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I'm proud to report that my handlers selected me as 'man of the match' again this year. It's a wonderful distinction, and I'm very pleased by it.

Now, I haven't done a stick of work for my 'handlers' since July 18, when I got on a plane for India and then returned here to do some real estate. It's amazing that you can get so much done in so little time. (Or a credit to those guys that they look at quality not quantity.)

Well, all that will change soon. Hopefully my future depends on the economic impact of results more than the economic implications of the effect of results on my feedback. If you know what I mean.

Sniffing, part 2

I posted on 12/25/2004 about sniffing. I am currently on leave from my main employ working on these buildings and other ancillary projects. More on that when we get together.

Conference bridges. I love them

I spend several hours a day "dialed-in" to conference bridges. They are like rooms in the telephone. You dial a number, then a code, then you are in a party line. A party where all people talk about is market sizes and next steps. But it's fun!

I'm buying it!

Treo 650

So should you

Sniffing

I have been sniffing around. In my private blog.

Calendar Year 1

Nearing the end of my first calendar year, and the end of a long project, it is coming due to evaluate the standings. There is a very interesting real estate project in the offing now (out of the office) and some other projects too. I will post more on the private blog.

It's safe to say I'm on break

Work has been so busy and so demanding on my extra-curricular time, that I have blogged here little in the last few months. It's a shame because these months have in fact been very eventful and formative for my longer run view of myself.

But there was that chilling event back in May when I was told I should cut down, which cut off a major subject area; and there has been some very busy time at work.

Oh well! Today I am at training though with a few moments to reflect and perhaps I will capture more of this into writing over the next two weeks.

Sleeping Less

Haven't slept a lot lately. Trimming on both ends of the night's sleep -- later bedtime and getting up pretty early (5:30am). The cumulative effect is probably a significant sleep debt. I know I spent last weekend feeling sleepy. Will probably happen again this weekend; you can't sleep down your sleep debt in one long morning.

Talking to a former Air Force guy, I got some direct info on modafinil (Provigil). He seemed to think you accumulated sleep debt on it. Maybe he saw guys take it for a while and crash afterwards? What I've read about it suggested that there was no such accumulation.

Meanwhile, a neuro guy I talked to says he doesn't believe the "no side effects" stuff either. He's talked to guys who have worked on the stuff and they think such effects will emerge.

I want to know who's taking this stuff, so I can see for myself. They say bankers are using it. And that it's easy to buy online.

Seeing the effects of moderate sleep deprivation, however, is instructive too. I was getting exactly enough sleep for the weeks preceding early May. My energy cycle fit exactly into the circadian rhythm of 9am and 9pm peaks, and I felt "perfectly awake" and "energetic" for most of the day.

After a few weeks of sleeping 2 hours less per night, I now feel physically tired even in the mornings. I am awake and alert, especially after coffee but I often feel a bit slower physically. Even mentally, on occasions I have simply overlooked things I was supposed to do (recently, I forgot to call someone right on time on 1-2 occasions...was only reminded later by my calendar). I need to give myself some cognitive tests. But I can say that I think my attention is diminished, and my energy level to support creativity is somewhat diminished too. Then again, you get more from spending more hours working, and not everything you do requires the theoretical maximum of your attention and creativity. Some of it is mundane.

Due time

More substance to come, in due time. Been so busy with the new dog, new work, new etc.

A Man is a Man

I met a guy last night who finished in my PhD program a year ahead of me, and who actually went to the same consultancy as I'm just now joining. After a year and a half there, I finally met up with him for dinner in LIC.

The weird thing was that this guy was always a little bit blue in graduate school. I don't blame him -- I didn't like the social life too much either. But he was a little more committed to making a go of it, and as a result was probably a little more trapped in it. I remember when he left -- he really talked of it as a fresh start, this new job. He'd no longer be a poor student; he'd have an awesome apartment in a skyscraper in downtown etc etc.

So what struck me is that things don't change. He still had this tinge of melancholy and still found himself a little unhappy with the social life his new job was affording him. Of couse, he's a very successful guy overall and interested in his work.

Rather than taking this as a conclusion for how busy I'll be, my main observation is that you can't radically change your outlook by changing your surroundings. You have to change more than that. So all those depressives back at Stanford should realize that they're never going to enjoy things much if they aren't enjoying things now. They should not simply blame the rough grad student life.

