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Thursday, October 30, 2003

 

Takeaways from 1st Quarter at Wharton

Here's another Top 10 I ran in the Wharton Journal. I've added brief explanations in italics for non-Wharton readers out there:
  1. Gargantuan tuition fees are merely part 1 of a 2-part tarriff (you'd think $35K in tuition would cover everything, but it's just the entrance fee)
  2. Core classes are merely pesky distractions from an otherwise uninterrupted career fair
  3. Study room Whiteboard-computer interface provides top-notch platform for collaborative tic-tac-toe (no one ever uses the ultra-high tech feature that lets you capture whiteboard scribblings on computers)
  4. Webcafe server is actually a HP12C with a weak battery (Webcafe is essentially the online virtual classroom where you find assignments and discussion. It's great but really really slow.)
  5. Textbooks are most effectively utilized as support for couches that have missing legs (you never have time to crack your textbooks here, everything you pick up is through handouts, cases and lecture)
  6. Finding heteroscedasticity in time series data is much easier than finding the statistics office (the statistics office is on the 4th floor of huntsman hall. the normal elevators and escalators only go to the 3rd floor. See if you can find the hidden elevator)
  7. Massive personal debt actually increases propensity to consume (what's another $20 when you're dropping $120K?)
  8. 32 pages of lecture material can -- and should -- be squeezed onto 1 piece of printed paper (two things: on-campus printing costs 0.10 a page which quickly adds up and cheat sheets are permitted in exams, so squeeze everything you can onto each sheet)
  9. Faucets that spontaneously activate in restrooms actually caused by friendly "Old Man Huntsman" ghost (the motion sensored faucets in the restrooms really seem to go off without rhyme or reason)
  10. Crime is fairly low inside Huntsman Hall (excluding, of course, what Au Bon Pain does to its customers) (Au Bon Pain cafe has 2 stores built into Huntsman Hall and you can be guaranteed you'll get long lines, high prices, and poor service)


posted by Ryan : 5:40 AM | permalink

Monday, October 27, 2003

 

There.com

I beta tested There.com a few months back, purely out of curiosity. There.com can perhaps be characterized as a more ambitious version of "The Sims Online," another community-based game. I was initially intrigued about an article in the WSJ about There.com's creation of a virtual economy with "Therebucks," a currency tied to the US dollar. Players can actually create virtual products (i.e. a t-shirt or a hoverboard for your avatar), and then sell those products to make real-world money. I ultimately got bored with the game and uninstalled it, but more on that later.

It seems like There.com is avoiding positioning this game as a game. They're positioning it as a novel form of instant messaging, which is an interesting angle. To understand this, we might look at a precursor to There.com, Electronic Arts' big disappointment called "The Sims Online." The original "Sims" game from which The Sims Online was adapted was a hugely successful, traditional, non-interactive PC-based game. Non-interactive games let you "play god," whereas community-oriented games don't let you have that kind of control. Community-based games are more like the real world where you can't do anything particularly special (my, that sounds bleak). There is no structured experience. It's up to the community to provide the entertainment.

Products like There.com tend to make interesting case studies and niche markets, but they're not likely to generate enough appeal to attract and retain a mass-market audience. Perhaps it goes back to Metcalfe's law, where the value of the network is dependent on the number of users in the community (although with this argument you might argue that There.com already has a sufficient critical mass to be of value to the average user). Ultimately, though, I think it comes down to the entertainment factor. Whether people are going to the box office or buying a PC game, most people want an escape from the real world.

posted by Ryan : 12:07 PM | permalink

Sunday, October 26, 2003

 

CEOs grossly overcompensated

A nice point of data from an article in The Economist on CEO compensation per $ of company profit:



Not a big shocker, but still somewhat alarming given this spike is in real (not nominal) terms. If Boards of Directors are not going to blow the whistle on this (they won't, most Boards are way too chummy with the CEO), shareholders need to get tougher with the companies they invest in. Everybody just turns the other way.

