BackNo textbook formula for business realities
No textbook formula for business realities
PremiumWhat I Didn’t Learn in Business School: By Jay B. Barney & Trish Gorman Clifford, Harvard Business Review Press,288 pages,Rs 695.
Newly graduated MBA Justin Campbell lands a job in a consulting firm. He thinks he’s equipped with all the business school strategies, but real-world situations don’t prove to be as straightforward. Campbell is the protagonist of the business novel, What I Didn’t Learn in Business School. Through his story, authors Jay B. Barney, a professor of management at the Ohio State University’s Fisher College of Business, and Trish Gorman Clifford, dean of faculty at the Jack Welch Management Institute, drive home lessons you may have missed at business school. In an email interview, Clifford tells us about the reality checks at the workplace. Edited excerpts:
The book’s main character, Justin Campbell, learns about himself while working at HGS. What did he learn at work that he was unlikely to at business school?
What are the three most important things that people tend to miss in business school?
First, asking the right question is as important as getting the right answer. Usually the question is given to you in business school, whereas in the real world, knowing which questions to focus on is an important skill.
Second, firms don’t make decisions, people make decisions. The assumption that firms take action is implied in many of the lessons in business school, especially in strategy and finance courses. In reality, people—with human biases and limitations, rather than perfect rationality—make decisions.
Also, just because you can do something doesn’t mean you should. Many MBAs focus on building skills and being able to do difficult analysis and approach challenges head on. In the real world, it may be just as important to learn when the analysis is unnecessary, or when to take a more circumspect approach to a challenging situation.
Give us one instance where a direct strategy, taught often at a business school, gets complicated and messy?
One direct strategy often taught at an MBA school is calculating net present value (NPV). Business schools teach a formula to calculate net present value that is very straightforward. Decisions about investments are then made based on the calculations. In the real world, the calculation of NPV can get complicated and messy because of human involvement or human nature. Different people in the same firm may make different assumptions about the numbers used as inputs into the formula, or the interest rates or time periods involved. Depending on whether the investment is desirable or not, managers can use this strategic tool to complicate an argument instead of giving a clear outcome.
Would this book be helpful for those who haven’t done an MBA but work in a business management scenario? If so, how?
Reading this book is a terrific idea for someone who does not have an MBA. The situations that Justin and his team face, and the challenges they overcome are typical of many business situations. Whether or not the reader has an MBA, the story is entertaining and the lessons are valuable and memorable.
What value-add does the format of a business novel provide?
Great strategies are narratives with dramatic elements, new information exposed over time, and critical points in time where characters take action. The format of the business novel allows this story to come alive through the characters, and the story includes not only business events, but draws out the human aspects of teamwork done by a mix of personalities under stress. The novel format places the business lessons in a realistic setting, and provides details and nuances that would be impossible to include in a textbook example or a short case.
komal.sharma@livemint.com
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