ClickUp is ClickDown

So this is what it feels like without an MBA schedule. December is like thick oxygen in a rarefied January to November.

I feel carefree and in tune with my body. My tell-tale signs of stress have been dissipating.

My mind now is absorbed in arcane and frivolous gymnastics. It has been freed from the rigours of Socratic learning and a load akin to Atlas – the Titan carrying Earth on his shoulders.

My thoughts are engaged with visiting the Neighbourhood Goods Market in Braamfontein, when I am going for a mountain bike ride on the spruit and where to buy tasty mutton for Christmas lunch

I feel rather like ClickUp, which is not up, but down. We are now on ClickDown time. Do not click on ClickUp it is down. Yes, that is exactly how I feel.

See you when ClickUp is up.

See you at GIBS – later.

My non-digital (or analogue) exam assistants

No matter how many 4 hour exams I write I still can’t believe how quickly time rushes by and how completely wasted I am afterwards.

Our Saturday morning was greeted not by a blackbird, but rather by a 30 page case study for our Managing for Results[1] exam.

As my inner reading assistant whizzed through the text and tables, my visual assistant was making mental cross references with frameworks and mental maps.

My most reliable assistant – the horn-rimmed spectacled librarian – went to work looking for the references I had stored in my dusty chambers, or commonly referred to as my grey matter.

Thankfully all my assistants were in attendance and delivered on their job descriptions. There was a clamour as they all fought for my attention, but I managed to stay calm and threaded a semblance of meaning using my rather slow and irascible writing assistant – my right hand.

Corporate Finance on Sunday was an entirely different matter. You can’t find a good assistant nowadays – especially on a Sunday.

The librarian was on a tea break for most of the morning.

The reading assistant – from the feedback I was receiving from Mr Synapse was that he was recovering from “a large night out” – was how he put it.

A mathematical assistant, although summoned, failed to pitch.

And my writing assistant – well this was the worst part – decided to go on a wild-cat strike.

As soon as GIBS allows the iPhone 4S into exams with its digital assistant SIRI[2], I am going to fire all my analogous assistants.

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[1] Managing for results is a cryptic reference to the supply and demand value chain.

[2] SIRI is IRIS backwards

Splodges of wonga

There are currently no claimants in the MBA class at GIBS for 2011 / 2012 for the grandiose titles of “Master of the Universe” or “gnome of Zurich”. But under the expert tuition of Andrew Abdo we are becoming informed and empowered into the world of high finance and how to manage splodges of wonga.
The Corporate Finance course is the last instalment in the trilogy of Financial Accounting and Management Accounting. Numbers are crucial to management success. Numbers are crucial to personal wealth success – ignore them at your peril.

Whereas Financial Accounting focuses on the Book Value of a company, Corporate Finance looks at the Market Value of companies. When a company confronts growth it needs capitals to fuel its assets. This can be done with the following parameters: equity, debt or selling assets. The million dollar question (and sometimes much more than that) is: which mix is the cheapest to attain, while keeping an optimal capital structure?

This part requires circumspect analysis normally reserved for expensive consultants like McKinsey or Investment bankers.  The tools to unlock a company value lie in its future cash flows (FCF) and its cost of capital (WACC). But first the capital asset pricing model (CAPM) must be determined.   Earnings per share (EPS) is also a useful comparison indicator of the current and future earnings of the company.

Now onto the lenders of spondulix – to figure out the bond value, using the face value and coupon rate we need to get the IRR of the future cash flows. The same approach is applied to a simply structured loan or a more complex structured finance offering with a senior and mezzanine facility.

Okay, so now we have got the cost of capital if shares are sold (equity) in the company and we can compare it to the cost of capital to acquire debt. Choices, choices.

The last step is to now get a weighting of equity and debt at the ratio of capital structure needed, or imposed by the market.

