Posts Tagged ‘Strategy’

Yesterday, straight after the investment class, about 30 of us (the MiF PTs 2013) ventured to a nearby Chinese restaurant to celebrate the new 4709th Chinese year of a black water Dragon by tossing and eating yusheng (鱼生) and wishing each-other great things in the year to come.

These festivities made my mind wander back to 2011 and re-evaluate things that happened in the past 12 months. Same day last year I was with one of my bffs (who was born on the same day, month, year as me) sipping negroni on Piazza Campo de’ Fiori in Rome.

One year and one day ago I was switching off the electricity in my London apartment, being forced to leave the country due to a recent change in visa requirements, as Mr. Cameron continued to bring to life his pre-electoral commitment to put emigration under control.

One year and two days ago I got a letter from Peter Johnson, congratulating me on being accepted to the LBS Masters in Finance course. Having taken the GMAT only 3 days prior to that, the news was a complete shock. I was at work and had to find a remote meeting room to allow myself a loud and cheerful celebratory dance. It felt really-really good.

So here I am now, in the very middle of it, and my experience so far cannot be farther from my great expectations in two major points:

First, the reason why I took the course was to advance my finance skills without getting too much fluffy stuff of MBA programs. I took corp. fin, accounting and macroeconomics in Chicago Booth, which was great and made me want to do a CFA. But when the bricks books arrived, I found myself deviating towards more healthy activities rather than spending my free time sitting on my bum trying to take in tons of information without an opportunity to ask a question. That interaction-lacking method of studying was depressing and put me off for a while. Similarly, I thought of LBS’s MiF as a painful remedy for those who felt the need to extend their knowledge in the field. I couldn’t have been more wrong. If you ask me now, what it’s like to do a MiF at LBS, my first word would be FUN. And you’d better take my word for it.

Second, it is not all about money. Our strategy professor, for example, is specializing in sustainability, and we spent 1/3 of the course discussing the benefits of green initiatives with representatives from Goldman Sachs, as well as hearing success stories from the industry; (some other time was spent modeling the prospects of Internet dating). And this responsible and reaching-out attitude is not being pushed top-down, – all the students in one way or another are involved in charity work, with some great successes like our co-student C. Coghlan’sGrow Movement”.

To sum up, although I am writing this now, I don’t feel any pressure or need to try and convince you to apply. The guys who I have met so far have so much in common with me that it feels like fate, so if you are supposed to be in LBS – you will get there one way or another. Doing a postgrad course, especially when it involves migration to a different country, is a big change. And there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle than to initiate a new order of things; for the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order. (that’s not me, that’s Nicolo Machiavelli)

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In our first lecture in Strategy this week we didn’t kick things off with the Five C’s, the Four P’s, or Porter’s Five Forces, instead we shone the spotlight on ubiquitous pop-star turned movie star turned social do-gooder Madonna.

We discussed how “Madge” built and sustained commercial success over the last three decades thanks to using controversy to establish herself, surrounding herself with the right people to make up for her weaknesses as a performing artist, and reinventing herself to anticipate the needs of her fans. Most importantly, though, Madonna always had a clear vision of who she wants to be: an “icon, artist, provacateur, diva, and mogul”, as her website proclaims.

Now, that might not be everyone’s aim in life but, regardless of your ambitions, I think we can learn a few things from Madonna.

1) You don’t need to be the most talented person to accomplish your goals

  • Madonna certainly doesn’t have the voice of Aretha Franklin, dance moves of Janet Jackson, or songwriting ability of Joni Mitchell, but what she lacked in talent she made up with drive and smarts. She is a notorious workaholic (sleeping an average of four hours a night) and drew on the talents of others to make up for her shortcomings. This takes both ambition and self-awareness which are attributes we can actively develop as opposed to raw talents that we are born with. So regardless of what you want in life, if you work smart and work hard (see Malcolm Gladwell’s Outliers for the 10,000-hour rule) your chances of success are likely to be much higher.

2) Having a vision for yourself can go a long way

  • Ever since she was young, Madonna knew that she wanted the “whole world to know who (she) was”. Whether you find this noble or not, Madonna’s creation of and commitment to her vision has made her a household name around the world. In 1977, Madonna moved to New York with $35 in her pocket and worked at Dunkin Donuts to pay her bills while she was moonlighting as a backup singer/dancer. It wasn’t until five years later that she received a recording contract that led to her debut album, Madonna, which ended up selling 10m copies and catapulted her to superstardom. Having a clear vision (for your career or life in general) not only helps us make decisions on how to use our time, money and energy, but it also gives us the resilience to persist through tough times. No matter how certain you are of what you want to do in life, we can all benefit from being a bit more deliberate and creating a strategy that will guide what we do each day of our life. Check out HBR Article “How Will You Measure Your Life?”.

