You Gotta Love Business Schools: Irrelevance is Always a Problem

Business schools, in their MBA programs, have a mandatory course, and often two, in writing a "Business Plan."  In a business plan a group with an ideal and no money attempt to convince those with money and no ideas that the two of them should partner. Business schools talk about such plans incessantly -- They have business plan competitions (in house and nationally), that have clinics in which students write business plans for clients.  The trouble is, no one asked the venture capital funds if business plansare valuable. Now someone has. In a study of 1,000 requests for funds, Godlfarb and Gera, of the Robert H. Simith School of Business, found that the plans are -- well -- worthless. "Nobody reads them."  Business school business plan teachers have not given up -- now the argument is that the plans are good for those drafting them ("self-critical thinking" of some such garbage) although not those are targeted by them.  By the way, business plans are never written alone in business schools, they are written by teams, who take "teamwork" and "leadership" courses.  Students are taught how to work together and how to lead by "facilitating others" to work together.  Little mention of quality of the decision or ethics in such training. We have now discovered (?) that teamwork is often "niceness" and "civility" training and groups being nice can make entire organizations very stupid.  We have taught organizational stupidity.  Look at our banks' boards of directors (not to mention the boards of auto companies, insurance companies, real estate companies, etc. -- organization stupidity, all in conformity with teamwork and leadership training.  Making a decision in a team effectively is less important than whether a decision is a good one -- a little disagreement, openly and candidly expressed is healthy.  We need to teach students how to develop a thicker skin rather than to pander to those who have thin skins.  Teachers to often teach students what they want students to do (be nice so the world will be a better place) not what students need to do (make good tough decisions in a rough environment).

I am reminded of the students fifteen years or so ago that caused business school self searching -- students often did better in business by skipping an MBA program after an undergraduate degree.  That's when business schools starting teaching "teamwork."  Right problem; wrong solution.  A new student suggest that fewer graduates from a top ttwenty MBAprogarm than from a "state school" end up as CEOs.  This stuff hurts.  Then there is the recent attack on business school finance professors -- the guys who make the big money and are the stars (they are often among the ranks of the highest paid in any university faculty)-- for teaching formulaic equations and mathematical formulas that -- well -- do not work.  You gotta love business schools.

So you want to be a business person?  Take a course on how to read financials, take a course on tax, take a course of valuation theories of future income streams, all from a professor who pushes you hard and tests you individually, take courses on the classics (not taught by crits, that is another problem) and play intermural sports.