From what I understand, a big part of what’s happening with Boeing, is that Boeing is run by Business person who want to maximize return of stock-owner rather than by people wanting to make a good product. The gained flexibility/nicer budget from massive sub-contracting led to “loss of knowledge”, and cutting-down quality control steps which “never catch anything” led to issue being missed-out.
Do you think that MBA program will take this reality into account ? or would they keep focusing on maximizing short-term profit even if it jeopardize the company’s future ?
This is somewhat of a mischaracterization of how this all shakes out/is taught/is perceived even though I get why it seems that way.
No one tells people “sacrifice the company for short term gains.” That’s not actually what people are taught. The problem is we have a misaligned incentive system that rewards that behavior more than it punishes it and little to no incentive to play the long game other than “make sure it doesn’t completely crumble under your watch.” So eventually people think they know what good leadership looks like (rapid expansion/rapid cost cutting/fat and happy shareholders with a C-suite reaping fat stacks as a result). All while they play hot potato with a company that is being redlined which may or may not be able to take the strain.
The issue is longterm plays/considerations are disincentivized rather than straight up demonized. Since MBA programs are ultimately going to teach you what businesses want and what keeps investors happy, it feeds into this perverse incentive structure.
Edit: there are obviously exceptions to this rule, but we’re talking broadly about publicly traded companies/companies answering to a group of investors
Edit 2: yea I did a second one sorry, just had a thought that feels pretty relevant. If anybody here has seen Silicon Valley then you know that the show sprinkles in some pretty serious realities once in a while. I always think back to when “Action” Jack Barker becomes CEO of Pied Piper and is fighting with Richard. Jack is MISTER MBA CEO ELITE in a nutshell. He’s the guy to run a unicorn company. At one point Jack asked him “do you know what our product is?“ And when Richard starts explaining the technology/platform he wants to build, Jack says “it is not your platform, it is not the box, it is Pied Piper stock. That is our product.“ [Sic.] When you view your decisions through that lens at all times, eventually you’re going to run into issues with the long-term health of your company. Stocks do not represent the long term health of your company. They are a complicated snap shot of that particular moment consisting of yes some data/numbers, but also “vibes” and more.
Sadly you see this at all levels of companies.
I’ve seen it in IT for 30+ years (Google is a great example): new projects/changes make you visible to upper management, but if you prevent failures/outages no one cares.
Now, have an actual outage and fix it, you’re a hero.
So, don’t prevent outages, but note the issues privately, develop mitigation plans, so when the outage occurs you’re the hero. That’s the lesson anyway.