01/12/2023
↗️The Missing Element.
Every company whose performance results do not satisfy its beneficiaries, needs turnaround. The initial point to approach the mastership of the corporate turnaround as the academic discipline, starts from the understanding of the reasons of decline - is it externally or internally caused? During my own career as a hired employee which happily ended 10 years ago, I almost never heard the correct answer for this question from the managers, whilst the reasoning that someone else failed that affected their performance, probably was the 99% of the reasoning why they ducked up. Everything was wrong, but they are great guys suffered the bad luck or external factors, thus, pay them a bonus. Frankly speaking, my disagreement with this position created for me the fame of holy bitch, who is on the Boards does not approve the bonuses to anybody. My picture of the world looks differently, and I see it from another angle, and even not from just one.
According to Dun & Bradstreet (1977), sheer bad luck calls the loud failure not more than in 1% of the total number of corporate decline cases. But probably even they would mind never, that the bad luck is also a manageable factor. Balthasar Gracian wrote, that being lucky is the art to be mastered: "There are rules of luck: it is not all chance with the wise, it can be assisted by care. Some content themselves with placing them-selves confidently at the gate of Fortune, waiting till she opens it. Others do better, and press forward and profit by their clever boldness, reaching the goddess and winning her favour on the wings of theur virtue and valour." Thus, where do people learn to manage bad luck?
Maital posed the question in 2013: "The MBA degree is the top choice for 2/3 of all graduate business degrees in the US. The trend for MBA students outside the U.S. was similar to that of those enrolled in US MBA programs in 2011-12, with 110,002 students enrolled. Since that
time, the trends did not change.
"The AACSB, which is the primary accreditor of business schools, reported that 250,389 students around the world were studying for an MBA during the 2020-2021 academic year." (Byrne, 2022). The MBA program was founded in early 20th century, in the USA. Since that time, the number of military aggression cases, terroristic acts, epidemics of serious illnesses, and financial crises demonstrate the exponential growth. Every reasonable professional would ask: what kind of knowledge is given to the students during the MBA programs, if the growth of the MBAs resulted in geometric progression of corporate failures, political conflicts, serious diseases, and wars?
For decades, management process appeared to become the academic discipline, promising to train how to govern the business successfully.
No need to go far to note the simple and obvious thing: the number of corporate failures rose in geometric progression with the growth of the MBA graduates. You know, Corporate Finance is a must for any MBA program. The question is: What do they study in MBA programs, if not only the number of the corporate defaults, but the amount of losses caused by them exponentially increased with the increase in the number of their graduates? Otherwise, is management something more than an academic discipline, and requires different skills and qualities, which probably shall be taught differently? What is the missing component in the MBAs educational programs, which delivers such awful results?
Dr. Russel Ackoff said, that the content of the human mind can be classified into five categories:
1. Data. The facts that must be memorized.
2. Information. The processing of data will answer the questions of 'who, what, where, and when'.
3. Knowledge is the application of data and information, which answers the 'how' question.
4. Acknowledging the reason: understanding.
5. Wisdom: evaluated understanding.
According to Ackoff, the first four categories are past-focused, while the fifth category, Wisdom, addresses the future. Through wisdom, individuals can shape the future rather than simply grasping the present and past.
The wisdom, the essential fifth element, which is responsible for creating the future, is not easy to achieve, it can be captured through deep learning, own insight, and experience. The only school which included the lucky wisdom book into the reading assignment for Strategy course, was the University of Oxford, Saïd Business School. When I studied here, during the Corporate Turnaround course, we learnt the General Motors bankruptcy case. We observed many data, presentations, publications, which were dedicated to its failure. So, after this academic exercise, now I know what ruined General Motors. Too many fu***ng MBAs, without the wisdom - the gene of evaluating understanding, which is responsible for the future.
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Written by Meggi Göring. All rights reserved. 2023. Copyright by the BOOST.
↗️Turnaround Guide. Corporate Turnaround, Business Transformations, Distress, Change Management. Part of the BOOST group.
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Credits:
1. Byrne, J. A. (2022, April 29). How many students are studying for an MBA?
2. Poets&Quants. https://poetsandquants.com/2022/04/29/how-many-students-are-studying-for-an-mba/ #:~:text=Some%20250%2C369%20students%20are%20currently,the%202020%3D2021%20academic%20year.
3. Maital S. (2013, July 17). Too many Mba’s in the world? TIMnovate. https://timnovate.com/2013/07/17/too-many-mbas-in-the-world/
4. Google. (n.d.). Dun & Bradstreet Reference Book of corporate managements. Google Books. https://books.google.co.uk/books/about/Dun_Bradstreet_Reference_Book_of_Corpora.html?id=K6pZAAAAYAAJ&redir_esc=y
5. Gracian B. The Art of Wordly Wisdom. Doubleday. 1992.
