Is Business School Worth It?

What do Bill Gates, Howard Schultz, Jeff Bezos, and Oprah Winfrey all have in common? Well, besides being some of the richest people in the world, these four also share a statistic. There highest level of education is a four year degree.

All of these people showed promise from a young age and some would even say that they were "born to lead". That begs the question... Is business school worth it? Can leadership be taught? Is B-school just a place for smart people to network themselves to slightly more money and marginally more interesting careers. Would the successful ones be successful anyway?

My hunch is that the answer is "it depends". It really depends on the person. Yes, Oprah and Bill were ready for the world, but these people are both extraordinarily lucky and extraordinarily driven. For the vast majority of us we can benefit from the education that business school provides. In fact, if you were to ask Oprah, Schultz, Bezos, or Gates if they would trade some of their lessons in the school of hard knocks for ones taught in a lecture hall, they would probably say yes.

So is it worth it to me... I think so. I think that I have the raw stuff it takes to be a leader and I am confident that when I graduate I will be a different, less confused, developed professional. I wouldn't trade the experience and I've already grown to value it a great deal. That's a good thing, because I will need to remember that as I begin paying back the loans.

Is Amazon Taking Over the World?

I was recently reading the Wikipedia entry for Amazon.com. Turns out that Bezos' Seattle army has been very busy...

In addition to becoming the world's largest online retailer, swallowing Zappos earlier this summer, and beginning to sell everything from ATV winches to Platinum Ruby & Diamond sets, they have set up a cloud computing business and a grocery delivery service.

Not bad for a company that frustrated early investors by not earning a profit for several years after its IPO. But is Amazon getting too big for it's own good? Well, let's look at the previously mentioned cloud computing and grocery delivery business to evaluate this question.

Amazon Web Services (AWS) began in early 2006 and offers several remote IT infrastructure services like data storage, a Query service, dbsase management, and even a web driven market for human computer labor called mechanical turk. At first glance it seems that Amazon is stepping a bit outside of its "core business", decidedly retail, to offer a very lucrative product like web services. But upon further investigation it begins to make sense. Amazon has been providing IT infrastructure of every sort for its internal customers for 13 years. Along the way they have figured out how to manage IT assets efficiently and keep them very reliable. So why not take that expertise and sell it to a market full of companies that really don't have any expertise in or desire to run their own IT infrastructure? Maybe not so far off course after all.

But what about groceries? Well, Amazon Fresh is still restricted to select areas of Seattle for the time being, but it also appears to leverage some of the core business strengths Amazon has developed over the last several years. Amazon fresh requires expertise in wherehouse management, delivery logistics, and customer service. These are all strengths that Amazon can pul out of its Fulfillment center human resources. Add in a little outside grocery talent like a wine guy and produce guy and your in business. It also doesn't hurt that Amazon has been offering non-perishable goods in their retail store for some time now.

The truth of the matter is that Amazon has developed an expertise at business operation over the last decade in a half and very few things are truly outside its core business anymore. So maybe we are asking the wrong question. Maybe the question we should be asking is "What is the next logical step for Amazon?". It seems this young behemoth is just getting started and if Bezos has his way we will see a lot more of Amazon in all kinds of industries. I wonder what's next...

On Break from Business School... Mac vs. PC ads

I was surfing the series of tubes today and decided I would check out apple.com. To fill in those of you who haven't been following the OS wars... Apple is due to release Snow Leopard in the next week and windows is planning the Windows 7 release in October (although the RC version has been available for months). Anyway, it was a web page talking about snow leopard that got me to think about Apple and head to their site.

Once I got there, I started poking around and ended up watching some Mac vs. PC ads. Having just completed a marketing class a few months ago I have a new appreciation for the genius (pardon the pun) of these ads.

First, Apple does an amazing job of constructing the two characters that are featured in their commercials to speak to their audience...

The PC guy (left above) is a slightly out of date guy that is trying really hard to be cool. He is unsure of himself and often over compensates and exaggerates. The Mac character (right above) on the other hand is laid back and cool.

Second, the commercials usually center around a particular flaw that Apple is trying to point out to potential switchers. They do this beautifully. Items like security, dependability, and ease of use have been highlighted. These have all been good points of difference for Apple to discuss, but in their latest ad they hit the motherload when they have a consumer ask the PC guy what kind of PC she should get if she "just wants it to work". This is obviously the voice of the customer and the PC responds that all PCs have issues like viruses. Her response... "I guess I will get a Mac". Great!!!

This series of commercials has largely gone uncontested by Microsoft (the obvious target of the ads) and they seem to be working as Apple's market share has been increasing for the last few years.

If you've got some spare time and want to catch a real life business school marketing lesson, check out the ads in my link above.

Happy watching...

An MBA Degree in Relationships

A few years back, while working for the sales division of Maersk Line, I had an interesting conversation with a business owner that changed my opinion of what it takes to be successful in business.

