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…