The biggest crime is how richly compensated the bad CEOs are.

posted by Ryan : 1:36 PM | permalink

Wednesday, October 22, 2003

 

New England road trip

On the West Coast, we had what are called "Freeway Exits." The concept is relatively simple. You take an offramp, then you see a few gas stations, and then you're on a major road which generally holds the same name as the freeway exit (i.e. University Avenue).

On the East Coast, there are no freeway exits. There are only entrances. Every offramp is another onramp in disguise, which leads to another freeway, which leads to 3 more bridges and 4 additional tolls. There are no distances published on road signs (i.e. Connecticut: 34 miles), and that is probably because the highway authorities know that, at any given point in time, there are a minimum of 14 additional turns separating you and your destination.

Anyways, tonight we find ourselves in Ludlow, Massachussetts just outside of Springfield. Springfield is the birthplace of basketball and contains the basketball hall of fame. I like most things more than I like bastketball (like, say, a good headache), and so my experiences in Springfield tonight will be limited to Wendy's and the Comfort Inn.

We're currently on our way up to Vermont. My wife and I actually have different goals for the trip, which is fine. She will most likely admire the fall foliage and take pictures of our 4-month old son in piles of leaves. Meanwhile, I will steal away to Waterbury and abscond myself in a large vat of "Chubby Hubby" at the Ben & Jerry's factory. And that is the beauty of Vermont... there is something for everybody.

posted by Ryan : 6:22 PM | permalink

Monday, October 20, 2003

 

Top 10 Rejected HBS Case Studies

(another meager contribution to this week's Wharton Journal from yours truly)

    1. Sticking it to Your Customers: The Rise of Au Bon Pain

    2. Gorillas in the Mix: Production Mishaps at Betty Crocker

    3. Unhappy Days at ABC: The "Fonz" Demands a Raise

    4. Furniture.com: A Horrible, Horrible Business Idea

    5. Suing Your Customers: New Revenue Streams for the Music Industry

    6. Innovation in the Skies: US Airways Introduces the Chewing Tobacco Section

    7. Men of Means: Frank Quattrone vs. Don Corleone

    8. A Snowball's Chance in Redmond: The Sun Microsystems Story

    9. One Part Sprite, Two Parts Anti-freeze: Going to Market with Mountain Dew

    10.The Scarface Dilemma: Supply Chain Disintermediation in the Narcotics Industry



posted by Ryan : 8:55 AM | permalink

Friday, October 17, 2003

 

Q1 Results

As the first quarter draws to a close, I think I speak for all first years when I say: WE ARE TIRED OF STUDYING!

The jury is out: a 1st quarter, 1st year Wharton student has way more work than can possibly be done (to say nothing of doing it well). Even if you did away with resumes, recruiting, social concerns, extracurricular activities, and personal hobbies, we'd STILL don't have time to study adequately for all of our tests and projects.

Yes, the first quarter has been a killer for many of us, even those of us with Econ/Business backgrounds. Personally, I have had previous experience or coursework in statistics, accounting, game theory, finance, and marketing (basically all of my core classes), but even still... this has been NO vacation.

From the conversations I've had recently, I think 80% of us are starting to realize that grades don't matter. I don't mean this in an "I'll settle for a B+" kind of way. What I mean is, "as long as I'm not in the bottom 10% of the class, I'm happy." Being in the bottom 10% is what's called a "QC" at Wharton. Most people try to avoid them, but most get at least one. One can actually receive a fair number of QC's before being asked to sit in the corner of the classroom wearing a dunce cap.

This is a new kind of thinking for many of us. Many are accustomed to aiming for the top 10% of everything. But percentages are relative. And personally, I'm still elated that I snuck by the admissions committee last fall.

So if grades don't matter, what does matter?

Admittedly, finding the perfect job right out of school seems like it matters quite a bit. To be honest, I've gotten a bit caught up in the whole whirlwind. Employee Information Sessions (EIS'), resume workshops, and coffee chats take a decent chunk of time out of the week. All worthwile activities, but lets get some perspective... how long are you going to keep your first job out of business school... 2, maybe 3 years? I mean what's going to happen if you don't get the prestigious job that 400 of your classmates want but only 10 get? I'm all about shooting for the stars, but it's easy to mistake the stars for the spotlight. There are lots of good jobs out there, and a job is what you make of it.

