Service Management Field Trip – Thessaloniki

Yesterday marked the last day of in person contact with our project sponsors. They have sent us some preliminary information to analyze and signed off on the project scope and definition. All that remains now is for us to do our analysis and provide our report. That coupled with the completion of our individual assignments will tie up the end of this course.

Shown above: View of Aristotelous Square from the Orizontes rooftop restaurant in Electra Palace Hotel Thessaloniki.

This has been a unique experience, to hear from the mouths of people who live here their opinion on a very timely topic: globalization, competitiveness and the structure of a nation’s (Greece’s) economy. Our professors did a lecture on Monday talking about the characteristics of the Greek economy, breaking down GDP components and telling a story about Greece’s economic focus and structure over the past 5 years as a backdrop for the current conditions the country is facing. They also prescribed a logical recipe for what would be needed to turn the Greek economy around and the challenges involved. These sentiments were echoed by many of the project sponsors who participated as many of them were looking to boost their competitiveness and engage the other economies of the world.

Today, I’ll be spending most of my time wrapping up all remaining loose academic ends in the hope of leaving nothing unfinished for my return to Toronto.

FEI Competition

Apparently, our final round presentation for the Financial Executives International Case Competition is now available online. Unfortunately, I can't embed it into the blog, but I can include the link below:

http://www.feicanada.org/cfo-tv.php?vid=22&page=2

Enjoy!

[Rotman] India, US, Canada, and Africa

[Rotman Series: 1, 2, 3, 4, 5]

Harmanpreet is an international student from India and holds a Bachelor of Computer Science and Engineering degree from the National Institute of Technology in Jalandhar, India and will be joining Deloitte’s technology consulting practice once he is finished his MBA at Rotman.

Harman had the interesting experience this past summer of working in Ghana, Africa and I’ve asked him to provide a short reflection of the experience which follows:

Before joining Rotman School of Management I was working as a technology consultant in one of the leading investment banks in New York.

To fast pace my career I decided to pursue MBA and because of some personal reasons chose Canada as place for that. I chose Rotman because of its excellent faculty and its location proximity to finance and consulting industry. I must say it has been an eye opening experience. The people I met, their vast experience, the work they have been doing in past amazes me.

I decided to take a bit different route to enrich my MBA experience. While working full-time in professional world it is very difficult to get an option of doing something completely different.

During summer break, I went to Ghana to work for Suame Magazine Industrial Development Organization (SMIDO). It is an industrial development organization of the biggest industrial cluster in sub Saharan Africa. SMIDO is an umbrella organization of various businesses in Suame Magazine area and is committed to ensuring the development of Suame Magazine into a technologically advanced industrial estate and representing the various economic groups that operate within the area.

Working in a under developed economy is a real challenge. But the satisfaction that I got from work that changes someone’s life is incomparable and this feeling kept pushing me to put more and more efforts into whatever I was trying to achieve.

My most important contribution while there was to approach a gold mining company with a proposal to sponsor apprenticeships for people displaced by their mining operations. It was ecstatic when the mining company accepted the proposal.

After summer experience my whole approach to business has changed. I used to think that business means making more money for you and for your shareholders. Now I believe that purpose of business should be to benefit human society rather than to accumulate wealth to satisfy egos.

It was an experience that I will cherish for rest of my life.
-Harman Singh

[Rotman Series: 1, 2, 3, 4, 5]

[Rotman] What country starts with "A", but doesn't end with "A"?

[Rotman Series: 1, 2, 3, 4, 5]

Arash is a old friend of mine back from my McMaster Engineering days. After pursuing his Masters of Engineering, he decided to come to Rotman to do his MBA and will be joining Booz & Co in the Middle East when he is finished here. We also went on the Latin America Study tour together in May of last year.

During my visit on the Middle East study tour, we visited the Aga Khan foundation. The Aga Khan Development Network (AKDN) is a group of development agencies with mandates that include the environment, health, education, architecture, culture, microfinance, rural development, disaster reduction, the promotion of private-sector enterprise and the revitalisation of historic cities. AKDN agencies conduct their programmes without regard to faith, origin or gender.

