What I learnt in MBA

I had heard of the saying 'You scratch my back, I scratch yours.'
In MBA, I learnt the saying, 'You screw my a**, I screw yours.'

Yeh hai meri kahani

Before one year - Hum jahaan khade hote hein, day-0 wahin sey shuru hota hai

Before placements - Bhagwan mainey tumse aaj tak kuch nahin maanga.....

During the interview,

Me - Main is resume per haath rakhkar yeh saugandh leta hoon ki jo bhi kahoonga sach kahoonga, aur sach ke siva kuch nahin kahoonga.

Interviewer - I-Bankers ke bayaanat aur sub-prime ko madde nazar rakhtey Taz-e-raat-e-hind, dafaa 302 ke tahet , muzrim ko 5 lakh ki pagaar di jaati hai

Me - Maa, me 5 lakh ka MBA banne wala hu

Mom - Yahi din dekhne ke liye maine tujhe paal pos ke bada kiya tha? Ab hum kisi ko muh dikhaane ke layak nahin rahe

(Prospective) Father in Law - Haraamzaadey! Teri itni himmat! Meri beti par dorey daalta hai! Teri haesiyat he kya hai? Is ghar ke darwaaze, tumhare liye hamesha ke liye band hein

Dost (IIM waley) - Maine tumhe kya samjha, Aur tum kya nikley!

Girl friend - Mai kahti hoon, Door ho jaa meri nazron sey

Doctor - I'm sorry, hum kuch nahin kar saktey. Ab Sab oopar waale key haath mein hai

Faculty - Bhagwaan pe bharosa rakho. Sab thik ho jaiye ga

From funeral to funeral

Nassim Nicholas Taleb in his book, "Fooled by randomness" writes, "It is said that science evolves from funeral to funeral. After the LTCM collapse, a new financial economist will emerge, who will integrate such knowledge into his science. He will be resisted by the older ones, but, again, they will be much closer to their funeral date than he."

One and only one funeral comes to mind now - the sub-prime crisis, the latest funeral in a long list of never-ending deaths.

P.S. On a related note, MBAs did not cause the sub-prime crisis. We are just not that intelligent.

You've come a long way baby

It is often repeated in global business circles that when the US sneezes, the rest of the world catches a cold. But have you ever wondered what happens when the US catches a cold? Judging from recent events, this is what precisely has happened. With the burst of the housing bubble, US has dragged down many other economies of the world. Even the BRIC juggernaut has slowed down.

When did the turn of events happen? When did sub-prime, which was a catch word in B-schools and a hot topic of discussion, suddenly turn into a monster? We have come a long way since last year. A lot of money has since flowed under the bridge. Last September, the sub-prime crisis had just reared its ugly head but no one could have predicted the level to which it has affected every one of us today. Governments are hastily organizing bailout packages for mopping up bad debts. Age old institutions are going off the radar. Investment Banking as a concept has been wiped out.

As far as India is concerned, the decoupling theory was badly routed. India has not been immune to the global hiccup. Inflation reached alarming levels, the pathetic levels of IIP has demoralized the industry and the stock market have seemed to lost all steam. The irrational exuberance which led the Indian stock markets to record highs till January has been squashed. The exuberance has gone; now only the irrationality remains. Newspapers scream valutions at 2005 levels, but who has the courage or the cash to buy today? Judging from the industry scenario, it seems India is heading for a recession with no brakes. And I'm on that train.

P.S. The above is not a rant, nor a crib. Just a dispassionate look on things which have happened and which are in store.

Is it time to worry yet?

An article I was reading on ZD-Net had this to say about the effect of the global financial crisis on Indian IT firms.

In fact, Premji, one of India's richest men by virtue of his share in Wipro, apparently practices frugality to the extent that he orders 'by-two' samosas in the office café. 'By-two' is a famous local habit, quickly adopted by newcomers, of splitting one order of anything (coffee to soup) between two people to save on costs.

