Item — HN Reader

I don't think it's that Costco has a problem with MBA's. I think if you get on the management track at the company, they will sponsor you through business school.

"Costco does not hire business school graduates—thanks to another idiosyncrasy meant to preserve its distinct company culture. It cultivates employees who work the floor in its warehouses and sponsors them through graduate school."

It seems like they just want people with experience working at its warehouses so they can get a perspective on how the day to day business operates.

1 comments

It's not MBAs specifically. It's the business consulting mindset in general that MBAs are taught. Costco wouldn't want for MBAs to come in and do consulting on how to improve their operations because those guys wouldn't have the necessary respect for what Costco finds valuable, which does include their on-the-ground work and unique culture.

MBA pattern recognition and recommendations would work well (hopefully) when the situation fits the pattern. Costco is clearly a non-standard retailer, so the question is how MBAs would respond to such non-standard patterns, and whether their recommendations would be good for the long term of that business. Maybe they would offer up excellent advice, maybe not. Costco is just erring on the side of caution and preferring their "home-grown" MBAs, rather than "standard" MBAs.

I can provide you an interesting analogy that may (or may not) resonate with HN readers:

It turns out that hiring a guy who's an expert at optimizing I/O systems for databases, to optimize your massive multimedia streaming farm, doesn't usually work. Because one is hyper random access and the other is massively sequential, also typical block size for one is probably measured in K and the other typical transaction size is probably measured in G. And there's certain latency consideration. And probably others.

The real question is if costco is successful, why are b-schools charging $100K to churn out cookie cutters that don't cut it in the real world?

If costco were swirling down the drain, AND simultaneously rejected "MBA culture" (or HN culture, or 4chan culture, doesn't really matter) then it wouldn't be much of a story. The question is why MBA schools, despite all the worship of their holy paper credential, can't graduate people who apparently know anything about retail, or at least don't know how to be legendarily successful in retail.

It would be like a med school that charged $100K but simply decided to not teach their students anything about biochem and then no one seemed to care. "Eh, blood sugar and electrolyte levels, eh, that stuffs hard, lets skip it and do some extra anatomy studies". Or in engineering, "Well, I never really liked finite element analysis and you'll probably not be expected to successfully do it on the job, so here's a engineering degree anyway and best of luck to ya". And no one cares other than a successful, yet fringe industrial company, who doesn't hire eng school grads to do finite element analysis.