One of their impressive projects was their work with Roshan, a unique telephone company that performed to the same standards of private enterprise with regards to profit generation, but also imposed high standards to their relationships with governments regarding transparancy. Arash had the opportunity to work with Roshan this recent summer and he's written a post about the experience which follows:

Little did I know what adventures awaited me upon starting my MBA at Rotman. Of course it would open new doors and new opportunities, but where exactly was still to be determined. However, I knew that I would have preferred an international experience, as a result of which I also signed up for the Latin America study tour for which we visited Brazil and Argentina. When summer recruiting came around, I applied to both domestic and international opportunities. Of the postings that came up, the one that stood out the most was the one by Roshan Telecom in Afghanistan. Having been born in Afghanistan, I jumped at this opportunity to go to back and work there. I was very young when I left Afghanistan so I never actually got to see the country, so this opportunity was ideal – international work experience in an extremely challenging work environment and the ability to see the country and my extended family.

Naturally, working there was not easy, and definitely not for the faint-hearted. The challenges were numerous – adapting to the local work culture, working with expats colleagues from 20+ countries, and learning about the telecom sector as well as the market in Afghanistan. Imagine doing business in a country where there is little to no rule of law, very little regulations and a largely illiterate population. In addition to this, security restrictions were extremely tight and violations were swiftly dealt with (one intern was sent home for breaking curfew rules). However, these restrictions were definitely necessary – while I was working there, there were numerous incidents in Kabul, including a suicide bombing, roadside bombing, rocket attack on the airport, riots and street fighting. The challenge was to try to reduce the possibility of being at the wrong place at the wrong time, and really, the wrong place could be anywhere, and the wrong time could be any time. Despite this, I did managed to connect with relatives there (they had seen me when I was born but I never met them), and made visits to a couple historic sites in Kabul as well as Herat. It was definitely interesting to see some of the places that my parents saw when they grew up, although things now were radically different. Over the last 30 years of war, the population of Kabul swelled from 400,000 to over 4 million and you could definitely feel it.

My project at the company was as interesting as it was challenging. I had no background in the telecom sector. More specifically, I was looking into a type of fraud that occurs in the sector, which made matters even more complex. My project was to analyze internal detection and treatment mechanisms as well as to come up with potential strategies for preventing this fraud from taking place. After spending days learning about this problem and gathering data, I spent the following weeks working on analyzing the information to develop actionable strategies that could be used to reduce the impact this fraud had on the company. I found it extremely interesting, and I found several areas of improvement that could positively impact the company by improving their fraud strategy.

After work we were shuttled back from the office in downtown Kabul to our guesthouse just on the outskirts of the city. Life was actually less complicated there than it is here – we had room service that cleaned our room every day, we had laundry service and buffet style breakfast, lunch and dinner. I absolutely loved the fruits there – the best grapes and cantaloupes I have ever had in my entire life. After dinner people hung out in their rooms or relaxed out in the courtyard, watched the Indians/Pakistanis play cricket, worked out, played basketball or played pool. All in all, not a bad life, if it weren’t for the volatility of the country.

Overall, it was a fantastic opportunity to work in a challenging environment and with an interesting company. I never thought that coming to Rotman would have enabled me to work in Afghanistan, but it did, and I am definitely grateful for that. In addition to this, the study tour was definitely very interesting and also helped solidify my interest in working abroad. Moving forward, I will be working full-time for a top tier management consulting firm in the middle-east, an opportunity which also came about through Rotman. Not only did my MBA at Rotman open new doors for me, but it opened up the entire world to me – the world truly is my oyster.

[Rotman Series: 1, 2, 3, 4, 5]

What Makes Rotman Different? A foray into the world of Business Design

In anticipation of our trip to LBS, Geoff and I have been asking ourselves: “What makes Rotman different?” In discussing this idea, one of the key points at the top of the list was business design. This week, I’ve had the pleasure of attending various events over at Design works where members of a university in Singapore are undergoing certification for Business Design.

