Burton Simmons’s “Adventures in Business School”

As I noted a few posts ago, my team managed to be the co-champions of the MarkStrat simulation. In the spirit of showing off, we were actually given a nice-looking certificate by the professor for doing such an awesome job. (He said something like, “Burton, I was impressed. Not only did you talk a lot of smack at the beginning, but your team actually managed to win, too!”)

Anyway, here’s my piece of paper:

In my Public Finance class, which ended yesterday, the other half of the final was that we had to give a small-group presentation on ways to fix Oregon’s revenue problems. You see, Oregon relies on income taxes for most of the money for the general fund which, combined with the lottery, gasoline taxes, and federal funds more or less makes up all of Oregon’s budget. The problem with income taxes is that they’re generally volatile and highly responsive to positive or negative economic indicators. (For instance, tax revenues were way down in the 1981-83 biennium due to timber issues and almost catastrophically low in 2001-03 due to the tech crash.)

How do you solve the problem of such amazingly high revenue swings?

Two groups approached the problem from a tax diversification standpoint. One encouraged the raising of property taxes (due to several measures in the late 90’s which limited property taxes), and another group advocated switching almost entirely to a sales-tax funded system, much like the State of Washington. Neither of these solutions appealed to my group; we don’t necessarily like taxes that much and we dislike the income tax the least because it’s very progressive in nature.

Looking at the problem, we realized that Oregon tends to have high highs and low lows. Moreover, Oregon’s revenues tend to be strong in all but recession/depression years. Another issue is that, due to the balanced budget amendment Oregon has, we can’t borrow to cover short years. Furthermore, when we do have a good tax year, we refund most of the excess collected taxes in the form of the kicker.

My group’s (highly elegant) solution was to eliminate the kicker, instead redirecting those funds into a rainy day fund that would automatically be added to the budget during periods of revenue shortfall. (I say “automatically”, as opposed to “by legislative or administrative action”, so that it can’t be used as a political tool.) Had we started this after the 1981-83 recession, we could have more than halved the effect of the 2001-2003 crisis on state government, which - considering that the State of Oregon is the state’s largest employer - would have resulted in remarkably positive results. Add to this the economic bonus of NOT slashing all government spending during a crisis - which, in our opinion, is vastly more beneficial than the small economic bonus provided by kicker checks - and I think our presentation was pretty solid.

Our Markstrat simulation has completed. My team, one of five, has been declared co-champions based on our performance. Even more impressive, we’re fighting for the top spot after 12 moves - and we were far behind in last place after 4!

Our strategy was simple. In our game, our scores were decided based on total market share (of both markets), stock price, and net contribution. Our strategy was to target the two fastest growing market segments in the initial market and use constant innovation combined with advertising & salespeople to drive up sales and drive down price. Late in the game we entered the second market and made progress there, though we were too late to enter to get positioned correctly before the end of the game.

Anyway, the net result was a spectacularly exhilarating come-from-behind victory that made the class both fun and a learning experience!

Today is the beginning of the end of the semester for me. Tonight I take the final for my public finance class.

I’m pretty terrified.

Yes, I have - of course - put time into studying. I’ve read darn near the entire textbook, and I’ve attended every class and done a good job on all the homework. The problem is going to be the format of the test - which will be the same as that of the midterm.

Now on the multiple-choice midterm, I had the second-highest grade in class. I was only one point behind, too. However, the problem is that the midterm (and final) were written by the authors of the textbook. Our class discussions have been helpful (and I have pages and pages of notes) but the questions asked are truly obscure.

For instance (and I’m generalizing here):

“This phrase” is an example of:
a) something
b) something else
c) a third thing
d) even a fourth option

I’ve never heard of “this phrase”. I even went back to the book (as did the person who got the highest grade on the midterm) to try to look up the answer. We looked up all the different things that could be the answer, and still never found it. That makes it a little difficult - even on a multiple choice test.

I’m looking forward to this test, though… because after I take it, it’ll be done.

My negotiation class had its final session a couple weeks ago. This was not, however, the last thing I had to do for the class. We still had a take-home final to do, but the professor was going to send it to us electronically later in the week.

