It’s very rare to see an elite academic institution come under fire from one of its own, particularly when that criticism stabs at the current heart of academia’s “value proposition” and a time when many are questioning the price tag of their next level of higher education. So when John Reich, Professor of Public Policy at UC Berkley and former Secretary of Labor in the US, fired the recent criticism of Harvard Business School above it caught my attention. Of unique interest was the underlying indictment of the contradictory notion of the elite academic institution as the incubator of the modern, “celebrity CEO”.
I say contradictory notion but its more of an error of logic to make the leap and assume that Harvard, an MBA or any other purely theoretical study on its own makes for a better CEO of an organization. It essentially removes the practical side of the “theory + practice” equation. It would be similar to stating that theoretical physics alone can tell us everything we need to know about the universe and that experimental physics is simply a redundant component.
A bit divergent from Professor Reich’s points raised in his post, the evidence of history suggests that there is in fact a real disconnect between formal education and effective leadership in business that cannot simply be dismissed.
In the 1980’s large corporations, like IBM, admitted to investing a significant amounts in “re-educating” recent MBA graduates. They found that these new executives lacked the basic reading and writing skills required to fulfill the functions of mid-level leadership, let alone qualify them for a role as CEO.
Further, the role of the modern CEO and even the “Celebrity CEO” is neither new nor has it had a mutually exclusive relationship with any higher academic institution for more than a century. In the early 20th Century, both J.P.Morgan and John D. Rockefeller ended their formal education with what today would equate to local community college. The former having earned a degree in Art History from a tech school in Sweden and the latter completing a 10 week course in bookkeeping. Henry Ford is documented to have had even less formal education. Later in the 1970’s there was the well-known Chrysler CEO, Lee Iacocca who did earn a bachelor’s degree in engineering from Lehigh University in Pennsylvania. He would forgo further studies at Princeton University, however, for an engineering position at the Ford Motor Company and the rest is as they say history. More recent examples include Howard Schultz, CEO and architect of the now world-famous Starbucks. The first of his family to even go to college, his formal academic career ended with a bachelor’s degree in communications from Northern Michigan University. Topping the list is perhaps one of the most talked about CEOs of our time, Steve Jobs. Jobs simply dropped out of Reed College in Portland, OR out of boredom and never completed a degree.
In contrast, some of the most famous Harvard grads of the last century were either “non-businessmen” or even failed in business. Two examples stand out:
Of all of the great accomplishments of his life, his business endeavors were not among them. It’s been well documented that TR was not good at business. He used up the majority of his family inheritance on risky cattle ranching endeavors that failed miserably. Much of his comparatively modest income after his political career ended came from his writing and even sponsorships. Lesser known is the fact that most of his excursions of later life, his safari to Africa and the like were almost entirely subsided. The safari to Africa was completely funded by the Smithsonian Institute and believe it or not, J.P. Morgan.
There is certainly no discounting or disrespecting anyone who has risen to the Presidency of the United States of America nor anyone graduating from Harvard in addition to earning a Juris Doctorate. So current political and personal achievement debates aside, the underlying question is, “does any of that make for a more effective business professional and ultimately a more effective CEO?”
In the case of President Obama, its untested…he has never been a CEO of a corporation. Some will argue that being the leader of the world’s largest economy is akin to being a CEO of a corporation but that’s a weak analogy. Corporations cannot print their own money, although I be they’d like to. A president can be impeached, but that is nowhere close to the same thing as being voted out as CEO by a board of directors. In addition corporations, operating in the red, do not have the luxury of simply moving the line of their break-even or extending the deadline of their loan payments.
Wrapping it up, it may sound like I am an opponent of higher education but in fact it’s quite the contrary. There are few who are bigger proponents of continuous learning, self-mastery and formal education. But I am also a proponent of the maxim of balance between theory and practice. Further, I suggest that informal education and self-study have not been given their just credit or acknowledgement in over a century. Lastly, I suggest that academic elite, do not necessarily, an effective CEO make. History has demonstrated that some of the most effective CEOs have unique mixtures of mindsets and skills sets that stem from both formal academic study and practical direct experience in the business fields.