I think I could win “the blog post with worst english” award for this entry… but feeling lazy to correct it.
During the entire last week, the class participated in an impressive simulated business game in which 7 teams managed acompany each for 12 quarters. The objective was to create maximum share holder value and demonstrate a sound strategy while doing so. I was lucky to be part of a great group that succeeded in the first part, but failed to convince the jury of the second.
Irrespective of which age group or culture students belong to, competition and success turns everybody on. Success is sweet even if it’s not backed by material rewards. I wonder why?! The intuitive answer is that success is still our measure for chances of survival (in real and symbolic terms ) – the “survival of fittest”.
It’s usually easy to assess what we learn from each course, but I find it hard to identify the unique lessons we learnt from this week long exercise. I guess, it might be because our focus was on winning rather than learning. Nevertheless, here are four lessons I take away. The situations are over dramatised for illustrative purposes :)
Asymmetric Intelligence: The game required each team member to assume different roles (production manager, marketing manager, HR manager etc). Throughout the week, all members had access to the same data and everybody had the same knowledge from the MBA program, yet there were different opinions about how we should respond to new information like increasing demand or declining raw material cost. Most differences arose not due to asymmetric information; it was because of asymmetric intelligence. The production manager could crunch his numbers over several quarters to figure out the optimal safety stock level which is lesser than that needed to meet the market demand forecasted by the marketing manager. By the way, the marketing manager will have arrived at his forecast with an analysis just as rigorous as the production manager. However, when the marketing manager hears from the production department that the market demand cannot be met, its as if there is a conspiracy to spoil the marketing teams’ performance. Ofcourse we talk and debate about it to come to agreement, but then its not always easy when the availabiity of time is a constraint. Sharing real time intelligence is just as important as sharing information in real time.
Management control systems: Control is synonymous to ensuring accurate and complete reporting to the external world, however, during the game we also learnt that its just as important to the internal organization. The goals of the different departments within an organization are by nature in conflict with each other if they are not guided by the same business goal. It is easy for the different departments to pursue completely different paths of growth if there isn’t adequate coordination between the different departments. We were lucky to have all the “management team” sitting in the same room for a week. This is not the same in real situations in which the production manager could be located a thousand miles away from the CFO and both their calendars are fully booked for 4 weeks. The only way to avoid this is with management control systems. Incidently, balance score card is one of the final topics we discussed.
Results, results, results: The only thing that matters in business is results. The difference between a terrible and a great team is an extra ordinarily thin line called success. With success, all minor differences get ironed out and trust is built quickly but in the absence of success, the same minor differences can appear like insurmountable difficulties.
Finally, in talking to my colleagues, I was told that an MBA holds its value only for 2-3 years after graduation. I always looked at it as benchmark figure with no rational explanation. But now, it is easy to see why. There are a number of concepts and theories we learn during this year and the only way to retain and develop this knowledge is to apply them in real business just like we did during the last week, what we learn during application of knowledge is completely different compared to classroom discussion. I guess the only knowledge from this MBA that will stick is that part which we apply during the next 2-3 years. Beyond that, the value created is not from what we learn from the MBA, but from what we learnt after graduating and in the real world!