Business School is a joke

I’m enrolled in a top-5 undergraduate business program, one consistently ranked beside MIT’s, UPenn’s, and Stanford’s. 99.5% of my classmates will graduate with a full-time job offer in hand, with about a quarter of those working at places like McKinsey & Co. and Goldman Sachs. The facilities are impeccable (we just got a $100M donation), the student groups rich and varied, the class sizes relatively small. By all traditional metrics, the Ross School of Business at the University of Michigan is exceptional; I should be proud to attend.
But I’m not. I’m actually sort of embarrassed about it, though I don’t hide the fact I go there for the simple reason that most people think it’s commendable. The goal here is to fight that misconception.


I’ll start with a slice of a typical afternoon.

Last week I attended a presentation by Zingerman’s deli, hosted by the b-school student group BOSS (Business Organization for Strategic Skills, whatever that means). It was about their corporate strategy, and I gave the event a chance because Zingerman’s is my favorite place to eat, and one of the more profitable sandwich places in the country despite having a tiny footprint in the outskirts of Ann Arbor. In fact, it was named the “coolest small business in America” by inc. magazine. Nice.
Most of the audience was dressed in business casual, and students mingled and exchanged e-mail addresses over chips and soda before the head of BOSS introduced the first speaker. He was a fifth-year Ross student, and he gave us a primer on “corporate strategy.” He mentioned that he was going to work for Merrill Lynch. He read directly off of a few slides (pie charts, flow charts, bullets). It was painful, but excusable because it was so short. I waited for the real meat of the event.
The main speaker was introduced as one of the deli’s twelve managing partners and their head of corporate strategy.
During her 45 minute PowerPoint-guided presentation, she said the word “growth” eleven times; she talked about deliverables and accountability; she went over their various systems, their management structure, and their mission statement. She didn’t mention sandwiches until I asked her which one she liked the most. She didn’t mention that the owners traveled extensively picking ingredients at tiny farms and bakeries, or brag about their customer service (their founder wrote a best-selling book about it), or describe their massive mail-order sales, or explain the seminars and tastings from which they generate a substantial profit, etc. In short, she didn’t really say anything at all, and yet the kids around me were taking notes.
That’s the root of the problem. That’s what the business school teaches us to do. Not once has a professor told us to “make great products” or “do something people love.” Why? For one, it’s harder to teach engineering to a marketer than it is to teach marketing to an engineer (take Google). The thing is, we’re designed to be investment bankers and management consultants, the professionals who guys like Warren Buffet will tell you are just “friction” in the economic system. And this coming from a guy who has created more wealth than almost any human ever. From the Berkeshire Hathaway 2005 annual report: “For investors as a whole, returns decrease as motion increases.”
You won’t see something like that at Ross. Nor will they ever show us a diagram with “middle management” and “consultant” next to our names; they never tell us that for the most part we’ll just move, play with, analyze, and talk about wealth, rather than create it. That’s for the engineers, the guys who they anachronistically think will work for us in fifteen years. What’s worse, you’ll see an absolute torrent of stuff like the Zingerman’s presentation. In fact, we’re taught to relish that kind of talk, to produce it ourselves. So what’s the problem? How could this possibly happen?
Let’s start with admissions.
The application is designed for students with good GPAs in introductory classes who spend their spare time earning titles (”Marketing Director,” “Head of Student Relations,” “Executive Vice President”) in clubs. They go to meetings where they design posters, e-mails, and flyers to attract kids to more meetings. It’s not their fault. Since the admissions committee only uses a student’s first year at Michigan in their analysis, and since it’s difficult to differentiate oneself from others taking the same prerequisite classes, kids are encouraged to join organizations that do nothing but promote them and itself. Like my buddy said, “It’s just something you gotta do.”
And despite an applicant pool of under 600, there are no interviews or recommendations - in fact, if you submit a recommendation you are guaranteed to not get in; odd, considering the main (the liberal arts one) college’s admissions department reads about 100,000 recommendation letters. So in this system, the stuff I do, like take hard classes, talk to professors, read books, websites, and Wikipedia, and write, is of essentially no value. Their emphasis is on

• having enough activities to fill up your activities sheet/resume,
• spacing your fonts correctly,
• not mentioning high school, because they condescendingly told us in mandatory pre-application sessions that everything we did before university was worthless.

