Brazilian High

Yesterday was awesome. It was full of surprises from our faculty, each one better than the last. Because some prospective students read this blog and because the surprises were critical to today’s success, I’ll refrain from any real explanation. The cool part was that it was our first day of cross-functional project work: addressing a business case from accounting, marketing, and leadership perspectives within our groups.

At the end of the day, three groups were selected randomly to present their arguments. For each group, one member was selected randomly to do the presentation to a panel of faculty members who played roles of actual decision makers/influencers in the case. Given the amount of time we had to prepare, any presentation was essentially an improvisation.

When we were first told about the presentation part of the assignment, my natural reaction was to hope that I was selected. After all, I love presenting to an audience; it’s my element. Then, as I realized that I had gaping holes of knowledge about the accounting and marketing aspects of our group’s proposal (We split up the work but didn’t have time to regroup before the deadline.), I became a little more apprehensive about being selected.

Our group was the second of three selected to present; I was selected from my group to be the presenter–be careful what you wish for! The faculty decision makers’ roles were intended to poke holes in whatever we presented, be interruptive at times, and generally stress the presenter out. I didn’t know the supporting evidence for several aspects of our plan and hadn’t even seen the powerpoint in its entirety, but hey, I didn’t come here not to be challenged!

The faculty gave me a hard time, especially on the quantitative stuff, but it was a big rush to be up there. The class gave me a lot of support from the audience, which felt great. At the end of the day, my presentation was pretty BSy, and probably was especially underwhelming to Stewart, the Accounting prof. I spent a significant amount of time afterward thinking about what I would have/should have said and receiving explanations from my teammates about what our slides actually meant. However, I received numerous backslaps and congratulations from my classmates afterward so I think I held my own.

Regardless, it was a great experience and I can’t wait to do it again. Afterward the class and the professors (out of character) met in the lobby for Brazilian (The case was set in Brazil.) caipirinhas before heading down to the dungeon for a long night of project work. What a day; I can’t wait to do it again!

On another note, the Chinese students made a very gracious presentation for lunar new year and gave away Chinese gifts to all the students. Coming from a country where everyone seems to be leery about competition from China, I found their unsolicited offering to be right in line with the warm, generous culture I’ve come to know and expect from these students.

Learning Russian

It’s approaching midnight as we’re working on accounting problem sets, seven guys holed up in a room all night after spending most of our day in here as well. Just spoken in Russian by our Czech to our Belarussian:

“Odkryt okna byla tvoja lucnaja idea sevodna.” Excusing the probable misspellings, this translates to “Opening the window was the best idea you’ve had all day!”

Accounting

If I had to choose one word to describe Accounting professor Stewart Hamilton, it would be “curmudgeonly.” He’s a crotchety old Scot who is very emphatic that we should not question the “why” of accounting practices; we should just accept them. He has already yelled at me in class because I applauded him. I can’t help it; his stodginess is hilarious.

So far our accounting education conjures up images of dusty old books and quill-written ledgers. As a software guy, that’s a little hard to stomach. IMD is very clear that we are not here to learn to be accountants. We are here to learn to be better general managers–the best general managers–so the intent of this course is to educate us just enough to be dangerous.

Our major takeaways from this course have been centered around how to analyze balance sheets, income statements and cashflow statements to support investment decisions. I’ve had plenty of exposure to these reports before in a software context so it’s interesting to see them applied to manufacturing, services organizations, etc. I’m also hoping to benefit from Stewart’s knowledge of fine Scotch whiskey.

I’ll leave you with a quote from Stewart: “You know you’re due it so you have to accrue it!” Imagine it with a thick Scottish accent.

Happy Mardi Gras!

Long night ahead of us

Our group’s ICA/E presentation on the electricity generation industry is due this week and we’re far from completion. We’ve just ordered pizzas to give us an energy boost (CHF 80–$70–for two pies!!!) and I think it’s going to be a long night.

At least we’re not the only ones. People are whistling in the hallways. One person starts then others join in. I whistled Daryl Hannah’s solo from Kill Bill on my way back from the bathroom and I had at least three others join in.

We’ve split off into subgroups for the time being and both of my partners are sick. I will be strong of mind and fend off their viruses! 🙂

WalMart

ICA/E revolved around a WalMart case today. How did it grow to dominate its much larger rivals such as K-Mart? Why and how could it diversify to include Sam’s Club? Why and how could it diversify into other countries? At what price to the small, rural town comes WalMart’s strategy? The case was set in 1986. I always find these retroactive cases interesting because then we have the opportunity to see how things played out with the benefit of 20/20 hindsight.

What really made the discussion personal for me is that Ralf chose Janet as the name of a hypothetical WalMart customer in Arkansas. I have an Aunt Janet who lives in Arkansas and is probably a WalMart customer. Ralf usually chooses Frieda or Greta for hypotheitcal names so good on him for proposing an accurate Arkansan name!

Since much of today’s class was devoted to discussion instead of lecture, there weren’t too many Ralfisms. As always, though, there were a few:

  • Let’s bring it on, duuuuuude!
  • At this stage in your career it’s important that you show leadership . . . and hold hands.
  • Coffee breaks are so 70s anyway.
  • I’d rather eat myself instead of letting someone else eat me.

The soup du jour today was cauliflower. Off to Finance!

Marketing

What Ralf refers to as “tra la la” is actually quite interesting. Co-taught by Martin Koschat (Austrian) and DominiqueTurpin (French), this course is a case-driven exploration of the entire marketing function, from understanding a market to taking products and services to that market. So far we’ve studied DVD production machine manufacturers, discount airlines, sport watches, and Espresso machines. The watch maker came to our discussion and offered us goods in kind if we could help him re-position one of his brands.