On Tuesday, Geoff and I attended a working session with Anita McGahan discussing the evolution of demographics across different geographies and the implications for the future of the health care industry around the globe. With our guests present, we learned a great deal about the specific differences in the Singaporean culture and life style and were impressed by the innovation produced by their ambitious programs.


This exercise was particularly enlightening for me, not only because of my previous work as a Wireless Consultant for RIM in the healthcare communication and process optimization space, but also to learn more about the business design process.

Today, I also attended a talk given by my class mate and president of the Business Design club, Jason Huang, at Design Works for our Singaporean guests. He gave a very inspiring speech about the current state of business design at Rotman as well as a road map to the initiatives he and his team are putting into place to further develop the program at Rotman at the academic and extra-curricular levels. I am particularly impressed by his attitude, aiming to be the top club at Rotman. I think he also has demonstrated that he has the will and ability to execute on these new initiatives, launching business design more prominently into the spotlight.

He also had a great point about case competitions where “the idea isn’t just to try to do well, but more importantly to learn” a sentiment which I would like to echo and I think reflects my personal motivation for participating in various case competitions, including those not necessarily related to my chosen profession.

What is Business Design @ Rotman? Find out for yourself by watching the YouTube video below:

Financial Executives International – 5th Best in Class Competition

On Saturday, a Rotman team composed of myself, Shree, Fei and Matt Literovich competed in the Financial Executives International 5th annual Best in Class Competition. The case company was HudBay Minerals. Unfortunately, we placed second, behind Alberta School of Business.

The competition was intense, as many of the teams worked late into the night on Friday to put together our decks and get a few rehearsals in before scrambling to get a few hours of shut eye. The next morning, our names were drawn for presentation order and we found ourselves in the seventh spot.

Matt Literovich was phenomenal understanding potential legal issues related to mining and commanded the attention of the room when he spoke of precedent case law.

Fei gave a detailed account of all the organizational issues we could expect as HudBay Minerals grew and followed our acquisition strategy.

And Shree’s knowledge of mining and dissection of potential target companies gave us an exceptionally high level of credibility.

All three were exceptionally strong in both the presentation and the question and answer period and this short description does not do justice to the quality of our presentation.

While we were very disappointed that we didn’t take the top spot, the event itself was challenging and very entertaining. Judges from the competition included top executives from HudBay Minerals, USGold, OTPP, Mercator, a justice and many other top professionals. Definitely a great experience, I would recommend any MBA student to attend this competition.

2nd Year Case Comp - My Turn

Last year, I went to the 2nd Year Management Consulting Association (MCA) Case Comp as an observer to see the upper year students duke it out. Just like last year, there were a few first year students who came to observe. This year, I put together a team to give it a try. While we didn't place, the experience was well worthwhile. It certainly served as a good primer to get back into "the right frame of mind" for school.

I'm incredibly impressed with the quality of the presentations. One of my buddies came out with a truly unique solution to the problem presented and had an equally incredibly pitch to sell the idea.

One interesting lesson was why companies focus on top line revenue at the expense of bottom line income. While a short term focused company will need to produce results in the form of profits, a firm with a more long term outlook will often focus on top line revenue as a metric reflecting product and volume growth (with operational margins improving over time and producing future profits).

The first place team was a group of part time students, and I'm starting to notice a trend when it comes to part time students and their performance in case comps.

Deloitte Brazil

[LAIST Tour Begins, Fazenda Tozan, Churrascaria – Nova Pampa, Port of Santos, Deloitte, Embraer, Natura, Gol de Letra, Bom Bril, Agencia Click, Nextel Institute, May 6, Rio, Rio Weekend, Petrobras, PREVI]

Deloitte is a well recognized name in the consulting world, operating in 140 countries. In Brazil, Deloitte made its entry in 1911 where they were asked to audit British railroad companies. Today, Deloitte has grown to 4000 professionals working with 132 partners. They have a multifunctional approach (versus a siloed approach) where they provide integrated solutions and command a leading 19% market share of audit services in Brazil followed by KPMG at 17% and PWC at 11%.

