A weekend of Contrasting Viewpoints

Our first weekend back in the final semester was a showcase of contrasting viewpoints, and some very dire predictions.

Our first session was lead by John Allison, Chairman of BB&T bank. Mr. Allison is now part of the faculty at the WFU Schools of Business, and his talk was on leadership, focused around the 10 core values that he used to lead BB&T. Well known for his affinity for the lessons of Ayn Rand's book Atlas Shrugged, Allison talked about how these values were founded in philosophy and economics and how they guided BB&T to be one of the few US banks that did not "require" TARP funding from the US Gov't. Not only did Allison's talk focus heavily on the strengths of market-based economies and capitalism, but it also highlighted his viewpoints on the errors made both in the present and the past by the Federal Reserve. He spoke about being on committees back in the late 1990s and early 2000s that highlighted flaws in the concept of "expanded home ownership", but he was unable to convince Congress or the Federal Reserve to modify their policies. He also spoke about recent speeches he gave at the Chicago Federal Reserve where he mathematically proved that the US will be bankrupt by ~2025, unless major changes are made to the structure of the US economy.

Our next set of discussions and viewpoints came from our Management Practicum on Environmental Sustainability and Renewable Energy. This session did a pretty good job of dividing the room between "it must be done, it's our future" and "it's too expensive, even though it might be needed". Using a framework from the following books, we began to walk through the challenges, opportunities and existing approaches to the US energy economy.

• Natural Capitalism - Creating the Next Industrial Revolution
• The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability
• Break Through: From the Death of Environmentalism to the Politics of Possibility

Environmental and Energy Sustainability are difficult topics to discuss because not only are they extremely complex technologies and economic models, but they are charged with personal emotions and MBA-learned skills about finding costs (usually near-term costs vs. long-term TCO). I've argued before that it involves massive scope that needs better communication and vision to be successful. And I'm also learning that it very much will require a shift in mindset from Costs of Acquisition to Total Costs of Ownership and Impact. The latter is something that I'm very familiar with from selling large-scale technology solutions in the face of rapidly commoditizing computing devices. And of course all of these discussions were had under the guise that we're reached the level of "Peak Oil" and that many natural resources on earth could be near extinction levels by the end of the 21st century.

Saturday's classes were a contrast in management and leadership evolution between large corporations (Leading Change course) and start-ups (Entrepreneurship course). Using the 8 step framework laid out by John Cotter, we looked at how leadership skills align to different types/levels of changes within large corporations, and how leaders can adapt their skills to these various changes. This framework served as an interesting contrast between larger corporations that often struggle during times of change because they expect their managers/leaders to adapt to ay type of change, and the skills required by start-up entrepreneurs in our Entrepreneurial Essentials course. While it may often be a VC firm that pushes leadership changes at start-ups as they grow (ie. bring in an experienced CEO/President), this seems to better align to the concept that not all leaders have the skills to manage a company through all types of changes. It will be interesting to explore how successful corporations are able to create leaders with these skills, or how they transition in new leaders as the change-management requirements shift.

All in all, it was a very full weekend of new ideas and intense discussion. There is not going to be any let-up in this final semester, and I expect the overall level of discussion to rise quite dramatically as we find the intersections of many of these important topics and how they will shape our world over the next 5, 10, 20 and 50 years.

1st Semester Summary - "The Numbers Classes"

"So sayeth the data" could easily be the mantra of any MBA program, and for good reason. While previous generations of business had their fair share of data to collect and numbers to crunch, today's world of data has exploded with the connectedness of networks, computerized analysis and a willingness of companies to share their data via APIs (Facebook, Twitter, Google, Yahoo, Amazon, etc.). But behind all of this data analysis are still the fundamentals of Financial Accounting, Quantitative Methods and Managerial Economics. These three courses make up what I called "The Numbers Classes" in the 1st semester. For most MBA students, these were either love or hate classes, depending on your predisposition to mathematics and problem solving. I tended to follow more on the love side of the spectrum, although I will deny all claims to "love" accounting...it's a black magic that still leaves me scratching my head.

Without going into great detail on these classes, several themes and lessons did emerge from the coursework:

1. There are lies, dam lies, statistics and then there is accounting. For anyone who believes that accounting is a cut & dry, boring, purely numbers crunching exercise is sorely mistaken. As we've learned over the past 10 years, accounting can make or break companies and economies if not understood and monitored properly. It is a science that is grounded in principles and rules, but the shades of grey between those two is enough to fill a 64 box of Crayolas. For managers at any level, it is critical to understand how your company manages their accounting, and how your work impacts the accounting and results of your business. It was incredible to watch all the subtle ways that Balance Sheets, Income Statements and Cash Flow Statements could be affected by decisions that could be viewed as proper or improper, depending on which shade of grey-colored classes you happened to be wearing that day.
2. Anyone can generate or collect data, but only those that can use it to communicate important concepts or make critical decisions will ever be paid to analysis that data. Standard Deviations, Normal Distributions, Probabilities, Pricing and Stocking via Critical Fractiles, Confidence Intervals, Variance, Regression Analysis - all of these quantitative methods can either make your head hurt, or make you appear to be a genius when trying to analysis the data related to your business. More than anything else, Dr. Boone's course provided an outstanding introduction into critical thinking.  Considering how complex and critical quantitative analysis has become in modern business, I actually wish this class had been slightly longer so we had time to cover some of the more complex topics in more depth, but for now I feel like I have enough of a foundation to apply to the rest of the courses in the program.
   
3. While every manager would probably prefer to take a long-term approach to their work, the reality is that much of our work is short-term and succeeds or fails based on our ability to live "on the margins".   Managerial Economics provides an alternative look at the data and accounting for business, by looking at what marginal value, cost or utility our next decision or action will create.  For some people it seemed like a way to manipulate decision making because it didn't always deal with real costs or revenues (just the next cost or revenue), for for others it provided a clearer picture of how to analyze the options between decisions.  The techniques learned in this course are definitely something that we'll build upon in later classes. 

No matter how much anyone wants to talk about vision, leadership or strategy, the fundamentals of any MBA program (or analysis) is the data.  It provides a foundation from which to look at both sides of a decision, as well as to create relative comparisons vs baselines, history and predictions.