OwenBloggers: Isaac - MBA '08

My three immutable laws of business...

Here I am roughly two and a half months after graduation and Owen already seems like a lifetime ago.  Unlike many of my colleagues who took some time off after business school, I literally started the Monday after commencement.  The last few weeks have been some of the best of my life--- I'm feeling "back in the saddle" at work and loving every minute and I'm now in possession of something called a personal life.  What a change from just a few short weeks ago.

It's a fantastic feeling to walk in to work every day.  My position is exactly the kind of role I flourish best in- limitless possibilities, a great team to work with, and supportive upper management.  I walk in with a smile on my face and walk out gleefully planning the next day's battleplan. 

Owen gave me a toolkit that I put to work every day--- from accounting to statistics to management practices, I'd be willing to bet 75% of my decisions during the day are somehow impacted by the last two years at business school.  I feel sharper and more confident in my decisions and I'm able to draw from a much larger pool of experiences. 

That being said, I was driving home tonight after an exceedingly productive day and had this notion to try and sum up B-school into bullet points  (Since everything in an MBA program gets the bullet-point treatment at some time or another). I tried to map out the key "take-aways" that would go on the last slide of the 2-Year MBA Powerpoint deck...  what were the things you really wanted your audience to hear? 

Within a couple of seconds the three points below had materialized in my thought process.  I'm sure these three points are terribly obvious to those with or without an MBA.  However, I feel Owen provided me with a litany of experiences that all but force me to focus on these three concepts every day in my professional life.  I cannot seem to escape these concepts, and I have yet to find an example where these three rules don't apply.

1. Hiring is the most important thing any company ever does, and few firms do it well. 

In my personal experience I've watched the complete disintegration of a firm purely as a result of poor hiring.  Watching this fiasco unfold was one of most important lessons I've learned.  It was also a clear example of deviating from the golden rule in hiring: "A people hire A people, B people hire C people, and C people hire F people".  Within the span of three months enough B people had come on board that it was only matter of time before the C's and F's started filling the seats.  I don't care how expensive hiring becomes, in either time or hard costs, it's always worth it to hold out for the A's. 

We just spent for weeks hiring two key people for our firm.  Based on our current company plans, these two individuals were very important hires.  I personally spent one-third of my time calling references, conducting interviews, and talking to head-hunters.  In opportunity cost terms, this was a very expensive process.  However, after over a dozen interviews for each position, we have two new team-members that for all we know could have been custom-grown in a lab somewhere--- just for us.  They're perfect fits and will be instrumental in helping our firm in reaching its overall potential. 

2. Cultivate passion.

If people don't love their job, they won't be good at it.  Whether it's the lowest man on the totem pole or the CEO, if they don't really care about the work they're doing, you're only getting a fraction of the potential output.  I'm still relatively new at my job, but almost every time I talk to a client of the firm they remark at how much everyone sounds like we really love what we're doing.  It inspires confidence in the customer and makes us a company people want to work with and for. 

Cultivating passion isn't an easy thing to do; it takes a concerted effort across the organization.  People have to believe in what they're doing, and most importantly, they have to believe in each other as a team. 

3.  Know the customer's business better than the customer. 

This is a key to success that rarely gets mentioned.  Knowing the customer's business is more than knowing who their own customers are--- it's about knowing how their business works and how you build products and services to best fit their needs.  People just don't take this into consideration enough, but it's a huge advantage to those who do.

For example, what do your customer's cash flows look like?  Is their business seasonal?  What are their Unique Selling Propositions and how to do build services to support one of their own selling points?  What are their biggest fears and how do you do things to to relieve them?  Who are their competitors and what can you do to give them an edge against them?   It's scary how infrequently business stop to think about these things but yet how simple it is to take them into consideration. 

And just like that... It's over.

Just walked out of my last class at Owen. 

I'm not going to take your time to bore you with all the various thoughts and emotions running through my head right now.  Suffice it to say, it's nothing if not a sad day.  Two years has streaked by in what seems like a three week period.  Nothing prepares you for the sudden realization that all the friends you've made, all the life-changing experiences, all the restless nights in the library cramming for Corporate Val--- It's all over.  It's right now, in this very instant, that i wish i could hit the "reset" button and flash back to the summer of 2006. 

