Stanford Business School, Sloan Program, Entry 3: The First Week of Class

We just ended our first week of classes at the Stanford Graduate School of Business (GSB) in the Sloan Master’s program. The Sloan program, as I mentioned in my first post about arriving here, is a one year, full-time Master’s program that is kind of an “accelerated” MBA for people who have significantly more experience in the real work world.

Although it’s only been a week since classes started, it feels much longer – that’s because during this “pre-term” we have the same three classes each day, every day, for three weeks before the fall quarter “officially begins” at the end of September.

The three classes during this pre-term aren't graded. Professor Flanagan, our econ prof, told us on the first day of class that there are three distinct languages he could teach the class in – words, graphs, or mathematics.
Read more!

I would actually say that’s a pretty good way to describe the three classes that we’re taking during this pre-term:

• Managerial Accounting – mostly math (budgets, income statements, balance sheets – the math itself isn’t that difficult but knowing which number to plug in where can be tricky)
  




• Microeconomics – mostly graphs (demand curves & supply curves – they look pretty simple – two lines on a graph, but reveal much more than meets the eye)
  




• Strategic Management – mostly words (in-class discussion about real-world company case studies on what made them successful).
  

I’ll say a lot more about each of these classes below, including what we’ve learned (which is quite a bit, especially for only one week!), what our professors are like, and what I think of the material. But first, some general observations about the first week of class:
What’s it like to take classes at Stanford Business School?

It’s actually very unlike any of my undergraduate classes. For one thing, the classrooms aren’t big lecture halls, nor are they little breakout rooms. They’re more like a mixture of a trader’s pit in a stock exchange, and a movie theater that has stadium seating.

There are rows of tables and chairs, each one slightly higher than the last one, with the professor standing in the middle of the room. It’s also a lot more high tech than I remember undergrad classrooms being - instead of blackboards, there are white-boards, and there is a built-in projector and screens for showing slides and videos from a laptop.

Moreover, we have very nice plush green chairs, and the tables on each row have slots in the very front for our name-tags (Nice, no worrying about my butt getting sore after sitting in those old wooden chairs we had in undergrad for an hour and a half).

Taking classes is a little bit like a cross between high school (“Suzy, you sit here, next to Johnnie, that’s your assigned seat”) and the United Nations Security Council, with our nametags very prominently displaying who we are and what delegation (er, I mean company) we are representing. In fact, this last bit about the UN is doubly true in the Sloan Fellows program since almost half of our classmates are international, so we can get a pretty good perspective on an issue from around the world.

What is a Case Study Anyways and Why Are They So Important?

In Business School, much of the curriculum centers around Case Studies. WhenI first heard this term, I thought it sounded a little mysterious, since during undergrad, we only had “problem sets”, “exams”, and “group projects”, but never "cases". There are, as far as I can tell from the first week, two kinds of “case studies” in business school:

· A problem set disguised as a “case”. In much of our classes, including accounting, microeconomics, and our modeling with excel class, what biz schoolers (er, I mean, GSB’ers) like to call a “case” is really just a problem scenario followed by a set of questions about it.

Think of those old wacky groups of SAT questions that start with some kind of introduction: “Suppose Tom is in Denver and Fred is in Houston. Suppose also that Tom starts jogging east at 20 miles per hour, and Fred starts jogging west at 20 km per hour.” After the introduction there is a group of questions associated with the scenario: “When, if ever, will Tom and Fred collide with each other?” and “If so, which city will it be in?”.

OK…OK, maybe SAT questions weren’t quite that outlandish, but you get the idea. Now think of pretty much the same thing but with a company as the subject of the scenario and not dorky guys named Tom or Fred. Simply making the case about a company makes it seem like we’re studying “real business” and handling “cases”, not just really learning arithmetic, graphs and spreadsheets. One Example is our Davis Kitchen Supply Case that we got this week in our managerial accounting class, which started with a company that makes ovens. In fact, it makes 6,000 of them per month (with the recent housing slump, not sure exactly how they stay in business, but that’s beside the point). The costs associated with making these ovens (actually, they weren’t ovens at all, they were stoves; oops!) range from $50 for variable labor, $60 for fixed overhead, to $95 in marketing costs, including variable and fixed costs. That’s the “setup”.

