I am definitely not a Thiel fan, but I strongly agree with him here. The best managers I've had were always ones who deeply understood something besides management. The supposed universality of management theory, plus the training toward slick presentation and glib self-promotion, makes it very easy for people to not only not know what's going on, but have a strong personal interest in not knowing what's going on.
This definitely leads to short-term gains as people work the obvious levers to make the profit graph go up and to the right. But I think it's antithetical to the sort of deeper investment that builds real businesses and provides sustaining innovation.
Toyota, for example, was run by engineers, who came up with a deeply different theory of business. It was so fundamentally strange to American MBA thinking that US car companies were unable to comprehend it despite many attempts to learn it in the 70s and 80s. Toyota went from Japan's post-war decimation to become the world's leading car company, while US carmakers have needed government bailouts just to stay afloat.
This stands in deep contrast to the way MBA-style approaches kills established companies by over-extracting short-term profits in ways that destroy long-term value. Toys R Us is a recent example, and Simmons is a good historical one: https://www.nytimes.com/2009/10/05/business/economy/05simmon...
This definitely leads to short-term gains as people work the obvious levers to make the profit graph go up and to the right. But I think it's antithetical to the sort of deeper investment that builds real businesses and provides sustaining innovation.
Toyota, for example, was run by engineers, who came up with a deeply different theory of business. It was so fundamentally strange to American MBA thinking that US car companies were unable to comprehend it despite many attempts to learn it in the 70s and 80s. Toyota went from Japan's post-war decimation to become the world's leading car company, while US carmakers have needed government bailouts just to stay afloat.
This stands in deep contrast to the way MBA-style approaches kills established companies by over-extracting short-term profits in ways that destroy long-term value. Toys R Us is a recent example, and Simmons is a good historical one: https://www.nytimes.com/2009/10/05/business/economy/05simmon...