Student Experience: An Unexpected Business Lesson

Thursday, September 7, 2017

Last week I wrote a blog about my new job, so it seemed appropriate this week to tell you the story of how I got fired.

I should back up.

This past year my classmates and I took many conceptual courses where our professors were very good at taking what we were learning in the classroom and relating that knowledge back to our day jobs. I've written before about how I've applied specific skills I've learned into real life environment, but two of the best classes I've ever taken that allowed us to comprehensively apply our knowledge were Decision Models with Professor Morgan Wise and Financial Strategy for Value Creation with Professor Avi Atholi. Both of these classes truly put in-class learning and real-life lessons and mistakes into perspective.

I took Decision Models with Professor Morgan Wise first, which built upon what we learned in Statistical Models. For my final project, I chose to take some data from a rewards program I ran at Midland to find out if it was having an effect on our undergraduate retention numbers.

I could go into a lot more detail with Decision Models and the outcome of that data, but it was the elective I took this past summer. Financial Strategy for Value Creation with Professor Avi Atholi that I want to spend most of my time on. It was the single best course I've taken throughout my entire academic career, thanks to the practical applications and the invaluable lesson Professor Atholi taught me that I will never forget.

This class was a seven-week simulation where my teammate and I ran a car company. As a team, we had to make decisions about every aspect of the company, from how it was financed and the marketing methods we wanted to use, to making the strategic choices in where to play. Every week, a year of sim time passed and the results of the year were posted for us and the competing teams to see.

Halfway through the course, we ran a quarterly earnings call using the results from our simulation while our classmates were the board of directors with Professor Atholi acting as the chairman. We had to present to the board and convince them to rehire us as the CEOs of the company.

We were told at the beginning of the course that you'd learn a lot about yourself. How you handle stress, how you feel about risk, and how much you've actually absorbed the information you've learned in the previous terms. I'm not sure any of us really took that as seriously as we probably should have. 

My partner and I did very well for the first four simulation years. Our shareholders were happy, we were beating our main competition and growing out lead, and we were gaining value every period.

It all went wrong after that. The strategy which served us so well for the first half of the simulation proved ineffective in the long term. Our sales had been strong and growing steadily, but at the first sign of real competition, the bottom fell out. We went from leading our segment in market share by a high-single digit margin to trailing by a double-digit margin.

When it was all said and done, my partner and I were fired by the board. While our initial strategy was effective and we finished out with several years of consecutive growth as well, our failure to take into account how our competitors and their decisions would affect our sales led to very poor performance in the middle years. The lack of foresight and flexibility forced the board's hand.

Something in particular that Professor Atholi said to us during the board meeting especially stood out, and I'm certain will affect how I think the rest of my career.

He asked a question about one of our vehicles, which absolutely tanked. I ran a financial model on it that said, in theory, that decision should make us money. When Professor Atholi pushed us about the vehicle's failure, I made the argument that while the results were terrible, I stood behind the financial model and thus the decision-making process.

"Any monkey can run numbers," he said. "You need to show judgement." 

As I've talked with friends and mentors of mine who have been in the business world for a while, I told them the story, and they all laughed. A lot of them had to learn that lesson the hard way, but to a single person that all said it was true. It was amazing to be able to learn it in the classroom where the stakes are bragging rights and a certificate instead of the corporate world where the stakes are people's jobs and millions of dollars.

Not to mention, getting fake fired for running a fake company into the ground is a lot easier to explain to your family and next employer.

These past two terms have been the most enlightening so far. I can see the light at the end of the tunnel now, with just two more terms (16 weeks including breaks!) to go.

Jack O'Connell, Midland MBA Class of 2017

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