halfmba

Issue #44

Last Update March 2, 2006

National Half an MBA by Gert Innsry April was a remarkable month; the 9/11 commission elicited testimony that explained not only Bush's failures as President, but also illuminated his previous failures as a businessman. Simply put, our first MBA president continued his undergraduate habits into graduate school. An earner of “Gentleman's Cs” has basically learned only the minimum needed to pass; in MBA school, he obviously did the same and only learned half of what a manager should know. Condi Rice, Richard Clarke and others testifying before the commission made plain that Bush learned that a manager should be able to delegate. He failed to learn that a manager, after delegating, must follow up.

This failing extends to his senior managers as well. Condi Rice excused her lack of action after receiving warnings that Al Qaeda by saying, first, that these warnings did not cite a place or time, so she considered them vague, and second, that no one had asked her to take a specific action based on these warnings. No action was therefor taken, and the warnings were, in effect, ignored.

Now imagine this scenario: the Chief Information Officer of Fortune 500 company receives information from his senior Information Security manager that the internet is buzzing with word that an attack will be made on the company's websites. The internet chatter has not specified when or how. The CIO tells her Information Security manager that his warning is too vague, and besides, she is busy with other things. Since he has not asked for a specific course of action, she ignores the problem. The manager than succeeds in having his memo passed to the CEO. The CEO reads the memo, asks no questions, and moves on to other matters. A month later, a breach of security brings down the company's websites and causes significant losses to the company.

Which of the following do you think the Board of Directors should do:

1. Endorse a stock offering to replace the funds lost in the attack, and raise the compensation of the senior executives involved;
2. Encourage the CIO to force out the Information Security manager, and sue a small company whose computers did not contribute to the attack;
3. Fire the CEO and CIO, cancel their golden parachutes, and sue them for incompetence, misfeasance and malfeasance?

A real manager (one who had actually been awake in MBA class) would have asked where the vulerabilities were and what was being done to harden the websites for attack; would have asked for a plan in case an attack occurred; and, on being told that there was probably more information available, but that it was scattered throughout the organization and the relevant departments were not cooperating, would have called the senior managers responsible into a meeting and would have knocked some heads until everyone was clear that this issue was a priority. He would also have set a date for results, and made it clear that he would be monitoring progress closely.

Condi Rice's incompetence is, to some extent, understandable. She is, at heart, an academic, with neither the training nor the temperament to be an effective manager. Her boss, however, had the training; he might even have the temperament, although he has not yet publicly exhibited it in contexts that involved no financial profit to his friends. What he also had was the old family complaint, a failure of the “vision thing”, an understanding that leadership involves good personnel choices, hard work, and a willingness to engage uncomfortable realities. A passive manager is not a “hands off” manager, he is a bad manager. It is not a matter of style, it is a matter of substance. Yale should ask for its MBA back.