Once the scenario is set up, we are supposed to answer a group of questions about them. Suppose some slimy mafia guy came to Davis Kitchen Supply and said that he could “take over” making their stoves for them, at a cost of only $215 per stove. Should Davis Kitchen let this guy (ok it wasn’t really a slimy mafia guy in the case, I made that part up) take over manufacturing of those stoves?

I think you get the idea. Basically you have to add up all the variable costs, and fixed costs, and figure out at which price it makes sense to outsource stove-making vs. doing it yourself. The econ “cases” involve a little less math and a little more graphing of supply and demand curves– for example there was one this week about US farming associations telling their members to dump (or simply destroy their wheat or rice or corn or fruit crop) in order to get the price of that item to stay high. We had to figure out whether this was a good idea or not, and under what circumstances it would make sense to do these.

The only real complications in these cases is 1) figuring out the right answer, and 2) making a presentation to the class (using powerpoint or excel) as a group (“study group”) about the answer that you found. We’ve had some pretty creative ones already.

· A full case study of a real-world company. The second group of cases are more like the “case studies” that I had been told about by my buddies who had already gotten their MBAs. Before I got here, I thought it odd that you could learn much by sitting in a room where the students all opined with each other about what they think a company should or shouldn’t do. But this has actually become the dominant form of teaching in the best Business Schools today.

These case studies are usually put together by Harvard Business School, or by Stanford GSB, range from 10 to 15 pages, and include the fully history of a company and some of the challenges facing the CEO of the company. In the first week alone, in our strategy class, we did cases related to Wal-mart, Capital One and a few others. It turns out that talking about the strategy of real life companies is actually quite fun. In fact, it hardly feels like we’re in school at all … so Case Studies like this give us a level of engagement that other subjects don’t.

What is a Study Group and How Late Do You Study?

So I finally figured out what a study group is – a pre-assigned list of “friends” that you have to work with during each term that cuts across all classes in that term.

In fact, I’m beginning to think that working in study groups is not just about the classes themselves, but about learning how to work with diverse groups of people that we had no choice in being involved with. This must be a common case in the business world; but as an entrepreneur, I have almost no experience at working so closely with people that I have no control over, so this has been an interesting experience.

Part of the reason for a study group is so that you can all help each other get through the term – by preparing for class together, sharing notes, and doing group assignments. However, thus far I have to say that the study groups seem to be as much of a source of stress as the classes themselves – almost no one I’ve talked to is really happy with the way that their study group has decided to do everything, though everyone (including me) likes some aspect of what their study group is doing.

One fundamental question each study group had to answer was how often it’s going to meet and when. For our group, which was larger than other groups, this little question, which should be easy to answer, has been the hardest one to answer.

A few of us in the group, like me, are not morning people. As an engineer and a writer, I tend to go to sleep well after midnight every night, so I would prefer evening meetings. In one of my software companies, I even had an explicit rule: “no meetings before 10 am”.

But, many of the members of our study group are morning people, so they would prefer to meet before our first class in the morning, which is at 9:15 am. So something like 8:15am. Ouch!

We decided on what seemed like a good compromise, our first meeting would be in the afternoon, after the first day of class, which was the Tuesday after Labor Day. After all, the pre-term wasn’t being graded, so we could afford to take it easy in the mornings, right?

Wrong! Before I knew it, while I was wandering around the San Jose Art Festival on Labor Day (Yes, this would mean I was enjoying myself and relaxing before we started our high pressure classes with no grades), my iphone started buzzing with emails from study group members about how they’re worried about all the reading over the weekend, and want to meet at 8:30 am to discuss it (Yes, this would mean we were doing study group meetings before classes had even started; I guess we were really worried about not being prepared for our classes with no grades).