This chapter in my life is closed.  If you've ever read a really great book and you stumble on that one chapter that seems to clear up all the questions and set the stage for the rest of the story, well, that's pretty much the feeling i have right now.  I feel like the chapter in my life known as Owen will define where the rest of my own story will take me.

Goodbye Owen--- I will truly miss you and look back on my days here as some of the best of my life.

Second Year MBAs: The Dukes of Moral Hazard

The two years spent in an MBA program are likely the most dynamic (even unstable) years in your life. The first year at Owen is heavily concentrated in the Core, which basically takes your life and sucks it down into a deep, dark hole.  You’ll spend the first three MODs working harder than you ever can imagine.  100 hour weeks become the norm, you begin to feel like the library should become your permanent mailing address, and you’re bouncing back and forth among Finance, Marketing, Operations, Accounting, and almost every other business subject you can imagine.  The workload is unmanageable, but somehow you prioritize your deliverables and you make it through.

Along comes MOD IV, and all of the sudden the workload gets a little lighter.  The deliverables are, shockingly, manageable.  You start to maybe even take a Saturday off.   You’ve likely decided on an Internship and start shopping around for housing.  The Capitalist Ball (aka, Prom) lets everyone blow off a considerable amount of steam.

Then, all the sudden, your first year is done.  You end up doing a little traveling before your Internship begins.  You move to a new city, meet new people, and fill your days with new experiences.  You complete your Internship and then pack up and move back to Nashville and prepare for your second year.
You attack your Second year with much the same ferocity you took into your first year.  You’re ready to get back to academia and resume filling your brain with information and proving your aptitude.  You’re also very much ready to get back and stick it to the first years with all of your accumulated knowledge. 
But, then… Something happens.

Sometime between November and February, the climate shifts.  The majority of the class is now holding at least one job offer.  Many people have already accepted. You then look at your GPA and begin calculating the chances you’d be able to actually gain or lose even one tenth of a point.  And then it hits you--- you realize you can’t change your class ranking, and even if you did--- it wouldn’t matter anyways.  You are already sitting on job offers that wont change regardless of how hard you work.  Or, if you’re still looking for the right job, you think back and realize nobody has ever really even cared what your GPA was.

And so it begins.  The “Senior Slide” takes full effect.  Second years go from taking four or five courses per mod to one or two.  The chance of seeing a second year burning the midnight oil in the library becomes roughly the same odds of Britney Spears winning the Nobel Peace Prize. 

The strange thing is that we’ve just spent the previous 18 months having the concepts of incentives and moral hazard beaten into our brains.   MBA’s are masters of expected future value--- its one of the fundamental concepts that defines our education.  So we all sit back and realize the expected future value of us beating ourselves to death in 2 or 3 more courses rapidly approaches zero. 

I guess my take-away is this.  The MBA curriculum is very similar to a theme park roller coaster.  It starts off big, throwing you around, seeing how much you can take.  There’s a little breather right in the middle as it climbs up the second hill.  That second hill takes you for a short, but extreme burst of dips and turns, and then it ends far too quickly and you pull into the station wishing you didn’t have to get off. 

My changes to the "Core"

A couple of nights ago about a dozen students from my class had the opportunity to attend a "feedback session" with members of the Owen administration over dinner.  I think it's been said many times before by many of the other bloggers, but Owen is unique among business schools in that it's one of the only one's you'll find that constantly pushes for improvement and advancement, and does this by whole-heartedly engaging the student body in the process.  Nearly everyone I know lists this quality as one of the top reasons we came to Owen in the first place. 

Over the course of dinner my classmates and I talked about the things we loved, the things we liked, and the things we didn't.  At some point during the night I made a somewhat serious comment that one thing I'd like to change would be to add Corporate Valuation to the Core (the Core are courses required of all students). A few other classmates pointed out courses that they thought were "indispensable, yet currently not mandatory" that they would like to see made part of the Core. While I realize it's not likely that all (or any..) of of Core changes will be made, I figured I'd share my opinions with you here on OwenBloggers.

Owen Courses I'd make required if I ruled the world...

