This weekend I was listening to the latest episode of the Art of Network Engineering podcast featuring Russ White. Russ is one of those guests that has a breadth of knowledge outside of technology that colors the way he looks at things in the realm of enterprise IT. Plus he’s a fun interview.
One of the questions he asked was around the idea of technical MBAs. For those that might not know, MBA stands for Masters of Business Administration, which is a post-graduate college business degree. An MBA is widely regarded as a way to put yourself on a track to be a manager for a company in some capacity. An MBA is punching a ticket to be a future CEO. Why does it seem like the number of MBAs coming out of prestigious business schools don’t have a technical background then?
Where the Action Is
I’m going to quote liberally from a book I’ve been reading called The Personal MBA by Josh Kaufman. In it, Kaufman lays out the reasoning behind using his book to study the principles behind the information given in MBA classes instead of spending $200,000 to go to a business school for two years for the same material. The layout of the first few sections gives a great overview of the way that most people think about MBAs as well as how most MBAs view the business world.
The original reason to get an MBA was to apply scientific reasoning to management. The goal was to have managers for factories that looked at the numbers and made sound decisions based on facts and not hunches. In theory that was a great way to get started. However, the numbers started to change in favor of a newer, more exciting way to apply numbers. Instead of crunching them to make people more productive, MBAs started moving toward ways to apply that analysis to make the company rich.
In the past 50 years the number of business school graduates going into finance and consulting has exploded. Per Kaufman, something like 60% of the people getting MBAs have moved toward finance as their preferred area of management. When you think about it that makes all the sense in the world. Finance is where a company can get bigger and more profitable. Value creation can be heavily impacted by workers that are looking to invest profits and reduce costs across the board to increase return to investors. Likewise, investors more heavily reward managers that make them money. This feedback loop means the easiest way to pay off your MBA debt is to go into finance and make the company rich.
On the flip side of the discussion, do you think of value creation when you think of IT? I can remember way back in college when getting my BBA in MIS and being taught that I was going to be spending a lot of my time convincing management that IT departments were not just cost centers. Sales generates revenue. Marketing supports sales. Accounting makes sure we’re actually making money. IT? Well, we ask for stuff and then install it and then fix it when it breaks. We don’t actually do anything to make money.
I know a lot of my readers are probably shouting at their screens right now talking about how IT supports the business and enables the value creation that other parts of the organization do. You’d be absolutely right in your assertion. However, the stigma that IT has is that we take money and don’t give any back to the organization directly. Kind of like how plumbers and electricians are still seen as “dirty” or “low brow” kinds of jobs. Despite evidence the contrary IT is drag on the whole organization. IT doesn’t do the hard work of making money through emails or apps or ensuring databases are up and running to search through for customer leads.
Given that IT is a cost center and the real rock stars all go to finance to keep the shareholders and investors happy is it any wonder that MBAs want to work on spreadsheets instead of Excel? If you had a choice between limiting your career trajectory while also having a lot of business school debt to pay off would you do it knowing tech is a much more exciting role? The question pretty much answers itself.
Promote From Within
Let’s look at the second major reason that MBAs are always technical disciplines. Who is in charge of your IT department now? Is it an MBA? Is it a manager that came from accounting or sales? Or is it someone technical that got promoted a few times and now finds themselves in charge of all the IT teams? Does that manager have a formal background in management or a degree? Or do they learn the ropes as they go and feel a bit rough around the edges?
In many IT organizations that I’ve worked with and worked for the management in those areas tends to be promoted from the bottom up. Instead of a more formalized structure of managers trained to be managers and hired into the organization to manage, IT is more about enabling intelligent and qualified individuals to maintain the department. You see far more people with advanced technical certifications or years and decades of technical experience working to keep the lights on as opposed to the lessons of quantitative analytics from business school being applied to streamline operations.
Admit it. You’d rather work for someone who knew the tech as opposed to someone that had been trained to be a manager right? Is there anything worse than walking into a meeting with the head of the IT department knowing that they won’t understand the challenges of a new hardware installation or implementing a new protocol that could impact operations? The nerve of those people! If they would just get someone technical in that seat that you could talk to things would be different for sure. This place might even run right for once!
The fact is that most technical professionals prefer someone that understands them over someone that is good at managing others. They would rather spend time talking to a promoted tech resource that understands the differences between SSL and TLS instead of someone that was trained in how to go to management and ask for more budget this quarter. We’re more comfortable with people that understand the things we do. It’s the same in accounting and finance and sales. We want to be managed by people that know how to deal with our special areas of expertise.
Extend that to the business school. MBAs go into finance so most finance people are managed by MBAs. IT is managed by people that worked in IT, which is more focused on certification and practical knowledge rather than formal learning in universities. The divide grows each time a new class of business school graduates starts applying for roles in a company. Would you take an interview with a cost center department full of people that automatically don’t like you because they think you don’t know the difference between a switch as an access point? Or would you rather talk to people that “get” you in the finance department?
There have been attempts to bridge this gap. In the above episode AJ Murray mentioned a hybrid degree that offered training in IT and in business. I too looked at the possibility of obtaining an MBA and a MS in MIS from my graduate school. As mentioned by AJ that major was the least popular option at his school and it didn’t last too long at mine either. That’s because the amount of work that you have to do for both degrees is far above what you’d have to do in order to get just the MBA. And there isn’t a lot of crossover either. You could be in a quantitive analysis class for finance on Monday and writing Python code on Tuesday for a program that was due at the end of the semester. It just doesn’t make sense when most of the candidates would prefer one over the other.
Russ wondered why there aren’t more people with a technical background getting an MBA. My answer is that the ones with a technical background don’t want it and the ones that want it don’t want to deal with tech. Management doesn’t care if you can manage a team of high-performing nerds to streamline operations for the business. They do care if you can cut costs and use financial wizardry to make the company more profitable. Why do you think so many people who are CEOs are former CFOs and not former CTOs or CIOs? The MBA is a degree to teach people to manage and the roots of it go back much further than enterprise IT as a discipline. As much as we might hate to admit, MBAs are focused on the business, not the departments. And as long as the road to the CEO’s chair involves making money for the shareholders you won’t see many technical people in that chair any time soon.
I got an MBA in the early 80s, the school was in the chicago loop where I worked so I could walk to class after work and take the train home, also back then my employer picked up most of the cost. I did get mine in finance. This was also before there were any IT certifications. It has helped over the years but I never really used it. Clearly things are much different now.
I got my MBA as an investment for future growth. At the time I was working as a consultant (in Cisco’s Advanced Services organization) and I often had to work directly with CxOs. Having a common language and a (somewhat more) shared point of view with the “business folks” allowed me to be much more effective and deal with more complicated situations than just delivering network designs.
Over the years it also allowed me to switch back and forth between technical leadership and management roles. In both cases I was leading people and had to deal with “business level” problems and decisions. The only difference is whether people actually reported to me or I had to work through a more “complicated” org structure.
I definitely think an MBA is a valid growth opportunity for technical engineers that feel they can expand their role into more business-focused bigger-picture domains. It doesn’t mean you have to forget all the technical stuff you know, but it does give you a growth opportunity.
I’m curious about this too. I’ve seen more and more articles about how the number of MBAs coming out of prestigious business schools don’t have a technical background, but I haven’t seen a lot of discussion about why that is. Do you think that’s because people think that a technical MBA is redundant or something?