The next day, because the group didn’t have enough time to argue every point in the reading from every angle, the time was moved even earlier, to 8:15 am. The next day, we had suddenly somehow decided that we were going to meet even earlier, at 7:45 am every single day! Double-Ouch!

I came to business school with memories of my undergrad days - staying up late, ordering pizza, discussing problems and working collaboratively with my classmates, with more than an occasional philosophical discussion thrown in each night.

I had heard that the Bill Clinton White House was kind of like that – with all night policy study session and lots of creativity and free flow of ideas. When George W. Bush came into office, this changed, since Bush rarely stayed up past 10 pm.

I suddenly felt like I had shown up for work thinking I was going to work for Bill Clinton, but when I met my boss on the very first day, it turned out to be George W. Bush instead! Triple-Ouch!

Let's just say I missed more than my fair share of early morning study group meetings in the first week; in the real world I wouldn’t show up at 7:45 am even if I was being paid good bucks to do so – and in this case I’m paying Stanford, not the other way around.

Well not to belabor this point, but I get the sense that our class is really taking this pre-term a little too seriously. I was speaking with one of the Sloans from last year and he said that we’ll have plenty of pressure in the fall – we should be enjoying the pre-term, perhaps enjoying the world famous Stanford Golf Course.

Actually, that is exactly what a few of our classmates did on the Saturday after our first full week. See, at least some of our classmates in Business School know how to relax: Sleep in, play a few holes, enjoy the California sunshine. Right?

Wrong. it turns out that their tee time was set for 6:30 am on Saturday (Yes this means that they had to get up even earlier on the weekend than on the weekdays!).Quadruple-Ouch!

Anyways, after a little bit of early heart-burn our study group has now settled into a rhythm. Now that some of our meetings are in the morning and some of our meetings are in the evening, I’m relatively happy with our study group. We’re also finding ways to be more efficient in our overly high reading burden.

What Have You Read for me Lately?

For someone with an engineering background (we’re called “Quants” in B-school, as opposed to the “Poets”), Business School isn’t really that difficult, though it can be hard. I mean hard in the sense that adding up 10,000 numbers isn’t conceptually very difficult. It just takes a lot of tedious work no matter what path you take – whether you type in 10,000 numbers into a spreadsheet, into a calculator, or calculate them by hand.

In the same way, we are required to read several chapters of our textbooks, do some problems, read and review cases, and be prepared for the next class, every single day. In querying the Sloan administration, I was told that the program is designed so that it’s really not possible to read every single thing we are supposed to read by the time we need to read it, while still having a life.

So, the reading can be a great source of stress, if you let it be. But that’s what the study groups are for. In our group, one guy had gotten an MBA before and told us that it might be helpful if we break up the reading, assigning different chapters to different folks, who would prepare summaries for the rest of the team of their assigned chapters.

I think the reason they designed it this way was that they wanted us to find ways to juggle the reading by prioritizing what is essential to study, and what can just be read casually. I actually think that this one of the keys to business school success.

What we learned.

OK enough of my general observations. Let’s get to what we actually learned this week. Wow, this post has already gotten long – and I haven’t even started on my reading for this weekend. I’ll have to tell you what we learned in the next post...stay tuned.

SPECIAL DISCLAIMER: the opinions and experiences recounted in these blog entries about my year at Stanford Business School for the Sloan Program are my own personal observations and ranting. This blog is not endorsed by either the Stanford GSB or by any of my fellow Fellows.

Sloan Program: Entry 1: Arriving at Stanford for Orientation

This week I started as a Sloan fellow at the Stanford Business School – which isn’t called the Stanford Business School at all – it’s almost always called the GSB by people in the know (short for the Graduate School of Business) -- so if you run into a Stanford Business School alum, say "GSB" to them and they'll be impressed. So I’m going to augment my usual “entrepreneurship entries” in the Zen entrepreneur blog with updates on what it’s like to attend this program at Stanford, for those of you who might find this fun or interesting, or perhaps both.