In our other course “Managing for results” Dr Helena Barnard took us through the value of the demand and supply value chain. The Nollywood case, about the Nigerian film industry, highlighted how a keystone like Iroko is attempting to become the de facto aggregator and provider of content through YouTube. Another fascinating case was on the product offering by Danone called Danimal to the bottom of the pyramid in South Africa.

It was a tough, learning filled four days on the GIB MBA. I am punch drunk from all the knowledge acquired, and power drunk from all the opportunities these learning’s provide.

Theory of Constraints and the Easter Bunny

After reading “The Goal” by Eli Goldratt I was immediately struck by how meaningful the approach to a steel factory was to solving problems in financial services. To an outsider – someone who hasn’t read the book – a fictitious steel plant and retail banking are poles apart. But lifting up the hood and peering logically at the problem I have experienced that processes all have a constraint, or a weakest link.

http://www.goldratt.com/

http://www.goldratt.co.za
The idea is to focus on the constraint and make it more effective. This can be done by a knee-jerk reaction like hiring an additional resource, or buying a new piece of equipment. A clever way, or a way of not incurring any costs, is to reintroduce an old piece of equipment into the process to relieve the constraint, or at least increase the throughput at the constraint. Another way to improve the constraint is to place quality control before the constraint thereby only allowing good applications, or acceptable widgets to enter the bottleneck. Outsourcing is another great way to relieve a constraint.

The numero uno fact to remember is that the throughput is determined by the constraint. If 10 widgets can go through the constraint, and the next process can handle 30 widgets, the capacity to produce the additional 20 items is lost.

Another eye opener is that a busy factory is not necessarily profitable.  All the resources that are working on work in progress should only be working at the drum beat of the constraint; otherwise they are overproducing stock that will sit idle in the warehouse.  

Dr Pieter Pretorius, a Goldratt disciple, took us through all the assumptions business people make and how we are hoodwinking ourselves by eliminating profitable products because of a fictitious “cost per unit” calculation. He likens “cost per unit” to the Easter Bunny. He says the bunny can be drawn, and can be talked about, but that doesn’t make it real.

This picture is of my syndicate Blue 7 playing a game similar to one written about in the book ”The Goal” for our group assignment.

Over the last week we also delved into the Labour Law Amendments that have been recently repealed by Nedlac. Professor Albert Wöcke, an old trade unionist, gave us a guided tour through this territory.  Dr Mark Bussin, from 21st Century Pay Solutions, came to give us a talk about remuneration for Executives. We learned how the short term and long term incentives are more telling than the base salary structure, and also how state owned enterprise executives are paid on a scale based on assets (under management).

My brain is almost full so I have started to weed out unnecessary clutter. The clutter consists of previous assumptions and bad information.  I am topping up at GIBS with renewed paradigms and Gestalt flips.

See you at GIBS.

 

Exam marks tizz

There are many things about human behaviour that are very peculiar. Here are two examples of some mind-screws; one for sportspeople and the other for MBA students.

When you are told that the distance for a particular cycle race is 100 km a cyclist will expend all of her energy until the finish line with nothing more to give. Strangely enough, if the cyclist was told the race distance is 120 km then a psychological recalibration occurs and a physical effort will be realised where on the mountain-top finish the cyclist will be exhausted, with nothing more to give. Nothing has changed other than an official saying the race is shorter or longer.

In other words, we set ourselves a goal (or have a goal set) and then we go until we reach the goal. If the goalpost – or finish line – is moved we then get ourselves into a psychological tizz – we are mind-screwed.

The MBA example is this: We are told that the exam marks for Prof John Ford's Management Accounting and Dr Peter Tobin's Information Knowledge Management will be available after 4pm on Thursday (The normal waiting period for module results is 7 weeks).  Being human beings we lock in on the 16:00:00 PM (UTC +2:00) [Pretoria, Harare] time.

At exactly 16:00:01 PM (UTC +2:00) [Pretoria, Harare] we log on and can’t find the marks. We do this again at 16:01:41 PM (UTC +2:00) [Pretoria, Harare] and still no marks.

