Rest, Rats, and Publishing

Winter break is a fantastic phenomenon that I had almost forgotten. I cherish these days off because I recognize just how rare they are. It seems that only students and Europeans know what it means to take a month off at a time.

It's a time to rest, but it's also a time to take on projects outside the walls of the school. So, I've put on my publicity hat and begun to help my dad with his first book. The (dying) publishing industry has long been an interest of mine, although I've never formally worked in it. The old guard is unquestionably on its way out, and while on-demand publishing leaves much to be desired, we are on the brink of a meaningful change in the way books are publicized and distributed.

Consumers now have a voice (beyond simple purchasing power) and it's not much of a stretch to ask why a high-profile reviewer at the New York Times or WSJ is necessarily more capable of writing a sound critique than some of the most prolific reviewers on Amazon.com.

But reviewers and publishers alike need to protect their interests and with some degree of success they have created barriers by simply closing their networks. Reviewers won't even look at a book unless it's from a major publishing company. In turn, publishing companies won't look a book unless it's from a specific sub-set of agents. And, increasingly, the only relevant question that an agent or publisher asks is "what's your platform?" not "how good is your book?" There's nothing overtly unethical about this paradigm, but just consider all the good literature that you, our culture and our world are missing out on because of it.

Aptly, my dad's book, which I will blog more about later, is about business ethics. Specifically, the book addresses the rat-like behavior that greed creates and corporate structures endorse. It's no doubt timely, with Madoff representing merely the latest, high-profile example of business gone awry.

Our challenge will be to break down those traditional barriers that publishers have created, or of course, given the opportunity, to sign on with one of them. After all, it's just business.

On the Synergies of Minds

First semester came to a close on Monday with a capstone experience known to the Johnson School as the integrative case. The case gave us a 48 hour opportunity to utilize some of the knowledge we gained in Strategy and Finance to conduct a valuation of MGM Mirage and make some strategic recommendations.

A few of the teams recommended that MGM sell properties in Vegas to improve liquidity, and by a most timely twist of fate, MGM announced the sale of Treasure Island on the morning of our presentations. This was a welcome dose of reality to be sure. All-too-often cases seem like such retrospective snoozefests (particularly the older cases), where we solve for an answer that has already played itself out. There's no imagination in it, no entrepreneurial insight. But this case was different, and although it wasn't without pain, the experience was a valuable one.

Beyond the merits of the exercise itself, the case once again reminded me of the nature of the people that the Johnson School attracts. Thus far, I've worked with three different, randomly assigned groups for various projects throughout the core. Each of the groups, in its own way, provided a distinctly positive experience. The group assignments gave us the opportunity to work with people who would have not come together otherwise, and it never ceased to amaze me how truly rewarding such forced collaboration could be.

Group work does take longer than individual work--the coordination of five minds is not always an easy task--but the product is well worth it. And there's nothing quite like burning the midnight oil to establish enduring friendships. So, if you happen to be reading this, deep thanks to Kelly, Lailee, Dan, Ryan, Bruce, Matt, Melissa, Mark, Ben, Dave, and Karey...you all made group work a true pleasure this semester!

Perspective.

Here I am in the midst of final exams (one down, two to go), and I can't help thinking about what the great thinkers of the ages would say about the corporate world and this special degree we call an MBA...

One thing is for certain--my studies thus far at the Johnson School, particularly in Economics, Finance, and Statistics, have expanded my mind in particularly salient ways. These are subjects that I now can't imagine knowing nothing of, while still understanding our modern world.

I'd wager that most of my favorite philosophers would approve of these subjects that are so fundamental to the MBA, but I'd be hard pressed to find one that would fully endorse today's corporate milieu. Thoreau had some powerful ideas about "work" and he, more than anyone, would point out flaws in the system. Ironically, Thoreau would have made a great business person--truly a great entrepreneur--both because he was adept at just about everything he did, but also because he understood how to see past the unnecessary, often self-imposed, structures that we so blindly adhere to.

