Final Posts: 3 of 3 (Three Truths)

Lately, my posts have been painfully long. Therefore I’ll keep the final post short, very short :)

I’d like to share three truths I learnt from this year.

• Management is an art;
• The most important life skill is the ability to ask right questions; and
• Business is a moral activity.

~

I’ve loved sharing my thoughts. Next Month, I’ll move to a new address:

Cheers & Thank you!

Final Posts: 2 of 3 (Vlerick Interview)

As I close the blog, I’ve wondered about how I have changed in the past year. The answer is “In many ways, and for the better” and I guess a single post wouldn’t adequate the detail the entire story…

Vlerick was kind enough to publish an interview with me for the Alumni Magazine, I’m not sure when the magazine is out, but the interview questions made me think about the changes over the past year… here’s the transcript.

Final Posts: 1 of 3 (Graduation day)

Its been a while since I posted on this blog. I am an MBA!! actually, I’ve been an MBA since July 3rd : )

Immediately after the graduation ceremony, I drafted a post which I did not publish. I felt the post did not have a clear argument and needed a second thought. It was about how business schools claim that they are partly responsible for the economic crisis. Well, its been more than a month since I drafted this post and the gravity of the  economic crisis seems to have subsided, yet  my opinion has not changed (the argument is still weak I admit). I’ve decided to publish it anyway : )

Rationality of Irrationality

Now that it is job hunting season, which it has been for a while for most students, my assumption is that it’s not only hard to find good opportunities in the current economy, but even more difficult to negotiate on good pay terms once opportunities are found. The reason is when the potential employee has a very low BATNA (Best alternative to negotiated agreement), the employer can indeed push terms favorable to him forcefully.

In analyzing this situation, I concluded that it is more beneficial to be irrational rather than rational… For example, let’s say X’s aspiration base is $ 300,000 (Yes, I know that’s an outrageous aspiration aka investment bankers’ aspiration… hehe) and his base expectation is $ 200,000 (I think I should remember what one of the investment banks told students a few months back – that they plan to hire 1 employee from Belgium!).

Any case, X finds and is chosen for an opportunity in company Y and it can afford to pay $ 250,000 and yet Y, given the current situation, only offers $ 150,000. Now let’s say X’s next best opportunity is a job at Z (not as desirable as Y’s offer) and pays only $ 100,000. What should X do?!

The rational choice in this case might appear to be that X must accept Y’s offer of $ 150,000 while knowing fully that he deserves the $ 250,000 that Y can afford to pay. Yet, I believe it might also be rational to accept Z’s offer and reject Y!

X has a very weak BATNA. In this case, it appears to me that one of the rational choices is to be irrational and not accept Y’s offer hoping that Y will not have a better BATNA either and therefore will offer to pay at least $ 200,000 which is X’s base aspiration! Of course, this depends upon what is Y’s BATNA… but the bottom line is when you have nothing to negotiate with, irrationality might be the only affordable tactic :) I guess this is the basis of the Chicken game… but interesting to think which kind of applicants would have enough courage to play that game.

Opportunity cost

Its Friday and Its a silly post :)

Recently, during lunch… I told my colleague that everything in life can be explained by economics :) I could tell she did not agree with it… or at the very least she thought I’d gone crazy… I’ve wondered if I truly meant it or if I was only exaggerating… I’m beginning to realize that I meant it :) Here’s an example of how much in life can be explained by economics.

Death! why do we fear dying? We don’t fear it for what will happen after death because clearly after death, nothing happens or can happen. OK, a religious person would believe he/she will reach heaven which is not a reason to be fearful of. I doubt anybody truly believes they will reach hell because we all have moral justification for everything we do :)

So why then do we fear dying? Economics can explain it… The reason we fear dying is the “opportunity cost” of being dead… the opportunity cost is everything we could have done by being alive instead of being dead :)

In-company projects

We are all in the final phase of MBA: The in-company project. If my guess is right, most of my classmates are struggling with one big challenge right now… “How to convince large corporations to appreciate the novelty of our recommendations and how to convince them to invest resources and to implement these solutions”… It’s a wild guess, but I’m pretty sure that it’s not unfounded :) Here are two perspectives to this challenge the way I’ve come to realise in this past month:

Perspective One: Cultural adaptation

The definition of “Culture” is that it is a shared and learned system of values, beliefs and attitudes.  One of the first courses in the MBA was “managing across cultures”: Although we only discussed one dimension of culture which were cultures across nationality, this concept seems to be just as relevant today for the culture of the school and that of the corporations is quite different. 