I played the game. I joined, but didn’t regularly attend, a couple of clubs (Michigan Economics Society, Michigan Billiards, Students for the State of America [ASS backwards!]). In my essays, I wrote well about essentially made up stuff. My “example of teamwork or team-building” was loosely based on pick-up basketball games I played once every few days, my “most important activity outside the classroom” was about a business plan I had drawn up just a month before and hadn’t really developed, my “reason for applying to Ross” was based on a career path - private equity - that I hadn’t really settled on. In short, my application was bullshit. Proof:
.

While the details of my future remain hazy, and while I expect any number of wrinkles to send me off my course, I certainly have a relatively well-defined impression of what I’d like to do. The education I hope to gain here at Ross will serve as an extremely stable foundation upon which to build that career in finance and private equity, the steadfast and solid guide to inform difficult decisions at each crossroads of my career. Indeed, it is a key component – if not the very core – of my future plans.

.
At business school, it seems, bullshit wins.
I took five classes in my first semester. Three were economics classes to finish that degree: Game Theory, Econometrics, and International Trade Theory. The two others were mandated by the BBA program: Accounting, and Operations Research and Management Science (OMS).
It was clear from the first few minutes of lecture that the business school got what it asked for: friendly, busy kids with mediocre math skills. The accounting class was like any other, though it crawled along, and exams were simple rearrangements of the practice tests; the book was put together nicely, so there was no reason to attend class, though the lectures I went to were unbelievably boring (think Ben Stein in Ferris Bueller’s Day Off). OMS was, for this little essay, a perfect case in point.
We learned what took 45 minutes in my Econometrics class in an entire semester. We spent three weeks discovering that flipping heads with a fair coin three times in a row has a probability 1/8. We powered through Excel spreadsheets that could average long columns of data. We learned Bayesian statistics by plugging numbers into tables. There was no rigor - for instance, when we learned the basics of optimization we were told to visually solve problems by moving a sloped line away from the origin and note where it hit the other lines, rather than tackle a system of equations or (aha!) do simple calculus. All the while we were told that what we were doing related to business through oversimplified case studies where we served as consultants to Firm A. Using the word “Science” in this course’s title is insulting.
There’s nothing wrong with introductory classes. Basic concepts, after all, need to be addressed early on. The problem was (a) the lack of rigor: we were taught to “plug and play” numbers (in accounting, too) rather than understand them. We studied hypothesis testing without mentioning research design or understanding variance, we saw conditional probabilities as a few fields in a table and ignored set theory, we were taught to answer questions about Excel Solver output by saying “If this number is 0, then it means ___” without being told why (the answer had to do with negative marginal returns). If you’re rigorous, answering not just the how but the why, you can get even remedial kids to do great things; if you only hit the surface level, if you only teach procedures, you make everyone a monkey. And (b) the attitude: I’d lose 30% credit on a problem set for not simplifying equations, or skipping two steps of algebra, or writing VBA code to solve problems instead of drawing a decision tree. There were no opportunities for acceleration, and the focus was on terms and processes, templates and formatting.
I think there are a couple of things at work here. The main thing is that the professors are by definition not right for their position. At least Math or even Economics professors (at the top universities) are leaders in Math and Economics; they publish important papers, work for the Federal Reserve, and teach really smart kids in their spare time. B-school professors use buzzwords, follow slow but tried-and-true curricula, and make sure that in submitted work your group’s names are in alphabetical order. They don’t run companies or make great products, and they’re not even consultants!
Interestingly, group work is the supposed sine qua non of the undergraduate business curriculum. It’s what gets us high marks in the Wall Street Journal rankings, what consistently attracts recruiters to our school; it’s our bread and butter.
Without getting into a lengthy discussion of what I think every reasonably intelligent person knows about mandatory group work at the undergraduate level, I’ll point out the obvious: it’s counter-productive. But it’s also illustrative of the whole problem I’m getting at here.
Mandatory group work teaches you how to manage, and thus it’s at the heart of a curriculum designed to build professional managers. What this really means, though, is that it teaches kids how to assign tasks to people who aren’t capable of doing them, how to schedule wasteful meetings to re-format and explain individuals’ work, and how to make bad and inconsistent PowerPoint presentations. I’ve read enough Dilbert to know that the b-school model of management is accurate, but that doesn’t make it good.
In fact, it makes it a joke.