The Leadership Development Program, as I had earlier written, is a unique program at ISB. This is included in the curriculum as a graded course. The program tries to give us various perspectives on leadership. There are many sessions devoted to exposing us to making presentation, group discussion, conducting meeting, etc. These are all incidental. The Program is conducted by a group of Professors, the chief priest of which is Prof Rajeshwar Upadhyaya. He is truly brilliant in the breadth of knowledge, style of pedagogy, articulation and presence of mind. The other day he took us a session on the socio-historical perspective of the current day environment. In two hours time, he covered the history of human thought. Starting from pre-historic era, Greek Civilization, he covered various social, religious, military and scientific developments to unravel the evolution of thought. What was great about it was, he brought information and perspectives from various books and disciplines to integrate them into a unique framework. He covered Aristotle, the Bible, Freud; Evolutionary Psychology; the Decline and Fall of the Roman Empire by Edward Gibbon, Alvin Toffler’s writings, The End of History, Communist Manifesto, Hitler, World Wars…. the list is longer than i can write.

He also provided a perspective on why there is always a dichotomy between our rational and emotional/instinctive aspects. The uppermost layer of brain, neo-cortex, is a recently developed part of the brain and not so well integrated into the human brain. Hence, it is also referred to as thinking cap (cap, meaning it is removable). What are dominant, and rarely understood, are the lowermost layers of brain. Freud called them sub-conscious and unconscious. Desmond Morris covers this topic in his famous book, the Naked Ape.

In summary, rationality is a new development; instincts and emotions, such as anger, jealousy, etc were what helped the Homo sapiens survive for long and now these emotions do not seem to be too essential or at least appreciated, particularly in an organizational context. Understanding the importance of this structure of brain and what function these emotions play is very important to manage life, both personal and organizational, better. Finding a balance between rational and emotional aspects and channelizing emotions to bring the best out is a critical focus area for any manager.

He is going to cover the Program by reference to ‘Leadership through literature’ (literature reflects the social/economic/religious thoughts of the age in which it is written). He is going to use Gladiator, Satya, etc movies to give us perspectives of Leadership. It is going to be fun.

Post Scriptum: Readers interested in pursuing MBA may want to look up my write up @

http://isblife.blogspot.com

Both the courses and classes were interesting. The professors gave new perspectives to think about entrepreneurship and operations management

Entrepreneurship – the class discussion revolved around the case of Ruth M Owades (a popular HBS case study). Prof wanted to know our views on what she should have done – retain her well paying job, take a jump into entrepreneurship (she had an idea with her and had done some basic work) or wait for sometime before she took a jump. Most of what we spoke reflected our own views on entrepreneurship. As one would expect, most of us turned out to be conservative.

The key take aways – do not get into ‘Analysis Paralysis’. The more analysis we do, the more information we need to do further analysis. We can never make decisions. It makes sense to take leap of faith. The entire study of the market can be done while doing business. The second, but more important, take away was, try to minimize the investment required so that there is an option to exit, should the venture fail. This requires transferring of risk to other supply chain partners in the business. This of course needs tremendous negotiation skills and efforts. The entrepreneurial aspirant needs to have pedigree, intelligence, network, etc, to be able to translate the idea into a venture and make it successful. Ruth managed to start her business with close to zero investment.

Though one does not become an entrepreneur by doing a course, the course can provide some pointers to what to think about and what not to do. Does not say what to do or how one can succeed. Entrepreneurship is more a mindset.

Operations Management – the key take away is that much of improvement strategies such as TQM, BPR, ERP or Six Sigma look at improving the process per se. But, much of the goods spend more time waiting than getting processed. Same is the case in a service industry. Trying to reduce the time in waiting should be more important than making the process per se more efficient. Say, Railway Reservations – people spend more time waiting in the queue than at the counter. Just computerizing the counter did not improve speed and reduce queues. Allowing people to book tickets over internet was definitely a better option. It is important to focus improvement at the right place.

The operational structure and process should be guided more by the corporate mission, vision or strategy of an organization. If one has a up-market restaurant, one cannot build the processes in the restaurant with cost as a basis. Every process has to be built around quality. Wal-Mart’s mission to offer the lowest price. Hence, its entire processes are built around reducing costs. Variety of offerings, time (speed of delivery), cost and quality are important variables in process improvement.

Term break was as hectic as the last term was. Thanks to our procrastination, we ended up spending three full days on completing our strategy project. A movie, an evening at a pub and visit to parents and friends filled the rest of time.

Tried best to catch up with reading – Confidence by Rosabeth Moss Kanter; Mind of the strategist by Kenichi Ohmae (ex-Director of Mckinsey, Japan) ; the Goal by Goldratt (prescribed reading for our Term III. Had missed out reading this book before). All good books to read.