• Corporate Valuation (Professor Craig Lewis).  This is the most important course I've taken at Owen.  This is the most important course I've ever taken, period.  Professor Lewis is the most effective instructor I've ever met/seen/heard of, period.  I made the joke at dinner that I'd take corporate val every mod for the entire two years of Owen if I could.  Shockingly, several other students at the table actually took my joke seriously and actually said they'd do the same thing if it were offered.  It's that good. When you're in class, you are so engaged you leave at the end of the period exhausted.  The course is by far the most challenging at Owen, but what you learn in a short 7 weeks is enough to fill years of real-world experience. His teaching methodology and grasp of the material are without peer.  My personal feeling is that if you come to business school and do not take this course, you have done yourself a massive disservice.
• Taxation of Business and Investment Transactions (Professor Henderson).  Ok, this one might not be for everyone as it's a fairly intense (ok, really intense), but it's one of those classes that will help pay for B-school.  Come again?  Yes, my feeling is that this course gives you and understanding of the tax code and its impact on business (and your personal finances) that will easily have a gross benefit of thousands of dollars in the course of your early career.  This course teaches me that I'll likely never want anyone by a CPA doing my taxes (business and/or personal), but the way i treat expenses and income will be dramatically affected by this course.
• Bottom of the Pyramid (-type) course.  Right now i'm taking the BOP course that focuses on the alleviation of global poverty through business efforts.  I think every MBA at Owen should be required to take two such courses that are more focused on discussion and practical knowledge than on pure academic learning.  Maybe open up the amazing courses at main Vanderbilt campus so we can expand our offerings to more than just grad-level finance and operations classes.   Classes that stretch the thinking and challenge the conventional wisdom are often the ones with the most long-term value, and i feel Owen could benefit by adding a few to the curriculum. 
• Game Theory (Mike Shor).  Wow.  This is without a doubt a course that should be made mandatory.  Professor Shor is a... um... what's the word i'm looking for?  Rockstar?  Yeah, that'll work.  Seriously, the course is incredible--- don’t leave Owen without it.
• Mandatory Capstone projects.  I think one of the missed opportunities here at Owen is a mandatory capstone requirement.  Right now, they are optional, and given the course load we are already saddled with, it's very hard for the average student to find time to dedicate to the project.  Perhaps a MOD where we only take 2-3 other courses (geared towards your specific capstone) along with dedicated time/resources for the project would work...

Hey, where'd the OwenBloggers go???

Some of you might have noticed that the Blog has been kind of quiet the last week or so--- some of you might even be asking "why"? Rest assured, we're all still here; it's just that dreaded time of year known as "finals". 

For those of you who aren't fully acquainted with the Owen MBA curriculum, it work something like this:

We are on the MOD system, meaning our classes are in quarters, and we typically have seven weeks of classes (two classes a week, fourteen sessions or so...) followed by one single day of "study" and then finals.  For those of you who didn't go back and re-read that last sentence, I'll assume you didn't pay much attention, so I'll say it again: one SINGLE day's break between classes and the first final exam.  You're working full tilt for seven weeks, handing in the lion's share of deliverables the last week of the course, and then BOOM--- finals are a day away...  I've never understood why we don't give at least a weekend until finals begin, but that's the way it is.  So if you don't hear from the OwenBloggers crew for the next week, don't send out the search party, they're OK (or as OK as you can be with a corporate valuation final hanging over your head...).

In Sam's last official act as Editor of OwenBloggers.com, he asked us to talk about a few things, one of them being what our Holiday break plans were.  I remember thinking  back to pre-MBA wondering if students actually got time off or not.  Well, yes we do, and at the same time, no we don't.  Our last day of finals is the 20th and class starts back the 7th.  Technically, that gives us a little over two weeks off.  The reason I say we really don't get all that time off is because many firms are still conducting internship/fulltime interviews and many students are traveling to conferences and career forums.  So, depending on who you are, you either have 2+ weeks off to travel and rest or, perhaps, just a few days here and there.  This year I luckily don't have anything to bring me back early, so my wife and I will be in Connecticut for a week and then I'll have another week off to recoup before my penultimate MOD. 

It scares me to death thinking that my MBA career is nearing an end.  I cannot express how quickly this has all flown by--- there is simply no way to tell you how strange it feels to look back and realize a year and a half has gone by in what seems like three week's time...