The gentlemen's name was Mel and he owned an animal feed trading company that sold most of its products to Japanese customers. Mel was telling me about a group of young men that were preparing to start an import/export business in the US and they were planning on having customers in Asia. Mel's first question to these guys when they came and asked him for advice was "Do you know someone over there?". The question wasn't how much experience do you have in this type of business or do you have any international experience. He was asking if they had an existing relationship with people that would be their business associates or customers.

This "old school" mentality flies right in the face of the "big idea" philosophy that is so popular among young business people these days. The "if you build it and its really cool, they will come" crowd. Companies like Google or Zappos seem to be very successful because of one really good idea. The part that is invisible is all of the relationships (the network) that existed when these companies formed.

So what does this mean for someone getting their MBA degree today? Well, I am taking it to mean that it is really important to build as diverse a network as possible... Not because its good to know people or because I want to use them for something some day. The point is that the more groups and individuals I interact with, the more people I will be able to connect and engage in favor exchanging with. I guess what I am trying to say without using the s word (synergy) is that building relationships with several diverse groups is beneficial for all of the parties involved. It's a win-win.

So, yes one hit wonders do happen, but most successful enterprises are forged through careful steps involving key individuals from the founder's(s') network.

Thanks Mel.

Caught up in the Pace During this MBA Vacation

For the last year I have been writing about the challenges of balancing family, work, and school while pursuing an MBA. Today, I am struggling with the challenge of balancing a new job with anything else...

For the last 2 weeks work has been insane. My day starts around 7am and I am usually not leaving until close to 6pm. Then when I get home, I am often on the laptop for another couple of hours. I know I have to remember that I am still new at this job, but I honestly don't know how I am going to survive once the school year starts. So, I understand that I probably won't have the work-from-home time after a few more weeks, but I will have 8 hours of class, 4-8 hours of group meetings, and an ever occupied mind. I guess I can always think back to when I was working 13 hours a day over night when I was in operations management and be grateful, though. It could be worse.

Yes, that's it. A positive attitude goes a long way. I'm sure in 5 weeks when I am back in the swing of things with school I will be well settled into work. Then the next 15 months of school and this challenging position will prepare me for the beginning of my climb up the ladder in the corporate world. Are you convinced yet? Neither am I...

Looking Back Over Year One of Business School

Since I am now officially a second year B-School student, I am ready to impart my wisdom regarding some of the key take-aways from my first year experience. Well, not quite, but I do want to share some very "high level" summaries with you.

Let me explain...

At the end of the quarter it is customary for the professor to do a course wrap up. During this wrap up it is to hear something like, "If you remember one thing from this course, it should be...". Well, those "one things" are what I want to share with you tonight.

Here you go...

Financial Accounting - If an organization or a person says something, try and think about why they would say it and how they benefit from saying it

Microeconomics - Incentives change behavior.

Statistics - Numbers can be manipulated to tell any story... and beware of averages without standard deviations.

Corporate Finance - NPV, NPV, NPV, NPV... oh yeah, and it's really hard to predict cash flows, establish a discount rate, or beat the market.

Open Innovation - The user community can sometimes be a company's best and cheapest form of R & D.

Managerial Accounting - You get what you measure... and ROI is a pretty good measure of performance.

Marketing - If your going to make a reccomendation about marketing strategy, you better have numbers that tell you the size (units/$$$$) of the opportunity. If you don't, you better be very good about making it up... and thank your customers.

OK, so a few of them were two things... but you get the picture. That's the first year of Business School in a nut... walnut shell. Enjoy!

Summer Installment of Business School comes to a Close

On Wednesday night my group gave our final presentation for the management class we have been taking all summer. We are finally done!

The presentation was on an HBS case about a P & G employee by the name of Lisa Benton. She had turned down a lucrative offer at a small firm in return for some classical marketing training from P & G. However, after 4 months in the program, a rookie boss, an abrasive colleague, and a cultural misunderstanding later she is less than satisfied with the training and the future potential. The presentation centered around the problems that had come up in her short tenure and a recommendation for a path to success. The short version of that recommendation was, "buck up and use your network". After all, Lisa was a graduate of Harvard Business School.

The professor seemed to like it so we all went out for drinks afterwards to celebrate. It was a long summer.

Now, I am looking straight ahead to 6 weeks of freedom from school. It will be a chance to really turn a corner with my new employer and get some rest in general. My wife and I are already planning our weekend get away.

I will return in the fall for a business spreadsheet modeling course and a macro-economics class. Then it's back to the grind. Hopefully I will recharge adequately over the next several days in order to handle it. The vacations never are long enough...

But this is what I signed up for when I decided to do business school at night. I knew about all of it, the 16 hour days, the forgetting what your wife lookes like, the endless projects, papers, and group work. The first 12 months have officially ended and I'm a bonified 2nd year. 16 months and counting...