The other lesson I'm tempted to draw is that I'll probably enjoy the demands of the consulting life just fine, since I always seem to get along okay in my other pursuits -- even when I was moonlighting in a tough job for Virgin while working on my dissertation full time.

All that said, it's funny how short a year and a half is. He just started at this place. And already the big question is, "when do you leave?" Lots of people leave after two years, and that's the question facing him now. We'll see what happens to me. It was interesting to see him staring at this milestone -- only 6 month away -- with nearly total uncertainty about what he'd be doing after it. I'll have to be sure to think far ahead at all times.

Training's Aims

Training is over and I'm home in Little Neck. It was all a bit sad, this last day and the farewells. I wonder when I'll see some of these people again. A few are joining my office, but others are going all over the world. This business has a high churn rate, and many will be on to the next thing sooner rather than later.

The training definitely helped me feel more comfortable about the work and about the people I'd encounter doing the work. And I've made some good friends. And I even feel like I've learned some stuff about finance, economics, M&A, marketing, strategy and operations. Not bad for a few weeks.

I look forward to seeing all those duded again when I'm next in Europe or Asia.

M&A

For the last segment we are learning about M&A through a really interesting case project about Kellogg in 1999: slowing growth in cereals, lots of cash, need to match the size and market power of the retailers on one side and the food processors on the other, the hunt for faster growing product categories and meeting the needs of changing "on-the-go" and ethnic lifestyles.

We are stalking a takeover target and trying to match the opportunities with our needs. This afternoon, we dig into "synergy" analysis and methods for quantifying and analyzing them. You always read about this crap in the newspapers and it's usually the advice of investment bankers ("You can save 10% on manufacturing costs... you can ramp up new product growth...") without deep understanding of actual businesses. We, obviously, have very deep understandings of actual businesses.

This I can tell you even as a novice because our analysis goes far beyond the "industry comps" and "financial ratios" that I have always seen bankers focusing on. Those are the drivers of their analysis -- can we bring our company in-line with the industry average opex/sales ratio? Maybe.... What is driving up marketing expense? Do we just graph it as a straight line? It isn't clear.

Beyond the financials are the strategic and market dynamics concepts that they've been teaching us about for a few weeks now. The power with vendors, the qualitative differences in the distribution network strategies, the scale economics of purchasing inputs as a buying unit, etc. These ideas guided us to look at the financials in more educated ways, and helped us decide how to tinker with projections and valuation.

My assessment is that this overall approach produces really valuable insights, and that many of the "standard tools" that we use (certain financial measures, frameworks for markets, etc.) are in fact rather powerful. You can improve your analysis a lot simply by adopting them. The further insights of course are for us to add, and we are trying to do it.

M&A cases are pretty fun -- but I think they involve a lot of wheel-spinning as you evaluate options. I don't know if I want to be staffed on something so time-intensive and flashy. I'm interested in launching interesting new products, joining new markets, or re-designing market positions for big players. We'll see if they let me do that.

Reducing the Online Component

I used to have a lot of free time -- and you could measure this by the proliferation of online projects. I now have much, much less. I will soon forget the bylines of Salon and American Prospect writers, lose track of the new titles in the contempo indie segment, etc. And I won't know what the cool new internet fads are. Others here at training are complaining that their "personal" reading time is falling -- I think my internet use has taken the hit. Fewer entries here, on LICNYC, and all over the internet.

I'm spreading risk, I suppose, by investing in this nice new job. It should pay off over time, but it's always very tempting to do something more radical in the short term. Looking back on the last 5-10 years, though, I'm pretty pleased with the growth curve. So I'll keep at it.

What Do You Learn If You Learn Nothing

In this training course they are taking people who are not used to working in business (in principle, you could be a lifetime academic -- one guy has a BA, then central bank work, then PhD, then assistant professor job and nothing at all in the "real" world).

They are taking these people and teaching them some "business". But what can you really learn in a few weeks? Nothing?

Here is what you learn:
- about this consulting company's culture
- you meet a large number of actual people
- you spend a lot of time with them in a risk-free environment and grow to like them through games and relaxation
- you are coddled in every way so you have a nice experience at this learning "center"
- you work in a few high intensity cases right up front -- to burn off your anxiety right at the start
- you are put in some weirdo teams with no training and simply set at it. You raise tensions a little. You get over it.