Rosabeth is a Harvard Professor. She says that self-confidence is not a personality trait. It is a response to a situation. Example, a not-so-good team can win against a mighty opponent if it is on a winning streaks; a good team can lose against a weak team if it is on a losing streak. This happens with Indian cricket team all the time. Its ‘wins’ are more a reflection of its confidence than the ability of its members. The book is a good read and the tips can be used to improve performance, both personal and organizational.

The Mind of the Strategist by Ohmae) writes about his view on the formulation of strategy – (mental) processes involved in developing strategies; he talks about strategic triangle – “company, customers and competition”, and how focus on each of these can influence strategies one can develop; and he talks about environmental forces, which influence strategic/business thinking.

The Goal, I write at the risk of sounding prehistoric, is a brilliant book on theory of Constraints. Much of what is given in the book is known today. But when it was written in early 80s, these concepts were not well known. Simply put, the book says that we can only be “as efficient as the bottle-necks” in our processes; or our strength is “as strong as the weakest link” in the chain. The book talks about how to manage the work flow to manage the bottle-necks and improve operations at a manufacturing facility; about defining goals as the starting point of any analysis on improving efficiency or productivity. Once goals are defined, the rest of the process can be attuned to meet the goals. The learnings from the book can be applied at individual level too.

It is a good time to summarize what I learnt from the subjects that we covered in the second term

Decision Models & Optimization (Liner Program and Simulation)

Some might surprise as to what exactly is the difference between Statistics and Decision Models. There are three main learnings from these two subjects

• Statistics – the biggest take away is Regression.
• Linear Program – how to write formulae or to run Solver to find an optimal solution to a given situation?
• Simulation – what is Monte Carlo simulation and how to find optimal solution when you are not sure of the variables?

The simplest way to differentiate them is this

• You run a Regression when you know independent variables (or uncontrollable) and you do not know the function defining their relationship or at best, the function is ill-defined

• You run an optimization solution, when you know the function, the independent variables but not the Y-axis values

• You run a Monte Carlo simulation when you do not know or uncertain about the independent variables and the function. You want to know Y-axis values

That is all there to these courses. But if one is not from a quant background these two become the toughest of the courses.

Global Economics

• China finally allows its currency to appreciate against the US dollar.
• The blasts and the threat of blasts in London is a productivity shock
• In PPP terms, India is the fourth largest economy

These are some of the news items, which I can easily understand and relate to. Earlier I used to get some sense out of them. But now I know the theoretical underpinnings that explain these phenomena and their consequences

Competitive Strategy

Sure, one course which cannot be taught over a term. But one can always get a panoramic view of what strategy is.

There are two aspects with which a Manager has to deal – Industry and Firm level issues. What forces influence the Industry profitability and how to assess them – Porter’s five forces model is the most popular

What factors are critical in the success of a firm – Core Competence, Activity System, Culture, Global strategy, Competitive advantages, etc define how well a firm does

The recent research has shown that firm level factors are far more important than industry level factors.

Marketing Decision Making

This was about how marketing decisions need to be taken. Any decision without taking competition into cognizance is a myopic one. What market research reports to use; how to use them. What models can be used to make demand forecasts; how do you capture share of market (share of voice X share of mind X share of distribution); what roles can advertising play; what roles do distributors play; how to manage launching and taking a new product to the market; how to manage firms in declining industry; product life cycles. The list goes on.

But if one wants to get into marketing function, what we learnt, as I realize, is not sufficient. There are many specialized courses, such as consumer behavior, advertising, etc, which need to be covered in the electives.

When at b-school, it is a good thing to keep asking oneself these questions everyday

• What were the reasons why I wanted to attend an MBA program?

• Am I digressing too much and losing focus?

• Am I getting complacent and trying to rationalize my routine?

• How can I improve my learnings by leveraging my colleagues’ knowledge?

• How can I relate what I learn to what I did back at my work or what I expect to do when I leave the school?

• Would my current level of knowledge have helped me in performing better in my previous job?

• Have I become an expert in an industry or an area or have I at least started to prepare in that direction?

• Have I kept my resume ready?

• Can I get more organized and if yes how?

• This is my last chance, before retirement, to not report to anyone. Given a chance, is this all that I will or want to do? Aren’t I responsible for an enterprise called “Myself”?

For me, Term II went by at the speed of thought. One needs to be highly organized and disciplined to optimize returns from an MBA program. Even a couple of days of slackness can put one behind by many miles. Forget about grades. It takes the joy out of the entire learning experience. All that one will keep doing is trying to catch up with what was missed out and it becomes laborious and boring. I am happy that I more or less stuck to what I had committed to myself at the beginning of the term. It was learning and consolidating the learnings to be able to relate them to the real world.

