The Harvard 19

12 December 2014

Business schools like to boast about how many of their graduates have become corporate CEOs—Harvard especially, since it has the most. But how do these people do as CEOs: are the skills needed to perform there the same as the ones needed to get there?

MBA students enter the foremost business schools smart, determined, and aggressive. There case studies teach them how to pronounce cleverly on situations they know little about (as discussed in last week’s TWOG), while analytic techniques give them the impression that they can tackle any problem. With graduation comes the confidence of having been to a proper business school, not to mention the “old boys’ network that can help boost them to the “top.” Then what?

Some Surprising Evidence

This is one question these centers of research do not study. We made an exception. A decade after its publication in 1990, I looked at a book called Inside the Harvard Business School, by David Ewing. (The first line was “The Harvard Business School is probably the most powerful private institution in the world.” Unfortunately he might have been right.) The book listed 19 Harvard alumni who “had made it to the top”—the school’s superstars as of 1990. My attention was drawn to a few people who would not have been on that list after 1990.

So Joseph Lampel and I studied the subsequent records of all 19. How did they do? In a word, badly. A majority, 10, seemed clearly to have failed, meaning that the company went bankrupt, they were forced out of the CEO chair, a major merger backfired, and so on. The performance of another 4 we found to be questionable at least. Some of these 14 CEOs built up or turned around businesses, prominently and dramatically, only to see them weaken or collapse just as dramatically.

Frank Lorenzo experienced major failures with all three airlines that he headed, while Benton & Bowles, the renowned advertising agency headed by Roy Bostock for a decade, was closed down five years after he retired. Perhaps most prominent and dramatic was the story of Bill Agee, CEO of Bendix and later Morrison Knudsen. About a book written by Mary Cunningham, another Harvard MBA, who worked alongside Agee, a Fortune reviewer wrote:

What little discussion there is of actual business consists mainly of genuflecting in front of a deity called The Strategy…. Near as I can tell, it consisted of getting Bendix out of a lot of fuddy-duddy old-fashioned products and into glitzy high tech. What makes this a terribly ingenious idea, let alone a good one, she does not say. (Kinsley, 25 June 1984)

Another Fortune article picked up from here (O’Reilly, 29 May 1995). Agee “was facile with finance and accounting, shrewdly selling assets and investing in other companies…. [But after] Bendix’s ill-conceived effort to go high tech…a takeover attempt…backfired, leading to the sale of Bendix.” Then, at Morrison Knudsen, a construction company, Agee “made some dreadful business decisions.” According to some executives, he used questionable accounting practices to boost earnings by tens of millions of dollars. The writer concluded: that “Agee’s fatal flaw was his weakness as a manager.”

Of course a couple of years in a classroom does not necessarily destroy someone’s potential for management—there were, after all, those 5 others out of the 19 who seemed to do well. But the performance of the 14 suggests either that business schools have succeeded in putting some wrong people on the track to that top, or else that the schools’ emphasis on cases and analysis may be putting some right people on the wrong track to managing.

More Surprising Still

These results were surprising. They did not prove anything, but they certainly deserved consideration. So more surprising is what happened next. Nothing. We hardly hid these results: we published them in a Fortune magazine article (19 February 2001) and they appeared in my book Managers not MBAs (2004, pages 111-119, which has sold 80,000 copies). You might think that this would have set off some alarm bells, or at least evoked a bit of curiosity. That they did not may suggest as much about business schools as do these results about their graduates.

In the last three TWOGs, I have been critical of what has been going on in business schools, especially Harvard. Is this some kind of vendetta against it? Not at all.

When I studied management across the river in the 1960s, at the MIT Sloan School of Management, the Harvard Business School was just as renowned as it is today. But it was weak in research—in fact some of its prominent faculty derided research. The turnaround since then has been quite remarkable. In the areas I know, Harvard’s faculty is fantastic, especially in the ability of many to relate concrete issues to conceptual understanding. Too bad that they have to devote so much of their teaching efforts to a method—and its view of management, like that of other business schools so concentrated on analysis--that is doing such great harm to our organizations and the societies in which they function (see

We are mired in a heroic view of management (now called leadership)--centralized, numeric, individualistic and often narcissistic--that is too often detached from what is supposed to be managed. People who believe they can manage everything often prove themselves capable of managing nothing. We don’t need generic managers; we need engaged ones. The problem has been bad enough in the private sector; its infiltration into other sectors of society is far worse. Do NGOs need “CEOs”, business models, strategic plans, measures galore, and all the rest? Harvard and most other business schools have to be doing better than that.

Next week’s TWOG will discuss what we have been doing about this, by focussing management education on practicing managers who learn from their own experience.

© 2014 Henry Mintzberg