News Media

An interesting idea was spurred by some discussion today of the information products industry. Some products are substitutes -- like two brands of tires or raw, reliable data on stock prices. But other products are actually complementary goods, like tennis balls and rackets, or unreliable and opinionated forecasts about the next 10 years of technology trends. If you want to understand the future of the technology market (or fashion, or stocks, or politics) it is pointless to order one subscription and read that. Nobody has the answer. Yet they aren't all garbage. They are different, well-considered opinions on various subjects. So if you want to be well-informed, you have to order all of them. Ordering Yankee's reports is a good indication that you order Gartner's and Forrester's.

Well, that introduces the dynamics of complementary market price competition: the prices get inflated. They would actually be lower if one company sold all the options. Think of the balls and rackets. When a consumer buys them, they consider the bundle as a single value decision. So they budget say $10. Should the racket be $5 and the balls $5? If the companies are competitors, they cannot agree. In fact, they face a prisoner's dilemma: each is tempted to jack up their price a bit to capture more of the consumer's budget. The result is that such markets have higher prevailing prices than markets where a single supplier sells the ball/racket combo. Amazing.

Well, the same is true for information products of a speculative nature like Yankee et al.

Now, think of this. The news of the world is a commodity like stock prices. But news analysis -- that is different. That is more like the future forecasting. Consider then why Fox and MSNBC are spewing such "nonsense" or "biased" material in contrast to CNN. The game is not about quality. It is about creating complement goods that drive up total "price" -- in this case it is total viewership by users. People may be adding Fox to their cable news diet and growing the total pie even as they steal some share from CNN. That is the key fact to look into -- but the analysis is very interesting.

Marketing and Strategy

We just finished a 5-day segment on Marketing and Strategy. These are softer sciences than the Finance and Economics we spent several days on during the first section of the course.

One source of promise are the technical methods of marketing analysis: the Delphi procedure, perceptual maps (multidimensional scaling and also the additive method), focus group and conjoint analyses, and also the various other measure of important demand and uptake strength. For example, it is nice to know that there is a model of product adoption and that it has a definite shape and definite inputs -- a real tool for thinking about early, mid, and late life products (the Bass model).

One frustration is that it all went by so quickly. True enough we will not make perceptual maps ourselves but rather look over the ones that marketing researchers produce for us on our studies. Okay, but the other material we covered felt far less substantive. Everyone knows about the 5Cs, 4Ps, Five Forces, BCG Matrix, Seven S Framework, etc etc. They are not informative at this stage. What we need is either a)practice in using them or b)a more detail analysis of how to think about them.

A message of the approach they may have taken could be "that's all we have as far as propositional knowledge on this subject". The rest you will have to learn from real cases and from your peers in the office. That could be right, actually -- there is so much garbage out there in the "press" about strategy etc etc.

On a Deserted Island

We begin week 3 of this course tomorrow and it has been pretty long. The days and nights sort of blur together in sameness -- breakfast is served the same way every morning at 7am, the coursework through the day has the same patterns, the evenings are all flowing through the same corridors. It feels very short because of this conceptual compression.

One result is that we've all bonded together nicely. I get the impression that I'd quite like to work with these folks and I've got a nice feeling about this whole place. We'll see what reality is like when the time comes; these are all PhD-types and the real world will include people of very different backgrounds.

I've been excercising often and keeping reasonably good habits these few weeks. I hope the real life will permit similar behavior.

Looming this next ten days, the closing on our building. Should be any day now.

The Time You Have

The conference facility they have us in is great in many ways -- leather recliners in the rooms, great air conditioning, sporting facilities complete with resort-style games, really good (health-conscious, decent selection, moderately tasty) food. They even have internet in the rooms.

But they don't have wifi at this place -- which isn't asking too much, is it? So it slowed me down. I had to find a network card! I was down for like 4 days solid. A record for me. I rarely went 2 hours without internet access (in my pre-work, loafing PhD days, anyway).

Even so, there is no internet in the classroom. Probably a good thing, because it means I pay attention. But also a bad thing -- for this blog. I haven't had a chance to make those quick observational entries as I would have liked to.