Sure enough the marks appear on my nth logon attempt at 16:09:56 PM (UTC +2:00) [Pretoria, Harare].

As a human being and MBA student I should avoid the exam mark tizz and just logon to ClickUp in the evening with a mug of Horlicks sometime after the 8 o’ clock news. But, no I have been mind-screwed and I will log on at exactly 16:00:01 PM (UTC +2:00) [Pretoria, Harare] – I’m only human after all.

See you at GIBS

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Leadership Metamorphosis

This Saturday the GIBS MBA Blue group 2011/2012 class spent the day with Professor Dave Beaty. http://www.2btassociates.com/pdfdocs/Resume_dtb.pdf

His wisdom and knowledge comes from working in a wide range of different posts including the Pentagon and as a professional golf mind guru. He applied his magic on our class. His wand touched our careers as we unlocked our “Career Anchors”. http://www.careeranchorsonline.com/SCA/startPage.do

He deftly manoeuvred the entire class into understanding the importance of co-operation through his Big Foot/Little Foot game.

We learned about a career mishap that befell on the protagonist George, in our first cartoon case study. The parable revealed layers of learning that had everyone in the class promising to make BIG mental notes not to fall into his “Peter principle” syndrome. It cost him his job. Another insight from the case was “where was management?” while George slid into a management billabong.

This is what separates the GIBS MBA from the other MBA’s in South Africa. We are not stuck in silos; we are being elevated to a strategic advantage point high above the day-to-day management idiosyncrasies and ruts. We are undergoing a leadership metamorphosis.

 See you at GIBS.

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3 Day Champions

The first three day session for Module 3 is behind us. What a world of difference good lecturers make. Andrew Abdo takes the angst out of financial accounting and Adrian Saville is eloquently guiding us though the vagaries of macroeconomics.

With another 4 day session coming up we can expect to become even more immersed in these subjects.

Our accounting preparation included a 10 hour computer based learning assignment from Harvard.  If only accounting had been this well explained in first year varsity. Andrew Abdo then used his experience as an MBA alumnus and training expert to use simple graphical methods of relaying complex concepts.

In our macroeconomics sessions we have been covering case studies from a smörgåsbord of countries including the Nordic countries, the Dominican Republic, Vietnam and Botswana. We are being introduced to the complexities of competitiveness in a country.  How does economic growth affect inflation? Will productivity or technological advances reduce unemployment? Will reducing the M3 money supply reduce interest rates? How are exchange rates influenced by the balance of payments?

There are more questions than answers at this stage, but they are keeping me up at night. Within the next two weeks I will have a framework in which to navigate these waters.  These two subjects are incredibly important in the search of financial enlightenment. Without this enlightenment you may well be a victim of recessions rather than a shrewd champion.

See you at GIBS

Vitalstatistix and Impedimenta

Who hasn’t had a voice, either one’s own or someone else’s, raging at you for not being more ambitious?  In Asterix and Obelix comics it is Impedimenta that nit-picks Vitalstatistix to rise above his station and to observe his rights as commander-in-chief.

On Saturday night I had voices cajoling me to improve my statistics, but impediments got in my way.

Sunday morning was D-Day.

8 am: pencils sharpened and calculators at the ready.

Try difficult questions on for size. How about T-statistics for vital statistics? And what about probability … I say it was probably a robbery.

The knowledge we started Statistics 6 weeks ago with and what we had on Sunday were two different views of the data world. Sunday was the pinnacle of our data omnipotence.

We were confronted with mountains of data, stacked in bits of bytes.  We slowly sifted through the data stack. We prodded at first and then unpicked, unravelled, transformed and doctored the sample data.

At 10:55 am on Sunday morning we had a presentable decision: Statistics is vital.

