Summary of The Golden Passport

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Rating

8

Qualities

  • Innovative
  • Eye Opening
  • Controversial

Recommendation

Business journalist Duff McDonald argues the Harvard Business School (HBS) strayed from its initial mission of producing graduates who both make money and make the world a better place. The problem he diagnoses is that its academic emphasis on efficiency and profit has produced too many graduates who manage only what they can measure. Management by measurement is a flawed approach to running an organization because it de-emphasizes immeasurable factors in success or failure. HBS grads at the helm of the US government, major banks and top consulting firms could not prevent the 2008 financial crisis. McDonald notes that HBS has reduced business management to a mathematical science while working to incorporate ethics in its curriculum. He finds that HBS’s focus on efficiency has, indeed, produced capable managers, but few great leaders. getAbstract suggests this comprehensive history to readers seeking an understanding of how HBS evolved.

About the Author

Duff McDonald wrote The Firm: The Story of McKinsey and Its Secret Influence on American Business and Last Man Standing, about Jamie Dimon, chair and CEO of JPMorgan Chase.

 

Summary

Management by Measurement

The Harvard Business School’s founding presumption was the concept of teaching business management as a professional practice with a scientific basis. The first dean, Edwin Gay, wanted the school to develop a “science of business.” Gay recruited Frederick Taylor, the “father of scientific management,” as an HBS lecturer in 1908. His “faux-science” formed the curriculum.

Taylor conducted time-and-motion studies to determine a maximum “scientific” level of worker productivity. Prior to Taylor’s involvement with HBS, the Bethlehem Steel Company retained him to study worker productivity. Taylor’s assistants used stopwatches to determine that Bethlehem workers each could load 47.5 tons of pig-iron bars in a day – or four times more than the amount they were loading at the time – if the company paid them a piece rate by the ton instead of a daily wage. Bethlehem invested $1.1 million to implement the Taylor “system,” and it paid Taylor $100,000 in consulting fees.

But Taylor’s “science” was unverifiable, because he never shared his data or methods. His focus on efficiency sanctioned the notion that a single metric was pivotal to...


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