In fact, the schedule hasn't even left me time to make those when I get back to the room. Partly my choice, partly the choice of the schedulers. Take for example, Monday:

6am wake

6-6.30 some excercises

6.30-7 run 2.5mi

7-7.30 dress

7.30-8 breakfast (eggs, bacon, cereal, coffee, OJ, berries)

8-10 lecture: finance - the equity cost of capital (WACC, EVA, CAPM and Beta, ATM model)

10-10.15 - break, call home. drink coffee

10.15-1pm team work on business unit valuation

1-2.30 lunch (salad, sandwich, swordfish steak, turkey wrap)

2.30-4 lecture: finance - company valuation, continuing value, market risk

4-4.15 break

4.15-7 lecture: finance - multi-business valuation, M&A framework

7-8 dinner (lobster, club sandwich, salad), throw laundry in machine

8-11 team work on multi-business valuation

11 beers, game of pool

11.30pm back to room, laundry to dryer, emails, deal with "MSblaster" virus on laptop

12.30am sleep

Long day right! When do you expect me to catch up on the "personal life" element of my "life"?

The nice thing though is that everything is taken care of. No thinking about food. The laundry is across the hall, free, and safe. The coffee is ready in the morning. They put new pens and paper on my desk every time I come into the classroom. All I have to remember is to dress properly and show up.

Personalities

There are clearly different types of personalities and they work together in interesting ways. Some people like to step back and let someone else coordinate the action, accepting the extent to this diverges from their own ideas but using that independence to pursue their ideas privately. Others feel very inclined to push their thoughts in front for group analysis.

Some other folks here at the training are doing personality related stuff - Myers-Brigg and how to use it to get what you need done, influence, etc. We are experiencing the same lessons in our little workteam, as we try to coordinate our work.

In fact, though, you see the same dynamic in a large classroom of 30 people. Some people play the role of "question asker", others avoid "wasting others time" with their questions. But there is a clear leader there -- the professor.

In the room of equals, you sometimes have to battle it out. You do have to learn how to work in a team - it's true.

Making an Entrance

For my first day at my first really serious job ever at the first post-PhD thing I have engaged in the whole "rest of my life" part of things -- for that first day of activities and nervous first introductions, I arrived 5 hours late.

One of the five "teams" my colleagues had been broken into had written a song about me -- "Where is Amol?". I had to dance in their presentation (as well as my own team's presentation) and was featured in a second team's lyrics as well.

It was a blustering first adjustment to the situation. Get your screw-ups out of the way, I guess.

The First Day of a New Life

All the hilarious details are coming soon, as I am at my training now, but I am without good internet. So they will wait. But they will include:
- first impressions about people
- work schedule
- the food
- the excercise
- the backgrounds
- the senior people
- what we're studying
- my own world and what it means to me.

How to Get a Consulting Job

Still reading that secret book by a secret author, and just got through the chapter on the character of the consultants they hire.

Apparently, it helps to be good-looking (since this guy keeps mentioning how helpful that is to a consultant).

Here as in the discussion of how to please clients with good work, there is a baseline assumption that people are smart ("intellectual horsepower" pretty much) to go with his previous unwritten dogma that the work must be outstanding. He has little advice on that matter - rather the focus is on the other aspects he's worried people will forget, e.g. that the consultant be handsome.

More broadly still, it's character character character. Integrity, trustworthiness, personableness, confidence, reflectiveness, curiosity, etc. Good writing. Accomplishments sufficient to steady the young consultant's nerves in tough situations.

I never thought of such stuff as I went into the consulting interviews, and I should have. From my academic record alone they can assess all they need to for the intellectual aspects. Why bother interviewing? They want to assess these other qualities. Pay attention when you are in the interview.

Another thing: he is adamantly opposed to hiring people for permanent employment in foreign cultures. Like, don't hire me to work in France or Australia. Even though it's important to give people experience overseas, you don't want to station them there for life. He has good arguments for this.

Finally, to those aspiring consultants, he is very forceful in opposing "senior hires". It is best to hire people with less than 3 years experience. You will learn everything you need to know on the job and in the ongoing training. A huge emphasis of the structure of the consulting organization is to train up and train down, train everywhere all the time. You will learn about business there. All you really need to be is: smart, ambitious, handsome, etc.

You don't need to know squat about spreadsheets.

You can see the reasoning for this when you take the long view. Management consulting as a field was entirely novel in the 1920s. Just a few guys trained mainly in accounting or law or industry experience were advising clients of many types on many wide ranging problems. The conception of the industry is as professional, independent, highly talented and capable problem solvers for any problem you face at the high levels of running companies. Those guys didn't have MBAs, usually, and the MBA would have been rather useless to them at the time anyway. It had been a kind of training for middling managers, and in fact these people were specialists on the CEO's challenges.

