Elon Musk says MBA graduates lack innovation skills. Here’s why he’s wrong

SOURCE: Britta Pedersen/POOL/AFP
Do MBA graduates contribute to the decline in corporate America’s ability to think creatively? Here’s why that might not be the case.

By U2B Staff 

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Do business schools produce MBA graduates who lack innovation skills? 

When speaking during The Wall Street Journal’s CEO Council annual summit, Tesla CEO Elon Musk opined that CEOs in corporate America don’t spend enough time on product improvement and fail to give customers what they really want. 


“I think there might be too many MBAs running companies,” he said, adding that there is an “MBA-isation of America” which he thinks “is maybe not that great”.

The business magnate instead encouraged leaders to “spend less time on finance, spend less time in conference rooms, less time on PowerPoint [presentations], and more time on just trying to make your product as amazing as possible” by spending more time on the factory floor and with their customers.

This isn’t the first time that Musk has been critical of MBAs. 

In his 2013 interview with the American Physical Society, Musk said that MBA programmes “teaches people all sorts of wrong things”, adding that “They don’t teach people to think in MBA schools.”

While he does hire people with MBAs, he notes, “I hire people in spite of an MBA, not because of one.”

Ironically, his company is highly desirable among young graduates and business-school students said student career-services website Handshake, which found that Tesla consistently ranked among the top three employers receiving the most job applications.

Business schools leaders rise to the defense of an MBA

Musk’s comments sparked the ire of business school leaders who argue that his comments generalise what is taught in MBA programmes.

“I have nothing but the utmost respect for Elon, but he’s wrong to focus the blame on MBAs,” said Robert Siegel, a lecturer in management at the Stanford Graduate School of Business, to WSJ. “I think he’s got a strong element of truth of what leaders should be focused on, but he is completely off base talking about MBAs.”

Siegel said the university offers students a variety of business-school courses on product development and customer engagement, in addition to opportunities for aspiring entrepreneurs to pitch their business plans for capital and work with professors and other departments, such as the engineering school, to help launch their ideas.

Former dean of Columbia Business School Glenn Hubbard said an MBA gives entrepreneurs the foundation needed to succeed, including imagining a product for a customer’s needs, developing a strategy, putting together a financing plan, and building a team. “He is a visionary, but many CEOs do well at vision and execution with the benefit of an MBA, or with a strong team of MBAs.”

MBA graduates do go on to reach dizzying heights of success

The U.S. News Best Business School notes that among the top 100 CEOs in the Fortune 500, about a third have an MBA. Five MBA programmes have trained more than one Fortune 100 CEO, and all are highly prestigious institutions, placing among the top 10 in the U.S. News Best Business Schools rankings.

This includes Harvard Business School, the University of Pennsylvania’s Wharton School, Northwestern University’s Kellogg School of Management, the Stanford University Graduate School of Business, and Columbia Business School.

The report notes that some CEOs attended MBA programmes outside the US, including Ramon Laguarta, the chairman and CEO of PepsiCo Inc., who received his MBA from the ESADE Business School in Spain.

Rich Lyons, the former dean of the University of California, Berkeley’s Haas School of Business, opined: “Do firms with fewer MBAs on their boards and senior teams have shorter meetings? I’m skeptical. Might Musk’s rightful emphasis on the product be more a function of the science-driven industry he’s in, as opposed to valid generalisation?”

The MBA has long had its critics. Amazon CEO Jeff Bezos has criticised MBAs in the past but has become one of the biggest employers of MBA graduates, said WSJ. 

Dr Christine Menges, MBA Careers Center director at the WHU – Otto Beisheim School of Management, previously told U2B that companies like Amazon are big recruiters of WHU Otto Beisheim School of Management’s MBA graduates while many of their graduates are also moving into the tech and startup scene. 

MBA programmes are known for equipping learners with leadership skills and helping them climb the corporate ladder — but they haven’t remained static and have continued to evolve over the years. 

In the past few years, an increasing number of US business schools have incorporated STEM elements into their MBA curricula, making STEM MBA programmes increasingly popular. 


Its popularity has also led to a wide number of MBA-related programmes including specialisations in finance, entrepreneurship, Islamic finance, and sustainability, among others.

Reports also suggest that MBA programmes continue to increase graduates’ prospects of earning higher salaries.

According to the QS World University Rankings: Global MBA Rankings 2019, MBA graduates can expect an average salary increase of 77%. This report is supported by findings by The Graduate Management Admission Council (GMAC), a global association of leading graduate business schools.