I, The Absolute

Archive for August, 2005

Term III – review

Posted by itheabsolute on August 31, 2005

Another Term ends. Another review.


Only four things matter to customers. Organizations better work everything around these – cost, quality, variety and availability. How can operations handle these?

1.Cost – improve efficiency (aka Toyota)

2.Variety – make flexible resources so that the plant can make a variety of products (same counter, different burgers and nuggets, aka, Mcdonald)

3.Availability – make the product available at many places and during most of the times. Keep the waiting time low.

4.Quality – value for money. Not easy to measure; nor easy to achieve

Corporate Finance

WACC, CAPM are well known concepts and are found in popular press. What was interesting was the Modigliani-Miller theorem. It simply says that how you finance an investment is not going to change the cash flows from that investment. If X is the present value of the cash flows of the company, the capital structure or changes in it will not change X. All the changes in capital structure will do is to reallocate cash between equity holders, debt holders and government (tax). There are many ifs and buts to this theorem. It may not sound intuitive and empirical, but just think about it. An analogy given by the Prof was – just because we do not observe a feather and a stone falling at the same pace does not mean that the force gravity exerts on them is different. Other extraneous factors make the observation difficult.

Managerial Accounting

It is all about how companies have been following wrong methods in calculating cost of producing a product. Thereby, selling products that made losses, withdrawing products which returned profits.

Activity Based Costing (ABC) is an important system. This will help identify proper costs associated with the production development to a particular product. ABC has helped many companies become profitable by letting them identify costs properly.

Then there was transfer pricing. There is no one formula for this. Wherever possible transfer pricing has to be at market value. If there is excess capacity, then the products/ services can be transferred at marginal cost,etc.

Budgeting and variance analysis were other concepts


Effectual thinking – how to convert an idea into an opportunity using existing resources – intellectual capital, social capital and human capital. The value of financial capital comes much later in the evolution of an organization.
(i have already covered a bit of this in one of my posts)

Post Scriptum:

Did my exams okay. I have gotten used to B grades. It looks like I will get them if I read or even if I don’t 🙂 Except when the subject is heavily quant oriented.

Next term – only one quant oriented course (investments). The rest are all faff ( as many of the ISBians call). If some subject does not have quant orientation, then the take aways are expected to be minimal.

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Posted by itheabsolute on August 29, 2005

We have Term III exams tomorrow / the day after. Time cannot run faster than this. As usual, not fully prepared, but have now gotten used to this.

Students’ opinion
=the most scary subject this term – Corporate Finance
-mid-term was cancelled. So have to cover the entire syllabus
-no cheat sheet
-haven’t understood anything
=the most under-prepared subject – Entrepreneurship
-does one need to prepare when the case on which analysis is to be
done is going to be given a day before
-when it is open book / open notes

We never had cheat sheets, open book/notes exams in undergrad. Why do we need them now? Why cannot we do well now even when we have all these, at least for some exams?


Citibank has called for applications (resume + essay) for awarding scholarships. Am told about 70 % of the students has applied. HSBC scholarship applications were not this many because HSBC wants the scholarship-winning students to sign a bond for three years. Citibank scholarship is free of strings.


One of the most researched topics, these days, in operations is “waiting time”. Our Operations Management course deals at length with the waiting times, queues and psychology of waiting. The fun is that it is not the handling capacity, the speed of processing, or the increasing population that increase queues. It is the ‘variability’ in these that can make, theoretically, waiting lines infinitely longer.

The following are the axioms of the psychology of waiting
– people want to get started. Just a small movement in the queue is also fine
– uncertain waits are longer than known, finite waits (if it takes 30 minutes, tell the customers. Don’t let them wait without saying anything)
– unexplained waits are longer than explained waits
– unfair waits are longer than equitable waits (that the relative of the counter guy got the tickets by breaking the line annoys us)
– The move valuable the service, the longer the customer will wait (Doctor, for example)
– Solo waits feel longer than group waits (just someone else standing next to us, even if he is unknown can make waiting better) (when there is a mirror next to the lift, the waiting can become better as we keep watching ourselves in the mirror)

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Six Steps to Greatness

Posted by itheabsolute on August 27, 2005

The last session of Leadership Development Program was held today. Prof Rajeshwar is simply brilliant. Some of the students tend to view the entire program as waste of time. The Prof has given some tools which I strongly believe can be used to develop oneself. If world was made of equations, then it is a different story. World is made of people and when an individual is at the centre of it, imagine the benefits that can accrue by developing oneself. Today, he gave the last but the not the least effective set of tools. These may sound simplistic, but they are not. Some of them may sound pueurile, but the overall effect of following these can be far reaching.

