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.