That I continually hearken back to the words of a man who spent two years in relative solitude by a pond and refused to pay taxes is ironic. Still, his ideas ground my studies here with a unique perspective and I hope that nostalgia forces me to never lose sight of them, even as I wade, knee-deep, in rules, regulations, and pesky exams.

Here's one of the many intensely relevant things he said: "...if one advances confidently in the direction of his dreams, and endeavors to live a life which he has imagined, he will meet with success unexpected in common hours. He will put some things behind, will pass an invisible boundary; new, universal, and more liberal laws will begin to establish themselves around and within him; or the old laws be expanded, and interpreted in his favor in a more liberal sense, and he will live with the license of a higher order of beings."

Cheers to all my classmates who took the Finance final with me today. May we all beat the mean ;-).

Cows, Barns, and Good Business

For the first half of the semester I helped out the admissions office by giving information sessions to prospective students. One of the questions that came up more than most was "how do you like Ithaca?", and on my drive out of town for Thanksgiving I realized I should address the question here.

When I first considered applying to business school, I looked predominately at city schools. I distinctly remember the Columbia information session in the Bay Area because 75% of the talk was about all that NYC has to offer. It seemed odd to me at the time because they were giving the presentation to a bunch of tech nerds who were probably far more inclined to believe that Silicon Valley is the center of the universe. Regardless, the point is that a school's location is a pretty important factor in many people's decisions about where to apply.

Last year around this time (in fact, just before the Christmas holiday) I made the long haul from San Francisco to Ithaca for my admissions interview. The experience was transcendental--I knew almost immediately that Cornell was where I belonged. I also understood this to be somewhat ironic because I had been so set on an urban location previously.

Ithaca (and upstate New York more generally) is a strikingly beautiful place. It's almost cliche to point out, as evidenced by the ubiquitous "Ithaca is Gorges" slogan, but sometimes ideas are cliche because they are so true. I've seen quite a bit of this country--I've driven across it twice--and there's no shortage of beautiful spots. Arches National Park in Southern Utah is spectacular and Yosemite is just short of Eden. But Upstate New York has a beauty all its own. My favorite part of the drive to and from Cornell is the view of some of the most picturesque farms you can imagine. The cows and old barns are the stuff of paintings and it's not hard to see why there are so many artists around.

Beauty aside, Cornell's location creates an intimacy at the Johnson School that no city school could ever rival. Upon graduation, we'll all have the opportunity to spend the rest of our lives fighting urban crowds, clawing through corporate bureaucracies, and establishing networks amongst strangers. For now, Ithaca is a respite and I can already see that it's one that never really breaks down. The Johnson School community in diaspora seems to take care of its own pretty well around the world. And believe it or not, there's a contingent that just can't leave Ithaca behind. A few weeks ago I spoke with a CEO and former Johnson School MBA who moved his start-up back to Ithaca, because he felt it was the best place to incubate a small company. I'd be willing to bet that the managers of some of the start-ups out in the Valley who are trying to justify exorbitant office leases in a tough economy might be inclined to agree with him right about now.

Reality Check

If there's one stereotype that's true about MBAs, it's that they take themselves too seriously. Sometimes it's a good thing--taking one's self seriously can lead to higher productivity, stronger drive, and a general hunger for success. Other times, it can show a lack of perspective.

The financial crisis demonstrated that the many MBAs on Wall Street ought not take themselves so seriously, as their world crumbled before them, both because of them and in spite of them. Entrepreneurs today face ongoing reality checks in the form of failures, but there was a time (during the dot-com bubble) when they were guilty too. Not only did they take themselves too seriously, but they felt they were entitled to do so.

For me, Frozen Assets, the women's ice hockey team here at the Johnson School, is a weekly reminder to laugh at myself and with my colleagues, and to find some perspective in my MBA experience. We fall on our butts; we skate in slow motion; we whiff; and we fall again. In the end, we have fun. Women's ice hockey doesn't allow checking, but let's be honest, sometimes the inability to stop results not only in a hard check, but also in a reality check.