PS:

Term III again has some very interesting topics – Entrepreneurship; Operations Management; Management Accounting; and Corporate Finance. We also have a special course of Leadership Development, which again is quite interesting.

Paper based descriptive exams are difficult to manage. It has been many years since I have used papers to write essays. Most of the writing is on the computer. The result of this is that, I have flexibility of not following any particular logic or order in my writing, or more importantly thought. I can always randomly put my thoughts on the computer. Later, edit the entire write up by juxtaposing the thoughts, which are closely related and thereby create cogency, order and logic in what I write. When I am writing on paper, I do not have the flexibility of this edit facility. I need to organize my thoughts before I put the pen to paper. But the mind has lost the habit of getting thoughts in orderly fashion. About 5+ years is a long time and habits do change. The mind has gotten used to thinking the computer way and cannot easily adapt to thinking the paper way.

Today’s strategy paper was the first time that we were asked to write descriptive answers. Our abilities to think and integrate various learnings from the Strategy sessions were tested. On one side, it was fun because this truly represents what a manager is supposed to do; on the other, it was cruel because our minds have become incapable of thinking ‘order’.

The lack of excogitation will I hope be seen with sympathy, if not empathy. In the past few days, the mind has been stuffed with a whole lot of numbers, graphs, concepts, cases, formulae, what not and what more. It just broke down about an hour ago resisting any further infusion.

We have our Term II exams on 18th and 19th. The time is running at breakneck pace, allowing the mind little time to recuperate and get a sense of what it is being battered with. The body is in no better state, what with sleep deprivation and bulimia.

‘Trauma Transforms’ was the most interesting buzz-phrase on the campus. It was easy to talk about and fanciful to use. People have gone to the extent of fancying to transform trauma itself. Now with trauma really getting to us and deforming our being in the ways we have rarely been used to in the last many years, the phrase is the most loathed.

As we undergo this experience, I eagerly but with hope look forward to a transformation that was intended, but not emerging on its own. As an HBS alum had put in his article which was circulated around – Transformation is fine, but into what?

The last words of the valedictory mail from our Global Economics Prof. He has succinctly drafted what it takes to being an innovator, making difference and perhaps being at the top. The difference between being an also-ran and say, a Jack Welch or a Porter or a Drucker.

The Prof. further quotes John Steinbeck

John Steinbeck wrote in his beautiful novel, “Sweet Thursday,”
“…the clarifying leap springs from the rich soil of confusion, and the leaper is not unfamiliar with pain.

And further writes

Quote

What I or anyone else can hope do in a short time is only rake this soil. The leap is yours to make.

Unquote

The people who made difference and set standards are those who challenged the existing beliefs and theories. They were bold to question what was deeply ingrained. They set new rules and said what worked earlier does not work any longer.

If Einstein did not have the guts to question the fundamental flaws in Newtonian thinking, we would still be operating at a different efficiency scale.

But what does it take to be bold and irreverent as to question what is, so to say, ‘obvious’ and ‘widely accepted’. Some attributes, apart from what the Prof. has already mentioned, which I think can make a person evolve into a different orbit than he is operating at are

• Passion – about what one does
• Observation – looking at colleagues, seniors, competitors, consumers and the world in general
• Empathy – so that one understands why others have come to a different conclusion than ours
• Conviction – about what one thinks/believes

I keep coming back to this ad nauseum. Does a b-school teach all these? Nope. No school can. It is up to the individual to keep looking inside his head and heart, as much as looking outside. To keep questioning what is “assumed as true”.

Post Scriptum:

• It is sad that eyes are made only to look outside. There is an increasing need to keep looking inside.

• What a b-school does is definitely give an opportunity to look around; an opportunity to get in touch with ignited minds, which by themselves can be catalysts of further thought

• When our Prof. says to shift those graphs, he means that there is no need for us to accept what a Friedman or any famous economist has said. We can always challenge the concepts and draw a new graph to describe the economic phenomenon. Someone challenged Keynes and hence we are able to manage our economies better.

