Circa 1946: It was when Dennis Weatherstone turned 16 and straight after school that he was hired as a book keeper at Guaranty Trust. By the age of 18 he had acquired elementary banking qualification, from a polytechnic institute, Northwestern Polytechnic in London. His father was a clerk who worked in a London transport company. Guaranty Bank was then one of the largest American Banking company in London, U.K. He was promoted to deal in the foreign exchange desk at London and then quickly rose through rank and file to become the CEO of JP Morgan, before he retired. He was knighted with KBE by Queen Elizabeth II, the only employee of JP Morgan Chase to have received that honour.
He did not receive any formal education in management; neither did he attend University in his life, but during his tenure as a CEO he was mostly seen as a banker to other bankers. He had acquired most of the skill-sets, required of a CEO, from his work itself and the learning that he got was through his on-the-job role that he played at Morgan Guaranty. Many in Wall Street firmly believe that if the other banks had followed the risk management models, developed in JP Morgan by Sir Dennis, the world would have had been a far better place during the fall of 2008!
Circa 1950: It was at the age of 19 that Warren Buffet passed out of University of Nebraska – he had enrolled in Wharton School of Business, University of Pennsylvania; later on got transferred to Nebraska – with a degree in Bachelor of Business Administration. Later he joined Columbia Business School to study MS in Economics. Born into a wealthy family in Omaha, Warren Buffet – the only son of businessman and politician, Howard Buffet – had early on displayed his fascination towards stock markets. At the time of enrolling into Wharton Business School his senior yearbook picture read: ‘likes math; future stock broker.’ He enrolled into Columbia University only to study under Benjamin Graham, who by that time had acquired a name for himself – and indeed, with his colleague David Dodd – in the discipline of Value Investing. Warren went on to found Berkshire Partners Limited (BPL). Today, he is worth USD 50 Billion, and is the world’s 3rd richest man alive!
What starkly separates those two individuals is that whilst one came from a humble background – son of a London Transport Company’s clerk; never attended university – the other was well educated, indeed, in good management schools: Wharton and Columbia. Success stories like the former are galore but everybody does not get chances like Sir Weatherstone, in terms of experience. The fact that he was picked up by Guaranty Bank – then an American bank in London, which later became part of JP Morgan – that Lewis Preston who moved to London, observed the young Weatherstone and his knowledge and potential; that Preston later took Weatherstone, to New York where Weatherstone followed Preston all the way up the career ladder for the next two decades, had nothing to do with either Weatherstone’s ability or inability; He was lucky!
Management education or an MBA/PGDM from a business school or from a management institute gives every aspiring individual, a chance to acquire perspectives of different functions that makes up an organisation. In order to manage an organisation every prospective employee must be well acquainted with what happens in a typical organisation. Why is it that there is a department or a division for each and every function? Why are their so many people and why should they be engaged in a common goal of one or perhaps, a few visionaries, who call themselves as Board of Directors? These and many more questions get answered at the end of a management course. Those who want to be a part of any organisation or begin an enterprise as an entrepreneur too, must acquire knowledge in business and management. This is perhaps, one discipline that sheds ample light upon all aspects of anything that needs to be managed: take family matters, take business, take charity or social services organisation, take government departments or the government itself, take agricultural farming and many more, the one common thread that flows through all of them is that all of them, at some point or other, have ‘divergent people working for common goals.’
To manage diversity and to turn them towards a unified objective requires some understanding of how to do it, in the first place. A farmer may know the techniques of sowing the seeds in a particular manner; a government department may want to accomplish certain objectives by the end of its term; a family may have some goals to achieve – education of kids, retirement etc; social organisation may have to direct its benefits to a select few and make sure that the intended recipient is benefited out of such benevolence. How do all those people make sure that they achieve their objectives? They have to first ask themselves: what are the achievable goals? How should they be laid across the timelines? What should be the milestones? Such tasks whether complex or simple, needs to be understood, their pros and cons appropriately weighed in, before committing resources to it.
To understand the complexities of a business, a typical individual who needs to learn all of them through experience, may need to work in all those departments to understand the operational aspects of those departments and the complexities inherent in them. Take HR: to understand human resources function and to gain experience in it one must function in recruitment through payroll to the point of separation; to understand administration one must be a part of administrative function in that department; to understand finance one must work in a finance department; to understand sales and marketing one must work in the marketing department; but to acquire knowledge of global exposure one cannot possibly work in every country where the organisation has its operations – though work experience in two different international locations would give people a vantage point – and then come around and say: Well, I have been there and done that!
This poses a herculean and insurmountable task and challenge respectively, on the face of any individual, who would want to traverse the long routes of learning, by picking up the threads and beads of lessons, by doing it the hard and time-consuming way. The appropriate manner, to acquire knowledge about all of such functions and the complexities of management concomitant with it, would be to attend a business school and learn in a simulated environment. A case-study based discussion of organisational problems and constraints, and teaching of business and management ideas and concepts, imparted with perspicuity would only make learning about business and management more interesting with clarity of perceptions. Some of those lessons could be implemented in other vocational learning too and in fact, even in family! Nevertheless, wherever there is an element of managing things, people or resources, a lesson or two in management, would only help but never harm!
This does not mean that management education is a panacea which could replace work experience. It is not supplementary to work experience rather acts as a complimentary to it. Knowledge of management coupled with experience could fillip the aspirants with adequate strength of knowing where and how to begin, wading into the high seas of complexities of magnitude! The purpose of this article was never to undermine the knowledge gained through experience. Neither does this article intend to make a claim that management education can be an ersatz to experience. What it intends to communicate is: management education with adequate experience becomes a tool, with which it enhances an individual’s ability to manage organisation and its resources more effectively.
As a matter of fact, the role of that of a manager could be played more effectively only if the individual had acquired some prior experience before committing himself to exploit his/her knowledge, gained through management education. This prior knowledge would put his/her learning into perspectives making it easier for the individual to relate the management concepts and theories to his/her experience.
Conclusion: Every successful manager or organisation should not choose between management education and experience. They should not be viewed through the prisms of incompatibility; neither should they be looked condescendingly, as trade-offs. They are indeed, the best available combinations: ‘experience, with management education.’ In the same vein, organisation should also not treat those who do not have any experience (hands-on) but has management education, as a complete novice! Ramifications from such treatment may not augur well for the organisation nor for the individual and neither would that do any good to the society as well! Therefore, management education should never be pitted against experience; rather, it is better to say: “management education coupled with experience.”
This article is written by Prof. Santosh Nair of Kohinoor Business School & Center for Management Research, Khandala. For more information on the business school, please click KBS