There's a special camaraderie that comes with playing on a team--whether competitive or not--that cannot be reproduced in other areas of life. I'm not a psychologist, but I think it has something to do with the physicality of it...the blood, sweat, and tears, so to speak. Next week (Nov. 23rd at 3.45pm), we play the Johnson School faculty. I'm not sure who's going to step up to this annual challenge, and I hear a certain, well-known finance professor is chickening out this year. In any case, I think the game will be a great success...assuming everyone leaves with teeth intact.

33% Cotton, 33% Recycled Plastic, 34% Genius

Thanks to the cajoling of some of my best friends, I'm working on a MSFT case competition this weekend. You can read more about it here: http://blogs.msdn.com/firenze/. Teams participating from the Johnson School were asked to address a case surrounding environmental sustainability for the enterprise--a pretty lofty topic.

Through an entrepreneurial lens, the most interesting aspect of this topic is undoubtedly new product design, product line extension, and product augmentation. The arena of sustainability is no longer concerned simply with overlaying eco-friendly ideas atop pre-existing business models; it's about developing new business models to take advantage of opportunities created by awareness of issues surrounding sustainability.

Did you know, for example, that Coke is making apparel out of recycled bottles? Apparently, it's a 15 million dollar business. Check out the case study here: http://www.thecoca-colacompany.com/citizenship/products_case_studies.html. Hats off to the team of innovators that decided it would be a good idea for Coke to make clothes out of plastic bottles--the idea would have never crossed my mind. The point herein is not that this initiative is the absolute best thing that Coke could be doing for society. Rather, the point is that Coke is making money off a hot trend, which, in the end, is doing more good than harm to our world.

Start-ups abound that focus on sustainability on much deeper levels, from organic food to clean technology, but the opportunity for innovation and profit is far more ubiquitous. Ask Coke.

What Grows on a Decision Tree?

I just finished a stats assignment using decision trees, so I'm going to devote this blog to statistics. Stats is interesting to me because it's a science of uncertainty. It's not trying to prove one thing or another, it's simply trying to say something about those things. In that way, it's unpretentious.

I have to admit--there's something therapeutic about making a decision tree. You can lay out a problem on a piece of paper and break it down into the root probabilities and then fold back the tree and presto-chango, you have a decision. No one can really claim that it's definitely the right decision, the profitable one, the ethical one, or the strategic one...but at least you know that probabilistically, the odds are in your favor. Of course, the probabilities that you start out with have to be reasonably accurate or else you're dealing with fallacies and your tree isn't worth the paper it's scribbled on.

Business people, namely CEOs, are always talking about "going with their guts." They seem to go with their guts far more than they should, and it often gets them into trouble. The main problem is that we all have natural biases, no matter how many times we tell ourselves that we are objective. CEOs, investment bankers, et al. want to make money and they want to make as much money as they can as soon as they can, so they get bigger bonuses. "Going with their guts" necessarily coincides with this reality, whether they are conscious of it or not. Instead, they could be sitting in their corner offices jotting down probability trees, using realistic probabilities, vetted by unbiased market research. Then, they could fold back their trees and make decisions that are actually good for the firm, the employees, the stockholders, etc.

I think these special trees will come in handy down the road for me and many of my peers.

I'll have a Tall Glass of Milk with That

Earlier this week I attended a small round-table discussion with Jim Farrell, the founder of F'Real (www.freal.com), and a handful of my classmates in the Entrepreneurship and Venture Capital club. I hadn't planned on attending at first because F'Real sells milkshakes and it wasn't obvious how the company and its challenges were immediately relevant to my career. Lucky for me, there was a spot open at the last minute and I took advantage of the opportunity. Here are a few reasons why the conversation was immensely relevant:

1. Amidst all the hype of the financial crisis--all the talk of greed, recklessness and misuse of government (tax payer) bailout funds--Jim Farrell and his company were a breath of fresh air. For one thing, there are few products that incite such joy and nostalgia as the all-American milkshake. Second, Jim is a true, pure entrepreneur. This wasn't a conversation about business plans and venture funding. Rather it was about an individual believing in a product so sincerely that he was willing to take a leap of faith to create something with his own personal well-being on the line.