Many of the now bankrupt firms had accounts with the IT giants for developing their IT systems. And since they are no more, the fallout is going to affect the IT industry as well. And here we are being complacent, having McDees and Coke Floats and Subways. Are we being smug about the whole situation? Are we choosing to hide behind a imaginary veil of hope? Has the time to start worrying come yet? Time itself will tell.

7 Laws a manager must remember

1) Murphy's Law

This is arguably one of the best known and widely quoted laws out there. It was named after Captain Edward Murphy, an engineer in the US Air Force who created it in a fit of frustration. In its simplest form, it says "Anything which can go wrong, will". Many of you might have experienced a corollary of Murphy’s Law in daily life while standing in a queue. The queue in which you stand seems to always move the slowest. Although you cannot do much about selecting the right queue, in the world of business a manager can use this law to be prepared. In this day and age of highly complex and interconnected decisions, it is prudent to have a contingency plan (or many) if the one you choose doesn’t work out. Software projects may overshoot their deadlines, demand forecasts may go horribly wrong because of sudden rise in raw material prices, or the marketing campaign which you so carefully thought up of may go haywire because the competitor trounced you with a newer product. As a manager, you are paid to make decisions, and unless you learn to anticipate things which can go wrong, you won’t be making much progress in your career.

2) Parkinson's Law
"Work expands so as to fill the time available for its completion."

This is another law which is quite well-known in the scientific and business community. This was first coined in an article in the Economist in 1955, and time and again it has proved to be true. On the outset, this law simply seems to point that it is important not to procrastinate. A manager is supposed to be efficient in doing his work and in allocating the time required for its completion. But if one digs deeper, one can find out at least two hidden meanings.

One is the principle of budgeting. The actual resources for a project will expand to its budgeted amount. This is a very commonly used practice by functional heads while deciding their annual budget. Rather than improving their department’s efficiency by aiming to cut down on the actual resources used, managers actually allow the bloating of resources so that their forecast looks accurate. Moreover having a higher budget for their department can increase their prestige. An effective manager should instead proactively measure and fight any unnecessary bloating of resources.

The second implication of this law is from the field of Economics. It hides in it one of the basic mechanisms of supply and demand. In the long run, the demand for a product increases to match its supply in order to achieve equilibrium. Although in Economics the reverse is also easily true, once the supply decreases, the demand for that product also decreases (due to higher prices). This is not so easily seen in the business world. If the time available for a project decreases, there is a highly likely chance of it overshooting the old and even the newer deadlines by a significant amount. Thus the Parkinson’s Law enables you to prepare your project plans more carefully.

3) The 80/20 Law

The 80/20 law, also known as the Pareto Principle was actually framed by Juran, one of the leading exponents of quality in manufacturing organizations. This law has been empirically observed to be true in so many situations that it has become universally applicable. In its most general form, it states that 20% of the causes drive 80% of the consequences. In a business environment, it can be applied to many situations - 20% of the employees do 80% of the work, 20% of projects will take up 80% of the resources, 20% of the employees get 80% of the salary(?) etc. A variant of this was even used controversially in GE by Jack Welch to categorize employees into three bands. He exhorted the organization to make the top 20% “feel loved.” Application of this law can help a manager to find out which resources are costliest, which customers are most valuable, which employees are hard-working and thus focus resources on these important causes.

4) Hurst's Law
Complexity can neither be created nor destroyed. It can only be displaced.

This law parallels an oft-repeated adage, "Problems cannot be solved." For every problem you solve, there arises at least one problem equal in complexity to the 'solved' problem. Business consultants would do well to keep in mind this law. Armed with a heap of tools and techniques, consultants work to re-engineer business processes and re-structure hierarchies, promising an effective and efficient organization. But many a times they fail to foresee that the new structure is simply creating new complexities which have not improved the overall condition at all. Managers grappling with supply chain issues can also keep in mind this law to ensure the proper flow of information and resources. The entire value chain needs to be looked as a whole to ensure that the complexity is not simply shifting within the organization. They should instead find ways how it can be actually shifted out of the system.

5) Parkinson's Law of Triviality
Organizations give disproportionate weight to trivial issues.

