Harvard Business School Dean Nitin Nohria calls the book unfair and overstated. Duff McDonald, the author of the newly published The Golden Passport, acknowledges his book is highly critical of HBS but nonetheless defends it as a fair and well-researched work.
Whatever you think about the claims in the book, including assertions that HBS is at least partly responsible for income inequality in the U.S., the economic implosion of 2008, short-term thinking, corporate malfeasance, and Wall Street greed, it’s a controversial and provocative tome. He mocks Dean Nohria, chastises famous HBS Professors such as Bill George and Rosabeth Moss Kanter, and virtually crucifies now retired HBS economics professor Michael Jensen.
McDonald’s scathing critique of the Harvard Business School is as much an attack on a single institution as it is a condemnation of the business school industry, its students and graduates.
So what are the absolute worst and most inflammatory accusations that McDonald levels at Harvard Business School? And what are the surprisingly admiring things about HBS that he has to say? We’ve gone through the 659 pages of the book to tease out the author’s ten best and worst things he believes about the top business school in the world.
First the good stuff:
1. Is the MBA degree a worthwhile investment?
“While most people focus on the $60,000-plus tuition, the full cost of attending HBS, that is to say, the opportunity cost, can be $500,000 or more. Is it worth it? Of course it is. The lifetime of enhanced opportunity–both pecuniary and otherwise–that a Harvard MBA provides makes the calculation a no-brainer. A Harvard degree guarantees respect: an HBS degree only starts with respect (at least from certain quarters). Its true value is near guaranteed entrance into the Western capitalism’s most powerful realm–the corner offices and boardrooms of the corporate elite. They say there are no sure things in life, but this actually is one: A Harvard MBA really is a golden passport to the land of wealth and influence.”
2. How strong and influential is the HBS alumni network?
“The list of current or former CEOs hailing from HBS would fill a phone book. Even the list of sitting CEOs is a long one–in 2015, the Financial Times counted 28 HBS grads among the CEOs of the world’s 500 largest companies, the most of any business school, and well ahead of second-place INSEAD, which counted nine….As of 2014, 139 of Fortune 500 companies had an HBS alum in a senior leadership position, and a full 50 of those companies had HBS grads as CEOs.”
3. Can a Harvard MBA increase the odds that a person will become truly wealthy?
“While there are many reasons one might choose to attend HBS, one of the most common is for the opportunity to supercharge one’s earning ability. As this point, the business school rankings track average starting salaries of school’s graduates down to the penny, but those numbers vary from year to year. And salary isn’t what matters to these people; wealth is. And if you want to become wealthy beyond belief, you could do a whole lot worse than spend two years at HBS. Consider the number of billionaires who have come out of the school. According to Bloomberg LP, there are currently 17 billionaires with HBS degrees, for a total of 18 if you add Michael Bloomberg himself to that list.”
4. What is the actual impact of the Harvard Business School?
“As the nation’s most prominent–and largest–business school for the last century, HBS has shaped–and continues to shape–the direction not just of its graduates’ lives, but also those of the organizations they work for and the economy itself. Harvard University occupies a singular place in the public’s imagination, but Harvard Business School–the child reluctantly adopted by the parent early in the last century–eclipsed its parent in terms of its influence on society long ago. Given its position in the business firmament, anything that happens at HBS (changes in curriculum, in student career choices, in the methods of socialization of its students) has butterfly effects not just in the U.S. economy but globally.”
5. Is Harvard Business School an enormous success?
“HBS has proven an enormous success in many respects–it played a major role in distilling, defining, and teaching the fundamentals of business administration; it provides its graduates with unrivaled opportunity; and it is a money machine onto itself.”
6. What about the financial resources of the Harvard Business School?
“As of year-end 2015, HBS sat atop an endowment of $3.3 billion. Harvard’s combined endowment of $32.7 billion puts it atop the list of the richest universities in the world, but even on its own, HBS would place 30th overall, just a shade below Dartmouth’s entire endowment of $3.4 billion. If it is indeed true that financial performance–specifically fundraising–is the main factor in making or breaking a dean’s reputation, than Nohria’s reputation has been made. Fifty years ago in 1966-67, the school raised a total of $730,000 from 12,140 of its alumni…Harvard President Drew Faust cannot be disappointed with Dean Nitin Nohria’s fundraising performance. By March 2016, the school had raised $925 million of its goal of $1 billion.”
7. Has HBS taken a leadership role in digital learning?
“One realm in which HBS has actually been a leader of late: digital learning. Historically content to move at the leisurely pace that is the nature of a large, successful institution (or perhaps unable to move more quickly), the school has sprinted well out in front of the pack with its digital learning platform, HBX. Unlike competing platforms that were either free or open to anyone willing to pay. HBS has kept the filter tight with both selective admissions and a tuition requirement.”