The ROI of an eMBA

Why on earth would you do an MBA - well, that's for me to know and for you to discover. We will be dealing with modules such as accounting, finance, business economics, technology, marketing, operations, managing change,  strategy and entrepreneurship over the next two years.  That's long you might think but actually, it's not.  Not if you look at it from the perspective of a lifelong learning experience.

Learning has always been one of the fundamental drives in both my personal and professional lives. I do not see this MBA as an assignment but as an experience.... a journey with no destination actually.  And because there are so many beautiful sayings with the word journey in it, I want to share some of these with my fellow students.  We're seventeen of us - most are in their early Thirties, like Soulsister - mother of two, sings jazz and works in the hospital.  Then we have Boyscout - works as a sales engineer and is a natural born leader.  Oh yeah, then there's Boy Wonder - who already managed an internet company at the age of 12 and is the youngest in class (roaring Twenties).  Here we go with the first batch of "journey" mantras that you can use for your next reflection moment:

Life to me is a journey - you never know what may be your next destination. (D. Russell)
The journey of a thousand miles begins with one step. (Lao Tzu)
Every day is a journey, and the journey itself is home. (Matsuo Basho)

Now, whom else have we got in class? Well there's Donald trump, works as a project manager in the health care industry and loves to cook. Mr. Oiseau is a lobbying ornithologist - early Thirties and quite introverted (but we're working on that). Beckham works in insurance and is a passionate soccer fan.  Then there's Miss Moneypenny, a caring mother of two who's always in for a dinner party. I mean, in the possible event of us throwing a party: we have cooks, musicians, party makers and cocktail shakers - that's gonna be a real bash.

And if we ever get on the wrong train, we still have Dr. Phil, our trusted adviser and counselor - married with children and whose mantra always makes me laugh: "a dirty mind is a joy forever".  Now, if you ask me - this is the ROI of my MBA - it is not a monetary thing, it is not a prestige thing, it's about going with these people on a journey where we focus on the journey, not the destination. Joy is found not in finishing an activity but in doing it. (Greg Anderson).   Remember that we are not human beings on a spiritual journey. We are spiritual beings on a human journey. (Stephen R. Covey) and to close with the famous words of philosopher Captain Jean Luc Picard: Time is a companion that goes with us on a journey. It reminds us to cherish each moment, because it will never come again. What we leave behind is not as important as how we have lived.
And now it is time to boldly go where no one has ever gone before: the first take home exam on Integrated Performance Management, BSC, Management accounting and control.... Beam me up Scotty.

A case study about the case study

Today the penny dropped - the reason why we use the case study method in the program is to make you curious. It is supposed to light your fuse and wonder which solutions are out there to solve the mystery.

We had to do two case studies for Integrated Performance management before the end of this week: Paper & Carton versus Detroit automobiles. The case study method was in fact introduced by Harvard Business School some time ago. It usually starts with a 2 to 6 pager you have to read on a given case - it is well built up, structured and has exhibits. Either you are to do the assignment yourself or in group but the purpose is to solve the problem before you really know how to solve the problem.

Case studies urges you to discover new ways of looking at information, facts or data. In fact, the student is faced with a murder mystery like situation and first has no clue who-has-donnit. Then you start analyzing, let intuition play a role, revive past experiences, talk to some people, apply some common sense, look for links and whatever is left as a solution - how irrational it may seem - is the solution.

But sometimes the course does not end in class - you have to put in some extra study hours at home to read and work on the cases yourself. Depending on the subject this might take from a couple of hours to a full day of hard work. Now, you still have your fellow MBA students as a safety net. See it as a buddy system - get in some feedback from the group, find the expert... leverage the knowledge of the crowd seems like an appropriate statement here. It's just like in the corporate jungle: you need a network that you can rely on - and on the flip side a network that can rely on you - it's all about reciprocity.

Now our class of seventeen is a network that is mainly composed of decision makers - in fact, it does not matter if it is on operational, managerial, executive, IT, sales or whatever level - we all have to take decisions in our daily professional lives. But nowadays we work with teams to analyze situations, dive into cases and prepare decision making. We don't do solo-slims anymore... we have to look for synergy - ever since ancient Greece, syn-ergos, συνεργός i.e. synergy has stood for: a situation where different entities cooperate advantageously for a final outcome. Our Greek philosopher friend Aristotle summed it up pretty well in 2300 before Google when he stated "the whole is greater than the sum of the individual parts".