Anyone who has been in a meeting that seemed to last forever has come across this law. The frustration multiplies when your bosses are the ones who guide the meeting and you're but a pawn in the meeting. A very common tendency of managers is to jump into the problem immediately without structuring or organizing the facts first. By not spending time to understand the requirements, one tends to pick up the most obvious problem that comes across and work towards solving that first. But the most visible problem may not be the most important. Following this approach proves to be very wasteful in terms of both time and resources. A manager should keep this caveat next to the Pareto Principle in importance and ensure that by assigning priorities to the problems in front of him, he can apply his resources in the right order and in the right proportion.

6) KISS principle
Keep it simple, stupid

The importance of being precise is constantly hammered by B-schools into students. However a mistake which most newly-minted managers make is to confuse precision with verbosity. Managers are made the butt of many jokes on how they use complex words and phrases even for describing something simple. Thus, “we sell toothbrushes” may turn into “we provide complete oral hygiene”.

Though it is important to be precise to prevent errors, such precision should come from simplicity. As Einstein said, any fool can make things bigger and more complex. It takes a touch of genius and lot of courage to move in the opposite direction.

Saying that your organization engages in continuous value creation may look good in mission statements but a manager should be able to simplify things. Not in a way to leave out any particular detail, but so as to be able to explain the 4Ps or Maslow’s hierarchy to a 4-year old child. Spouting out management jargons may impress your peers at the annual industry seminar but will always leave your subordinates confused after they come to you for clarification.

7) Unintended consequences
Any action taken purposefully will produce some unintended consequences.

This is a law which parallels Murphy's Law, but unlike its more famous counterpart, this adage actually allows positive side-effects. This may ensure that a company may find a new use of a previously scrapped product because the government has changed regulations or even the fact that getting fired from a job gave you a chance to develop that entrepreneurial spirit in you.

Although possibly apocryphal, the story of how 3M failed in its quest to develop super glue and instead created one of the most useful inventions in history – the Post-it note is proof enough of this concept. Another example of this law at work in the business world is Adam Smith’s invisible hand concept. An individual aiming to better his interests may actually produce certain consequences which were totally unintended in the beginning. This law ensures that a manager keeps in mind that there could be results which no one has thought of before. He can then take steps to minimize the damage as much as possible. Of course if the side-effect is positive, a manager can claim the action to be intended and well thought of.

The obsolete 6pm rule

Nowadays post-mortems can be conducted even in the dead of the night.
- Professor, Strategic Marketing.

Pun Intended? :)

Sub-prime and buyout blues

Last year, the sub-prime crisis had hit the US home mortgage sector. Around one year has passed since the term came into fad. A lot of articles have been written, a lot of gyan dispersed on the topic. Even I have had some fun with the sub-prime buzzword. But now it seems the circle has been completed. After Bear Stearns collapsed in March this year, it was the turn of the venerable Lehman Brothers to find a similar fate. However there were no takers for the institutions. BoA has agreed to buy Merill Lynch, so such saviour for LB. The financial crisis which we made a lot of fun of last year has come back to haunt us. Though the financial sector has been the worst hit, there will definitely be a trickle down effect in other functions, IT, marketing etc.

The financial system seemed to be in a dire need of a catharsis and recent events seem to have helped in the cleansing. Now it remains to be seen whether the ruins of the financial sector can be cleared in a few months time or is it time to sit at home wondering what to do with an MBA degree? My optimistic (naive ?) self says that the rubble will clear. So it is time to be prepared. It is time to fire up all cylinders, even if there seems to be no road ahead.

Cchange forrtunes througgh numerology

It's official now. Alternative career options are coming back with a big banng. After the recent foray of Jawed Habib into hair-cutting schools, Sanjay B. Jumaani (did I get the number of as right?) is planning to open a numerology school where he plans to teach eeager students the art of adding, twisting and dropping letters from the nnames of celebrities and movies to supposedly turn around their fortunes. He was the 'engineer' behind the naming of the hugely popular movie 'Singh is Kinng', though it remains to be seeeen whether that was the reason why the movie was actually successful. Like a true businessman he says that currently this market is largely unorganized and thus there is a huge potential for such business.