See you at GIBS

Pink Boats and Sisonke Stars

Our case study on Sunday afternoon featured the cool Scandinavian clothing and shoe retailers called “Moods of Norway”. It was a well picked topic for the hour. The company exuded fun and used a variety of novel branding initiatives like buying a boat and painting it pink. They would then sail around the Norwegian coastline popping champagne at every opportunity to spread enthusiasm for their brand. It worked. They have become an iconic brand in their home country and even supply the Norwegian police outfits.

Dawn Nathan-Jones the CEO of Europcar South Africa highlighted the green thread that runs through her company. Europcars “moments of truth” span an estimated 700 touch points with customers. Another dimension of Europcar was how they have created an internalisation program called Sisonke – a Zulu phrase meaning “we are together.” This is a customer centric company that actively looks for new market segmenting opportunities.

Our final session of Analytical Tools and Techniques (aka Statistics) showed that we have come a long way in our understanding of this enigma.

Sometimes one has to be cruel to be kind. Wee-hour assignments forcing us to practice our new techniques immersed us in the material. We came out the other side better for it.

Exams and assignments are now the buzzwords.  

See you at GIBS.

Definitions

Statistics – it is a riddle, wrapped in a mystery, inside an enigma

Regression Analysis – study of how far an MBA student can regress in statistics

CHAID dendrogram – a highly visual and cascading decision tree. (The CHAID technique was developed in South Africa by Gordon V. Kass)

Sisonke Stars – Europcar staff

p-value - is the probability of obtaining a test statistic at least as extreme as the one that was actually observed, assuming that the null hypothesis is true

t-statistic – about 45% of the Blue group MBA 2011/2012 drink tea

Grandmas’ Waffle – dough-based cake or MBA students’ unprepared reply

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A Tsunami of Symbols

On Sunday evening when all was said and done there were a number of MBA students that felt as if they had been pummelled by a Tsunami.

When the going gets tough the tough go shopping. So we went shopping on Saturday.

Our task set by Nicola Kleyn was to ascertain the validity of the statement: “World class service in Jozi – myth or reality?”

Our group chose Cramers Coffee on Main Street in Jozi. We were delighted with the results. The resident Barista called Lekunutu said: “I pour my heart out in every cup.”

And he did.

On top of my smooth, creamy and flavourful latte was the shape of a heart.

Lekunutu defined the Cramer experience as “to be frozen in time, to be transported to a safe oasis.”

Cramers Coffee was a wonderful experience shaped with superlative, world class service that exceeded expectations.

Down the road on the way to the Carlton Centre we found another coffee shop. It was chalk and cheese. Coffee is coffee – right?

No it isn’t.

Our coffee maker was not well versed in the art of coffee making. The experience was average. It felt unnatural, replicated, mass produced and un-special – in a word, forgettable.

Back in the classroom things were not as clear cut. The symbols of the Mean, Mode and Median were clashing with the Product, Price, Place and Promotion over four days of rigorous learning.

The collateral damage is still to be defined. However, the devastation was apparent.

Definitions:

Throw the baby out with the bathwater – what SAB did with the Lion brand

Monster – the Afrikaans word for sample. May be used interchangeably in Afrikaans or English

Hypothesis testing – to be defined

Marketing – in the process of being defined

Normal Distribution – an abnormal invention that defies meaning

Mean – an invention that obeys normal logic

StatTool - a swear word for 20% of the class who couldn’t install it on their laptops

See you at GIBS

Sore wrists and beautiful minds

Any exam where callous-free knowledge workers need to write frenetically for 3 hours is unfair. But we have been taught life can be unfair on this MBA course – so we get on with it.

The Human Performance and Behaviour exam this last Sunday had the GIBS students scrawling over 15 pages in 180 minutes. Some of us hadn’t written an exam for a decade. Nerves and lack of wrist strength played on everyone’s minds. Three questions in three hours.

 On your marks (hopefully top marks), get set (open book test equals tough questions), go (hold on, what is this first question all about – please Ma’am may I have another test paper – this one is too difficult).