1. Reverse the way you get out of bed – the summary of what he said was, man is a creature of habit. The first thoughts in the morning are those that were thought at night. By managing habits, one can get effective
2. Look for good in other people – not easy because we have a greater propensity to look at bad than good. But this can be consciously developed. This can be developed as a habit.
3. Learn to greet people – show energy. Sometimes it may appear to be pretense but sooner than later it will become essence
4. Establish some symbols – concentrate on it to derive inner peace and clarify one’s thoughts and feelings. it can be god, or any other form, from which one can derive some strength. Usually it is god for many people.
5. Take care of yourself physically – most neglected. It is imperative that the mind has a proper body to execute.
6. Feed your mind with the right stuff – what u feed the mind with is what it will give back. Read books, be with better people, see proper programs on TV, etc (read GIGO )

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Grade non-disclosure policy

Posted by itheabsolute on August 25, 2005

Is status quo the best thing? ISB had a grade non-disclosure policy during its first year. What it means is that the school and the students will not disclose the grades to the recruiters. The fact that the students have been picked up through a rigorous selection process, that the curriculum at the school is quite demanding and that the school has reputation and ethics not to give pass grade to someone who has flunked just to be able to place the guy, should be reason enough for the recruiters to come and pick up students. Of course, subject to interview process.

ISB has a disclosure policy now, but limited to letting students report their grades to recruiters. ISB will not release our grades to recruiters. Without our permission, that is. Now, some of the students have been trying to bring the topic of non-disclosure for debate so that we as a student body can decide which system is better. There are arguments on both sides. Nothing is right or wrong. But one system will foster a particular milieu on the campus; the other will foster a different set of experiences. Since there is enough student diversity, people will have different views and preferences. But in the overall interest of not only the current batch but the coming batches, a debate is essential. Efforts made by one of the colleagues are not being encouraged. Let the term exams pass, I will also do my mite in trying to generate a debate.

All those well known b-schools have non-disclosure policy. The point is they take students with work experience and mind you those who have already succeeded and proven their mettle back at work. Using a yardstick of grades alone is a wrong way of going about. This is the logic these schools use. Yet all the major companies go to these schools for recruitment.

The problem here is Indian education system. IIMs take freshers. What better way to judge freshers than to look at their grades. The entire recruitment scenario in India is geared up to picking up guys from these management schools where most of them are freshers. In fact, Mckinseys and BCGs of the world deviate from their global policies to suit Indian education system. Given these, bringing about a change in our – be it the students or recruiters – orientation towards grades is difficult.

Starting a debate, however, should not be.

PS: If anyone has any points to add for or against, please drop a comment.

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Raj Kamal

Posted by itheabsolute on August 23, 2005

B. Tech, IIT, Mumbai
District Magistrate (Indian Administrative Services)
Associate, Mckinsey

Yesterday we had a team from Mckinsey to make a presentation. For me that is an aside. A member of the Mckinsey team by name Raj Kamal shook me out of my thinking. The above gives a chronology of his career. He last served in Indian Administrative Service as District Magistrate / Collector. A district magistrate is an administrative head of a district with magisterial, revenue and law & order authority in the district. He will have a battalion of people working under him, all the district heads of other departments, including police chief of the district report to him. He handles problems covering political, revenue, law & order, poverty related, etc. Simply put, he is THE government in that district.

Raj decided to study further, quit IAS and joined ISB. He says that he did not know what Consulting was about when he came to ISB. He worked hard and realized that Consulting will give him a good experience. He was picked up by Mckinsey and joined as Junior Associate. A junior associate is the lowest in the pecking order (post MBA position) at Mckinsey.

Leaving a position of such authority and joining as a junior associate at Mckinsey is something which is hard to do. To me, it is impossible to think. I asked him on how he felt. He says that consulting is a different kind of learning experience and he does not think about authority, etc and that joining as junior associate has not bothered him. On the contrary, he is enjoying his stint at Mckinsey. I felt – was I talking to a Level 5 leader? He surely combined humility and professional will.