They structure their portfolio of advisory services based on industry verticals. In Canada, Deloitte is known to focus on public and financial services whereas in Brazil they focus on manufacturing, retail and the growing financial services sector. Their growth targets are projected to move from 10% to 20% across the board with the highest growth occurring in their consulting services at 25%.

Even with the recent global financial distress, like many other consulting and advisory service firms, they have shifted their focus in branches like their Corporate Finance advisory from M&A deals to restructuring distressed companies and managing them in receivership. According to our contacts at Deloitte, Brazilian banks have been exceptionally successful despite (or rather because of) the financial crisis in the US. The top banks in Brazil are local banks (rather than subsidiaries of foreign parents) and their international presence has allowed them to extend their services beyond retail banking into commercial banking and even IPO’s in global capital markets.

Also, with the upcoming convergence of IFRS (Brazil’s current standard) and US GAAP and Brazil’s increasing role in the global market place, they anticipate having a spike in engagements from clients looking for advice on the implications of the changes in accounting standards and their implications on the complicated tax systems in Brazil (greatly differing by state).
Deloitte is also heavily involved in projects like the World Coup 2014 and the Olympics in Rio where they are not only assisting with capacity management of the facilities for the event itself, but also the legacy planning for the facilities in the future after the event itself is finished (ensuring long term sustainability and viability of the project costs).

Deloitte also has a strong focus on social projects, celebrating their “Impact Day” on June 11, the day of the World Cup, where they have a series of planned activities matching their core of applying knowledge with the development of educational programs. All of their professionals will be volunteering throughout the country taking children to play football with star athletes and preparing creative activities throughout the day.

Because of Deloitte’s unique relationship with a variety of top companies (boasting a client list that includes 80% of the Global F500 companies), they have provided us with contacts for our study tour which we will be visiting over the next few days. They also gave us an insider’s view of details into the developments of sectors within the Brazilian economy including the development of the infrastructure (marking the return of their focus on railroads). They gave us an in depth look at why Brazil is such an attractive country with which to have a presence in the global market place and why they have earned their place among the BRIC countries as one of the top emerging markets.

Business Design Competition - 3rd Place

I spent to better part of yesterday afternoon and this morning participating in the Business Design Competition. Our team was composed of myself, Yan, Mark, Justin and Xinxin. It was an interesting challenge. We were introduced to the business design process and given an open problem and carte blanche to find an appropriate solution.

We had a great team dynamic and every member contributed according to their strengths. At the end, I think we all learned something new, picked up more skills and experience which we can certainly apply to other aspects of our business careers.

The competition was judged by several industry professionals including a strong showing from Monitor Consulting.

After the first round presentation, when we discovered that we had made it to the second round, I think our group took the criticism of the judges very well. Even before our ranking was announced, I had told my team that I was exceptionally happy with the improvement we had made as a group in refining our presentation skills on the fly.

Fundamentals of Strategic Management - SBUX

Today we hit Q2 running and had a new class, Fundamentals of Strategic Management with Anita McGahan. Her reputation certainly proceeds her, as she has been described as a protegé of Micheal Porter. You can tell with in minutes of meeting her that she's intense. Many students are intimidated by her, but in our class she was absolutely brilliant. Even some students who weren't considering consulting before are certainly considering it now.

She dived right into describing ROA and benchmarking companies versus the industries they were in versus the economy at large.She showed how a company might "out perform" the general economy, but still be "under performing" their industry. This is an idea which I had recently discussed as an extension of Nick Kerhoulas' idea for CEO compensation, but using derivatives (long / short positions) to mathematically come to the same result for bonuses (compensate CEOs and other top managers based on alpha less beta).

Also, I've previously mentioned that DuPont Analysis is one of my favourite financial frameworks because it is intuitive and Anita cut into it in more detail, specifying (as I had previously) that:

ROE = ROA x FLA

But she emphasized that FLA is a financial strategy whereas ROA is an operational strategy (I got called on this question when I was describing it in my post, but obviously Prof. McGahan described it much better. I made the mistake of saying that Total Asset Turnover, TAT, was "how much you could sell". Anita described it better as "Operational Strategy"). She even confirmed my hunch that FLA = 1 + D/E.

