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Elon Musk Believes ‘Too Many MBAs’ among American CEOs Can Limit Innovation

UTC by Benjamin Godfrey · 3 min read
Elon Musk Believes ‘Too Many MBAs’ among American CEOs Can Limit Innovation
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However, Elon Musk’s position should not discourage the pursuit of an MBA amongst American CEOs as businesses present data-bound situations that will require MBA skills to address.

Elon Musk, the founder and Chief Executive Officer of electric automaker Tesla Inc (NASDAQ: TSLA), and space ship manufacturer SpaceX believes that the problem with the corporate world in the US is that there are Too Many MBAs amongst American CEOs. Per a CNBC report, Elon Musk noted this while speaking at the Wall Street Journal’s CEOs summit, and he added that such high business qualifications limit innovation.

“I think that there might be too many MBAs running companies,” Musk said. The iconic Tech magnate believes that the “MBA-ization of America” is not so much of a good thing as corporate CEOs spend their time analyzing spreadsheets and other financial data rather than spending ample time on product differentiation, where the future of the business lies.

“There should be more focus on the product or service itself, less time on board meetings, less time on financials,” Musk said, adding that “A company has no value in itself. It only has value to the degree that is [an] effective allocator of resources to create business services that are of a greater value than the costs of the inputs.”

According to Elon Musk, one of his greatest mistakes serving as the CEO of both Tesla and SpaceX was in spending a lot of time in meetings looking at and analyzing PowerPoints and spreadsheets, instead of being out on the factory floor.

“When I go spend time on the factory floor or really using the cars or thinking about the rockets…that’s where things have gone better,” Musk said at the WSJ summit.

Musk encouraged American CEOs to get more involved in creating valuable products and services by an effective allocation of resources and noted that by so doing, profits will roll in overtime.

Elon Musk and the MBA Counsel

Elon Musk’s position is not to discourage the pursuit of an MBA amongst American CEOs as businesses present data-bound situations that will require MBA skills to address. However, the acquisition of an MBA should not redirect the focus of business leaders from neglecting the crucial livewire of the business, which is its products and services.

With an MBA increasingly becoming necessary to get a seat on the board of companies and startups alike, the focus in years to come may become diverted. Herein lies the clamor of Elon Musk and the vocal advice he lends at the Wall Street Journal’s CEOs Summit.

Elon Musk is walking the talk in his counsel and it is reflected in his current networth of about $157 billion, according to Bloomberg’s Billionaire Index, placing him as the second richest man alive after Jeff Bezos of Amazon.com Inc (NASDAQ: AMZN).

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