Saturday, September 20, 2014

MBA, Innovation, & Selection Bias

Nathan Furr makes the case over at Slate that many notable innovators have qualms about hiring MBAs because, he thinks, the MBA curriculum teaches skills used in large, industrial corporations where there is more certainty, at least in comparison to innovative, start-up-ish companies.

FLG, who has an MBA, largely agrees, but thinks Furr misses something more fundamental -- selection bias.  People who chose to get MBAs, particularly name brand MBAs, are those who, pretty much by definition, are choosing the safe, well-worn path.  The stereotypical Harvard and Stanford MBA is somebody who did an Ivy League undergrad, then worked for McKinsey or Goldman for a couple of years, before heading to Palo Alto or Boston to punch their ticket one more time.   Basically, somebody who is extremely good at working within the established system, not the against the grain type that is needed to innovate.   The content of the coursework only further intensifies this, but the root is there at the selection bias.

Also, FLG realizes this reality flies in the face of the elite B-School marketing that emphasizes the social anthropology grad who did a tour in the peace corps and then successfully launches a company that produces cheap, solar powered toilets that produce potable water for the developing world, but that is just too bad. 

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