• 36 % of the dog food, 32 % of the diapers, 30 % of the photo-films, 26 % of the toothpaste, and 21 % of the painkillers sold in the US are sold at Wal-Mart.
• 39 % of the sales of Tandy, 23 % of the sales of Revlon, 20 % of the RJR Tobacco, and 17 % of the sales of P & G are sold through Wal-Mart.
• Wal-Mart’s daily sales are higher than the GNP of 40 countries
• Wal-Mart’s annual sales are higher than the GDP of 190+ countries
• Wal-Mart’s each year growth is equal to Pepsi’s annual sales.
• Wal-Mart loses US$ 2 Billion because of pilferage.
• USD 285 Billion sales at the year ending Jan 31, 2005 year
• More than 138 million customers per week visit Wal-Mart stores worldwide
• Wal-Mart employs 1.6 million associates
• Wal-Mart grocery prices are 17 to 20 percent lower than other supermarkets
• Wal-Mart potentially saves individual families more than $500 a year
• Wal-Mart employs a Chief Diversity Officer, to take care of diversity initiatives
• Wal-Mart buys merchandise and services from more than 61,000 U.S suppliers and supports over 3 million supplier jobs in the United States
• P&G is working on restructuring its business/organization to develop synergies in working with Wal-Mart. P&G already has linked up with Wal-Mart. P&G gets data on every sale of its products made at Wal-mart. Its production is aligned to meet demand at Wal-Mart. P&G expects that by 2010 about 50 % of its sales is going to be done through Wal-Mart.
• The heartbeat of many a retailer in India stopped for a moment when the President of Wal-Mart visited India sometime in May/June to consider options in India. (India is yet to allow foreign investment in Retail)
• Wal-Mart has one of the highest number of law suits running against any firm

How did Wal-Mart grow so large that corporate giants such as P&G are looking at realigning their businesses to work synergistically with Wal-Mart.

• Vision of its founder, Sam Walton – His untiring spirit and belief in Americana; His utmost contempt for things flashy and almost nauseatingly excess love for frugality;
• Excellent sense of what customers want
• Excellent logistics management
• Excellent operations – in store operations / distribution
• And fantastic use of Technology to excel in inventory management (this is where Wal-Mart makes or can further improve all its profits)

Post Scriptum

• The reference of the title is to a book on Sam Walton and Wal-Mart, called “ In Sam We Trust” by Bob Ortega.

• Tomorrow we have our last Competitive Strategy session. Our case for tomorrow’s discussion is Wal-Mart Stores, Inc.

Flip side of Wal-Mart’s growth
• A survey in Iowa revealed what had happened in that state since Wal-Mart had arrived in 1983:
o 50% of clothing stores had closed
o 30% of hardware stores had closed
o 25% of building materials stores had closed
o 42% of variety stores had closed
o 29% of shoe stores had closed
o 17% of jewellery stores had closed
o 26% of department stores had closed
• On average, about 100 stores go out of business in the area surrounding a town with a new Wal-Mart store

What is an MBA program if we do not learn jargon at the end of it? I list a few of them. Some of them are popular; some are little known.

• Air Time: a precious opportunity — speaking or making comments in class.
• Analysis Paralysis: not being able to make a decision because you’ve gotten lost in the thicket of your own analysis.
• Back of the Envelope: a quick analysis of numbers, as if scribbled on the back of an envelope.
• Burn Rate: amount of cash a money losing company consumes during a period of time.
• Buzz words: jargon, usually used to make an impression upon someone
• C-level: Those modest, hardworking souls at the top of your org chart: CEO, COO, CFO, CIO, CPO, CTO, Chief Dog Walker, etc.
• Cold Call: unexpected, often dreaded request by the professor to open a case discussion.
• Corner Office: office location that all MBAs aspire to and the exclusive province of partners, managing directors, and senior executives.
• Cycle Time: how fast you can turn something around.
• Four Ps: elements of a marketing strategy: Price, Promotion, Place, Product.
• Experience curve: There was also the experience curve, which meant that the more a firm knows about a market, the more it can lower its price and increase its market share.
• Poets: students with little quantitative skills or experience (numerically challenged).
• Power Naps: quick, intense in-class recharge for the continually sleep deprived.
• Quant Jock: a numerical athlete who is happiest crunching numbers.
• Roomie: a room mate
• Rule of Three: you should not talk more than three times in any given class, but you should participate at least once over the course of three classes.
• Run the Numbers: analyze quantitatively.
• Sharks: students with high quantitative skills or experience
• The Five Forces: Michael Porter’s model for analyzing the strategic attractiveness of an industry.
• Porter-Kotler – the most famous authors on the campus. For any Consulting, marketing interview, your preparation is not complete without reading the books of these Profs.

(H)asta manana

Post Scriptum:

• Come next Monday, we have out Term II exams. So far, I can term my preparation as quite inadequate. Three of the four subjects, Marketing Decision Making, Global Economics and Strategy, are not quant based and I am hoping to clear the based on my experience and on the classes I attended. Decision Models and Optimization is completely quant oriented and I, as are many of my friends, am struggling to comprehend.

• (H)asta manana, in Spanish, means see u tomorrow. H is always silent in Spanish.