Anyway, the point is it doesn't matter where you come from really -- except that you are not too full of the wrong approaches and thinking to be a consultant. For this reason, the CEO of a major company is not a good choice to be a consultant. He won't know about pleasing clients, training his peers and reporting staff, etc. He will be a war-fighting general.

The other problem is he should have better things to do. If he doesn't, he has issues you don't know about yet. If he does, he will leave soon. So don't bother hiring him.

So they hire MBA-level (or JD, etc) mainly, and promote from within. It makes sense. More companies should do it.

Things Consultants Use

The training is continuing, and now I'm back to looking at a book I read a ways back. I think it's an MBA standard-issue volume, but it's also one that my firm likes and encourages. I think it's an amazing accounting book -- without the stupid stuff and all the useful stuff, plus perspective on what all these concepts can be used to ascertain.

For free, I have included the standard super-best calculator that everyone uses. Nevermind that they don't do a thing but NPV/PV/FV on it. It can do all kinds of other nifty things! And it will impress your colleagues - believe me, it will. (Unless you are an investment banker, in which case you really ought to have one to avoid looking like a moron.)

Secret Book, by Secret Author

As I become indoctrinated into the culture of my new employer, I'm reading this book a friend gave me about the place. It's one of these things you're not really supposed to tell others about, and plus I'm trying to keep a low profile on this thing, so I'm certainly not telling you.

Buy something from Amazon anyway, like this incredible book that made me think about technology and all marketing very differently

Instead of telling you what the book says in any detail, let me tell you about indoctrination. The Cadliani book a few weeks back discussed an interesting line in psychology about getting people on board with stuff -- the key is to get them to simply agree. If you say to someone "would you watch my stuff?" and they say "sure", they are 100x more likely to actually do things to protect your things. You'd think there was an understanding anyway, but there isn't until people actually, physically, mentally buy in.

The Chinese exploited this in Vietnam and Korea with American POWs, getting them to write things they explicitly didn't believe in return for pathetic little prizes like extra cigarettes. Once it was in writing, a change came over people. They felt inextricably linked to what they had said--however mild its criticism of capitalism--and felt they couldn't simply renounce it. They hadn't ever believed it really, but they had written it with their own hands for modest rewards. They had assented to it -- hence the powerful tactic of mailorder marketers in getting you to stick that dumb sticker on the mailback card to "claim" your free prize. Once you've done something, anything you are far, far less likely to back out of the magazine subscription when it arrives (especially because you already collected the free gift).

So much for Red China's tactics of indoctrination. Back to the consulting world's.

I must confess I'm pretty jazzed about the stuff this guy is saying. It's meant to be a historical review of this company's accomplishments, with an attitude of reflection on the fundamental principles that led and will lead the company in success. Here is what appeals to me:

- articulating the vision of management consulting as distinct from "accounting" or "dealmaking/lawyering" or other fields that are significantly more boring. They've got me there. That other stuff is boring.
- the "profession" aspect - a discipline that must have strong integrity, independence, commitment to the client, etc. if it is to be authentic and serious and successful. The idea that the consultant never takes authority, only provides the best possible recommendation and insists on fair conditions for providing such.
- the importance of people - the staff keeps coming up. There are things these guys didn't do because the consulting staff didn't like it or couldn't get excited about such projects, or things that should be avoided because they overextend the staff, or keys to negotiating with a client that can be tested by their effect on the project team's utilization. This is a major issue for me that always guided me away from the IBMs and AT&Ts of the world -- monolithic companies with roles for many less able and lower quality people. I didn't want to be in any such environment. I'm hoping all this principled talk suggests a better place.
- "sales" - these guys really seem to think that selling is a bad idea and client service should come first. Not only for professionalism but also because sales is a long-run road to nowhere; only client service can keep building on relationships.
- there are some other clever and wise sayings throughout this book, but many of them are about how to run an organization or a project for success. I'm sure they apply very widely. The one that gets no detailing but simply comes up every third paragraph is "do an excellent job", which is just obvious to the writer and needing no explanation. I will point out that what's missing is the advice to the junior chap just starting out.

