Do MBA's make the best CEOs?

McGill Management Professor Henry Mintzberg, on his blog, says there's significant evidence that MBA head honchos are not as effective as counterparts without the degree.

Prof. Mintzberg has long been a critic of the degree that most people in business consider an important prerequisite for success. He has refused to teach MBA students, arguing teaching MBAs involves teaching the wrong people the wrong things at the wrong time, and written a book critical of such programs.

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With Joseph Lampel of Manchester Business School, he studied 19 Harvard Business School alumni who had been considered business superstars in 1990 – top performers with a lustrous MBA education.

Looking at how they fared in ensuing years, he found that a majority, 10, seemed to have clearly failed -- their company went bankrupt, they were forced out of the CEO chair, a major merger backfired, or some similar significant setback occurred. Four others had questionable performance, meaning that 14 out of 19 stars had failed to shine.

"Some of these 14 CEOs built up or turned around businesses, prominently and dramatically, only to see them weaken or collapse just as dramatically," he writes.

Of course, that was just one sample and one study. But now he notes two other business professors -- Danny Miller of Montreal's HEC business school and Xiaowei Xu of the University of Rhode Island – have completed studies with much larger samples and even more troubling results.

In the first, they studied 444 CEOs who had been celebrated on the covers of Business Week, Fortune and Forbes from 1970 to 2008. They compared the subsequent performance of those companies that were headed by MBAs – one quarter of the sample – with those that weren't.

Both sets of companies declined in performance after hitting the cover. "It's hard to stay on top," Prof. Miller has noted.

But the ones headed by MBAs declined more quickly and the performance gap remained significant even seven years after the cover story.

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The research suggests an association between the MBA degree and a desire to achieve growth via acquisitions, leading to reduced cash flows and inferior return on assets. But if the companies suffered financially, the CEOs with MBAs didn't -- their compensation increased about 15 per cent faster than the others.

"Apparently they had learned how to play the 'self-serving' game, which Miller referred to in a later interview as 'costly rapid growth,'" Prof Mintzberg says.

The second study was broader and more recent, looking at 5,004 CEOs of major United States public corporations from 2003 to 2013. The results were much the same. The researchers report, "MBA CEOs are more apt than their non-MBA counterparts to engage in short-term strategic expedients such as positive earnings management and suppression of R&D, which in turn are followed by compromised firm market valuations."

And again, they were well-rewarded for this non-performance.

Prof Mintzberg notes that business schools are centres of inter-disciplinary work, and their MBA programs "do well in training for the business functions, such as finance and marketing, if not for management."

Something in their training may be leading to the poor results. Still, with so many of their graduates getting to the top – if not necessarily staying there – the incentive to change is small. But he argues the problems the studies point to are significant: "Too many of their graduates are corrupting the economy."

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How the Bullet Journal helps you to organize

Entrepreneur and productivity writer Belle Beth Cooper is constantly on the lookout for new apps that can help improve her performance. But one system that she hails for its simplicity and flexibility involves just pen and paper. It's The Bullet Journal, which helps to organize your note-taking in meetings and turn that into an effective to-do list. In Quartz, she lists four main elements:

An index, in which you list the page numbers of any subject you want to find again later. This requires numbering your pages or using a journal with pre-printed page numbers.



A future log, in which you keep track of upcoming events or deadlines for the next six months.



A monthly log, in which you note events and deadlines for a specific month, and a list of monthly tasks.



A daily log, in which you write down tasks, events, and notes each day. This is your daily to-do list.

"The Bullet Journal's main feature is rapid logging, which is used for the daily logs," she explains. "The idea of rapid logging is that you can mix together notes, tasks, and events in the same place and use different bullet points to distinguish between them. A task ('pick up dry cleaning') gets a simple dot. A note (Jack's in town) gets a dash. And an event ('happy hour with co-workers') gets a circle."

As the task proceeds, you can change your markings accordingly. For example, if you finished the task, you can turn the dot into an "X." If you didn't finish, it can be moved to a future day or month by rewriting it on a future page, and you turn the dot into an arrow to reflect the move.

That sounds complicated, but she argues the opposite: The simple markings make the process of getting started and sticking with the Bullet Journal system fast and easy.

"For me, one of the best parts of the system is the index. Instead of flipping through my notebook constantly to find the meeting notes I need or that phone number I jotted down some time last week, I can use the index to record the page number of anything I might want to revisit later. And it doesn't matter if related notes end up scattered throughout the notebook, rather than grouped together. The index lets you fill your notebook from front to back without wasting pages or needing to estimate how much space you'll need for anything," she writes.

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The worst mistake to make after a bad hire

Too often managers sense they made a mistake in hiring very soon in the new recruit's stint. But they procrastinate, hoping things will get better.

"The worst mistake you can make with a low-performing new hire is being overly patient," consultant Karin Hurt writes on the Let's Grow Leaders blog.

Here are four reasons she cites to act sooner:

They’re as frustrated as you are. They didn’t intend to mess up and badly need a conversation as soon as possible about their struggles.



You’ve got a limited window of time to clarify expectations, which may not have been clear and could be a source of the problem. “If you wait too long to articulate and reinforce your standards, your new hire is likely to assume you just aren’t that serious, or that what he or she is doing is acceptable,” says Ms. Hurt.



Bad habits are hard to break, so you need to define what behaviours are expected.



Your top performers are watching, and if you fail to act, you’ll lose credibility with them.

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