Wednesday, March 7, 2012

Lessons I learned in Business School

I recently read a blog post by Rob Go of Next View Ventures called My Top 3 Lessons learned in Business School. The post inspired me to reflect and write about my own top 3 B-School lessons.

Lesson 1: What Strategy is

Before Business school, strategy was this buzzword that I saw used around me all the time. The phrase "What's your strategy for getting the Milk from the fridge?" might be an exaggeration, but not a big exaggeration. At Kellogg, I learned a lot of tools that help understand industries dynamics and judge whether a firm strategy would be successful or not. Most of all, it helped me get a simplified, clear cut definition of strategy. Strategy, according to me, has 3 steps:

1. Decide what you will stand out for? What will you differentiate in?

2. Validate that customers value your point of differentiation

3. Allocate resources to achieving the point of differentiation

Let's take an example. Zappos - known for customer service, not shoes. So their resource allocation is in culture and in giving people in the call centers leeway to make customers very happy. Do they have the lowest prices always? Not quite - if you look hard enough, you can find the same shoe for cheaper elsewhere. But while buying something like a shoe, which you can't make a decision on until you wear it, would you rather find the cheapest upfront price, or rely on a retailer like Zappos, that will take your shoes back, no questions asked?

Another example is Apple - known for innovation and design, not low cost and operational efficiency. They do happen to have a very efficient supply chain, but key decisions are not made with Supply Chain being the determining factor. Case in point - when Steve Jobs decided to make iMacs of different colors, it created havoc for their supply chain. What if you wanted your iMac in pink, and the store had it only in blue? Now the store had to carry multiple colors per iMac. But it didn't matter - Steve realized that your computer was becoming a fashion statement; having colors was more important than supply chain efficiency.

Lesson 2: The "Soft stuff" can be learned

Before Business School , my vision of an ideal leader was charismatic, outgoing, and visionary. Through case studies, class exercises and observing speakers and my classmates, I realized that the "soft stuff" can be learned. This includes leadership, teamwork, negotiation, influencing others etc.

The fact of the matter is that the soft stuff was the most valuable part of Business School. I began to understand what were my leaderships strengths and weaknesses, what company culture actually meant, and how simple things such as where you sit in a room mattered. 

A simple story - one of the first classes we had in Business School was called Leadership in Organizations. Shortly after this class ended, I went to compete in the MIT Sloan Sales Competition. My first case was individual - selling investment services to a rich individual. I prepared hard, established rapport, listened to the client etc., but I think the one thing I did mattered more than anything was choosing where to sit. You see, when you sit on the opposite sides of the table from each other, its like you are having a face-off. If you sit on the same side of the table, it's like you are solving a problem jointly. In order to be able to sit on the same side, I actually made sure that the proposal I was presenting was not printed. Instead I had to drag my chair over on to the same side, sit next to the person who I was selling to, and walk him through the proposal on the laptop. The result - 2nd place in that round :)

That was one example. Another major leadership lesson was on leadership styles. We all think that we have one leadership style, but the fact is that we all have a combination of multiple leadership styles inherent within us, and we can change how much of each we use depending on the situation. 

Lesson 3: Mindset, not skill-set

This was not a lesson per se, but a revelation. People often ask me what skills I picked up during my MBA that is useful in my consulting job, in startups etc. I can hardly point to one or two skills that are super crucial; instead, it is more of a change in mindset; in how I analyze any issue, business or otherwise. Things such as approaching problems with a hypothesis, quickly figuring out how the hypothesis can be proven or disproven, digging deep into understanding the root cause of most issues, and being able to take a much broader view of the different aspects of the issue.

If this sounds vague, it probably is; I do feel that there has been a marked change in the way I think about things.

Now let me tack on to the post and answer this very important question that I get asked all the time - what is the ROI of an MBA? Is it worth the financial trouble? Is there a ROI analysis that shows that?

If you take on a job that pays more than your pre-MBA job, and stick there for a while, you will have a clear justification; especially if you intended to just stick in your old job if you did not go to school. If you have a zig-zag career path - which is the norm, not the exception - you might never be able to clearly explain with an excel model how your career path would have been different. What if you had quit your job and started a company which sold for a billion dollars? There are so many options, and too much variability.

But if you come out a changed person, and think and act differently - now we're talking. That might be more than worth the financial trouble. Of course, the tons of fun and the number of friendships you build during Business School helps :) I had an amazing time at Kellogg, and would not give up the experience for anything.

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