Also, her description of Porter's Five Force's was brilliantly (no surprise) insightful as she explained how three of the forces:

1. Buyer Power
2. Supplier Power
3. Threat of Substitution

were all measures of Value Creation (what value can be yielded by this industry - directly related to Industry Structure in the previous graphic and more specifically by the graphic below).(Also note the graphic immediately above can be recursively applied to describe an entire Value Added chain)

However, the last two of Porter's Five Forces:

1. Rivalry
2. Threat of Entry

were directly related to Value Capture (or more generically, Competitive Position as described in the first graphic above).

When it came to applying the material to the Starbucks case, she used the framework to describe where the most interesting stories were in the case, used math to describe the costs of achieving SBUX's growth goals and showed that against the balance sheet that additional fund raising was necessary to fuel growth. She dipped briefly into finance to describe EPS dilution caused by the payback periods required to cover store openings.

Even in building a potential solution, she lead the class in a discussion which critiqued possibilities such as franchising: why firms in the industry, the majority framed as operating as a sole proprietorship, would under report earnings and be disinterested in becoming a franchise.

Besides being a very technical and framework heavy course, it was certainly enjoyable. I know it sounds weird, but she kept our class in absolute stitches with her jokes about strategy and doing business (as I type this, I am aware of how awkward this appears).

To put it lightly, this promises to be an interesting class. This felt exactly like a case interview for consulting.

CIBC Run for the Cure with McKinsey

The MCA organized a very popular event for the Rotman students, a team for the CIBC Run for the Cure in downtown Toronto today. The event started at around 10am at University and Queen.

The event was followed by a nice brunch with two people from McKinsey. One was a recruiter and the other was a former Rotman grad who was currently working there. They gave us a great deal of insight into the world of consulting and what makes McKinsey different (global P&L, on-site time with clients rather than home office analysis). They elaborated on how their model has advantages and differences from some of the other top consulting firms.

The event was a great success as the Rotman MBA audience asked questions and learned more about an industry that has a great deal of appeal, but most new students know little about. I'm also quite happy that those who joined our little management consulting case interview prep team where disproportionately represented (against the Rotman MBA class at large). Of the 30 who appeared (there was great interest, but limited space), of the approximately 10 team members in our case prep group, 6 were at the event.

What the Wednesday?

We were warned. We were told. "Your Wednesdays are 'free', but they are not 'free'". It's all fine and dandy to hear a current student tell you that at a recruitment info session. It's another thing to watch all your 'free' time quickly vanish. No complaints though. This is what I asked for and what I wanted. But here is a quick run down of what happened today:

8:30 I am a slave to routine. I could sleep in, but the habit of getting up in time for a class at this time of day is hard to break (nor would I want to). It gives me a chance to catch up on emails, review what is happening for the next few days and maybe sign up for upcoming events. It's like our mid-weekend, a good time to prepare for the course work for the upcoming classes. It's a good time to get that MPO or FIT reading out of the way, or review those Econ notes I didn't fully get a chance to appreciate (and write a math blog post about).

10:30 Meeting with my team. Although we have a great group of people, I'm feeling a bit worried about our time constraints. This quarter is evapourating very quickly (a common theme I'm noticing) and I'm concerned that we aren't where we need to be. However, our team (despite a relatively slow start) quickly gets into gear and within minutes we are having very energetic and passionate discussions about ideas for our project. We create a fantastic idea for our Foundations of Integrative Thinking presentation and the momentum requires that Poonam to furiously write the ideas on the blackboard that her team mates are throwing at her. After a whirlwind brainstorming session, our team has finally settled on a great idea and has already moved on to how our model can be used to explain CEO compensation (more details after we present)

12:20 Rotman Ambassador interview. I've applied to be a Rotman Ambassador, which is a position which allows us to participate in the recruitment process by giving potential students an insiders view on Rotman. I've done this before, for both McMaster Engineering and RIM, and feel like it would be natural for me to continue. After all, it was through talking with other "Rotman Ambassadors" (I don't know if they officially held the title, but they certainly acted in that capacity) that I was so attracted to the merits of the program.

