Business School: Summer Session is Wrapping Up

Thursday marked the end of one of the most interesting classes that I have ever taken. The course was called "Rationality and Irrationality of Consumer Choices" and was Taught by Eric Uhlmann.

The first question that he asked the class (a group of business school students taking a Psych class) was, "Do you guys general consider consumers to be rational actors?". I didn't quite get what his point was, but after 8 classes with him I now understand that he was calling into question how rational human behavior really is.

This basic question forces you to look at your own decision making process. From behavior it is logical to work backwards into what drives behavior, that is judgements. Social judgements was really the crux of the course and also the name of Eric's website.

We covered things like associations and the automatic thin-slicing that our brains do when we see an individual. This thin-slicing causes us to associate people of color, white people, Puerto Ricans, women, muslims, jews, tall people, fat people, or engineers with certain characteristics based on our past experiences. We are wired to do this because thinking through every judgement we make would cause the simplist of decisions to be very complex.

We also covered moral outrage. An example of moral outrage is evident in primates and humans when a realatively unequal payment is made for services. In primates this is tested by giving the chimp a piece of fruit at regular intervals for doing a task. After doing this for some time another chimp is brought in and given more food for doing the same task. This experiment has resulted in the original chimp throwing the food at the handler and stopping the task.

So the question is asked, is this rational? If the food was payment enough, why is the chimp upset when he is contuing to get the same reward (which he deemed adequate) for the same work?

Not that people are chims, but the parallels that can be drawn here are obvious.

Eric challenged us to think of consumers as irrational and biased creatures that are subject to the whims of their own mind tricks. He also showed us that we as leaders are succepptible to the shortcuts that our mind takes as well. Not all of the parallels are as obvious as the moral outrage example given above, but we could usually apply the conepts in a marketing or management context.

This will probably be the only Psych class that I take in business school and I'm glad I took it. Besided the substantially lower work load, the class offered me an opportunity to pull the logic out of business and view it through the lens of someone who has dissected human behavior. I'm sure I will call up things I learned in this class throughout my professional career.

Business School Makes it Easier to Drink from a Firehose

Drinking from a fire hose is a common way that people describe the first few weeks with a new organization. The idea is that it's hard to process everything your learning with the crazy amount of information about the company, the building, the business, and new colleagues/networks all coming at you at once. As with drinking from a fire hose... you get just a little bit while a lot spills off the sides of our face.

Today was day 7 with my new employer and I am definitely still spilling a lot of water onto the pavement. However, I have noticed that the time I have spent in business school is helping me process a lot and just cope in general. Whether it's the jargon or a deeper understanding about the metrics that directors are ultimately looking for, the hard work is beginning to pay off.

As I mentioned in my last post, I am on a team that is managing a server supply chain. Prior to a few weeks ago, no one was tracking the day to day movement of the individual server racks. Due to a lack of man power and some systems inefficiencies it was a bit of a shotgun approach. Now, the team is focusing in on the just landed and near term shipments. It is becoming a daily management task combined with a longer term control piece. The problem solving aspect of what is really an ambiguous assignment is easier given my training in business school. This is actually something I didn't realize. I think it comes from the exposure to the wide variety of subjects and case studies within those disciplines. Essentially, you get very good at gearing up on a topic and building a framework to solve problems within that topic. It's a type of brain work out that requires a lot of reps.

Anyway, the job is going well. Still very challenging and I'm still a contractor, but the team is full of great people and b-school has definitely prepared me for this challenge. So keep the pressure up on the firehose... I'm still thirsty!

Business School and Jargon

Where is the value proposition?

Are you part of his org?

How high is the Gross Margin?

What was the EBITDA in Q1?

Let's start reporting up with a more consistent cadence.

Have you socialized that idea?

Plug that into our free cash flows to recalculate NPV.

Is that a balance sheet item?

If we sell that much inventory will we hit a LIFO layer?

All of the above questions and comments represent statements that influence my decision to attend business school. The issue is this, if you can't speak the language, then you don't have a chance at moving up.

Now don't get me wrong, there is more to business school than just understanding jargon, but it is one of the most useful things that a graduate leaves with. Another real life example of jargon is the world of accounting acronyms. I recently came across a list of accounting acronyms that required scrolling to reach the bottom of the page.

All of this confusion begs the question... why so many acronyms? Why the jargon?

From what I can tell so far there are two reasons for this:

1) There are a unique set of ideas that as you grow in your understanding of business require new terms. An example is the term "value proposition". This refers to the trade off a party will incur if they take an offer (or proposition). If the trade offs result in a gain for the party than the value proposition is said to be a good one.

2) Some business people, particularly some MBAs like to engage in class warfare. The general attitude is that using jargon communicate superiority and ensures a higher "barrier to entry" (pardon the jargon) for someone who hasn't had a formal business education. This is half insecurity and half pride in my opinion.

Do you buy these reasons? Maybe the first one is a bit naive. In any case, learning jargon is one of the most valuable things you get from business school. Once you speak the language it is much less intimidating and the glass ceiling seems to retract. Is $18000 a year too much money to pay in order to add 350 words to your vocabulary?

I guess it depends on our perspective. Think on it.

A Working Stiff

First of all I have to apologize for not writing yesterday evening. I actually had a class immediately after my first day at work and got home pretty late, so I didn't write. Hopefully I am redeemed with this entry...

The last two days have actually been very good. I joined a team at my new company that has only been recently formed. As a result there aren't really any experts and I can enter the conversation and make some meaningful contributions. Not to say I'm pulling my weight yet, but it's nice that the norms haven't quite been set.