That's what the case study method is all about - Ground rule # 4: case studies are about putting the individual parts together without the manual. And sometimes this implies old-fashioned RFTM work and do some self-study. This week, I had transfer pricing, incentive-based transfer pricing, marginal costs, optimal quantity, allocation of indirect costs, responsibility centers, equity considerations and the holy grail of management accounting: ROI and Economic Value added. Mighty residual if you ask me... but Yes - I get the point - I now see how I should investigate my murder mystery at Paper & Carton and Detroit automobiles! And Yes, my first ideas were pretty much aligned with the theories - it only needed a couple of ratios and formulas to calculate it - but hey, that's what Excel is for right?

Mumbo jumbo in the basement

Right, will have to put in some extra study hours and home work for the module on Corporate Performance. Frankly, I was a bit worried to see this as the first track on our 2-year agenda. On the flipside, this course is taught by Dr. Professor Werner Bruggeman who has a very refreshing approach to making you understand the ins and outs of management accounting. First, You have to see financial accounting, management accounting and long-term profitability management from a holistic point of view.
In this particular case, financial accounting is like the building plan of your house: in theory and on paper it looks fine.  But when making short & long term decisions, FA cannot deliver the intelligence required to making the right decisions from a profitability point of view.

Mumbo jumbo in the basement

Management accounting focuses on getting the right information to the right people at the right time. Managers and CEOs make decisions based on a number of factors, parameters and hypotheses.  Having the right data in terms of profitability, overhead costs, cost breakdown are essential for good decision making. The question whether you want to (dis)continue a certain product or service requires an understanding of the contribution management fundamentals.

Contribution management is the mumbo jumbo that managers do when making short-term decisions.  They look at hedging the overhead costs of the organization with incremental orders.  Thus they can consume unused capacity at a marginal cost: the variable cost.In order to reach your full capacity potential, you might want to hire some black-belt ninjas that deal with bottlenecks inside your organization.  This "Theory of Constraints" was introduced in the Seventies by Goldratt and focuses on optimizing your production capacity. Obstacles along the road (overbooked people, jams in the througput, means,...) are skillfully removed in order to maximize your capacity.

This mumbo jumbo can go on until you have reached your full capacity.... producing more will become counter-productive.  You need to make considerable investments to  grow your capacity but your overhead costs now grow exponentially... Time for another approach I'd say.

 No ABC without technology




Now, if you want to optimize and sustain long-term profitability, you're talking about Activity Based Costing.  The principle behind ABC thinking is simple: allocate a ratio or percentage to each of your activities.  The grand total of all activities can be expressed in hours or man days  and that's the total (operational) cost.  Now each activity will account for a given percentage of the overal cost et voilà: We have a cost per activity.  That's OK if the process is straight-forward and you don't have Murphy wondering around the work floor.

Complex organizations rather opt for a time-driven ABC approach where you can include multiple parameters  into the cost equation. These parameters are called drivers and they... euhm drive the overall cost per process, product or service up or down. This approach allows to identify new (structural) bottlenecks or efficiency accelerators.  The problem I see with ABC is that it takes more than two to tango: you need ERPs, CRMs, BIs, BSCs and CIOs; If the going gets tough, the technology has to keep on going; There is a critical dependency on several core IT systems to make it all work - and still has to be easy on maintenance. Not easy of you are dealing with legacy systems or a lack in web service capability.

But then again, if you want to know: who is your most profitable customer, which products or services yield high margins or what is driving corporate overhead costs, organizations need Aayooh - technology.

I think that I have a grip on it: there's full costing but that's not the same as pricing, you have variable costs that can be fixed and fixed overhead costs that become variable. And in the long run, you end up with a whale in your showroom: Aha, so that's what management accounting is all about - if we can't convince them, we'll confuse them.

Will the real Jean Jacques Cousteau stand up!