Interesting take-aways so far:

  • Marketing is the art of differentiation.
  • 2/3 of all transactions are business-to-business, so most marketing is business-oriented.
  • Marketing permeates all aspects of a business and essentially gives the customer a “voice.”
  • “Excitement,” performance, and basic factors influence customer satisfaction and fulfillment in radically different ways.
  • Different customers value different factors; good marketers understand this differentiation and react to it.
  • The difference between “product” and “brand” is essentially emotion.
  • A brand reflects a company’s values, its product’s benefits, and its target’s commonalities.
  • Buyers can only process a few issues simultaneously so sometimes branding requires sacrifice of some positive qualities in order to focus on the few that are most important.
  • Mass media advertising isn’t cheap. In the US it costs about $.02 per customer reached and each customer must be reached at least three times before your message sinks in. It costs a lot more to reach more homogeneous, targeted audiences.

At R7 we always knew in the back of our minds that we “should do more marketing” but it’s impressive now to see just how much we neglected. Marketing should drive your business, not be an afterthought.

Good music

Before I moved over here I acquired the Billboard Top 100 hits for each year from 1950 until 2007. During the few hours a day I haven’t been in my study group I’ve been making my way through them chronologically, loading one year at a time onto my phone. Usually, as I load the songs, I skip over the ones I’m not fond of. A few days ago, as I was loading 1966, it dawned on me that there weren’t any songs in the top 100 I wasn’t fond of. Wilson Pickett, Yardbirds, Paul Revere & the Raiders, Beatles (twice), Bobby Fuller Four, Gary Lewis & the Playboys, Herman’s Hermits, Turtles . . . and those are just songs 91-100! It only gets better from there. 1966, what a year. My parents lived through it. What did I live through? Vanilla Ice and MC Hammer. Great.

It’s also interesting to me how much genre overlap there was in the 50s and the 60s. I grew up listening to radio stations that just played oldies. Then my tastes evolved to classic rock so I listened to stations that played just classic rock. In my mind I always envisioned there being some definite time when rock & roll definitively ended and what we now call classic rock definitively began. In fact, though, classic rock was making inroads into popular culture while rock & roll was still going strong. I’m in 1968 right now and here is Cream right alongside the Temptations, the Doors right alongside the Supremes. It seems obvious but I had no idea. Here’s to many more years of great music!

Happy Chinese New Year!

Welcome to the Year of the Mouse!

It has been a wonderful weekend of work, wine, and winter weather. When I woke up this morning to work on a Leadership paper, the crescent moon was bright over the snowy mountains, the stars were reflecting off the serene lake, and there wasn’t a cloud in the sky. It was positively surreal. Even if my camera could have captured it, no reproduction would have done it justice; it was like something you would see in a computer-generated 3D desktop wallpaper.

Here are a few pictures from my first month at IMD. Enjoy!

Ralf Boscheck

It’s funny that I chose to introduce our Industry and Company Analysis/Economics course in last night’s blog because our prof was in fine form during this morning’s class.

Some Boscheckisms:

  • Why are we going into such detail? BECAUSE IT’S GOOD FOR YOU!
  • You’re tired? Why? Because you’re only sleeping four hours a day? That’s just half of what you’re supposed to have. There, problem solved.
  • At IMD, many professors will call this element “people.” In economics we call it what it really is: “labor.”
  • Cartels rely on facilitating devices, such as long-term contracts or implicit agreements to get around the prisoner’s dilemma. It’s a lot like marriage, actually.
  • Where did this great new technology come from? GERMANY, of course!
  • This is not some tra la la like marketing; there is only ONE right answer.
  • Why do you need a toilet break? I don’t need a toilet break, but that’s fine because I’m a hero.

This afternoon’s class is Marketing. Tra la la, here we come!

Industry and Company Analysis / Economics

Aside: the soup du jour at IMD’s restaurant was French onion today–delicious!

ICA/E is taught by Ralf Boscheck, a crazy (in a good way) German who throws chalk at students who ask inane questions. His first lecture was essentially the complete economic history of the world in four hours–step up to the fire hose and take a drink! He’s very, well, German, very focused on economics and not concerned with “tra la la,” as he puts it. “Tra la la” translates to “fluff” or “basically every other course being taught.” He frequently refers to schools of thought by the business schools that support them. E.g., “The Chicago folks would say that capital is never an entry barrier but if you’re at Harvard, you’d better not mention it because you’d be laughed off campus.”

Each group is currently working on a detailed industry analysis and company analysis for this class; my group was assigned electricity generation for our industry. Half the group has been burning the midnight oil doing industry research for the past two weeks. I am part of the second half, which will focus on a specific company in a specifc segment of that industry, analyzing its position and making recommendations. Our section gets under way next week.

The major take-aways so far from this course have been:

  • Substitutability: how easy it would be to substitute your company’s service, suppliers, distributers, customers, etc. affects the attractiveness of any market.
  • How to identify and define key success factors for companies in a given market segment
  • How to delineate a company’s assets, capabilities, and systems to analyze competitive advantage

Although I’m loving IMD’s focus on development of soft skills (one of its most significant differentiators from other programs), it is great to be paying attention to classic business hard skills as well. I’ve really never done this kind of analysis before and IMD provides tremendous support through digital access to millions of articles, books, reports, and other publications. Our Information Center is led by John Evans (Welsh) who, along with running a first class operation, is also an oenophile. Detailed data on the German renewable energry industry is great and all, but tips on places to buy wine around here would be for more valuable!