Lesson for me – I have already been in a relatively senior position in my past job. I have seen more money than perhaps an associate would earn at Mckinsey. All these four months at ISB, as I thought about career in consulting, I was finding it very difficult to reconcile to a probable reality that Mckinsey would discount, should I be selected, much of my experience and take me at a starting level, at best at a second level. Now that I have seen him, I am completely jolted out of my thoughts. Having served as a district magistrate, which is without doubt a far superior profile than I had, if he can give up all that and join as a junior associate, can I not do it? I like consulting but don’t know if I have the courage and humility to accept a position where I would start at the lowest position in the pecking order.

But I have started to think……………

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Resume Making

Posted by itheabsolute on August 21, 2005

Most of the b-schools ask for a resume. Amongst the plethora of activities that need to be done for b-school admissions, resume making usually takes a back seat. Because many think it is not that important and most think it is easy to make one. Resume making, believe me, is as tough as essay writing. Here are some tips for resume making

1. The resume can go into the second page only if you are the president of the United States 🙂

I remember of the days when I used to send four pager resumes to prospective employers. It is pain to read those many pages, if at all one can get the employer to read. The resume has to be one page. Period.

2. If you have put in some years of workex, start with experience and that in the reverse chronological order. Education can come next. Activities and Personal interests in the last.
3. Cover profile and achievements in your work. Always give numbers to quantify achievements.
4. Use active verbs which catch attention. Try not to repeat the same verbs in a resume.
5. Edit resume every two days over 15 days to one month.
6. Let someone else read your resume.
7. Spell check. Don’t rely on MS word to do it. Do this manually. Let someone else also do this.
8. Read resume aloud. See if you have written something that ‘sounds’ odd.
9. DO NOT write in the resume what cannot be properly explained or substantiated.
10. Do include undergrad grades if they are good.
11. There can be one or two hobbies. Don’t list too many. Please be sure to update yourself on what is happening related to your hobby. For instance, if reading books interests you, then be ready with an answer on what the recent book you read was and what the learning from that book was. what types of books u read, etc.
12. If you have any volunteer activity, do include. Be ready with answers on this.
13. Personal details such as married, Indian national, male, age/DOB, father’s name, religion, et al are better avoided.
14. Ensure proper formatting.
15. Try to convert it into acrobat before e-mailing (adobe allows five free trials). If a hard copy is going, ensure the paper it is printed on has quality. Try not to fold it.
16. Finally, be prepared to answer ‘any’ question that relates to the resume.

Post Scriptum:

I write topics related to MBA admission because I think these may help some prospective applicants for their applications, which they must be working on now.
Have had two interesting Leadership Development Program sessions. Am not able to find time to get my thoughts together and put them to paper.

This weekend was a nightmare with four assignments, all of which were difficult. End term exams are a week away:-(

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link to isblife

Posted by itheabsolute on August 19, 2005

Had agreed to post at ISBLIFE, a collaborative blog by the students of ISB. Have written about the checklist for MBA prep. You may want to check it.

ISB Life

PS: Clearadmit has finally read my blog. It makes a reference to my blog at

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Posted by itheabsolute on August 17, 2005

We are just ten days away from the third term exams and I haven’t covered a quarter of the syllabus. And no sooner do I start enjoying the concepts, the Professors bring in complex formulae in the derivation of which I get lost and cannot redeem myself. I have struggled to master quant, but now become clear that I am not made for it. I will stick to the Drucker’s advice – don’t work on weaknesses. I will hire someone who is good at quant.

This weekend we have BCG and Mckinsey coming to the campus. Both are late night sessions and will eat away good amount of time. I am coordinating BCG event. Hopeful that there are good takeaways from these. Some of the students have given up on consulting because of low grades and the scare of overload of work / travel in consulting jobs.

Tomorrow is the last day to apply to the student exchange programs (Kellogg / LBS / Duke, et al). After much deliberation, I have decided not to apply. My Singapore trip however is on. In between, Citibank will come to campus to interview students to decide scholarships. Most of the students given scholarship are absorbed into the bank. If I am able to get scholarship and strike a good bargain with Citibank within India, I may not look at Singapore option.

I had targeted to learn and get a good hang of 3Ss – Spanish, Squash and Swimming. I have started well with the first two and started enjoying them, particularly Squash. Swimming will get postponed till the year end.

