Howdy MBA

I have worked a number of years in the professional world, and I had to chose between an executive MBA program and a full time one. The executive MBA program is offerred by several top schools, and it would have allowed me to gain the academic training and credential of an MBA while continuing to work full time. Despite the large financial benefit of continuing to receive my full salary, there were four reasons for my decision to become a full time MBA student.

1. Immersion: I wanted to fully experience the MBA program.
2. Networking: It will be far easier to meet and interact with my fellow MBA students through taking X hours of classes together in a full time program as opposed to Y hours in a part time program.
3. Respectability: While executive MBA programs offer great flexibility, they don’t have the same clout as a full time program.
4. Restoration: While the MBA program at Texas A&M will be extremely demanding, I am looking forward to a break from the hectic life of an employee for one of the top information technology consulting companies. I will benefit professionally and personally from not having to fly between cities (and sometimes countries) each week and no working 60 hour weeks.

While the financial impact of going with a full time MBA program is the biggest drawback, I plan to mitigate this impact through financial aid.

I’m attempting to develop my “MBA Vision” so this is an article about a current event and its impact in the areas of business and the economy.

A great deal of recent news coverage has revolved around Pope Benedict XVI’s historic visit to the United States. Many news articles focus on how he will address the Catholic Church’s problem of pedophile priests, but I wonder what impact, if any, does the Pope have on the business world?

The Pope is one of the most visible and powerful religious figures in the world. Pope Benedict XVI’s theological knowledge is without question, but his thoughts about economics and finance are less defined. However, I have found a couple of articles that communicate his point of view in these areas. For example, he has spoken out against consumerism by stating (in this article):

“adolescents, youths and even children are easy victims of the corruption of love, deceived by unscrupulous adults who, lying to themselves and to them, draw them into the dead-end streets of consumerism.”

Of course, companies across multiple industries directly target young people since they usually have a high degree of disposable income. If the Pope’s view about consumerism was taken to heart by businesses, then they would have to stop spending billions of dollars on targeted advertising to convince young people to buy products ranging from toys to tennis shoes. Billions more would be lost if parents worked to wean their children off the lure of retail therapy and instill in them moral values in line with the Pope. So, the Pope could have a huge impact on the economy except for two simple facts: companies exist to make money and many parents are intense consumers themselves as evidenced by the extremely low level of personal saving across the world. In fact, many Americans have negative rates of savings because they are spending more than the make.

In another article, the Pope’s thoughts about how companies should treat their employees is summarized as:

At the same time the social teaching of the Church insists that businesses must also safeguard the dignity of the human person, and that even in moments of economic difficulties, business decisions must not be guided exclusively by considerations of profit.

While HR departments and public statements made by most companies fall in line with this notion of “we care about our people” it is clear that many companies place providing value to shareholders over the needs of their employees. This is clearly shown by their willingess to quickly lay off employees in times of difficult corporate or economic stress.

As we learn more about Pope Benedict XVI we will no doubt learn more about his thoughts regarding the business world. As shown by these two examples of his thoughts on consumerism and corporate responsibility for employees, his views could directly impact real business decisions. However, his true impact is constrained by the willingness of decision makers in both corporate offices and households around the world to practice what he preaches.

Today is the deadline to file income taxes in the United States. My wife and I contributed to a very high household income in 2007, and, therefore, we have the highest income tax bill we have ever incurred.

While I actually enjoy paying taxes because I understand that the government needs to be funded by the people it services, I do not like our complicated tax laws. We are required to keep numerous records, follow complicated schedules, track deductions, and file multiple forms. The complexity of this process keeps many accountants in business and contributes to the success of applications like Intuit’s Turbo Tax.

Speaking of Turbo Tax, I think it is an expensive application considering that it simply puts a graphical interface on top of information that is publically availble (albeit complex). Furthermore, it can only be used once, and then it has to be re-purchased every year. I can understand this model in games like the Madden NFL series, but Intuit should provide an “all you can eat” version that you install and simply update each year.

The United States uses a progressive tax system. That means that tax liability increases as income increases. While I understand that wealthier Americans should contribute more to the government, the complexities of our tax law have made a flat tax system an interesting option.

As opposed to a progressive tax system, a flat tax system would tax everyone at one marginal rate. Therefore, if the marginal rate was %15, then everyone would by that rate whether they made $30,000 or $300,000 per year. This would greatly simplify the tax filing process by reducing the complexity of tax codes and making it easier for individuals to file returns. Furthermore, companies could file settle the tax liabilities of their employees through direct payment to the IRS. If individuals realize capital gains or losses, then their brokers could without the appropriate amount and send to the IRS or report the loss.

