Day 14 – Tuesday Sept 21st 2010

Generally, Tuesdays and Thursdays are tough days, as the classes start at 8 AM and every one feels quite rushed. And on these days you can see lots of AMPers either skipping breakfast or packing breakfast and taking it to the room or having a quick bite in the McArthur Lounge itself  rather than going to the Kresge Boardroom for the the full breakfast. And this is true for me as well !

Today we had three classes and a much anticipated lecture session with Michael Porter in the afternoon. I have to remember that the lecture starts at 2 PM -  I was late for the last session, as I thought that the session starts at 215pm.

The first session was an interesting case of a company called lululemon - amazing company based out of Canada, which makes sport garments. Very strong culture almost bordering on being like a cult - there is a fine line between a cult and culture - but they are very different and in my view cult has a negative connotation to it. Cult is a group of people led by a charismatic person, either you are in or out, they have very strong views and can put off many people. Culture is way of doing things, it is a way of life, it is the explicit and implicit knowledge, values, attitudes, meanings, forms of communication - all cultivated and preserved to be able to do things in a more enjoyable manner leading to higher productivity ! My god, that sounds too complex.

Lululemon is a case of a company with a very strong culture and the growth pains of going to scale. The issue with strong culture based companies is that the culture can take over the organization. And these kind of organizations have to spend disproportionate amount of time in recruiting the right kind of people. And probably the down side is, these organizations can only have planned and managed growth - if they grow too fast, it will start breaking at the seams.

The session on marketing is the case of Harrah's, where they effectively build a CRM system and used decision science to predict behaviour of their customers - who incidentally are people who gamble , becuase Harrah's runs casinos ! - and using this behaviour rolled out programs to get customers to visit their casinos more often. Without getting into an ethical debate on whether it is right to get people more addicted to gambling, this case is all about mining customer data effectively.

Prof. John Quelch, who teaches Marketing here is very good - of course all these guys are very good, but Prof. Quelch's style in the class is enjoyable. He has a good sense of humor - here is one: " every time I ask a question, there is a mindless shuffling of papers, searching for an answer" !

Some interesting points, which I noted are:

• Need to track customer profitability to align awards/offers
• Metrics have to be customized to organizations; generic metrics will not work
• Marketing related:
• Marketing has low visibility at the board level; one of the reasons being, it does not have the equivalent of a P&L or an Income statement, which is commonly understood and accepted
• The CEO has to be the CMO (not literally)
• All organizations have to improve the left and right brain marketing
• And most importantly, marketing has to be integrated into Operations, HR  etc; it cannot function in a silo

One interesting converation which came up was this : it is strange to have a vision to be a billlion dollar organization - it does not seem aspirational to all stakeholders. Food for thought.

Prof. Paul Healy's session of Fiduciary responsibilities was an eye opener for me. WHile it may be obvious to the finance and legal guys, some of the court judgements on fiduciary responsibilities look very counter intuitive. Unlike common belief, Fiduciary responsibility is for all employees in the organization, not just the officers of the organization. If company resources are used for the personal benefit of an individual, it is a violation of fiduciary responsibilities. It is quite complex and varies by country. The case in Germany involving the Deutsche Bank chairman in the case related to Vodafone take over was quite interesting.

Michael Porter's session was packed and I also noticed some non-AMPers as well.  The topic was, "The Competitive Advantage of Nations, States, and Regions". Lots of research backed this idea that competetiveness of a location is not by accident, but it is a combination of macroeconomics, microeconomics and inherited endowements. It was a fantastic lecture and his abilitiy to articulate is wonderful.  I will write on this as a seperate topic later.  Here are some pictures of the session.

Prof. Michael Porter

Prof Porter - very passionate and articulate



Went to the gym for 30 minutes on the stepper and some time on the exercise machines.  Was not a long day, but quite tiring becuase of the heavy sessions - especially the one on Fiduciary responsibilities.  More later ......