I'll tell you one thing about reading all this history of great former members that started such-and-such office and led so-and-so engagement. These are very great things indeed. But I never thought about the sum total of my ambition as to be summarized in the few pages of a senior pooba's reflections. This is the first crack - take note!. The first crack in academia formed in the lounge of the Stanford Philosophy Department one day during my first year. This philosophy of mind guy was there, whining about some friend of his from college (Notre Dame) that was a fancy bigshot VP at Bank of America and how he makes all this money etc. He has box seats at Pac Bell Park and so on. Here, a tenured professor in the Stanford department, the pinnacle of what I could have hoped to achieve as a little first year on the couch, and he was damn right! Just a forgettable minor academic professional. He'd written a few minor items of purely temporary interest. It seemed to me then that I should think twice about this line of work.

So while this book is busily advocating the profession of consulting, I'm wondering if it can be the sum total.

Ratios and Calculation

One of the annoying things about homework style study is the false precision one often encounters. Case in point: elasticity. I don't know about you, but I take the absolute value of the elasticity. My little homework assignment didn't think I should. There are reasons for both views -- mine is the conventional method, theirs is a "useful" addition. But when you get a little question wrong, it is annoying. Remember, elasticity is (Qchange/Pchange)*(Pinitial/Qinitial) - and don't take the ABS().

Phone Etiquette

Most of my training has been online so far, but we do conference calls to review stuff and sort of even recieve lectures from faculty. Today they had a pretty good guy from Tuck. These business school professors are much better at lecturing and running discussion than the average philosophy professor -- I think it has to do with the $/course ratio disparity between the two types of schools.

On the conference call, one needs a good mute button. You listen for 99% of the time and sometimes interject for a few seconds. That button needs to be easy to access.

And you need to have handsfree. You can't sit their holding the handset for 90 minutes.

Finally, you need to reign in those personalities that want to interject at every turn. They are annoying. You see a pattern where 1 or 2 people have just a ton to say. Annoying! Distribution is important on such calls. Though, as in all things, you need to make sure your presence is felt. I think a minority of people (like me) have over-participation resentment mechanisms. So the negative effect of over-participation is limited to only that subgroup. Yet, that is a subgroup I generally think is worth pleasing. So you can't overdo the on-call antics.

There is even a cult of saying-less to keep track of. In smaller groups, if you participate MUCH less than everyone else, they will listen more closely when you finally speak. This works if you sometimes have really good shit to say. Plus they think you share the common business virtue of brevity and speed. You will find that lots of the top people you meet in the business world have an obsession with the same sorts of things: short meetings (held standing up), short emails, flying Southwest, shortcuts at airports, tricky ways to get discounts from customer service people, golf and watching sports.

Your mind wanders when you are on a conference call, so you should have a computer handy. Send emails, IM, and read the papers while on the boring call. If you simply sit there with a blank notebook, you will die of boredom.

Other tips for the conference call: get their early and be prepared to talk about the weather. It happens on every bloody call. Introduce yourself each time you speak and if it's a big call, say where you are from. "Amol from New York here. Blah blah."

The Office

The BBC's latest comic masterpiece is The Office, which you can download easily from Kazaa. As I watched the last episode yesterday, I found out they have only produced 12 episodes in the last 2 years! 6 per year, 30 minutes each. I can't go on! I'll go on.

The mastermind and centerpiece of the show is the character David Brent (Ricky Gervais), the paradigmatic bloviating office manager. Confronted by his bosses about a report he was supposed to prepare. He starts with "Ah yes, I've been developing some very deep ideas about this issue...". His bosses reply "No, David. We want the report not further nonsense. We are tired of this behavior from you. You are not delivering." So David becomes his transcendental self: "I think the issue here is that you are looking at my techniques through a mere keyhole. What you need to do is see the larger picture..." after which he begins to gesture with his hands demonstrating the constrained view of his working style and how it needs to be expanded to see the whole picture.

Bosses: "David, at this point I think we need some words."

And then comes the coup de grace.

Instantly shooting back, David: "I think actions speak louder than words. So..."

To which a stunned reaction from his bosses. Everything brilliant about this character is there in this line: the smug and immediate appeal to platitude as argument, the reactionless paralysis of his interlocutors, the constant churning of crisis around this man even while he fiddles along seemingly oblivious to what everyone else sees. It's a great show!

The narrative is at a terrifying climax now, at the end of the second season, as Brent faces...termination. Will it happen?

What I love about the show--including Gervais's character but also the rest--is the sheer realism. I know many David Brent's and so too for his officemates. I wonder which guy I am?

