Our preparation in the Living group was quite good. We are still missing Roger, who had to head back home for some personal work. He joined back today after the second session. On days when there is less reading materials, our group is doing fine. But if the work load increases, we will be in trouble. Gail had suggested that we tweak the process further for increasing our efficiency and effectiveness – and we all agreed that we will revisit this once we know next weeks schedule. The first class today was on Strategy. Prof. Rivkin, is quite an energetic guy and the class was quite lively. Some of the key lessons are:
- Low price, without a low cost structure is not a strategy
- A strategy is an integrated set of choices that positions a firm in an industry so as to generate superior financial returns over the long run.
Sizing up the external environment is critical – it could be markets, regulations, competitors, etc. After a break, we had a session on Decision making, by Prof. Max Bazerman. He is a fascinating person. His exercise in auctioning a $100 bill in class has fantastic.
We discussed the sales of US Airways as well. The other parties involved were United and American Airlines. In order to prevent United from bidding, the AA CFO did by sending an email to all employees that AA will not be the first to bid. But the memo also stated that if competition bids, AA will also aggressively bid. Of course the memo leaked to competition and United did not bid. Apparently this can raise eyebrows from “anti-trust” agencies.
Prof. Bazerman has also given us a case study on racing – which is for a group discussion over dinner. New groups were formed today for this. We discussed this over wine and dinner for about an hour.
The last session before lunch was by Prof. Tushman on Innovation and Organizational effectiveness. We talked about exploiting existing markets and exploring new markets. The Swiss watch industry’s reluctance to use Quartz was debated. A video on “Gunfire at sea” on the US Navy, highlighted a case, which can quite often happen in enterprises. Where an idea comes from a rank and file, but is completely ignored by the manager – for some reason or the other. Prof. Tushman also pointed out that most of the ideas which come out are junk, but a few of them can be game changers. And Managers have to evaluated all of them before junking them. Ability to react to market changes is not a function of the size of the organization. Sometimes the existing customers will hold you to what you do today, and because of this you can miss the big market change. The more successful you are at exploiting existing market, the less likely you are to explore new markets. This is the single biggest reason, why many managers and companies completely miss the boat when market changes take place.
Interestingly, the Prof also talked about how HBS Exec Education is also threatened by new players like Univ of Phoenix and Kaplan.
In the afternoon, there was a guest lecture by Niall Ferguson - the author of the best seller “The Ascent of money”. We all got copies of the book. I mistook the time of the class and went late by about 10 min – which was quite embarrassing. His session was on a contemporary topic of interest – is the current recession the third global depression ? He has tons of data and charts to strongly argue that it is not the case. Spent a lot of time discussing China and America and their interdependence. Good session.
It was a beautiful bright day today – so played tennis with Roger and Bart for about 30 min. And later played squash with Bart for another 30 min. So good day today for exercises. The living group discussion started on time and ended early, as there were only two cases to discuss. More later ….
No comments:
Post a Comment