Anyway, how I see it, optimizing profitability is for sissies. A true entrepreneur explores new worlds - these Jacques Cousteaus are constantly on the outlook for greenfields, unknown territories and blue oceans. They don't settle for a marginal profit increase, they go for the big kahuna with their innovative service offerings and unserved audiences. So ground rule #3 seems evident: Would Jean Jacques Cousteau take the plunge into the ocean or would he sit back and stay on board?

Why you should not worry and be crappy

Ground rule #2  - I suggested to work around two mantras for my professional and personal objectives.  Mantras are good to keep the focus and visualize your goals. For my personal life I have borrowed Guy Kawasaki's "don't worry, be crappy" to remind me that sometimes good, is good enough - as long as you keep churning yourself. The mantra driving my professional objectives will be Seth Godin's "small is the new big" - in essence, remain an independent thinker, survive the journey in the corporate circus and finally find my blue ocean... Who can do better?

Master in (Monkey) Business Administration.

Last Wednesday, I started my life-changing journey together with 16 fellow students. With these people I will spend the next two years of my life learning, sharing, debating, working. No wonder that the first module of the program from Group to collaborative Team focused on two aspects: Self-awareness (know thyself) and learning communities.
Although most people think that an MBA course is a rather individual track, our school pays a lot of attention to the community aspect as well.


In other words, the group you start with is the same group you cross the finish line. The group is our safety net when you need a sparring partner or buddy. But before you know how to handle the group, it's rather important that you also know how to handle yourself. That's why we had to fill in this Myer-Briggs test. It's a classic test for assessing your personality and personal preferences in 4 domains:

1.Where do you get your energy from i.e. are you an Extraverted or Introverted personality
2. How do you prefer to take in information or do you work by iNtuition or by Sensing
3. How do you make decisions: based on logic Thinking or on personal emotions and Feelings
4. How do you deal with the external world: do you Judge or do yo prefer spontaneous Perceiving

Of course, it's not an either/or story but (a very accurate) attempt to categorize your personality along these 4 main axes. Now my MBTI is ENTP so I prefer to be Extraverted, follow my iNtuition, Think and Perceive.

The good thing about the test is that it also helps you to understand the dynamics of dealing with the other 15 MBTI types. Consequently, it does not only increase your self-awareness but also the community-awareness. Now through individual and group coaching we will be helped to see this as the core of our personal and professional development plan.

What I take from the test is that I am Extraverted Intuition with Introverted Thinking and can be described by tags - and I quote - like "creative, enterprising, theoretical, conceptual, curious, adaptive, challenge-able, assertive and outspoken". Fine, been there, seen it, done it... but the test also tells me how I can be perceived by the outer world and this is where it really gets interesting. "If I do not find a place where I can use my gifts (...), I tend to become rebellious, combative, scattered and become a (nasty) critic".
In respect to my Feeling and Sensing counterparts, I forget to listen, show empathy, ignore other opinions and ideas. In their eyes, I can be perceived as excessively "challenging and stimulating" or coaching on steroids.

If there is one take-away from this test, it is that in relation to others... there is still room for improvement.
I was wondering if I would share these results here but then again, if you want to survive an MBA, you have to know these things. Be honest with it and deal with it, otherwise there is absolutely no point in doing such a program. I think this is ground rule #1 of an MBA: know thyself and let people take part in what's going on in your little own arena.

Meet Miss Havaianas

Now, when I write about fellow students - I have decided not to use their real names for the sake of confidentiality. To make the dynamics work, we will read sensitive business cases, discuss professional hurdles and personal feelings - so we have agreed to subscribe a psychological NDA with the faculty and our fellow students. However, I still want to share personal highlights, reflections, take-aways, conversations and moments with the reader. These will definitely involve other people from my tribe so have thought of using Pseudonyms. In the following chapters, I will introduce some of the main characters in my story including Faculty, Staff and Professors. The latter will be quoted by their real names as all of this information is publicly available.
This is how the system works: in the following 6 months, I will work closely together with Captain Starbucks : male, early thirties and export manager for a coffee company. Then there is Miss Havaianas; 32 and Brazilian with an impressive knowledge of Dutch and four months pregnant. Finally we have Zappos, father of two, engineer and working as a project manager for a Swedish manufacturing group. After six months, you form a new group and get three other working mates.