In my opinion, it was ok when you changed the spellings of names of movies or actors. It's their personal choice on how they want to spell their name. My English teacher in school used to tell me that you can pronounce proper nouns any way you like. But what gets to me is the uninhibited way they change the spellings of English words to suit their numerological beliefs. Isn't there any such thing as good grammar? Thus we have names like Singh is Kinng, Heyy Babyy and C Kkompany. Well, Bbollywood cannot be bothered with such petty issues. As long as the film doesn't have any content, the sstrange sounding name won't worsen it anyhow.

One more business opportunityy I missssed. Dammnn.

Hair-cutting schools

Jawed Habib has opened a hair-styling academy in my home town, Vapi. Now, I would consider opening a saloon would be logical but opening a training school for hair-cutting? In Vapi? I didn't know there were so many budding barbers in this town! After 12th standard, forget engineering, MBA, MBBS. Give the HAT (Hair-cutting Aptitude Test) and join the academy. According to an ad of his, the world needs more Jawed Habibs. Wondering how many will he find in Vapi?

But consider the following statements:-
* Hairstyling is the career of the century.
* The beauty saloon industry is growing at a rate of 40% and is around Rs 1500 crore.

Here are some back of the envelope calculations I actually had the time and craziness to perform...











As I passed through the academy today, another thought crossed my mind. I wonder how do they give training to the students? I mean the theory would be straight-forward, but what about the lab sessions? Where do they get volunteers to try their hair-cutting skills on? I wonder which is more scary - going under a medical intern's scalpel or under a barber-trainee's scissors?

For me going to a hair-saloon as fancy as this is like visiting a fancy Italian restaurant - I never know what to order. I prefer the IIT Madras saloon kinds where there is no need of a menu. Medium or short. That is it. Someday I may have to go to such saloons if a particular some one insists. Well that'll be the day...

Anyway welcome to the city, Jawedbhai H.B.B.S. Your presence in the city means that my small town is expanding and I have a good business opportunity here.

Sales v/s after-sales service

It has been my general experience that there is a wide chasm between the budget allocated for sales and that for after-sales service. Most people would argue that after-sales service is a part of marketing and that according to marketing gurus, marketing starts well before the product is developed and continues well after the consumer buys the product. A standard textbook definition. But in real life, does a company really focus on that after-sales part diligently? Few companies do so.

Take the case of banks, for example. Private banks nowadays send a representative to your house when you tell them you want to open an account. They help you fill up the new account forms, they take the minimum account opening balance from you etc. But does the bank maintain that level of service once the account is active? When I want to change my address, I have to go to the nearest branch. To reset my ATM pin (when I've forgotten my old one) I have to visit the nearest branch.

The most obvious point of difference is the type of interaction itself. While opening an account, a 'representative' from the bank comes over to your house. While doing other transactions, you are forwarded to a call-centre where after you press (quite) a few buttons, you reach a human at the other end. And what happens then? Even for a simple request, the call-centre 'executive' tells me to visit the nearest branch!

The counter-argument would be that it is because of the security aspect. Banks would like to be sure that they are dealing with a genuine customer before they do a sensitive transaction like closing an account or changing ATM pin or issuing a new ATM card. But its not that personal interaction would get rid of all these problems. We still have news reports of people duping the bank branch by forging a signature while sitting in the bank itself. Investing in technology can be (if the bank wants) justified in terms of providing customer service.

Another major difference seen between these two services is that while one is an integral part of the organization, the other is generally outsourced. Would any company dare to outsource its sales division? No it won't. Yet companies do not hesitate while deciding whether to outsource the after-sales service division. It is less of a headache they say, dealing with irate customers and product returns.

Why can't organizations be more balanced in the level of both these kinds of services? If B-schools have a specialization for sales and marketing, why can't they have a specialization for after-sales service? Isn't that what is required in the service-oriented economy?

I'll wait for the day when the banks agrees to send a representative to my house to close my account. Until then providing a 24x7 customer care number is just another gimmick in order to attract and impress customers.

