With the second to last installment of my Condensed MBA series, we move on to the second year. If it seems like the posts are heavy on the first year, that’s because the full time MBA tends to skew that way. At BC, we moved from quarters to semesters and from daytime to evening classes. For many, that allowed them to work either full or part time and for others it opened up time for the job search or to participate in extracurriculars such as my pet project the BC Grad Tech Club. Still however, there was a lot of learning that went on and, as always, I have documented my take-aways here. (If you missed my summaries of the first year courses see parts one, two, three, and four or a shortened version of the full first year on Linkedin.
Second Year: First Semester
For most marketing MBAs the end of first year means you never have to take a finance class again. For me, however, I finished first year feeling that I had not yet developed the strength in finance that an MBA ought to exhibit so I enrolled in Corporate Finance. It was certainly the right decision and I left the class with a couple of key take-aways:
- What is a company’s valuation actually supposed to represent? Whether it is the market cap of a public company (aggregate value of outstanding shares) or the estimated valuations that underlie investments in private companies, it is easy to talk about what a company is “worth” without actually being able to clearly articulate what that means. For me, drilling home the concept that the companies value represents the monetary value of its tangible and intangible assets AND the present value of the aggregate amount of money it will generate in the future was revolutionary. Understanding that last factor and what goes into calculating it (risk, discount rate, etc.) helped clarify a concept that had previously seemed rather convoluted.
- In any finance event, over-communicating your reasons is key- Whether it’s buying back shares, taking on debt, or issuing shares every move you make will send a message and if you aren’t clear about the why, investors will infer what they want. In fact they will probably do this regardless, but the more guidance you can give, the better chance you have of preventing misinterpretations. For instance, investors will almost always interpret a new share issuance as an indication that the management thinks the stock is overvalued. If you are going to issue new shares for any other reason you MUST be very clear about the why and even then you will see some drop in share price as not every investor will trust that you do not believe the stock is overvalued.
Analytics and BI
This class could just as easily be called working with Big Data and was led by one of the industry’s experts, Prof Sam Ransbotham. We covered a ton of ground but there are a couple things that really stuck:
- Moving beyond spreadsheets- I have done a decent amount of data analysis in the past but most has existed in spreadsheet form. With larger datasets, however, this simply isn’t possible. Instead, we rely on command based tools, in particular R, to crunch the numbers and tell stories through statistical analysis. Manipulating data without actually seeing it took a lot of getting used to, but once I got comfortable, it opened up a world of possibilities in data analysis.
- Data visualization is crucial, but beware of being unintentionally misleading- Technology and design have advanced so quickly that almost anyone can produce pretty stunning charts, graphs, or animations with almost a moments notice. The problem is that most of the best looking options can misrepresent the data or imply a message that is simply not true. This article, does a great job illustrating some of the cardinal offenses. Needless to say, I cannot make a chart without thinking of this class.
Customer Relationship Management
Yet another example of the high caliber professors we were lucky to have at BC, Kay Lemon really knows her stuff and managed to keep us all awake and engaged from 7-9:30pm on Monday nights (even when MNF had a serious effect on my fantasy football team Wilfork’s Touchdown)–now that is a feat! We covered a lot of ground in the class, but there are a few things that really hit home for me:
- Understanding the Customer Decision Journey is Crucial! Sales today are no longer linear, instead, they are cyclical and require a relationship that starts long before the point of purchase and continues well beyond the sale. Understanding that every interaction the customer has with your company or brand is a touchpoint and that certain touchpoints are more important than others (critical touchpoints) allows you to focus resources on the highest impact areas to create loyalty loops and happy customers that keep coming back.
- Customer Lifetime Value- This metric involves estimating the total amount that a customer will spend over their entire relationship (lifetime) with the company, discounting it to its present value, and subtracting the cost to acquire a customer. It takes some work (and some assumptions) to arrive at this value but understanding it helps to make tough decisions about which customer segments to target, what tactics, to use, and even what pricing makes sense. It is a tremendously useful framework when making long-term strategic decisions, and a concept I have thought a lot about as I launch Radici Travel.
- Reducing variability of demand: the secret strength of loyalty programs- I have always thought of loyalty programs as ways to reward customers for using your products or services and dissuade them from switching to competitors. I also knew that it was a way to collect valuable data that could be used for a variety of purposes. One thing I hadn’t thought of, however, was the impact on profitability of reducing demand variability and the role of loyalty programs in executing this reduction. If you can virtually eliminate demand variability, you can plan your staffing and inventory almost perfectly thereby eliminating waste and maximizing profitability.
Management Practicum III: Entrepreneurship and Business Planning
The third and final installment in the Management Practicum series, this team-based class involved taking a basic business idea (homegrown or from an outside entrepreneur) and turning it into in a full fledged business plan to be presented onstage in a contest judged by highly successful entrepreneurs and venture capitalists. I was fortunate to be a member of the Geck Squad, the winning team, and to learn a lot along the way. Besides a lot of pride and a snazzy commemorative clock, what did I take a way from the experience?
- Great teams make all the difference- The team I was lucky enough to be a part of could not have been better for a number of reasons. It displayed a great balance of skills, knowledge, and personalities that allowed everyone to add considerable value, spread out the duties and responsibilities pretty evenly, and left no gaping holes. Most importantly, however, attitude is everything and this team had a consistent positive attitude that emphasized the team first and insisted on the highest quality of output. Despite having some big personalities on the team, everyone left their egos at the door, and no task was ever beneath anyone.
- Quality and attention to detail is key- In the judges’ remarks at the finals they made a specific note of how some teams’ materials were sloppy or contained errors but noted that ours was polished and well formatted. In the grand scheme of things, a few spelling or grammar errors may seem trivial, but quality presentation and attention to detail has a huge effect on how you are perceived and the significant amount of time we spent on formatting and editing truly paid off.
- Setting a timeline is important, even when you know it will change- From day one, even when we hardly knew how the project would proceed, we set a timeline for what we would do and when. While we would make changes throughout the semester, having this roadmap always gave us guideposts and a basis for comparison when making decisions or changes. Additionally, having already visualized how the project would be done, we did not experience the same panic that some other teams had when the professor would remind us we were only 30 days from the finals. I have always believed that it is better to set a direction and adjust course as needed than to stand still or to stumble blindly. This course confirmed that belief.
Have you taken any seminars or courses that have really made a lasting impact? Do you have any thoughts on what I’ve shared? Let me know in the comments!