I say all this as prologue: I seriously hope that life in my consulting job will not involve exposure to such people. I hope instead that the firm's HR brochures are accurate, and that it is rather more like Head of the Class. (I want to be Arvid.)

Pre-work Homework

These last few days I've been catching up on my consulting homework. There are different parts, you see. The part where you read a book or textbook are fine. I know how that goes.

There is this other part which is little cases that we discuss on the phone. The first one was fun, since it involved building a pretty simple model using some of the concepts they were teaching us about: real vs. nominal #s, cash flow, valuation, regression models and t-stats/r-squared-stats, and so on. Models are fun.

The third part is really the bulk of the excercise. It's this online course from Tuck covering three sections: Financial Accounting, Economics and Finance. Economics is just economics: supply and demand, incremental analysis, industry structure, sunk costs, and other stuff like that you would know about.

Finance means something like "Wall Street finance" or stuff the CFO consults the investment bank on. That is: bond valuation, debt valuation, net present value, equity valuation and the capital asset pricing model, etc. This is different from Financial Accounting. It's mostly accounting, but with a financial slant. So: balance sheets, financial ratios, risk/debt analysis, cash flow analysis, etc etc.

It's this last section that is the most horrible. For each of the three sections you can take a self-quiz and decide what you need to do. For Econ and Finance, I was fine. For the financial accounting, I apparently need work on my analysis methods. Does the low asset turnover come from poor days-in-inventory or from the long accounts receivable policy? I don't know.

The finance section was easier, since it was all stuff that you can easily look up to refresh your memory. If you wonder how to work risk into your calculation of equity value, there is a simple equation for the discount rate: rate = riskfree rate + beta risk * (marketwide rate - riskfree rate).

The financial accounting, unfortunately, involves more detailed "rules of thumb" that aid in judgments about inter-relationships. And the real problem, then, is that I have to really go through the lessons for this section. Which forces confrontation with the worst part of the online course. It's very tedious! Learn an idea, then it asks you to do a dozen little questions with it. They get tedious becuase you have to launch all these little windows with charts and tables in them, do calculations, then input the number. All to prove you know how to divide liabilities by total equities, etc. Dull!

Now, the way to learn is to do stuff, I'll admit. But it's just a tough balance. It's much more fun when integrated into a total model-building project on an interesting subject. Tedious when it's rote repetition of simplistic methods. We'll see how handy it is. I doubt 90% of folks in management consulting can define the "quick ratio" correctly.

The Model Life

I love an elegant model, full of intricate connections and complex dependencies. As much as I hate calculating boring ratios and stuff just for practice, I do quite like constructing elaborate systems of equations with Excel. My training homework has reminded me of this fact, which I first learned at Gobi and Virgin.

This is a special, geeky pleasure that few other things provide -- gaming Google or writing little software applications are similar fun.

I wonder how long I will feel this way once it is underway at work.

Academic vs. Pedantic Questions

Finance classes have always been a bore because they are so practical. Why bother with technical studies of questions that you will not ever face? That's what makes the whole MBA concept so dull and pointless. The intellectual challenge of the fundamental MBA subjects is terribly light; it is vocational training. But to what end?

Pre-MBA and even post-MBA people will tell you the education is silly, mainly because they learned "everything they really needed" from actually doing. Actually doing is a very good way to learn things. Doing the financial accounting for Virgin Mobile was far more educational than the coursework at Columbia or even in this consulting mini-MBA. It's mainly tedium and even I learn about more concepts, I don't really accumulate much useful knowledge. A few weeks of working on the financial models at Virgin was enormously valuable.

Which separates the vocations and their pedantic study (excercises, repetition, made-up "real world" cases, yawns) from the academic subject matters such as philosophy or the sciences.

When you do philosophy, the practical excuse is that you are learning to think and solve problems. But the fundamental impetus is that these problems are gripping challenges. You cannot look away from brains-in-vats or mental modules (or, at least, I can't), and when you study them you study questions that really matter to you and the world.

When you study the finances of a hypothetical widget company, you are merely lifting weights, or sharpening files, or painting trompe l'oeil, or some other humdrum craft.

And so I think the full blown MBA is a terrible waste of time and that even this mini-version may be burning a bit hot. That is, it's not 110% customized to me and my background -- so I end up rehearsing some slightly pedantic stuff more than I'd like.