3) It’s easy to be successful in one thing, but harder to do well in everything without compromise

  • In 1987, a year after releasing her third album True Blue which was critically acclaimed and spawned three hit singles,  Madonna filed for divorce with her then husband, Sean Penn. Of her marriage to Penn, Madonna later said, “”I was completely obsessed with my career and not ready to be generous in any shape or form.” Madonna’s focus on a single goal has led to undisputed commercial success, but this is matched by failures in her personal life (most notably her two failed marriages and brief relationship with Vanilla Ice). In truth, this is the outcome of many people who are wildly successful in their professional lives and drills home the point that there’s an opportunity cost to everything. We just need to be straight with ourselves about what we want and what we don’t want, and appreciate that professional achievement should not be confused with personal fulfilment. For more on this check Out Tony Robbins’ TED talk on Why We Do What We Do.

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Business and Biology

Posted by: Kristen

Recently in our Strategy course we evaluated the concept of strategic evolution in addressing the question of how an organization can best structure itself in order to maximize its competitive advantage. As someone with a background in the life sciences, after having spent an intensive month so far covering topics such as management, governance, and finance, I confess I was particularly pleased to come across some old but familiar concepts from studies of biological evolution and ecology. What I found striking was the degree of relevance they had to the business world. In essence, the same problem is posed to any system (whether it be an organism or an organization) that must compete with other systems for limited resources: What is the best way to balance between becoming specialized to a niche to maximize profit and remaining generalized enough to preserve the ability to quickly adapt in case the environment changes? It makes sense to look for lessons from biology, which has had eons to work on this very problem through the process of natural selection.

One well-studied example of this is the story of the peppered moth in the UK. Prior to the industrial revolution in the 1800’s, the peppered moth looked, well, peppered – with sprinklings of light and dark patches on its wings as camouflage to match the lichen-covered trees and stone buildings they lived amongst. Most of these moths had similar light-colored markings; only a small fraction of them born were significantly darker than the others due to natural genetic variability. However, these darker ones were easily spotted amongst the light-colored environment and were typically picked off by predators before they could reproduce.

White-bodied peppered moth

Black-bodied peppered moth

With the industrial revolution, trees and buildings near major cities in the UK became noticeably darkened from the soot emitted by coal-burning factories. The change in the environment favored the dark-colored moths over the light-colored moths. It was now the light-colored moths who stood out amongst the background and were soon picked off by predators, while the darker ones survived to reproduce. By the late 1800’s the majority of the peppered-moths around industrial cities were dark-colored. They had become, through the process of natural selection, highly adapted or “specialized” to their environment.

Now imagine what happened when they eventually cleaned up the soot? The environment quickly became much lighter. Those dark moths that had just a little while ago been so well-adapted and successful now stood out amongst the light marble, stones, and trees of the city. Those that had been the most fit for the environment were again the least fit and their numbers were again reduced by predators and so on.

So, what can the adaptation and survival of the peppered moth tell us about optimal strategies in business?

1. Specialization allows you to thrive but may come at a cost if the environment changes.

2. To reduce those costs, maintain some intrinsic variability in order to adapt as quickly as possible to a new environment.

3. Unfortunately, the optimal amount of intrinsic variability is hard to know. In biology, the answer seems to be “just enough” and is likely a function of the degree of potential change in the environment constrained by the amount physically tolerable by the organism.

4. It doesn’t always work. Although the moths endured, there are plenty of examples of species (and companies) that have gone extinct because environmental changes outpaced their innate ability to adapt.

5. Think ahead. These moths were fortunate to have had enough intrinsic variability to allow them to endure the selective pressures that were put upon them since they weren’t able to predict nor prevent the industrial revolution from happening. While there may be forces beyond our control that will ultimately shape our futures as well, we also have nice big brains that allow us to have, hopefully, a more active role in our own future in the choices we make as individuals, organizations, and as a species. We can stay informed about changes in our environment and find ways to influence and predict them. We can diversify our businesses more or less depending upon the degree of those predicted changes. We can make a best guess. It isn’t easy and there are no guarantees, but that is the challenge of life, both in biology and in business.

Light and dark peppered moths on a healthy tree where the light-colored moth's camouflage is best suited.

For more information and photo sources, visit http://en.wikipedia.org/wiki/Peppered_moth_evolution

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