For those who have never heard of the Sloan Program, it’s a program that exists in three business schools in the world – starting with my undergraduate alma matter, MIT (which has, confusingly, both the Sloan School of Management and the Sloan Fellows Program). Here’s what I know about the history of the program:

The program was started by the old grandfather of modern American business, Alfred P. Sloan, the first CEO of General Motors. He was also an honorary member of the Dead Entrepreneur’s Society (ask me about that one privately if you’re interested since it was a group that existed briefly at MIT back in the early 1990’s). Mr. Sloan believed that mid-career executives who had been identified as “future business leaders” in America needed a special program that was set away from the business world to study management. Thus they (we) could return to the world of business with a fresh perspective, as well as practical leadership and business training that would be very difficult to get "on the job". Later, Sloan decided (through some wrangling by the schools themselves since he supposedly rarely gave money to any institution other than MIT, or so I’ve heard) to give some money to Stanford and the London Business School for similar programs. Each of the three Sloan programs is different – for one thing, they all have different lengths. For another, they have different curriculum (curriculi?).

Of course in Sloan’s day, being a “future leader” meant being an executive at one of America's largest companies. In fact, in the beginning all Sloan Fellows (as we’re called – don’t ask me why we’re Fellows and not students – I haven’t the slightest idea but it sounds very cool), were sponsored by their corporations. Today, many of us are either entrepreneurs or in-between jobs, who either have enough money to burn (er, I mean to say invest) for the program ourselves, or are wiling to do the American thing and borrow money from the federal government or private banks to attend. We’re called “self-funded” fellows (as opposed to “company-sponsored” fellows).

The only differences between self-funded and company-sponsored Fellows, as far as I can tell thus far are: 1) company-sponsored fellows have to go back to the company that paid for their tuition (rumor is that some companies will make you pay back the tuition if you don’t return), and 2) company-sponsored fellows have to get special permission to attend workshops like “entrepreneurship”, nor are they allowed to to use the career services at Stanford to look for jobs (for obvious reasons!). Otherwise the classes and experience are pretty much the same.

I heard about this program, surprisingly, not at Stanford or MIT, but at the London Business School, at my younger sister’s graduation from her MBA class last year. I saw a bunch of guys at the graduation who were my age (late 30’s) rather than her age, and I started to wonder what these old guys called “Sloans” were doing at Business School.

I chose to apply to the Stanford program because 1) I’ve always wanted to go to Stanford, which has a great reputation, 2) It’s at the heart of Silicon Valley and I’m a software entrepreneur, which makes for a good fit, 3) It’s in sunny California and not cold Boston or foggy London, and last but not least, 4) it was the shortest of the three Sloan programs (10 months, starting in September and ending in July).

I figured it would be OK to take a break from my business for this many months if I kept my cell phone with me at all times, still participated in board meetings and late night calls from time to time. We’ll see how well that works.

So with that out of the way, this week the US Fellows arrived on campus (many of the international Fellows arrived early), and we finished our orientation for the Sloan program. Classes start formally next week after the Labor Day weekend. Here are some quick observations about the first week:

1) Our class is very international. Given the global nature of business today, that’s probably a good thing. I think we have 18 different passports represented in our class of 57 people – other Fellows have come all the way from India, Japan, Singapore, China, Korea, Argentina, Brazil, and Europe to attend this program. I for one am looking forward to seeing how business is done in these other parts of the world and seeing how the dynamics of the class evolve with so many cultures represented.

2) As part of the curriculum, we get to go on "field trips" to some interesting companies in the US. I guess it wouldn’t really do for Business School students to just study at a University without going to see some real life businesses. For those of you who’ve never been in business school, these kinds of trips are not labeled "fun" but are actually part of the academic curriculum. This year we get to visit Google (if you don’t know who they are you probably wouldn’t be reading this blog online), LinkedIn (one of the more successful social networking sites of the past decade), Boeing (yes, we get to see the biggest building in the world, which is the size of 74 football fields), Nike (way cool, but we were warned not to wear Reebok or other competitive sneakers when we visit them -that would be considered a sneaker faux pas), as well as some institutions in DC and New York in the spring. Last year, the DC trip included a meeting with Bernanke (the Fed Chairman who replaced Greenspan), but not sure if we’ll be able to get him this year.