Still: the focus is on quickly introducing concepts that smart people will grasp instantly. Very little rote and rehearsal. And it's self-paced, so if I'm repeating it's mainly because I'm being a tad geeky.

It just makes me glad I did philosophy instead of some meaner thing!

Learning Consulting

Many of the people who join my consulting company come from non-business backgrounds. Even though I have some experience with startups and finance, I am a humanities PhD and not an MBA so they have me in with JD's, MD's, and other PhD's doing this training course.

There are two big stages: one is homework and the other will be the live training.

At the moment, I'm into the 2nd week (of 6) of the homework period. They sent me a couple of books and set me up with this really excellent online training course they have developed. The actual courses seem to come from third party providers like business schools or education companies. It's the new "case study" -- which has long been Harvard's proprietary market -- which business education will increasingly depend on. HBS isn't much involved in these courses, which suggests they may have let others steal the march online.

Coverage areas of the homework:
* quantitative skills - cutting across finance or statistics as particular areas, there are modules on a handful of useful concepts like NPV, probability, confidence intervals, growth rates, marginal value etc. These are elements of economics and finance education but presented in this format they are far more useful if you ask me. The course is precise and about ideas in abstract. Not too much case nonsense.
* financial stuff, and
* economics stuff - this is totally boring since I've done it a million times. You can "assess" yourself out of it by passing a quiz, but I think it's not well designed. The quiz is too hard if you have done economics though not using this course. That is, it seems to rehash questions and problems from the course itself, which are a bit extra-tricky out of context. So I got a couple wrong, and then bang -- "please take the course". But the course is far too elementary and plodding given my background.

Anyway, it's not too time-consuming and I don't mind it much. Tomorrow is our mid-point checkup call. We'll see what other folks say.

Getting a Consulting Job

This is a quick filler post. I wanted to do a complete and detailed series of posts about getting jobs in management consulting, but my heart wasn't really in it at the time. I was just "keeping my options open" back then, and wasn't really sure I was doing a good enough job to be giving advice to others.

Things worked out well and in fact I'm going to do some management consulting. So maybe my commentary about the process would be useful to people. Now the currency has passed though, hasn't it? I don't much remember the useful details. I should have blogged it as I was going along, I guess.

Let me point out the rough outlines, though:
* You need the right background to get interviewed
* You should prepare a lot for the case interview, so that you are following a rigid approach as you work through stuff with them
* You should learn about the non-standard cases they give you so that you don't feel weird when you first see them
* Post to Vault.com with questions since people are moderately helpful on specific questions
* I think the "casebooks" that you can buy are helpful to spur your thinking on sample cases, but they are not that realistic as preparation. None of my case interviews followed the casebooks at all.
* Real people with similar consulting interests are probably better preparation partners. Give and receive cases.
* Network a lot before going into the interviews. Talk to everyone you can conceivably talk to about consulting, their firm, their experiences, their advice for a person like you, the interviews, the market today, how busy things are, their alternatives and choices (VC, corporate, banking, etc).
* Get those people you are friends with to make contacts and recommendations for you at the firms of your choice if possible
* Cast a wide net if only for practice and meet with smaller firms in weird places
* Have a point of view about your interests -- industry, function, future -- even if you are not sure. "I'm not sure" is boring. A strong opinion is interesting.
* While networking with tons of people, pretend they are interviews. Talk the talk, remember the vocab, the pace and cadences, the culutural outlook.
* You should probably forget about overseas. I had little luck getting even initial attention there but very good success in the US. The disparity makes no sense.
* Know what the baseline prerequisites are: I think top schools MBA, JD, PhD, MDs are all impressive for these guys. Anything else is totally bizarre and I don't know how they react.
* You must be quantitative: don't think that my case as a philosopher disproves this. I did lots of finance work for Virgin etc and I think it mattered.
* Office choice matters - if you are Canadian, say, things are easier in Canada. Minnesota has a hard time attracting people. The big cities with big offices are in fact hard to crack, I hear.
* Health care and biotech are increasingly in demand, just as you would have guessed from Businessweek or the WSJ. What you read in the mainstream business press is reality.
* Everyone agrees that the "lifestyle" sucks and eventually that is what will cause you to leave. (Hours, travel, etc.)
* Extracurriculars are neat. People at these places think of themselves as genteel, cultured, worldly and they like to hear about your photography or foreign languages.

That's all I've got on this subject. Coming soon: the pre-hire training.