2. I've always believed that entrepreneurship is the most elevated form of ethics and this discussion reinforced that belief. Let me explain: MBAs, professionals and academics commonly talk about ethics in terms of what is unethical. They try to decipher unethical behavior and figure out ways to curtail it. This is fine and reasonable, but it's baseline. A more powerful approach is to understand ethical behavior in the positive. It can be subtle. For instance, with his dinner, Jim ordered a glass of milk. I absolutely loved this--a manager of a milkshake company that orders milk for dinner is poetic. As an aside, my dad once told me that he sat by Famous Amos on an airplane and for the entire trip, from takeoff to landing, the guy snacked on his own cookies. It seems to me that a manager who loves his product so completely could not help but be ethical. Ethical behavior can also be overt and it usually surprises people. Jim discussed F'Real's relationships with its dairy suppliers and the loyalties that existed even when F'Real began to outgrow the volume capabilities of some of these dairies. I won't go into the details, but it was touching. Further, entrepreneurship is inherently ethical because it is creative and progressive. By their very nature, entrepreneurs seek to make people's lives better, by offering better products, by creating new jobs, and ultimately by invigorating the economy.

3. Finally, technology and innovation are key to F'Real. The company has several patents, and it uses a special, high tech blender, and an innovative process. Again, details aside, suffice it to say that F'Real has a simple product that leverages a deep technological and process-oriented insight. All-too-often tech-focused entrepreneurs and venture capitalists are snobs about high technology--they glorify areas such as nanotechnology and artificial intelligence--but oftentimes the most productive, profitable technologies are far more grounded and intuitive.

Are you Analytical?

It's the one question I remember from my Johnson School admissions interview because it's the one question I didn't know how to answer. For me, it was like someone asking "are you nice?" or "are you a fan of Bob Dylan?"...and then pressing me to prove it. My answer was "yes," but I stumbled when I had to explain why I categorized myself as such.

Even though I highly doubt the question would be posed to an engineer, I imagine that if it was, she would just point to her undergraduate transcript, list several quant classes and put it to bed. In retrospect, I could've probably pointed to my transcript as well, emphasizing the fact that the great philosophers were masters of analytics and arguing that philosophy represents the more complex, natural extension of mathematics, engineering, and systems in general. It didn't occur to me at the time.

Now that I've officially finished one half of the core, I'd like to take another stab at the question:

The deepest, most versatile analytical ability comes not from the ability to work with numbers (although that can be important) but from the ability to problem solve. For that reason, the "ability to think" and the ability to solve problems is the very essence of the modern liberal arts education. So, my undergraduate education, which could be so easily dismissed as ancillary to business, is the very foundation that I continually rely on time and again, in the core, in business, and in life. It allows me to adapt, solve problems, and make decisions. Coupled with innate ability and professional experience, a liberal arts education is precisely what makes me analytical and allows me to solve tough problems, no matter how big the numbers are.

Anna Bruno, MBA '10, Park Fellow

My route to business school was by no means direct, but as far as I'm concerned, it makes perfect sense. An entrepreneur and a writer at heart, I found my way here via studies in religion and philosophy at Stanford, followed by a stint in public relations, marketing roles for two software start-ups, and a bit of post-acquisition work at IBM. I like wearing jeans to work, going in late and leaving late, and sitting at the same table as the CEO. I am and I always will be a Pittsburgher by association, but I've now spent almost a third of my life in the San Francisco Bay Area. Today, I'm thrilled to spend two years in Ithaca at the Johnson School-I wouldn't have it any other way