ("Emotive" is a big word here.) The passion is what provides the push to overcome design and engineering obstacles, to bring projects in on time -- and a peer pressure so great it sometimes causes a team to eject a weak link or revolt against an underperforming boss. "Apple," says Cook, "is not for the faint of heart."
Emotive. When was the last time you heard that term uttered in any business school classroom? It's analysis, baby, and logic, and numbers: none of that namby-pamby e-motion thing. Real men (and managers) don't e-mote.

No, businesses as well as business schools that keep them well-stocked with manager-droids are clueless when it comes to building and growing new businesses in the new age in which we live. Sadly, most business schools are churning out so-called 'business graduates' whom they have shortchanged. Right now, B-schools are sitting pretty, delivering well-worn canned material since there isn't any disruptive innovation in sight. But I believe it will arrive and will catch the schools with the pants down. Indeed, with recruitment sliding at B-schools, that point may have already arrived.

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