Friday, February 26, 2010


Skepticism about the value of an MBA degree and the general belief that it just teaches you to say sentences like - "I think XXX's competitive advantage in this high growth market ensures sustainable growth in the short to medium term." without any knowledge of the underlying fundamentals, is nothing new. When I was applying last year, one of my friends had said something to the effect of MBAs being glorified bullshitters who earn a lot more than they deserve. An engineer like me, he believed in the simple theory that there are always people who know a particular area better than any MBA does. A developer designs and writes the code; marketing is basically making emotional ads and getting people to buy it; and then there would be a finance guy who will tell you how much money you made. An MBA puts his hand everywhere without thoroughly knowing anything and ends up making more money and having a fancy title. An MBA never adds value. Not to the firm. Not to the self.

So what has 3/8 of an MBA done for me. In one sentence, made me more aware. How are share prices calculated. Why does the fiscal deficit matter and why the hell do governments go crazy about exchange rates. Who sets them anyway. What's all this talk about cultural fit and strategic alliance that newspapers talk about when a merger happens. What is marketing if not making ads and fancy banners. Wikipedia had answers to most of these. And you would say $100K is a bit too much to pay for awareness. Of course, there's the network you build along with the experience of living in a different country and culture. But truly, my biggest gain so far has been to pick up a Wall Street Journal or an Economist and understand what the article means. Again, I had pretty modest goals coming into B school!

The courses this quarter in particular have seemed to tie up a lot of lose ends. A company valuation is more than just the discounted cash flow. As our professor says, its as much art as it is science. Why the Chinese Govt. doesn't want the Yuan to appreciate and what would the EU do with Greece are just some of the questions about which I can now think. Pricing strategies, the Nash equilibrium, Second Price Auctions, Microsoft in India & China, PepsiCo's 'Beat Coke' strategy, Mars' acquisition of Wrigley's - 200 cases and a few dozen tech notes into the Darden experience, I am pretty sure that the limiting factor is my ability to take in what is being thrown at me.

Don't get me wrong. I'm not saying that I've become a subject matter expert in any of these. But the fact that I can appreciate the issues which go into most of these and am beginning to develop the ability to synthesize all of it is what makes this experience unique. True, there's some amount of bullshit that comes with it. I can totally see myself talking to somebody and pissing him off by saying something like "but look at the strategic implications!". And I think that's part and parcel of the whole package. The jargon creeps into our system. But I would like to believe that for the most part, there is some, at least some logic behind those cliched words.

I came to Darden with no formal business education. And I'm glad it was that way. What it has meant that, almost everything is new to me. Yes, I am a computer engineer and I have no problems understanding normal distribution, linear equations, probability and decision trees. Having written software program does makes it easy to build a DCF model. And if statements and modular designs are not an issue at all. But learning to think about the judgement that goes into each decision has been the really interesting bit. Acknowledging that often there are no right answers has been tough. And appreciating that the real value add is not so much in the individual concepts, but in their interplay has been fascinating.