Time and Action

Most MBA programs are known for the great final of lore, a cross between presentation and business simulation. It’s been years since I completed the great DVD/CD competition. While doing a little house cleaning, I came across an old journal titled, “What I learned while getting an MBA.” The memories came rushing back. Tangible objects have a life of their own sometimes, triggering moments forgotten.

Before starting the program I jotted down notes as I went, lessons learned. Inside, I had thoughts on negotiation, statistical analysis, manufacturing processes, and more. It was good to refresh, and I’m glad I still have this Mead Journal. What you don’t write down, has a tendency to get lost in the wind (see power of keeping a journal).

In looking at my old notes, I actually kept the simulation rules of the disc simulation and what I learned afterwards. It was probably the most fun I’ve had in a class. The simulation went something like this:

(1) You’re currently running a business producing CDs. You can choose to either invest in more factories, pressing CDs, or research this new crazy wild technology. Yes, it was DVDs. I feel older just typing/writing this.

(2) Like in life, there is a cost of doing business. You only have so much money/time. Money wasn’t free in this simulation.

(3) DVD factories cost more to build, took longer to get up and running, but had higher margins.

(4) CD factories were the opposite but there was an existing market for it, which meant more competition and less margin.

(5) Just like in days of VHS vs Betamax, there was a format war. Each individual team, if choosing to invest in DVDs, had their own proprietary format.

(6) And there was a crazy amount of complexity (like in business). You could add salespeople, invest in manufacturing, sign contracts for other teams to sell for you, etc., We had spreadsheets and multiple models. Literally, you could spend hours analyzing this stuff. Some people went insane looking at the sheer volume of data.

(7) Each team submitted what they were going to do to the professor/class lead. Build. Invest. Create partnerships. Based on these decisions, each team made or lost money. This was considered a turn. I believe the game had a total of 20 some odd turns, which represented time. Every game has to have a limit. Life can’t last forever.

Now, in any MBA program you are assigned to teams. I give the school credit. They could match personalities to a tee. There was the type A personality team. The analysis team. The debate team. What is amazing to me is that the MBA program had classes on statistics, power and leadership, negotiation, business strategy and more. But it didn’t have a class on how to put a team together. I believe I was in MBA class number 23, and they’d never had a team implode, yet. That’s incredible selection dynamics. If corporations and governments could select teams this good, how far would the world go? Maybe that’s why the University didn’t have a class on it. Why share trade secrets? The world should really be more giving.

And for my group of misfits, it was the Better Done than Good Team. Yes, time was precious. We weren’t lazy, just wanted to be effective. We all had families and day jobs. So, this was our motto. We reviewed the data. Debated multiple strategies. Made said decision. Executed tirelessly. I’d say ruthlessly but it is a class.

My memory is hazy, but I think there were six to seven teams/groups total. Each had different strategies. If this simulation ran 1,000s of times (I’m guessing someone keeps track of this and it probably has been used in one form or other in multiple business schools), I’d say most teams tread cautiously in the first one to turns to get a feel for the landscape. Let’s see what the next team is doing. Then, we can make a decision. Cautious we were not. We went big and bold. I’m proud of this. In college, I had a knack for wrecking business class simulations. For me, it was always about rigging the game with a little Chaos Theory tossed in for fun. If you have to be in class, might as well experiment a bit.

Now, I advocated to build 20 plus DVD factories and go massively into debt right out of the gate. The numbers said this was a laughable strategy. We debated this for a long while. In the end, we dialed it back a bit (not much) and ended up breaking ground on ten, give or take. I do think this was the right decision. This was eight more than the next closest team. Most laughed. Then, the turns started. We went into debt. And then went into debt some more. But then the game dynamics changed. The sales came in. It was an excellent example of capacity planning (special nod to our lead capacity analyst, he was incredible). This one move set the stage. Yes, we made deals, negotiated contracts, etc., But really the game was over before it really started. Still, I learned a few things:

(1) Be bold. Be right. By the time the other team’s adjusted it was too late. Note, we did have a team gain ground on us at the end in sales and revenue. If the game had two more turns, we might have lost. I thought were going to lose, but someone on my team pegged the math. The other team tried/came close. But it didn’t really matter.

(2) Understanding the rules and knowing what you can do to make changes mattered. Yes, you could buy more salespeople in the game, but the impact really wasn’t there. In this game, based on our strategy, salespeople didn’t matter (Sigh). But other parameters did. Knowing what metrics turn the tide in any simulation or business is essential. In real life, salespeople do matter. Everyone sells something. No doubt.

(3) Coopetition is real (even if it isn’t a real word). In this game, the standard mattered. We made a deal that all companies used the same standard. It cost a ton to pull off but expanded the market ten fold. Yes, we wanted to win. But we made more money by protecting the market too. There is a reason Google, Microsoft, Apple, Facebook, Automattic, etc., protect the Internet. Everyone benefits. Even the last place team in our game fared better in terms of revenue than the winners in simulations where there was more than one standard.

(4) We elected not to have a sales team because the return wasn’t there. Some teams did. For our business, we farmed the work out to another group. It was important to develop relationships with other teams. And some we didn’t.

At the end of the simulation, our team won the title by a hare. Selecting a strategy and jumping in took the day. But it wasn’t the trophy and kudos that I remember. It was the team I worked with. I still keep in touch with some of the group. In the end, the relationships we build are what sticks with you longer than any class or job. Thanks team, it was a fun ride.