I found out soon after I started that a major firestorm had been brewing during the time of my interviews. Turns out a major supplier decided to drastically increase the lead time on new orders. As a result, the team has had to find other vendors to fill the missing units and adjust the entire supply model to match the lengthened lead times. Apparently this whole problem and resolution has played itself out in a series of meetings taking place from early in the morning to late at night in the offices around where I sit. Sometimes ignorance is bliss.

Anyway, my first day was actually quite slow. I started off by going through the security badge process and then I was issued a backpack and a laptop. No one really gave me any rules for the laptop, so I'm just assuming its ok to take it home. The new place seems to have a lot of ambiguous "don't ask don't tell" policies.

I also haven't heard anything official on when I am supposed to be at work and whether or not its ok to work overtime. Yes, as a contractor I get overtime :) And to boot I won't meet my manager until the week after next.

Its great though. the ambiguity may wear on me at some point, but right now its nice to just plug in where I can make an impact and run with it. It's giving me a chance to prove that I can handle autonomy well. Hopefully, I will be able to retain it as I spend more time there.

I will keep you posted.

Here We Go! Riding on the coat tails of my future MBA Degree

In 9 hours and 20 minutes I will walk through the doors of my new employer. When I clear those doors I will put to rest the last 3 years of labor management and become a business analyst for a technology company. I won't wear a safety vest, hard hat, or ear plugs. I won't hear 15 explitives before 6 AM. I won't even be awake for 6 AM. I will have to watch my posture, be sure to take walking breaks every few hours, and get a chance to talk to some folks around a water cooler. I will get to try new lunch places. I am moving from an industrial work-place to a downtown office and getting a raise in the process.This kind of leap is only possible for someone pursuing their MBA degree.

As I prepare to go to work tomorrow (in jeans), I am taking the first step as a different kind of professional. I am slowly becoming the person I envisoined I would be before I entered business school. I have a stronger acumen, wider network of contacts, more confidence, and mounds of student loan debt. I still have a lifetime of learning ahead of me, but I am beginning to get some use out of a few new tools that I have picked up over the last year.

It feels good to be approaching a major change, but it is also nerve racking. A lot of questions are swirling. Can I do this job? Will I learn the new industry fast enough? Can I do solid work wearing jeans? Will my alarm wake me up tomorrow?

This is an opportunity that should have required me to quit my job. Luckily, I was forced into making the transition otherwise I may still be wearing high visibility yellow. Only by God's grace will I be wearing non-reflective clothing tomorrow.

I think I will wear Blue, actually.

I will post again after the day is over, so stay tuned. Hopefully me and my half finished MBA degree will thrive tomorrow.

Here's to leaping and bounding!

Back to Work - Business School Continues

I mentioned in a previous post that I was laid off back in May. The company I used to work for was kind enough to offer me a severance package, so it hasn't been terribly uncomfortable, but over the past few weeks I have become a bit anxious.

However, last week I was informed that I am going to start a new position at a local tech company.

I love fresh starts!

If you have been following this blog there is something that should jump out to you about a word in the phrase "local tech company".

Give up? It's the word "tech". Remember, "operations manager in an archaic union driven industry"? Now, I will be a business analyst in the tech industry and would you believe that I will be making more money? I think I owe this one to business school - plus a few referrals and the prayers of many.

It's a very exciting time, but some adjustment will need to be made over the next few weeks. I will have a new industry to learn, a new group of colleagues to meet, and a new building to figure out. I have so many questions... will my desk be tall enough, will there be a refrigerator near by, will I be issued a laptop?

A few items are for certain, though... no unions to negotiate with, no heavy industrial work environment to be endangered by, and no more working nights and weekends.

I will be a working stiff, while I'm not in class that is. Yes, business school continues in all it's summer quarter glory. Our first deliverable in the leadership course is due this week and the psych class continues to be amazingly interesting and a very low intensity class.

So back to it. My apologies for the frequency of my entries, they will pick up for the rest of the month.

Stay tuned!

An MBA Degree the new BA?

Over the past several decades in America, a University degree has gone from something an elite few could achieve to a product for the masses. We've gone from certain cities being centers of education to the ability to obtain a four year degree within 30 miles of any citizen in this country. In fact, with online education crossing the viability threshold, most people are within thirty steps of any level of education they desire.

And this is great news. Education has been linked to decreased crime, increased enjoyment of life, better lifetime earning, and more. The education of our nation has led to the GDP increasing and certainly bolstered our rise as a world power over the last 100 years. However, it has also done something else... flooded the market with qualified people. The days of a high school graduate having a snowball's chance in this labor market are all but gone and in the past ten years something similar is beginning to happen to the BA.

An article I recently read asserted that the MBA Degree is the new BA. I'm not sure this is entirely true, but I think it is fair to say that an MBA is the BA of the 60's or 70's. When someone earns an MBA, they build a strong network of classmates, get a door into companies near them, and join a group of alumni that are willing to help each other - all benefits of the early BA.

The one major difference between today's MBA and a BA of the present or past is rigor. Undergrad Business degrees are 2 years of general ed and 1-1.5 years of business courses, and the ability to augment the final two years with electives. In some cases a "business major" means someone took 8 "business classes". The MBA degree is different. You take 23 courses in business with the option of 2-4 outside electives. In addition, the program assumes that you have a clear understanding of the basics (accounting, stats, economics, etc.), so the depth is much greater.

And the depth is required now. Labor markets are flooded with people who have a cursory knowledge of business, but employers really want people who can innovate and create value at their companies. Is an MBA required to do this? No way, but its sure helps ease a hiring manager's mind when their new hire spent the time and money to get an MBA. It tells them they are serious about their careers, they are well connected, and they survived a rigorous academic program. You can't blame people for being risk averse.

So is it the new BA? Well, what do you think?