Standard Deviations

• I've been traveling a lot lately, and it's amazing how grossly inefficient most airlines have become.  I proudly fly Southwest whenever possible--- don't get me wrong, I don't have a deep love for the "greyhound bus of the sky" spartanism Southwest seems to embody, but I do value my time.  I've flown countless of times in my professional life, and I've come to the conclusion that while other airlines certainly have an upper hand on comfort, Southwest's focus on getting flights in and out on time is really what matters to me most.  I mean, honestly--- what's more important--- being comfortable while you are in the airport/flying or getting to your destination on time?  I had the displeasure of flying Continental this last weekend, and let me tell you, when you spend an extra 20 minutes on the tarmac because they cant find anyone to run the jetway, you find yourself longing for those uncomfortable-but-on-time Southwest flights.
• While the airlines are  pretty frustrating, nothing tops the TSA.  These guys must take classes on inefficiency.  In Newark I watched closely for about 15 minutes as the symphony of disorganization played before my eyes.  I came to some conclusions as I watched this all play out.  First, the "prep tables" where are take off your shoes, empty your laptop bag, and resign your dignity are entirely too small.  I started timing the gap between the first person going through the detector and the time when the next person was "ready" to walk through. It's amazing really--- it averaged almost 20 seconds of gap.  As the second person is undoing their shoes and pushing their bags through the xray, the TSA people are just standing around doing nothing... waiting for that second person to finish emptying their bags.  If the "prep" line was longer and people had more time to undo their shoes, bags, etc, then the gap between customers would decrease significantly and overall service time would decrease.  Yet another example of how B-school makes you an efficiency Nazi.
• Corporate Val is the most important course in B-school.  I'm sure some will disagree, but I've not had a class that is so deep and yet so amazingly practical.  Just like Sharran, I think I'd take it every MOD if it was offered.  However, because of the effort required for the course, it pretty much rules your life.  If it was offered over a semester, and work more spread out, then I think I might get more out of it... but the takeaway is this--- TAKE CORPORATE VAL. 
• Net Impact was a massive success.  I couldn't be prouder of the Owen Net Impact team, and i'm equally proud of my OwenBloggers brethren.  Without a doubt our coverage of the conference was the most important event in OB.com history--- I could have never imagined it being pulled off so professionally or efficiently.  I think the direction OB.com is headed today is one Sam, Sharran and I never could have envisioned, yet it far exceed all our expectations.  The thing that makes me saddest about leaving business school is leaving this team.

Standard Deviations

So i'm going to start a new series of semi-weekly posts titled "Standard Deviations".  It'll be bits-and-bites of information--- likely incoherent, but it's my ill-concieved  attempt to force myself to get my head out of my books and blog more. 

• This weekend was almost a complete bust.  Spent Saturday writing one paper, Sunday another.  With finals coming up and a 5-course class load, i'm trying to clear my plate for this week so i've got ample time to cry myself to sleep over my upcoming Derivatives final. 
• Weekend wasnt a complete bust--- i take that back. Had a lovely dinner with four old friends and one new one.  Fantastic little Italian restaurant named Cafe Nonna.  Highly recommended.  Great wine good food, better people.  After dinner we somehow were talked into going to one of these commercial haunted houses.  The actual haunted house was nowhere near as scary as the customer base.  Standing in line to get in was 100 times more frightful than the freakshow inside.
• Here's a little advice--- dont ask me what i think about the economy.  It seems that since i'm in my second year of an MBA, everybody thinks i can look into some crystal ball and predict where the economy's heading in the next year.  The fact is that even with an MBA, i'm only better at talking through and understanding the complexities of the free market--- the powers of prediction is not a course offered at Owen.  I have a more informed opinion--- but that's it.  Remember, even people who call themselves "economists" really dont have a clue.  If you look the academic economist's track record, they have successfully predicted 15 of the last three recessions.  Simply put--- nobody has an answer, but there are indicators. 
• But like everything in economics, the answer "it depends" even applies to seemingly clear-cut signals.  Take for example the fact the Canadian dollar (the loonie... i get a kick out of that).  is now somewhere at/above the level of the USD.  I bet in the last two weeks i've heard fifty people tell me what a bad thing this is for the economy.  Really?  Are you sure?  If i'm an exporter of US goods, this is great news.  Canada, our largest trading partner, now views US made goods as slightly "cheaper".  So... is that a bad thing?  The point is there's no right answer.  It's kind of like predicting the weather... storm systems are made up of an infinite collection of temperatures and pressures.  If I look at the barometric pressure and it's falling--- does that mean it's going to rain or shine?  It doesnt, but taken into account along with all the other "inputs" into the system, you can make a pretty good guess.  Same thing in economics, except there are many more variables and you can't measure many of them directly...
• A very good friend of mine sent me this link.  It's a somewhat morose topic--- the last lecture of a CMU professor diagnosed with terminal cancer.  However, it's a fantastic presentation and i urge everyone to take the time to watch it.  It really helps you take a step back and check your bearings--- we all need to do that from time to time.