While the MBA year challenges us to constantly think “outside the box”, we are often required to think “inside the box” to come up with improvement ideas in companies… To be honest, to hear words like “global standards must be respected”, “this is how it’s been done for ages” and “system wise, this is not feasible” can be disorientating after having spent a year in MBA learning that these stereo types must be broken. One might argue that these barriers can indeed be broken by using change management fundamentals, but unfortunately 2 months is simply not enough time for that. Ok, so to be successful in company projects, we need to adapt quickly to a different culture. Unfortunate, but necessary adaptation. I doubt an MBA by itself can help us here… to a large extent it depends on emotional intelligence. I wonder if this is the primary reason why companies often complain that students from certain schools (often consisting young students with great GMAT scores) are too academically focused! Fortunately, I think that won’t be a problem for Vlerick for the average age and average experience of students is far higher than most MBA schools (assuming there is high correlation between maturity and age/experience).

Perspective two: Distorted view of Creativity

We often go back to the companies with “break-through” solutions which often are in fact “begin from scratch and do things completely differently” solutions :) The trouble here is that students will often go for “sexier” and high impact solutions because we after all want to begin changing the world even before we graduate and yet the companies have zero tolerance for any solution which has high risk (large variation in the chances) of success and therefore prefer only incremental improvements in small phases which will sum into significant savings. Students want “revolution” and companies want “evolution”.

Here’s the simple truth: designing solutions with “revolutionary” approach is relatively simple compared to “evolutionary” approach while implementing “revolutionary” changes is exponentially more difficult compared to “evolutionary” changes. Students often design, Companies Implement :) the fact that we come up with revolutionary solutions only means we took the easy path and does not by any chance mean we were are our creative best :)

We are all in the final phase of MBA: The in-company project.

If my guess is right, most of my classmates are, just like my partner and I, struggling with one big challenge right now… “How to convince large corporations to appreciate the novelty of our recommendations and how to convince them to invest resources and to implement these solutions”… It’s a wild guess, but I’m pretty sure that it’s not unfounded :) Here are two perspectives to this challenge the way I’ve come to realise in this past month:

Perspective One: Cultural adaptation

The definition of “Culture” is that it is a shared and learned system of values, beliefs and attitudes.  One of the first courses in the MBA was “managing across cultures”: Although we only discussed one dimension of culture which were cultures across nationality, this concept seems to be just as relevant today for the culture of the school and that of the corporations is quite different. 

While the MBA year challenges us to constantly think “outside the box”, we are often required to think “inside the box” to come up with improvement ideas in companies… To be honest, to hear words like “global standards must be respected”, “this is how it’s been done for ages” and “system wise, this is not feasible” can be disorientating after having spent a year in MBA learning that these stereo types must be broken. One might argue that these barriers can indeed be broken by using change management fundamentals, but unfortunately 2 months is simply not enough time for that. Ok, so to be successful in company projects, we need to adapt quickly to a different culture. Unfortunate, but necessary adaptation. I doubt an MBA by itself can help us here… to a large extent it depends on emotional intelligence. I wonder if this is the primary reason why companies often complain that students from certain schools (often consisting young students with great GMAT scores) are too academically focused! Fortunately, I think that won’t be a problem for Vlerick for the average age and average experience of students is far higher than most MBA schools (assuming there is high correlation between maturity and age/experience).

Perspective two: Distorted view of Creativity

We often go back to the companies with “break-through” solutions which often are in fact “begin from scratch and do things completely differently” solutions :) The trouble here is that students will often go for “sexier” and high impact solutions because we after all want to begin changing the world even before we graduate and yet the companies have zero tolerance for any solution which has high risk (large variation in the chances) of success and therefore prefer only incremental improvements in small phases which will sum into significant savings. Students want “revolution” and companies want “evolution”.

Here’s the simple truth: designing solutions with “revolutionary” approach is relatively simple compared to “evolutionary” approach while implementing “revolutionary” changes is exponentially more difficult compared to “evolutionary” changes. Students often design, Companies Implement :) the fact that we come up with revolutionary solutions only means we took the easy path and does not by any chance mean we were at our creative best :)

Slovakia!

Last Wednesday, after finding out that the office will be closed until Monday, I decided that I must do something adventurous… I decided a really long drive would be fun. I met my classmates in Leuven at 11 PM on Wednesday and persuaded them to drive to Bratislava. 9 hours later, on Thursday morning at 830 AM, we hit the road… By Sunday Midnight, we had travelled nearly 3000 Kms: to and back from Slovakia! Slovakia is a beautiful country, but I will remember this trip for the sheer audacity of deciding to travel so far without informing anyone and without worrying about “what if” and thinking about “can we”… the attitude was “lets do it”…

It’s the kind of trip on which you realise just how precious freedom is… I’ll be absolutely proud of this trip when I cannot afford to do it anymore…  It’s also no coincidence that this trip happened just a few weeks before we graduate… such company of friends who are open for adventure and who see unlimited possibilities is not something we find in office or among family… if we do, we are very lucky! By the way, I was lucky also because I met an amazingly kind person!! It was a chance meeting and a fascinating one… its truly amazing how life throws surprises each time we ask for one… all that we need to do is ask :)

Here are some snaps from the trip…

Business Plan posted!