So what matters over the long term?

I would argue that learning matters, although it's easy to mistake learning for studying. I've found in any school environment that learning and studying sometimes overlap, but they often don't. Learning happens when you're interested in a topic or activity and pursue it without any expectation of reward. When you're learning, you've lost track of time because your curiosity -- rather than your fear of failure -- is driving you. I've had to really nurture the desire to learn from my classes, because it is so easy to be taken hostage by the short-term needs of studying and "getting stuff done".

Another thing I'd add to the importance of learning is the importance of forming and developing relationships, which is an extension of learning. Friendships need to go beyond the classroom and beyond mutual needs. True friendship and true networking, like true learning, exist when there is no expectation of external reward. Not everyone will award you an "A" for your efforts to reach out, but reaching out offers a satisfaction of its own.

posted by Ryan : 6:46 PM | permalink

Monday, October 13, 2003

 

Song of the week

I went and saw Cracker on Saturday. Good stuff. My song of the week (a new tradition here) is "I Ride My Bike" from their 1992 Tucson EP. The song is underwhelming for the first couple of minutes but then it just breathes, lets the drums do an "Everybody Wants Some" by Van Halen kind of thing, and slowly cranks up the intensity.

I love it when bands change tempo, and when they are secure enough to stop singing already and let their instruments talk. The reason why so much music stinks (i.e. most Top 40) is because it's so vocally driven. Play the same tempo, sing a few lines, sing the chorus, sing a few more lines, sing the chorus.... after about 10 listens it gets REAL BORING. The lead singer's voice should just be treated as another instrument. And all the instruments need to have a little time in the sun.

posted by Ryan : 1:46 PM | permalink

Saturday, October 11, 2003

 

Why big brands fail

This India Times article has a myriad of interesting thoughts on growth, goals, and mispent CEO time. Although it's somewhat confusingly written (perhaps it was translated?), there are a few noteworthy excerpts:
Goals are responsible for mucking up marketing plans. We are opposed to them because they introduce unreality into the marketing process. Managers who are obsessed with “what they want to do” love to set goals.

What are long-term plans except a meticulous outline of where managers want their company to be in five or ten years? The talk is of market share and return on equity goals.

These managers force things to happen instead of trying to find things to exploit. They chase existing markets instead of looking for new opportunities. They are internally oriented instead of being externally oriented.

I agree that growth (through innovation) often happens in spite of goals and forecasts, not because of them.

posted by Ryan : 5:16 PM | permalink

Friday, October 10, 2003

 

Recruiting MBAs

Booz Allen's latest Strategy+Business magazine features an interesting article concerning the shortfalls of MBA education. One of their points is that business school programs are producing "cookie-cutter" candidates. In this article (free registration required), Booz Allen correctly points out that "Companies today demand good collaborative thinkers who cooperate to solve problems" and that "schools tend to train people to simply assert their ideas; they don't sensitize them to the critical value of being an excellent communicator."

Part of Wharton's answer to helping us become "excellent communicators" would be the core Management Communication class (WHCP 653). I have not taken the class yet, but I did take a teaser course during pre-term. In one practice, I was assigned to play the role of a CEO explaining a huge round of layoffs to a local news station. It was useful and practical, and I hope I'm never in that situation in real life.

WHCP 653 aside, I tend to agree with the article that there is more emphasis
in business school on assertion than on effective communication. But in my view this is not always a bad thing. In fact, one of the main reasons I went to business school was to learn to be more decisive, more confident, and more assertive in management situations. Despite being surrounded by overachievers, I have felt that Wharton provides a much safer environment to "practice" being assertive than previous employment experiences. The beauty of having a class of 800 is that, if you say something stupid in front of 40 of them, there are still 760 others who will never be the wiser. But back to the article.... here are Booz Allen's 6 recommendations for MBA Program Reform:

  1. Require more courses in the "people skills" that are vital to managing effectively

  2. Emphasize the basic skills and tools needed for problem solving

  3. Provide strong grounding in theories of economics, measurement, governance, psychology, human behavior, and leadership