3) We are going to South America for an international trip at the end of the year. It seems that most people I know in business school end up travelling to Asia for an international study trip– either China or India or both -- since that’s where the “action” is today. In fact, last year’s Sloan class at Stanford just went to Asia at the end of their program. So, I gotta say at first I was a bit puzzled by our decision to go to Latin/South America instead. But I am looking forward to the novelty of it - Brazil has a very interesting economy these days, I’ve never been anywhere in South America, and I hope to see both Machu Picchu and the Nazca lines after the end of the trip. I’ll get to go to Asia on my own anyways (after all, I do own part of an outsourcing business in Pakistan, and India and China are not too far from there, political considerations aside). However, at least one of our South American friends didn’t seem too excited by going back there for the international study trip – he’s planning a separate vacation after our trip, going to, you guessed it, Asia.

4) Bill Gates is your friend. We had a Microsoft Excel workshop that was meant to “refresh” our understanding of Excel, with Professor Moore, who did in fact write the book on modeling with Excel. I’ve never met anyone who seemed to be so taken with Microsoft Excel – despite the many bugs that he warned us about. I thought I knew Excel pretty well already – having put together budgets, income statements, proposals, and balance sheets for my many companies. Turns out I didn’t know much about Excel at all – never heard of Goal Seek or Data Table, not to mention add-ins like Solver, Crystal Ball and Extend. Wish I had known about these sooner – they might’ve come in useful! I guess i'm going to be spending alot of time with my new friend over the school year.

5) Study Groups are the Key to Our Salvation. We were assigned to our first Study Group during our Orientation and we had a meeting with our group where we were supposed to discuss our strategy for running the group and how best to make it effective. I guess this was in good corporate style since I really had no idea what a Study Group was, or what it was supposed to do, and I suddenly found myself in a meeting about how best to run one. During my undergraduate days all we had were informal study groups – nobody was assigned to them, we were just a few friends who studied together and might, on occassion, copy each other’s problem sets if we didn’t have time to get them done by the due date (actually did I just say copy? No, that was a JOKE – at MIT we would NEVER copy one another’s problem sets, it is after all against the rules you know). In some classes during my undergrad days, we had group projects where one grade was assigned to the whole group for the project - maybe that's what a Study Group is. In Business School, it seems like everything hinges on Study Groups. Once I figure out exactly what one is supposed to be, I’ll let you know how best to run one!

6) Sloan Fellows have it easy compared to regular MBA’s. Since we’re older, with more management experience than your typical MBA student, most of us haven’t been to school in a while (the average work experience in our class is 12 years). That means that we get a bit of “special treatment” – though it does mean we have to come to school early. We have what’s called a “pre-term” – we take 3 classes for 3 weeks (Strategy, Managerial Accounting, and Microeconomics) without grades – it’s to get us used to the idea of “sitting in a classroom”, “arguing our points”, doing “assignments”, and doing all the things that students do again. Since I graduated 16 years ago, I think this is a very good idea!

In fact, this sounded pretty easy to me – we had a similar thing at MIT during my undergraduate days: our whole freshman year was pass/fail which took away a lot of the stress of competing against so many smart kids when you first arrived on campus. Many of the Sloan Fellows are married with kids, and some are business owners like me, so we have a lot of other things to be stressed out about. Like I said, this pre-term seemed like it was going to be pretty easy; but it turns out we have to read our first case and several chapters of our textbooks over the labor day holiday before our first class on Tuesday. Oh well, I better stop writing and start reading. Half the weekend is over and all I’ve done so far this weekend is go to a barbecue with other Sloan Fellows, and visit the world-famous Sausalito Art Festival.

SPECIAL DISCLAIMER: the opinions and experiences recounted in these blog entries about my year at Stanford for the Sloan Program are my own personal observations and ranting. This blog is not endorsed by either the Stanford GSB or by any of my fellow Fellows.