I watched a highly successful, wealthy man wreck a business he bought due to this. His success had come via rising up through accounting and finance, and he was brilliant within that arena, but outside of it he was fairly clueless. His people skills were wanting as well. He equated not asking questions with intelligence, and was very derogatory toward longtime employees who actually ran the place, “dime a dozen,” I believe was his sentiment. He bought a company that was very diversified as far as customer base, that was weathering the poor economy well, growing in 2008 and every year up to 2013. He only cared about profit margin and basically ran off all the large accounts except for one. Now, the business is declining and he’s letting people go, with a bias toward letting those longtime employees go over newer, inexperienced people with degrees that impress him, who don’t ask questions and are therefore more intelligent in his estimation. Vendors are not getting paid, deliveries are months late. That one customer is now looking for another supplier. It won’t end well, and all because he mistook his success as a numbers guy to mean that he knew everything about the place better than his employees.
I have seen much the same thing happen twice. In both cases thriving businesses were destroyed within a few years by a buyer who “knew better” than those who had actually been running the business.
I think a big part of this is the enormously disproportionate emphasis in “business education” programs on, as you say, accounting and finance. To the point where I think a great many people graduate with degrees in “business,” and think that accounting and finance is what business is about.
It may be, in financial fields, which I know little about. But I’ve considerable experience in several fields where actual services have to be provided to customers, and those customers made happy, if the business is to prosper.
In one of the businesses I mentioned, the new owner got together a coterie of yes-men and favorites in the front office, and they developed an attitude of disdain for those who did the work, even the project managers and supervisors, etc.
Called them “the guys in the back,” assuming, I guess, that the very hard work they did just happened. Which it was, when they took over, because the previous owner had respected and rewarded their work.
The new guy started cutting back on their commissions, to raise his bottom line, don’t you know. That, combined with the disrespect, within months the core who had previously kept actual production humming with little attention from the front office started jumping ship. And, of course, the front office discovered, to their shock, that when the work doesn’t get done on time and to specification, it creates huge and expensive problems for those “important” people in the front offices.
The owner, of course, attempted to correct these problems. Most of his efforts in this regard made things worse. In about 2.5 years a previously thriving business went belly up. It was really sad for me, because I’d had a lot to do with building the original machine.
But a guy with money and a business degree is often apparently too important to really listen to somebody who doesn’t have either. Very sad, not just for me, but for several dozen people who had also worked hard to build that business and took pride in their work.
My personal opinion, no doubt not all that well justified, is that a “bean-counter” is essential as the number two guy in any business, and quite often a disaster as number one. Most really important business decisions are not at root financial or determined by analyzing numbers, they involve motivating and coordinating people, and people just aren’t numbers.
But I don’t have a degree in business administration, so what do I know?