Emerging trends in finance and investing

This is what an MBA should teach - read, analyze and create reports. Not tacky presentations put up in a couple of hours.

Emerging Trends in Financing and Investing in India - A report created as part of the Corporate Finance course.

Challenges in entrepreneurship, anyone?

S T Coleridge said in his immortal poem, "Water water everywhere, nor any drop to drink."

I say, "Jargon jargon everywhere, not one in my head did sink."

SWOT of stubborn and flexible people

Let's assume that all the people in the world can be divided into two categories - flexible and stubborn. This division is on the basis of their ability or willingness to learn something other than their domain of knowledge. Now, the strength of the stubborn people is their expertise and confidence in their domain. However their weakness is that they are probably afraid of failing in the other domains. That is why they stick to their own field and possibly sometimes disparage the other fields.

Now if we take the flexible people, their strength is their ability and confidence to adapt to other domains. But their weakness is a possible lack of expertise in their own domain. That is partly the reason they readily accept to try out various other fields.

I guess each has something to learn from the other

A laborious MBA

'A manager must learn how to perform under pressure.'
'A leader must learn to manage deadlines.'

This is a common refrain given to justify the heavy workloads given in B-schools. But according to me, focusing on urgency and deadlines is not the only thing for a manager. What this would do is to create firefighters and crisis managers. And not all people perform to their fullest under pressure. Being a manager is not only being able to perform under pressure but being able to create something different, something which no one else has thought up of. And genius is something which normally needs patience. It may happen once or twice in the middle of the night but mostly it needs to be cultivated patiently. When you give assignments and ask students to submit them a couple of days later, sometimes two to three assignments in a day when you consider all the subjects, you rob the students of their creativity. In their haste to 'get it done', they do a shoddy job and mostly copy it from seniors or from the net. Just type out a sentence or two from the case in Google and you'll, in most cases, get a solved version of the same from the Internet. There is a difference in a presentation given by copying sentences from the net and breaking them down into bullet points and a presentation made after reading articles or reports and by developing unique insights from the group. There is a difference in a presentation given by dividing the slides among the members and a presentation made together after brainstorming and arguing the possible alternatives. The presentations have become so cliched that I can safely bet with my eyes closed that the slide after the title slide will have an Agenda and the last slide will be a Thank You slide.

One may be able to fool some of the people all the time, but not all the people all the time. This shortcoming easily glares up in the corporate world. When you do this in front of a customer, he or she is most likely to see through the bull. What needs to be done is to make the MBA course thorough but not urgent/laborious. Give us the motivation to read the Economist, to read McKinsey reports, to read HBR. Make us study them. Do not give the case studies two three days before the submission. Give them at the beginning of the quarter/semester. Set a deadline, preferably at least two weeks before and give the students the time and space to work out something. Point them to reports or articles which will help them out in their quest. Let the students know that original thoughts will be appreciated. And yeah, most important of all, set up a peer evaluation. This is most important to ensure that everyone works or at least shows up for the meeting. (<-- This deserves a separate post)

Appendix A: Here's just an example of the number of cases which might crop up in an average week.
Financial Management - 1 case per week. 2-3 pages only but impossible to decipher.
TQM - 1 case per fortnight (as of now) 5-6 pages. Somewhere on the easier side but supremely boring.
OM - The mother-in-law of all cases. One case per week, which will soon scale up to two. Ranges from between 4-10 pages long. Totally hopeless unless you're an operations freak.
MIS - The best and the simplest to understand but (yes, I'm an IT engineer, but still) painfully long. Two cases per week (at 8am), each case 14-20 pages.

That works out to around 5-6 cases every week. Couple that with average of 6 hours of class daily and surprise quizzes always around the corner. Where is the time to smell the roses?

Why I may never get top grade

I found a very interesting article online which compared attributes of high achievers, gifted learners and creative thinkers. To a layman the three may not seem all that different but apparently they are, and hugely so. Here are two important extracts which more or less sum up the article.

