The Tesla founder criticised the “MBA-isation” of corporate boards in America during a talk on executive leadership.
During the Wall Street Journal’s CEO Council annual summit, Elon Musk decried the prevalence of MBAs in business leadership, which he saw as detrimental to companies’ ability to think creatively and develop products that customers will find desirable.
“I think there might be too many MBAs running companies,” the Tesla CEO said. “There’s the MBA-isation of America, which I think is maybe not that great.”
Musk’s comments came amid a wider conversation about leadership given before an online audience. Musk also urged executives to spend more time on factory floors rather than getting caught up in numbers and losing sight of their goal, which should be to create “awesome” products or services.
“There should be more focus on the product or service itself, less time on board meetings, less time on financials,” he said.
Several business school leaders quickly fired back. “I have nothing but the utmost respect for Elon, but he’s wrong to focus the blame on MBAs," said Robert Siegel, management lecturer at the Stanford Graduate School of Business.
Glenn Hubbard, former dean of Columbia Business School, remarked that MBAs gave entrepreneurs a strong foundation for success, including training in business strategy and an acumen for imagining a product for a customer’s needs, which Musk had pointed out as good leadership qualities.
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“He is a visionary,” Hubbard said, “but many CEOs do well at vision and execution with the benefit of an MBA, or with a strong team of MBAs."
Musk recently overtook Bill Gates as the second richest man in the world as Tesla shares have experienced another surge, pushing his net worth to around $157 billion. Tesla’s stock value has risen by over than 90% over the past three months and over 652% annually.