Having spent three full months on creating a business plan, just four days before our group’s business plan was due for the final presentation, I told my freinds that I wanted to work on a different plan and make the presentation alone, their first reaction was “ashwin, are you drunk?”.. hehe… it was by far the craziest thing I did this year (academics wise)… but I’m glad I did it. It was quite an expereince to complete the entire plan alone in 4 days.

Our scores for business plans are out today and I passed :) But I feel all that effort just to pass is not fair. So I’ve decided to post the business plan document and presentation on the net just incase it is useful (I doubt it) to anyone interested…

The documents are here!!

Work Life Balance

It’s amazing how we use phrases without ever understanding what they really mean… recently, during one of the conversations, a manager told me that he would like to reduce complexity in the organization. I immediately nodded to acknowledge, but then when I wondered what “complexity” meant… I had no idea, “Reducing Complexity in the organization” felt as much like an abstraction as “understanding shapes of clouds”.

One of the best definitions I came across was “Complexity arises when an increasing number of independent variables begin interacting in interdependent and unpredictable ways”… Therefore the reasoning was that reducing complexity can be achieved by either a) decreasing the number of variables, b) reducing opportunities for interaction or c) reducing unpredictability. In an organizational design context this either means reducing number of independent roles (or people), separating the organization into different departments with specific focus or designing management controls in a way that it becomes easy to monitor and forecast the interactions… the choice of action would then depend upon the cost and the potential benefit of implementing actions a, b or c.

Unfortunately, firms get scared just at the thought of such analysis and to realize that some concrete actions are required to “reduce complexity”, therefore they feel comfortable merely discussing “complexity” as an abstraction and not do much about it :) Is it just companies… of course not, it’s also individuals… How about each of us wanting to achieve work-life balance! Do we even understand what work-life balance means?! I wondered!!

If work and life must be balanced, then they must be different because there is no point in balancing things that are homogeneous… To understand what is (supposed to be) different between work and life, we need to first of all understand what work is and what life is!

What is work? Work is a legally binding contractual commitment with very less flexibility in terms and conditions. In fact the contract when looked at the totality of implicit terms and conditions is so brutal that it even restricts who an employee can and cannot talk to (or let’s say express his opinions freely to) and I say that in spite of factoring in the open door culture! Imagine an employee talking to the customer’s Vice president while he is only authorized to talk to the operations manager…Work is also a binding contract which simply will not give the employee any opportunity to contribute more than what is asked of him either because the firm does not see the benefit of the marginal reward for the marginal effort of employee or even worse because the firm is afraid of disturbing the sanity of hierarchical structure… Come to think of it, this is the nature of most corporate positions irrespective of whether the person works in McKinsey or Ford and irrespective of whether he is a financial analyst or CEO. Work is that part of life which is defined by a binding contract filled with constraints and it is for good reason that it is that way because firms exist purely in circumstances where free markets fail!

What is life? Ouch, that’s a tough one! In the context of work life balance discussion, let’s just describe life as (supposed to be) not a contractual but voluntary commitment to oneself and other relevant stake holders :) and with more flexibility in terms and conditions. Simply put life must have lesser constraint in comparison to work. Therefore what we real should balance is the time we spend living that part of life which is not driven by us because it has many constraints and is inflexible (i.e. work) and time spent on living the other part which truly allows us to do everything we want to do because it is free of constraints and is flexible.

Unfortunately, life, just like work, has many constraints like the maximum money available which translates into our ability to doing things we want to do and few commitments which although voluntary at the beginning become contractual after a while like family, marriage and kids. So here’s the dilemma… firstly, how to make sure life has little constraints and then once that is achieved how to make sure we balance the time spent in these two different parts… Not an easy equation to crack…

Many strategies exist; either find a job that will give the flexibility to do whatever one wants to do… (I guess successful creative artist partly belong to this category), or find partners and friends who will support one with whatever he or she wants to do. But here’s what is known about the most frequently pursued strategy: slog it out at work (the constrained environment) all your life so that one can earn enough (actually maximum) money which should enable the person to break as many constraints as possible… well… there are no simple answers, but unfortunately balancing work and life is not as simple as maximizing revenue :)

Vlerick MBA Podcast

Here’s a link to MBA podcast of the school… The podcast can also be downloaded here

It gives an overview of the MBA program from different points of view: couple of my classmates, the dean, director of MBA program, an assitant professor and business development director. Among the two students who feature in the podcast are Andrew who is one of the funniest and finance guru and Corrinne who I will remember for how she described her bicycle… I was expecting she would describe it as conveneince, but she called it freedom : )