At amazon, everyone was obsessed with how "smart" amazon employees were, and yet the place was a showcase of terrible engineering -- rife with accidental complexity and tight coupling that spanned not just systems within a group, but across entire divisions -- and some what I read in this article I saw there first-hand. The management complained constantly about how bad our tools were, yet the people that they promoted and took care of were the ones that designed and implemented those same tools.
A great many managers haven't the faintest idea as to how to determine what constitutes a "smart" employee, so they zero in on things like degrees and number of hours worked because they don't have any rational standard for identifying the good ones from the bad, so the guy with the degree who's working 80 hours a week is obviously the best guy on the team! Look how hard he's working! He must be REALLY smart!
"Also, the article seems to conflate having an MBA with being smart. I wonder if Gladwell has ever thought that the reason Southwest has a vastly more efficient organization than its competitors is because it has a bunch of smart people who figure out how to do things more efficiently. People so smart in fact that they realize people on the ground can make much more informed decisions than people in a boardroom."
I think that was precisely his point. Enron used MBAs as a proxy for "smartness" and turned out to be a spectacular disaster. Southwest doesn't, and is one of the few US-based airlines that isn't relying on the US government to keep it alive.