Thursday 25 January 2007

Return on MBA Investment

This morning Corey Billington, in our first Operations class, shared his experience on reducing Inventory Driven Costs, a term he coined while at Hewlett Packard. It became clear to me while I pondered the effect of time on cost that IMD candidates must be particularly economically rational. Unlike MBAs at other schools, we like ‘pain’. Our pleasure is not in dining in chateaux, like our contemporaries at Club Med, Fontainebleau. But it all makes sense.

At the start of the course, somebody claimed that we were paying CHF 25 per hour for the pleasure of being here. I guessed that this figure had been arrived at by dividing the cost of the course by 8 hours of lessons per day, 365 days the year. If we deduct the days when we are officially on holiday, it comes to CHF 31. So to derive the best return on our investment, we need to work as many hours as possible. Working for 365 days, 24 hours a day, gives us a very reasonable cost of CHF 8.56 per hour.

So it is that, after completing a set of annual accounts for a fictitious manufacturing company, it’s 10pm and we’re just about to launch into discussing the case of a bearings manufacturer in preparation for the marketing class tomorrow morning.

What’s not clear is if the sleeping heads in the front row this morning were suffering the results of working late or…

Wednesday 24 January 2007

Winter hits IMD

In a quick break from this morning’s class on ‘leading people in organisations’, where I’ve discovered that my main motivation is ‘Power’, followed closely by ‘Autonomy and Growth’, I’m taking the opportunity for a quick update...

The storm that struck northern Europe a few days ago has finally reached Switzerland. At last, the snow is coming down. My car this morning had about 10cm of snow on it. It’s really winter now and the temperature is dropping. Fast. Minimum forecast temperature in Geneva for Friday is -21C! About -10C during the day.

This is great news for the many ski resorts in the area. It’s clear that the Christmas holiday season was bad for all the businesses whose livelihoods depend on 4 or 5 months from December to April. With little snow on the slopes, many people chose to cancel their trips to the mountains. Many of the pistes have been brown for much of the last month. For day trips, it’s fine. We’ve been up to Verbier a couple of times over night and found enough decent snow to have a good time.

Tonight I’m meeting the start-up company that I’ll be helping over the next 5 months . I’m not sure what they do - other than that it’s a hi-tech company looking for US$5m - are what they want from our little group. However, they are going to get some 500 hours of help from 5 IMD MBAs. For free. We have about 35 years’ experience between us across a number of industries and disciplines.

The start-up project, just one of the assignments keeping us in the ‘Dungeon’ every night till midnight (or so), was one of the main reasons why I chose to come to IMD rather than take up one of the other offers I received. The school’s strapline is Real World. Real Learning. It’s cheesy but true and a clear differentiator.