There are several arguments against a flat tax system. First, wealthier Americans would pay fewer taxes, and poorer Americans would pay more taxes than under a progressive tax system. Second, many would want to keep deductions such as the mortgage interest deduction which take away from the simplicity of the system. Finally, many government employees and accountants who process tax returns would no longer be needed.

Despite the drawbacks of a flat tax system, I would appreciate such a simple plan. Even if the government does no go as far as implementing a flat tax, I hope to see a less complicated tax system over the next few years. I also look forward to the study of economics, accounting, and finances in the Texas A&M MBA program, and I hope that my understanding of these concepts helps me better understand our tax system.

Almost everything we see in the world is governed by a brand, and, therefore, a company or some other organization was involved in producing it. Whether it is a televison, microwave, automobile, or piece of furniture, a company created it.

Each of these companies has a history. Some wear founded by a lone individual. Others were created by partnerships or joint partners. All are governed by some financial model that is public or private. Some companies have been around for many decades while others may be less than a year old. Despite these differences, every company has the same goal: deliver value.

I think that part of obtaining an MBA is developing what I call “MBA Vision”. This is the ability to see the businesses and financial models that govern everyday life. For example, I am currently in San Francisco on vacation with my family. Today we went to the Aquarium which is near Fisherman’s Wharf. As we walked and saw various street performers, I tried to see “beneath the surface” and think like an MBA student. I noticed that the crowds seemed smaller than the last time I was in San Francisco. Was that due to a regular lull in tourist activity or was it caused by the current economic climate of America? Also, I wondered what percentage of San Francisco’s economy was tied to tourism? Furthermore, if tourism does decline, then what impact, if any, would that have on the rest of the city’s economy? I have to do some research to determine the answers to these questions, but I enjoyed the mental excercise.

I believe that developing “MBA Vision” is an important part of understanding the world. Whether for personal thought experiments or choosing the next company to take over, looking beyond the mundane to find the extraordinary is what makes a life worth living.

Yesterday’s (Tuesday’s) issue of The Wall Street Journal had an interesting front page article about Alan Greenspan. Greenspan has been both lauded and lambasted over the past five years regarding the impact his tenure as Chairman of the Board of Governors of the Federal Reserve had on our current economy.

One thing I hope to gain from the MBA is a better understanding of the Federal Reserve which will help me to better understand articles like this. As a layperson, I boil the work of the Federal Reserve into two broad areas: rates and regulations. However, I’m sure that there are nuances to the institution that can only be understood by in depth study.

I think that everyone should have a solid understanding of the financial systems that underpin our economy. After all, the various financial “levers” controlled by organizations like the Federal Reserve have a direct impact on important personal activities like buying a home. They also provide context for periods of economic slowdown similar to what we are now experiencing.

This is inaugural episode of the Howdy MBA Podcast! It is very experimental, and I’m still working on enhancing the video quality.

The Wall Street Journal will be a big part of the Texas A&M University MBA Program so I thought it would be interesting to do a comparison of it to an easier to consume newspaper like USA Today.

By the way, after I read the article about Washington Mutual in the Journal, I realized that it is definitely not good news for shareholders. That just goes to show you that a cursory reading of the Journal just won’t cut it. You have to read the Journal, live the Journal, be the Journal . . .

Finally, if it seems that I’m holding the newspapers close to my face, it’s because I’m not wearing my glasses . . .

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I was fortunate to have received multiple offers of admissions to various MBA programs. However, I chose to accept the offer from the Mays Business School at Texas A&M for three specific reasons: ranking, placement, and price.

The Mays Business School is consistently placed at the top of rankings by periodicals such as Forbes, US News and World Report, The Financial Times, and the Wall Street Journal. These rankings compare schools by judging factors such as the quality of the faculty, career services, views of alumni, percentage salary increase, and cost. The high placement given the Mays MBA Program is testament to the high quality of the program across various measurements.

Historically, the Mays MBA Program has had high placement rates. In fact, the MBA Class of 2007 had a 100 percent placement rate which shows that the program not only provides rigorous business training, but its career services center knows how to match students with companies. Since joining the MBA program means I have to leave the business world for several months, I was comforted by the fact that a framework was in place that would greatly facilitate coming back at the completion of my studies.

Last, but not least, the Mays MBA Program offers a tremendous value for money. The tuition costs for the program which consists of 49 hours of course work over a 16 month period is about $7,000 for in state students. That is an excellent value compared to schools of the same caliber.

Obtaining an MBA from Texas A&M will provide a highly regarded business school education at a very affordable price that will help me take my career to the next level. No other academic institution that I considered could compete with those characteristics.