Saturday was the Microeconomics paper. In a space of 5 weeks the entire class has become mini-Keynesians and we all developed “Beautiful Minds”. Well finding the Nash equilibrium was tough – and was there or wasn’t there a Prisoners Dilemma? Now when I see the Libyan oil price shock I have mental Supply and Demand shifts springing around in my head. OPEC does this, Egypt does that. Demand curve shifts. Is OPEC a cartel or not?

In a strange way all this is put to bed. These two subjects that we snuggled with for over 5 weeks are about to drift off. On the cold light of this Monday morning the twin subjects of Marketing and Analytical tools and techniques has become top of mind. Is my wrist ready for this?

See you at GIBS

Sunday Theatre

A full matinee of videos and live theatre is not what you would expect from GIBS – even on a Sunday. The trick was that it was us – the students that made the performance. Each of our  10 syndicates expertly crafted a 15 minute production showing various HR issues for Prof. Margie Sutherland.

Our topic was “Challenges in implementing Employment Equity in your organisation.” Dipping into our toolbox of theories and models we used Pless and Maaks’ 4 stages to a culture of inclusion as our main approach to solving EE.

What made the afternoon special was that there was a growing camaraderie in the class as we each peeled back layers of our characters. Professional actors and motivational speakers have it tough. But it didn't take us too long before we all packed a powerful performance.

Mike Holland finished up our Micro-Economics course with the good news that he will schedule a review session next week off his own bat. Wow, that is a remarkable act of kindness.

See you at GIBS

Algebra, Royalty and Identity

This MBA is demanding, not only intellectually, but also inwardly.

In one day of class the students from GIBS 2011/2012 visited South Africa’s infamous death camp Vlakplaas, and then in the afternoon we were swathed in algebra around the price elasticity of demand.

I say demanding because no matter how you have sheathed yourself from the past or prepared for the MBA, you will feel like you have toppled out of a washing machine – you will feel groggy and disoriented.

In a debriefing session our class got involved in some metaphorical statue making. Two groups made human statues of their depiction of the state of South Africa. Not only was it interesting to freely discuss our interpretations, it was also a vehicle for us to unload our perceptions in the classroom in a non-confrontational way.

During one of the classes an anthropologist/project manager from the Royal Bafokeng Nation spoke to us about her involvement in the project. It was a fascinating hour and a half. We learned about the education projects, feeding schemes and the King’s vision on the 300 000 members of the tribe. The Royal Bafokeng tribe is a nation within a nation.  http://www.bafokeng.com/

Some of the practises and methodologies working well here, like the online status of projects, could be replicated in government.

Before you know it another 4-day session of modules has gone by.

The goal now is to complete the individual and group assignments. It is hard enough streamlining a group of seven individuals. I can almost fathom how difficult it is for a King to lead a nation of 300 000.

See you at GIBS.

Genesis Wizards

The first four days of the Genesis course have gone by in a whirl. We have been dazzled by Lyal White on his knowledge of Dynamic Markets, cajoled into insights by Terrence Taylor and video-taped doing hatchet Limpopo Aid budgets by Jonathan Cook.

Not all of it has been pretty. An “Amazing Race” simulation in Johannesburg brought out the best and worst in the MBA first years. Most adopted a win-at-all-costs approach, while others quite frankly didn’t know what they were doing.

See facebook for more pics  http://www.facebook.com/GIBSsa

A few insiders have given stories of near nuclear fallouts in syndicate relationships, while others have moulded firm(ish) bonds.

Like in the movies where the protagonist is placed under pressurised situations in an escalating fashion to reveal true character, so too did the GIBS MBA class of 2011 “Amazing Race”. Our “representatives” were replaced by our more revealing true-selves. A scary image.

Some of the second years came to speak to us today and we learned some new jargon:

Ants in your pants – first year job move

Wizards and lizards – those that are subject matter experts, and those that are not

Date night – for single student this means staying at home eating dates. For students with a partner this means setting a date once a fortnight to get some love back into the relationship.

See you at GIBS