Well, that time came and went and we did, indeed, get an email with our final in it. The final was not designed to be especially challenging; our workshops and intermediate papers were where the real work was. The professor even stated in the email that he didn’t expect us to spend more than a couple hours on it.

… and I didn’t. We were given a week to work on it - it was due last Tuesday. Being surprisingly proactive, I even finished it several days in advance (Sunday) and planned to print it out at school and turn it in Monday. (I don’t have a printer at home, since I a) don’t print a lot, and b) don’t have room for it in my 300 square-foot apartment.)

Well, Monday passed and, you know, being in a Master’s program, I got really busy and forgot to turn it in. No big deal, I’ll do it Tuesday.

Well, Tuesday came and, in the hustle and bustle of getting everything done for my other classes and getting ready for Thanksgiving… I forgot. Plain and simple, I spaced it.

Now, I didn’t remember all of this until Friday, the day after Thanksgiving, at which point I desperately penned an email to my professor with a humble apology, an inadequate explanation (how can you not look down upon “I forgot”?), a copy of my final, and of offer to do any extra work I could to complete the class should he not accept it (or just deem it necessary.)

After a night of fretting about it, I woke up Saturday and forwarded that email from his school address to his personal address (wanting to cover my bases.)

To my infinite relief, the professor chose, Saturday evening, to show mercy and accepted my final, late though it was. Words can not describe the worry that was alleviated upon reading his reply.

And that is the story of narrowly avoided tragedy in my Negotiations class.

As I was surfing the web the other day I came across an article titled “Business School is a Joke“, written by a 19-year old sophomore in the Ross School of Business’s undergraduate business program. In many ways, I see what he’s saying in his article, though in many ways I vigorously disagree - perhaps due to my age, experience, the fact that I’m in a master’s program instead of an undergraduate one, or the program I’m actually in. However, here are some of the main points his article:

Here, he’s talking about a local deli’s head of corporate strategy and managing parter.

During her 45 minute PowerPoint-guided presentation, she said the word “growth” eleven times; she talked about deliverables and accountability; she went over their various systems, their management structure, and their mission statement. She didn’t mention sandwiches until I asked her which one she liked the most. She didn’t mention that the owners traveled extensively picking ingredients at tiny farms and bakeries, or brag about their customer service (their founder wrote a best-selling book about it), or describe their massive mail-order sales, or explain the seminars and tastings from which they generate a substantial profit, etc. In short, she didn’t really say anything at all, and yet the kids around me were taking notes.

That’s the root of the problem. That’s what the business school teaches us to do. Not once has a professor told us to “make great products” or “do something people love.”

Here’s a newsflash: the person was probably talking about corporate strategy, and trying to be generic. Corporate strategy doesn’t necessarily have anything to do with “products you love”, but about taking someone else’s product and maximizing it. It’s like a chess game; you don’t worry about your individual pawns or pieces, per se, you worry about winning the game. So I think maybe he missed the point on this one.

One of his good points comes from examining the depth of his classes:

There’s nothing wrong with introductory classes. Basic concepts, after all, need to be addressed early on. The problem was (a) the lack of rigor: we were taught to “plug and play” numbers (in accounting, too) rather than understand them.

Now I can say that we are rigorous in my program; we definitely don’t teach “plug and play” numbers here. Depth of understanding can help in interpretation. However, at the undergraduate level (and in the beginning of the program, no less) perhaps the importance isn’t always in understanding how the work is done but what the results mean. I see his point, but I disagree with his viewpoint on this one.

Here’s another gem from his rant:

At business school, it seems, bullshit wins.

Again, I’m going to disagree. For very few professions out there is time irrelevant. So, while striving for absolute quality is perhaps admirable, striving to maximize time and results is a even more admirable. In paraphrasing (and loosely applying) the 80/20 rule, if I can produce 80% of the results from 20% of the effort it otherwise takes, then I can actually do a lot more with my time if I let quality slip a bit. It’s not about bullshit, it’s about optimizaiton.