From November onwards, we will be coached by Peter, Swedish and father of two who lives in Brussels. Peter will be my personal coach for two years and I am looking forward to sparring with him. He will also help us through group coaching and surprise surprise, we are gonna mix and mingle because this group is based on a fair distribution of the MBTI types. So we can learn from each other: the introverted from the extroverted and vice versa.
This learning group consists of 6 students and is composed of Miss Pixar, early thirties, married without children and GM, Iron Man who is also in his thirties and a real sports-addict. Then there is Furry Coat, an ambitious, single and sharp just-turned-thirty go getter. I like DC Comics, he is also independent, clever and likes to write and draw. Zappos is also in the group so seems like we'll be spending a lot of time together. Finally we have Mr. VC - late thirties and entrepreneur. Mr. VC is looking to invest in companies and make the jump to the next curve in roughly ten years. And I believe I have not introduced myself yet: I am Monkey bizz, born in the Seventies and ready to make the jump to the next curve: become a Master in (Monkey) Business Administration.

There is always a magical quadrant...

Just did the Myers-Briggs test and found it quite amusing. In a way it polls your "average feeling/acting/thinking" abilities... but then again, I wonder, aren't it the exceptions to the rule that they are after?

I mean, You can be sociable and talkative but at other times prefer to be lonesome and just by yourself. There are times when you like to get things done in an orderly way and times when we just want to go with the flow. There are moments when you want to invent and situations where you want to build. Everybody will recognize these "dual" feelings when dealing with people, situations and moments.

In the test, you have to slalom around ninety personality questions and at the end of the parcours, there is one more question before you hit the finishing line:

Would you have liked to argue the meaning of
A. a lot of these questions, or
B. Only a few

Bloody yes that I want to to argue the meaning of A. a lot of these questions.... It's all about context and that's what I don't find in the MBTI - the survey centers on how you perceive yourself vis à vis others, the world etc.
Now, On the brainoids site, I found a "magical" quadrant, mapping out the different MBTI types into four colors read segments.
The upper right blue quadrant appeals most to me.. guess because these are more right-brain thinking types although can't seem to place the Field Marshall in here.
But types like inventor, architect or mastermind do appeal. So curious to hear whether it is going to be a blue day tomorrow... will keep you posted.

Myers-Briggs and yourself

On Wednesday 7 October, we start with module 1 of the MBA Class: the objective of this module is "To accelerate the process of creating a group of participants committing to supporting and enhancing the coming learning journey." One of the topics that day is Myers-Brigg. I remember having done this MB test a couple of years ago when doing a "Manager for Managers" course at the ING Business School. So what's the fuzz about this Myers-Briggs test? Well, quoting the official website:

The purpose of the Myers-Briggs Type Indicator® (MBTI) personality inventory is to make the theory of psychological types described by C. G. Jung understandable and useful in people’s lives. The essence of the theory is that much seemingly random variation in the behavior is actually quite orderly and consistent, being due to basic differences in the ways individuals prefer to use their perception and judgment.

The questionnaire basically centers on 5 questions:

1. Favorite world: Do you prefer to focus on the outer world or on your own inner world? This is called Extraversion (E) or Introversion (I).

2.Information: Do you prefer to focus on the basic information you take in or do you prefer to interpret and add meaning? This is called Sensing (S) or Intuition (N).

3.Decisions: When making decisions, do you prefer to first look at logic and consistency or first look at the people and special circumstances? This is called Thinking (T) or Feeling (F).

4.Structure: In dealing with the outside world, do you prefer to get things decided or do you prefer to stay open to new information and options? This is called Judging (J) or Perceiving (P).

5.Your Personality Type: When you decide on your preference in each category, you have your own personality type, which can be expressed as a code with four letters.

After filling out the survey, the data is translated into 16 personality types of the Myers-Briggs Type Indicator® instrument.

Me and my fellow MBA'ers are to take the test this weekend - the result will be discussed I guess on Wednesday but I predict that my personality will be something like EIFJ:
- Extraversion
- Intuition
- Feeling
- Judging

I'll post the result of the tests later on next week - let's see how self-aware I am.