Just as I have academic and professional goals for the MBA Program at Texas A&M, I also have personal goals that I want to achieve while in the program. Many of these items are thing that I have wanted to consistently do for year, but they were difficult to achieve as a consultant who travels a lot.

• Get More Sleep: I plan to get eight hours (or more) of sleep at night. I currently average around four hours of sleep at night.
• Drink Less caffeine: This is directly related to the first goal. I often drink coffee or Mountain Dew in order to make up for a lack of sleep. I plan to drink coffee no more than twice a week and not drink soda at all.
• Drink More Water: Cutting back on my intake of caffeine will provide opportunities to drink more water. I plan to drink at least two liters of water a day. That’s approximately four bottles of water (the regular size).
• Exercise: The only way I have ever been able to consistently exercise is to do it every day. So, I will left weights every day and do some form of cardio every day as well.
• Enhance Family Time: I need to have at least one full hour of dedicated time with my children every day. This does not include watching television together! My wife and I need to have at least one meaningful conversation every day. For you single people, this is harder than it sounds.
• Improve My Yard: Although not a desert, my yard is far from “Yard of the Year”. I want to green out the grass, add mulch to the tree area in the front yard, and build a play structure in the back yard.
• Write My Book: I have an idea for a book. I plan to finish it before I complete my MBA. No, I can’t say anything more about it.
• Manage This Blog: I plan to update this blog at least once a day Monday through Friday. I may not be able to do that now, but I believe that I will have plenty to write about once the program starts in August.

So, those are my personal goals. This list is not exhaustive, and I will add more as they come to mind.

In line with one principle from Stephen Covey’s widely successful The 7 Habits of Highly Effective People, I am writing this post to “begin with the end in mind”. When I finish the Texas A&M Program in 2010, I expect to possess these qualities:

• Expert knowledge of discrete skills such as management, finance, economics, accounting, marketing, operations, and statistics both theoretical and applied
• Mastery of abstract skills like leadership, communication, teamwork, and ethics
• Understanding of the problems that face companies (both small and Fortune 100) and the tools that can be used to solve them
• Strong professional and personal ties to university professors, members of my graduating class, alumni students, and business and community leaders
• Multiple offers of employment from top tier companies who desire to add my experience and academic training to their pool of leaders
• A radically changed mind set about the business world and life in general. If I think the same way after I finish the program as I do now, then I have failed on an epic level

This list is not exhaustive, but it covers the major characteristics that I want to have at the end of the program.

If I thought that I could arrive on campus in August and begin preparing for the Texas A&M MBA program, I was wrong. During the Super Saturday orientation, it was made clear that waiting until August to begin preparing for the program would guarentee that I would start behind the curve. Here’s a list of things I need to do before I start the program:

• Complete an online course from the Harvard Business School to brush up on the areas in which most new MBA students struggle: accounting, finance, and statistics. Access to this course in provided by the program.
• Deepen my expertise with Microsoft Excel which is used throughout the program. I have a few books that will help me with this.
• Take a behavioral assessment test called The Birkman which is similar to Myers-Briggs Type Indicator. This assessment is also provided by the program.
• Subscribe to publications like The Wall Street Journal, The Economist, and Business Week. Professors sometimes refer to recent articles from these periodicals during class and may call upon me to comment on them! Also, go through the Mays Business School Essential Reading List for Managers for optional pre-MBA readings. Particular recommendations by students in the program include: Good to Great, The Smartest Guys in the Room, Blink, The Goal, and The World is Flat. Fortunately, I have been given a lot of these books over the years as a result of attending training courses and seminars. I just need to brush the dust off them and read!
• Tighten up my professional network at my current job. This means having lunch with key colleagues and mentors as well as adding people to my social networking profile on sites like Facebook and LinkedIn. I think this also means crafting a good “good bye” email.
• Speaking of social networking sites, I should review my profile on these sites to make sure I project a professional image. This should not be a problem because I think I have done a good job of presenting myself in a professional manner via my online identity. One of the speakers mentioned that the program does background checks and often finds pictures of prospective students drunk, high, or naked. This may be true, but it’s hard to believe since I assume that most people with these types of pictures would use privacy controls to protect themselves from prospective employers.
• I’m a US citizen so I can complete the Free Application for Federal Student Aid (FAFSA). Upon receipt of my Student Aid Report (SAR), I need to contact the Financial Aid Office to request a Counselor Review Form. This is key because the FAFSA is based on current income which will, of course, go down once I leave my job and start the program.
• Find a place to stay in College Station.

So, that’s my preparation To Do list. I will track my progress completing these tasks in future blog posts.