The thirty hour day

So the whole idea that your second year is a lot easier than your first is a lie.  I'm easily as busy, if not busier, now versus a year ago.  I'm a TA, a grader, taking 5 courses (including derivatives, which is like taking 3 classes by itself).  With OwenBloggers, helping friends with their own clubs and efforts, well, that doesn't leave me a lot of free time.  I actually did the math yesterday and found out that in order to do everything I'd like to, and have enough time to stop for 30 minutes to eat lunch, time to read maybe 2 hours at night, well, I'd need about 31 hours in a given day.  There aren't 31 hours in a day as it turns out--- and that means I'm not getting everything done that I need to. 

On a side note, the past few nights I've been at Owen very late; past 8 most nights and some 11 most nights.  As I pack up my things at night I pass a lot of familiar faces--- actually, everyone that's there burning the midnight oil with me is a second year.  Where are all the first years?  Are they that much smarter than us?  This time last year I was closing down the Owen library 3 out of 5 nights a week, and so were all my friends.  What gives? 

While I'm on the subject of things i don't understand-  I've got an issue with what seems like a flaw in the economic fundamentals we all believe to be true.  It seems we've got a situation here at Owen that clearly violates basic demand principles we were taught just a few short mods ago.  Somewhere in this very building you can purchase an item, a common item, from two separate locations.  In one location the item is of lesser quantity and higher price; just a few yards away--- same item--- greater quantity at a lower price.  We'd expect the lower priced/higher quantity product to outsell the competition many times over.  What I've noticed is that the higher priced/lower quantity item actually OUTSELLS the lower-priced variant. Is this a black-hole in economic theory? Some sort flaw in the Law of Demand?  No.  What this shows us is that even in these hallowed halls of business, humans aren't always maximizing.  Score one for the HOP folks.  Still blows my mind--- guess I cant talk down to the law school cafe anymore for their quirky pricing scheme.

Year 2, Day 1

It seems like only yesterday i was trying to find room 220 for my first Owen MBA class.  How quickly a year passes. 

Saw a lot of my friends at school today; everyone has fantastic stories about their internships, summer trips, etc.  It's going to take weeks to catch up with everyone. 

You can smell the fear around the halls.  The first years obviously have been "informed" that while the last week of orientation was a lot of fun and good times, all that just came to a crashing halt.  The dark, harsh world of Mod I is upon them. 

At any rate, you should be hearing from the OwenBloggers troops a lot more frequently in the coming weeks.  We're all settling back into school and organizing our schedules.  I'll be interested to see what our first year bloggers think of the beginning of their MBA experience.

A little housewarming gift

One of the problems students have when they move to a new city to attend B-school is that they've got to uproot their lives, change address, change phones, and start up fresh in a new town.  Then, two unbelievably short years later, you uproot and move again, get a new address, a new phone number, etc. 

There exists a solution to at least part of the problem, and i have an answer.  Grandcentral is a unique service (now owned by Google) that provides a centralized telephone number; the way it works--- you get a brand new number (in the area code of your choosing).  That number is your number from here on out--- till death do you part.  Anyone calling that number is routed (through rules you set up on their website), to your cell phones, office phones, home phones, etc.  If you move--- GrandCentral stays with you.  You simply take the new home/office/cell you have in your new city and tell GC to ring them instead.  It also allows centralized voicemail, tons of great messaging and routing features, and all sorts of other cool tricks.  No more worrying about updating all your contacts with your new information--- this is they number you keep for life.  It's the single best thing i've done since Tivo, and the slickest Google aquisition yet.  Above all else, it's 100% free. 

If any Owen student is interested in this service, it is currently in private Beta, but i'd be glad to share some of my invites with you.  Send me an email to Isaac (dot) Rogers (dot) 2008 (at) owen.vanderbilt.edu using your new Vanderbilt account and i'll send out an invite.  I've only got a few invites, so first come first serve.

Don't say i never gave you anything nice, class of 2009.