...the teacher announces an assignment, and the high achiever quickly tries to determine what the teacher most wants so he can please and satisfy the teacher's intentions: "What do you really want?" The gifted learner ponders what to do that would most interest her as she learns: "What I would like to do is..." Simultaneously, the creative thinker's mind begins to race with all of the diverse and varied possibilities that could be explored...

And,

...the teacher poses a question to the class. The high achiever is delighted because he knows the answer and is in control: "Oh, I know that answer!" The gifted learner considers multiple nuances and alternative perspectives: "The question could mean..." or "It might suggest..." or "Another way to say that is..." or "Yah, but..." The creative thinker is still obsessed with the seemingly endless possibilities of the earlier assignment, concentrating so much on his ideas that he completely misses the teacher's question...

I guess I have a pretty good idea where I belong. 75% creative, 25% gifted learner. And that pretty much sums up where I stand.

Here's the article (High Achiever, Gifted Learner, Creative Thinker). Specifically, the table at the end of the article is interesting and useful.

The creative thinker

• Wonders
• Daydreams
• Overflows with ideas, many of which will never be developed
• Shares sometimes conflicting opinions
• Questions the need for mastery (yeah man)
• Prefers the company of creative peers but often works alone
• Is independent and unconventional
• Is original and continually developing
• Improvises
• May not be motivated by grades (he he)

QED

One fourth of an MBA - II

Rather than editing the former post (One-fourth of an MBA), I'll add on to the post. Many changes have occurred since I last wrote that post. I got the results, got a few certifications along the way, among other things. The results are at best average. I'm somewhere half way among the class as far as grades are concerned. Time to make a very important point. Even before the exams I had lost all concern in the grades I would get in the exams. I had literally followed 'Grades are moh-maya' and had taken it easy. Now if I say that grades are not good, it may feel to most as a case of 'sour grapes'. A better if not ideal situation would be if I can say the same thing 'Grades are moh-maya' even after being at the top 10% of the class. Then it would be a real test of character and self-control ;) Hmm, that's a thought.

AFA Vapi is concerned, it is the same old place. Nothing new except a few more brands opening their stores here and there and a few more buildings getting built. Many other things have changed, most of which I won't jot down here. Due to a cruel turn of fate, I'll be in Chennai on the 31st itself. But then I guess I have to forget all luxuries and pleasures of life till the time I'm doin' my yem bee ay.

One fourth of an MBA

The exam fever is almost as good as over. Tomorrow is the last exam. It wasn't much of a fever anyway, more like a cold. It troubled me for a week, went away on its own. Of course the result is another fight altogether. With tomorrow's exam and a couple of other assignments, the first semester ends. Twenty five percent of my MBA degree done.

In this four months, I made many friends, learnt a 'huge big' number of things, mostly outside the classroom and by watching group interactions. Of course there was some classroom learning as well. Some of my beliefs got strengthened, some questioned and reversed. How would I rate this semester? 6/10.

Now a month long vacation back in sweet Vapi. Got things to do, got people to meet. And get ready for the next quarter as well. This probably will be my last post from IIT Madras in 2007. See you next year.

PS. I will probably fill in details in this post at home. I want it to be a comprehensive analysis of the first quarter of these two years.

The joys of being a consultant

Sigh... The real joy of being a consultant.











At this point, let me clarify a misconception that have plagued consultants from the advent of crore-plus salaries. There goes a one-liner saying 'Consultants are people who take your watch to tell you the time and charge you for it.'

Agreed. That's what consultants do, but the important thing here is that the watch (your business) is not the typical watch with a clear digital display. The watch (your business) here is an ancient sundial or (god forbid) it could even be a candlestick. Now tell me, will you be able to tell the correct time on this watch of yours or do you need a pistol packing consultant like the above depicted?

The practical side of MBA

Of what use is learning the derivation for the Simplex Method?
Of what use is analyzing the complexity, formalization and differentiation of an organization?
Of what use is drawing endless charts of supply and demand without being able to apply it to daily situations?

Why can't we have a more practical and commonsense approach to an MBA?
Why can't we have more Rajeev Karwals in the classroom?