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The Level 5 virtues

Posted by itheabsolute on August 16, 2005

Leadership Development Program gave me an opportunity to read some of the most interesting articles I have ever read. They provided great insights.

1. Managing Oneself – by Peter Drucker. He explains how people waste time by trying to overcome weaknesses. He says focus instead on strengths. That is where our maximum improvement will come from. 85 % time should be spent on strengths. 10% time on those peripheral factors which directly contribute to our strengths. 5 % time on weaknesses.

2. How Hardwired is human behavior by Nigel Nicholson: It basically says that man still carries all those psycho-physiological elements which made a successful animal species and led to its survival. Some of those may not be relevant in today’s context. But they are so hardwired that we cannot escape from them. We need to realize their utility and use them or channelize them to get better results. Anger, our instinct to gossip, etc are some of the examples. Naked Ape is a good reading which talks of similar concept

3. What makes a leader by Daniel Goleman: EQ is king. IQ is good but can take one only thus far. Emotional intelligence has five components – self-awareness, self-regulation, motivation, empathy and social skills. The first three skills are about self; the last two about our interface with others. All these “can” be developed through a disciplined approach

4. Tipping Point Leadership by W Chan Kim and Renee Mauborgne: No point trying to change everything at the same time. No point trying to change everyone. The article takes the example of NYPD Police Chief, Bratton, and explains how he used the techniques which can be labeled tipping point leadership techniques to effect a change in the crime rate and the way of work in NY. Cognitive hurdle – put managers face to face with problems; resource hurdle – focus on hotspots; don’t spread your resources across and waste them; motivational hurdle – focus on key influencers in the organization; political hurdle – identify and silence internal opponents and isolate external ones. Read the Tipping Point by Malcolm Gladwell for further ideas.

5. Narcissist Leadership by Michael Maccoby: Three types of leaderships – erotic; obsessive and narcissistic. Narcissists are innovators, driven in business to gain power and glory. They are in love with themselves so much that eventually they lose touch with external information which further leads to their down fall. They are successful, but do not have a sustainable success.

6. Level 5 leadership by Jim Collins: Five levels of leadership. Level 5 leadership is at the top of the pyramid. The level 5 leaders build enduring greatness through a paradoxical combination of “personal humility” and “professional will”. Level 4 leaders produce great success stories, but the organizations they led fall off once they leave the organization. Level 5 leaders are extremely humble; they choose successor who will keep the success going. They don’t take much credit for the success of the organization. Think of the CEOs who are on the cover page of every magazine. Contrast them with those CEOs whose companies have far higher EPS, but the CEOs themselves are not known at all. Further reading: Good to great by Jim Collins.

PS: the Buddhism and the Buddha can provide great leadership lessons. My desire to read about the Buddha and the Buddhism has gone up several times. But, it may not be all that difficult. My LDP professor says, Buddhism is a two slide power point presentation – Slide 1: Life is suffering; Slide 2: Follow eight fold path to escape suffering and achieve moksha (list those eight).

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Posted by itheabsolute on August 14, 2005

Students who come with a clear goal of moving into consulting or finance roles have a relatively easy job of picking up electives. ISB offers a range of electives that enables one to specialize in finance or operations or marketing or leadership & change management or entrepreneurship. One has to major in at least one concentration and maximum two. To major in a concentration, one needs to take at least six topics/subjects mapped under that concentration. One needs to complete sixteen electives to graduate. Having put nine years of workex behind me and having worked in a middle management level, really don’t want to go into jobs which seek narrow but highly specialized skill set. Would rather look at general management roles, if not immediately, at least a year or a couple of years of graduating.

I said the job of picking up electives is difficult or easy only in relative sense. Given an option, I would not like to major in any concentration, but since I need to meet this requirement, I chose to opt to major in “leadership & change management” (LCM). There are quite a few interesting topics under this concentration. ‘Negotiation Analysis’ and ‘Leadership lessons from world literature’ are two topics I look forward to with enthusiasm. LCM will consume six of the choices. I will use the other ten options to cover subjects as Managing IT, Operations Strategy, Consumer Behavior, Strategic HRM, et al.

Electives are fun. For just the simple reason that they are electives and not compulsory. I ‘choose’ the subjects. The rest of the fun comes from the fact that the subjects are quite varied and let me broaden my understanding. There is good amount of learning possible.

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