  4. Design curricula so that students can learn -- by doing -- to apply multiple disciplines on the job

  5. Encourage students to take electives outside the traditional core curriculum

  6. Create differentiated curricula and allow students to concentrate in specific industries

How does Wharton stack up on these? I've been happy with #2-5. As for #1, I'm not convinced people skills can be taught in the classroom. But I do feel there are a LOT of opportunities outside the classroom for people skills development. As for #6, Wharton really excels at functional excellence (partly through its sheer scale). Of course, Wharton's known for finance. But take a look at Marketing, Entrepreneurship, Supply Chain Management, etc. To get more granular in terms of industry would likely feel constrictive to a majority of the students. Many of us came back to school because we weren't sure what we wanted to do in the near term (those of you working on your admissions essays, pretend you didn't hear that).

Back to the article again. Sadly, Booz Allen and other firms "have shifted a portion of their hiring away from MBA programs. In part, this is because the total cost of hiring and training an MBA is very high." Having recently attended a number of recent recruiting events I have a few thoughts of my own on this matter. To those firms who are worrying about the high cost of recruiting us MBA's, I present a few cost-cutting recommendations:

Now, to those firms who are comfortable with their MBA recruiting costs: feel free to ignore these recommendations. After all, we love free stuff, and we love feeling like we're being courted. But never think it's necessary... you had us at "hello"....



posted by Ryan : 10:33 PM | permalink

Wednesday, October 08, 2003

 

What to ask your interviewer

In the fervor of recruiting events, I submitted some advice to students via our school newspaper. In case you don't have access to the print version of the Wharton Journal, here it is:

Getting the offer: Top 10 dynamite questions to ask your interviewer

  1. Have you found indentured servitude to be rewarding, or are there drawbacks?

  2. Do you guys have Coke or Pepsi in your vending machines? 'Cause Pepsi ain't
    gonna cut it.

  3. Want to arm wrestle for an offer?

  4. Can I receive my signing bonus in SEPTA tokens please?

  5. Speaking of bulge-bracket banking... do you think this suit is too tight?

  6. Is the culture of your New York office any different than the Azerbaijani
    one?

  7. Do you want a twinkie? No, I insist... come on, there are like 20 in this
    box. Really, I can't eat them all.

  8. Care to stop by Au Bon Pain for a monopoly pricing model case study?

  9. Do you guys block KaZaa?

  10. Umm... what is the expected bonus level for your bottom quintile performers?



posted by Ryan : 12:34 PM | permalink

Sunday, October 05, 2003

 

MBA admissions selection biases

BusinessPundit references this Forbes article about HBS producing the greatest number of Fortune 500 CEO's of any business school. Although Forbes writes that "they must be doing something right," Rob correctly points out that there is a selection bias here: Harvard may be more likely than Wharton or Stanford to admit someone on the "CEO track." In his own words, the HBS admissions director expresses the school's singular focus:
Q: Can you share with us a snapshot of the ideal HBS student?

A: We're looking for leaders...
Of course, I only quoted part of his answer.... he goes on about how it doesn't matter whether they're leaders in the private or public sector, profit or non-profit.... but lets be honest: how many of your admits are going to be able to afford a $120K tuition bill and the stay in non-profit? Wharton's own Rose Martinelli and Alex Brown emphasized recently that Wharton would like to attract a wider audience beyond the typical consulting and investment banking profiles. The effort is certainly noble -- and necessary -- but may continue to be an uphill battle with tuition fees being what they are. I would argue that Harvard's success in producing successful CEO's really does "mean they're doing something right" (as Forbes states), but more in terms of their alumni endowment.

Another twist: My learning team and I recently interviewed the University of Pennyslvania's wrestling coach, who has been tremendously successful in transforming the school's team into an Ivy League champion. He shared a surprising fact about alumni donations: the star wrestlers are not the most generous alumni contributors. Some of the best contributors were those who struggled (or never played a competition match). If a school is looking for admits who will give back, it may make sense to look outside the usual "thoroughbread" applicants.

posted by Ryan : 2:53 PM | permalink

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