A question asked more and more these days.
The times of golden parachutes to leadership may be over. A new challenger has approached.
This month, Kim Kardashian spoke at Harvard Business School to a group of MBA students.
As a businesswoman herself, she discussed which direct to consumer insights she's experienced from her time at Skims, an American shapewear and clothing brand, including their marketing, challenges, and greatest wins.
Yet, in a recently published research paper titled, "Would Chat GPT3 Get a Wharton MBA? A Prediction Based on Its Performance in the Operations Management Course" by Wharton Professor Christian Terwiesch...
Would artificial intelligence be able to replace the students she spoke to?
According to Terwiesch, the bot score between a B and B- on the final.
He stated the bot's score shows its "remarkable ability to automate some of the skills of highly compensated knowledge workers in general and specifically the knowledge workers in the jobs held by MBA graduates including analysts, managers, and consultants."
The bot did an "amazing job at basic operations management and process analysis questions including those that are based on case studies,". He also suggested the bot's explanations were "excellent." and "remarkably good at modifying its answers in response to human hints".
This begs the question, if artificial intelligence can replace MBAs, which value remains?
In a recent podcast with legendary PayPal mafia boss and entrepreneur David Sacks, Coleman Hughes described his experience at Columbia University.
He argued almost "all of the income boosts you get from having a college degree comes via the signaling value of having completed the degree rather than from any new skills".
Hughes also stated, "the notion that college is effectively a four-year IQ and work ethic test rather than an experience that actually makes you a smarter and more valuable worker" rang true to him.
Sacks replied, suggesting he had a similar experience at Stanford University years ago.
Like Kardashian, when Co-founder and former CEO of Netflix, Marc Randolph, spoke to groups of MBAs he was "shocked" at the number of students who expected to become "wealth managers".
He claimed more MBAs these days look to manage other people's money rather than create value themselves and asked,
"What are we teaching people?".
One could argue business schools like Harvard have become more in the business of indoctrination than education.
Why do certain graduates of Harvard Business School end up managing Harvard's own $53.2 billion non-profit endowment?
Could it be schools like Harvard became increasingly focused on grooming students to grow their endowment, rather than teaching real education?
Peter Theil, well-known entrepreneur and Stanford dropout, may believe so. He launched the Theil Fellowship, challenging highly talented entrepreneurs to drop out in exchange for a $100k grant to "build things instead of sitting in a classroom".
The fellowship included people like Vitalik Buterin, co-founder of the Ethereum cryptocurrency, and Dylan Field, co-founder of Figma, which sold to Adobe for $20 billion.
Theil believes we are living in an "education bubble" with rising tuition costs. He states, "we now have $1.3 trillion of student debt which was only $300 billion in 2000. It's gone up by a factor of four in 15 years."
"is the education worth the debt people are assuming?"
And states under President Bush, the bankruptcy laws were rewritten so that "even if you went personally bankrupt... You'll pay off your student debt for the rest of your life, and if you haven't paid it off by the time you're 65, they garnish your social security" as if student debt exists in a vacuum.
Theil used to believe the type of good traditional education provided was a mix between an investment into one's future and a consumption good like a "four-year party", but now argues it's a combination much crazier.
On one hand, he argued, "the main reason people go to college is as an insurance product, where people go because they're scared of falling through the very big cracks in our society – so even if it's not a great investment it's still important to buy insurance". Theil suggested this is why parents save up so much money to send their children to college, and why kids take out so much student debt.
"Whenever people are spending this much on insurance", Theil said, "the underlining question we should be asking is",
"Why have the cracks in our society gotten so big?".
On the other hand, Theil stated, "it's a tournament, which is the exact opposite of insurance", and suggested the value of these elite universities is driven by exclusion akin to a "nightclub" with an enormous line of people not letting anyone in.
"When you conflate a tournament with an insurance policy... you end up with some really wacky decisions", Theil concluded.
He also shared his thoughts on the value of MBA degrees. Thiel stated that while he is skeptical of making sweeping statements, he believes that an MBA may not be the best investment for some students as the typical profile of an MBA student may not be well suited for entrepreneurship.
Thiel described MBA students as "anti-Asperger's" and extroverted, often with low conviction. He also noted the hothouse environment of business school can lead to herd-like thinking and a tendency for students to pursue fields that are not well-suited to their interests or strengths.
Thiel suggested a better path forward may be through gaining real-world experience by building companies and working on specific projects before pursuing an MBA to resist the herd mentality.
In "The Downfall of the Ivy League", Jordan Peterson argued this herd-like mentality is the same that lead Ivy League schools to replace merit-based thinking with radical segregation-based thinking.
He suggested this resulted in a lowering of standards and a devaluation of degrees from these institutions, and that Silicon Valley companies are now less likely to hire graduates from Ivy League universities, as their competitiveness has decreased compared to other schools.
Instead, Hanson claimed, these companies are "stealthily" administering their own tests to prospects, rendering MBAs non-sufficient.
Peterson argued the admission of students without merit to an Ivy League education caused a decline in the quality of education offered at these institutions.
"The Ivy Leagues had transformed themselves from old boys clubs in the 1960s to highly elite intellectual institutions by the 1990s", he said. But then what he saw was that being members of the one percent with "almost certain hallmarks of long-term success" was not enough for many students and their "idiot professors". They had to have the label of oppressed too.
"You had these unbelievably fortunate ivy league students who were offered an opportunity... unparalleled in human history [while] simultaneously claiming the status of the poor and oppressed."
"Having all the privileges and opportunities of rich and powerful wasn't enough for them, they had to have all the virtues of the poor and oppressed too," Peterson stated.
Hanson replied, claiming there is a movement of parasitical exploiters devaluing the institutions' brands so that admission and graduation are the same, grades are abolished, and everyone passes regardless of merit.
Richard Walls, an MBA graduate, discussed comments made by Elon Musk about the value of MBA graduates to companies.
Musk argued there is too much emphasis on "PowerPoint" as opposed to product improvement in companies, and there may be too many MBAs running companies. He suggested the path to leadership should not be through MBA programs, but rather by earning one's way up by doing useful things, and that there is too much "MBA-ization" of America.
"There's a bit too much of the somebody goes to a high-profile MBA school and then kind of parachutes in as the as the leader but they don't actually know how things work" — Elon Musk
Walls agreed with some of Musk's points. He acknowledged that while MBAs can add value to a company, they are not typically the ones responsible for meaningful innovation and that product-focused people like engineers and builders are the ones improving product experience.
However, as a company grows, Walls believes MBAs can leverage the levers of value in a business by understanding where operational improvements can be made to maximize enterprise value.
Walls used Tesla as an example of a product that sells itself. Tesla focused a disproportionate amount of energy on creating the best product and in return spent zero dollars on marketing.
He believes for an MBA to make the biggest impact, they must have real-world experience before earning their MBA.
So, with A.I. passing MBAs, the decline of merit-based education, and companies creating their own alternatives, what value does an MBA have left?
Which do you believe? Are MBAs here or stay or go?