His concluding paragraph, despite some of the quality of his earlier points, proves to me that he’s missing the point:

Mandatory group work teaches you how to manage, and thus it’s at the heart of a curriculum designed to build professional managers. What this really means, though, is that it teaches kids how to assign tasks to people who aren’t capable of doing them, how to schedule wasteful meetings to re-format and explain individuals’ work, and how to make bad and inconsistent PowerPoint presentations. I’ve read enough Dilbert to know that the b-school model of management is accurate, but that doesn’t make it good.

You see, being an effective manager or even leading people isn’t just assigning tasks to people who aren’t capable of doing them. If I go out there and do little more than schedule wasteful meetings, than I haven’t learned what they taught me here. Instead, effective management is about producing great work from good people. It’s about figuring out the best way to do things, not just a good way. It’s about distilling patterns from unrelated facts. It’s about arranging individual resources to produce the maximum result possible, while taking little to no credit for success and all the blame for failure. That is what business school is about, not producing Dilbert-like managers who consume more than they produce.

And that’s why I think he really missed the point.

The semester is starting to wind down and it’s time to register for classes for my final semester. In this last semester I’m only going to take three courses, which is technically part-time but it’s all I need to graduate. I assure you, I’d love to take more but, since I paid to take two courses over the summer, I can’t afford to go full time now.

Such is life.

In any event, the schedule of classes available has been posted. I’ve managed to narrow down my list of classes I want to take to 8:

Strategic Applications
Sales Force Management
Not-for-profit Management
Net Enhanced Organizations
Data Mining
Operations Management
Value Chain Management
Leadership

Now, I definitely want to take Leadership. And, if possible, I’d like to constrain any daytime classes to Tuesdays and Thursdays (so I can do job-hunting stuff the other days.) Finally, and I’m a little flexible on this, I’d really rather not have an 8 AM class since I’m NOT a morning person and I learn better with good sleep.

So what shall I do? It’s a conundrum.

I’m enjoying my public finance class.

We’re learning a lot about the State of Oregon budget process – more than about local or federal systems. This is great for me; I have a real interest in how my state works. Furthermore, since we’re so close to the state capitol, we have access to people (who come in as guest speakers) who really know how this works. For instance, we’ve had someone from the state Office of Economic Analysis come talk to us. We’ve also had a speaker from the Legislative Fiscal Office. These speakers help make real an otherwise merely conceptual topic.

Some of the more interesting points in the class are our discussion of taxation theory; what constitutes progressive versus regressive taxation and the idea of taxing wealth versus taxing income. (For the record, I wholly and completely oppose taxing wealth, which includes the taxation of property.)

I’m glad I’m taking it.

I spent all day in a mock negotiating session today. I was one of a team of four people, and what I learned about negotiation is that there are unreasonable, stupid people out there. People who – when theoretically on your own team – do not seem to understand basic math or be able to clearly communicate an idea. The worst part of this is that these people may someday be in charge.

In my specific instance during all this, I left the negotiation frustrated beyond capacity for reason. There are people on my team that I now know I will never work with, because my interests (win/win scenarios) are not aligned with theirs.

So be it.

A hypothetical that I posed:

“Would you ask someone to pay for 50% of your car so they could use it 30% of the time?”

If you can, I salute you. I can tell you, however, that if someone asked that of me I’d be incredibly insulted. (And let me assure you, we talked about the “zones” in distributive bargaining – those zones being reasonable, credible, and insulting offers.)

Anyway, I’m ready to be done with this class. I’ve learned a lot, but it just cost me a Saturday that was supposed to be an otherwise great day.

It’s time to start playing games. Seriously.

At this point in the semester, most of the work I’m going to be doing on a daily basis will be for simulations. My marketing strategy class will be working with something called MarkStrat. We’ve divided into teams and we will be competing in a strategic simulation as we fight for market share in a growing market, working on innovation, customer interaction, market definition, etc. Thus far it’s a lot of fun, but I also enjoy strategic game.

The other game is SimProject, for my project management class. It’s a project management simulation where groups will be bidding on resources, assigning those resources to tasks, and managing the group while trying to complete the project (and competing against other groups based on total project duration, project cost, and a few other variables.)

Both are going to be a lot of work, but I’m going to do whatever it takes for my teams to win. Not that I’m competitive…