It was a tough week for me in MBA-land, owing to a nasty virus that laid me flat — and made it harder for me to soak up my full share of b-school learnin’. Apologies. I swear you’ll get your money’s worth next week:
Why cash is king. I always heard this phrase but never really knew what it meant. Sure, cash is awesome, but why is it king? The answer arrived during Accounting class while we were learning how to make cash flow statements. It turns out that a company’s net income can look pretty darn good while its supply of cash is pitiful. And, as we all learned during the recent crisis, no one says no to cash (but plenty of folks can say no to credit). Which is why the cash flow statement – which tracks the cash flowing in and out of a company during a year – is a super-valuable document when you’re evaluating a company.
Sometimes it’s OK to miss class. The pressure to attend class is immense here. It’s nothing like undergrad where exam day was the only time the whole class showed up. Here at b-school, class participation is 40 percent of our grades and you can’t participate if you aren’t there. And for me going to class is crucial to understanding the material that I never quite get on my own. But this week I was sick and, for the first time, I thought about missing class. I put up a good fight, dragging myself to a couple classes and propping up my throbbing head. But I finally let myself miss a class on Wednesday and it made all the difference to my health and my sanity. And – lucky me! – I had a half dozen fabulous classmates who sent me their fabulously detailed notes.
Why fantasy football is so hard. It turns out building the right team is tricky. Teams are the hot house flowers of the corporate world – they need the perfect mix of sustenance to survive and thrive. Team composition, unclear goals, scarce resources and poor management can all send teams into a tailspin. It may explain why so many teams – the Dolphins, the Lions, the Mets – can’t make it work.
You can run the numbers, have the best analysis and still get screwed by Hannah Montana. The Ohio Art Co. makes that coolest of old-school toys: the Etch-A-Sketch. They also make another toy that you’ve probably never heard of, a crazy-haired, spindle-limbed doll called Betty Spaghetty. A couple years ago the company decided to try investing in advertising to juice its Christmas sales of Betty and, as part of one of our cases this week, we analyzed the test. The results looked good and they seemed on target to make millions over Christmas. But then our marketing professor revealed “the rest of the story” and we learned that Ohio Art had been screwed by … Hannah Montana. The insanely popular teenybopper blew up that year and you couldn’t find poor little Betty Spaghetty amid all the Montana Madness in the toy stores. It was a cold, harsh reminder that sometimes in business you can’t see the Hannah Montana coming.