1:00 Resume Drop in clinic. This may be one of the few items which I can front load. It appears my resume seems to be in decent shape, but it's nice to get a second pair of eyes.

2:00 Case prep team. Wow. This "little team" has grown quite a bit. We've gone from three (Neesha, Fei and myself) to about nine or ten and I've already heard some whispering in the grape vine that there are more people interested. We did some basic case prep and decided we'll stick to market sizing questions for now until our group normalizes and warms up before we start tackling the more complicated cases. Katie was phenomenal in giving some advice (she clearly has had some experience before) and between all the input in the room, we came up with some great preliminary strategies for how to tackle cases (beyond what is given in the Wetfeet and Vault guides).

3:30 International Study Tour interview. I applied for the study tour in the Middle East (UAE and Jordan). As I mentioned in my Rotman application, I want to get into Private Equity and M&A advisory, but have a particular interest in emerging markets (as the most likely place to find high IRRs for projects and investments). It was probably the most difficult interview I've had in a while and I actually think I didn't perform as well as I could. I am certainly impressed (border lining on intimidated) by the caliber of the questions asked. It would be a fantastic opportunity to go, both in terms of what I would get out of the experience as well as what I think I could potentially offer to the program through my participation.

4:00 Meet up with our financial accounting prof, Franco Wong (no relation), as our Section's Rep. He asked to talk about his mid-quarter review. There are no major issues in our class and the students seem to like him and his style well enough (which is true of all our classes). We did talk about that incessant buzzing noise which seems to only plague our class room, but I've already spoken to the PSO and they'll be talking to us about it in class tomorrow. It's a signal transmission problem caused by... 'phones with data service'. Our room is like a Faraday cage, and gives phones just enough signal to connect, but loses that signal just as quickly. The constant connecting and disconnecting of phones induces a charge in the cables, so even if the speaker system is off, it will still create that insufferable clicking noise.

5:00 Google! This will get it's own post (which still doesn't do the presentation justice).

6:30 The details. Cooking. Cleaning. Laundry. It's surprising how much time these essentials eat up.

9:00 Go to Rotman to read Stat's (for our upcoming quiz).

10:30 Finish readings, but decide I'm too tired to read ahead and go home. Start blogging.

Informal Case Study Preparation Team

As I had mentioned before, we have a small but growing group of people preparing for case interviews at this early stage. While many people are focusing on the academic component of the MBA, those who are ahead are looking for opportunities to prepare for upcoming interviews. While I've often been critical of colleagues who need to "chill out" (sometimes doing work in advance is 'doubling work' rather than 'front loading', such as reading cases too far in advance), I think that those who are aware of the need to understand case preparation earlier rather than later are getting a distinct advantage. For those with little experience in this area, there is always the initial shock value when they realize that case interviews can become very complicated very quickly.

I've been nominated to 'chair' our little informal group as I've had the good fortune of doing case preparation over the recent past and I've been building a list of skills which most people are not aware of as being important for case interviews.

There will be a meeting with the Management Consulting Association (MCA) today to talk about what the club can offer us. They are one of the most expensive clubs on campus, second only to the Rotman Finance Association (I am a member of both). As I have a keen interest in Private Equity and Advisory services (such as M&A or restructuring), I have to decide if I will take the investment banking route or the management consulting route to get to where I want to go.

Rotman Management Consulting Association - 2nd Year Case Comp

Yesterday, there was a second year case comp was organized by the Rotman Management Consulting Association (MCA). I've already paid the fees, so I didn't feel too guilty eating their lunch. It was good to see our second year colleagues in action and get a preview of what case competitions are all about.

There were industry judges from some of the major consulting firms in Toronto: BCG, Monitor, Accenture, Deloitte, etc. I even met a good friend of mine who was judging, now an Associate for Monitor and had a chance to speak with his boss. We had a great chat about consulting and life beyond the MBA.

The actual case was quite interesting, involving the analysis of a product. There were some great insights provided by the groups and I learned a lot about the process of developing a case as well as where to look for opportunities and challenges.

I'm building a team with some colleagues: Neesha Patel and Fei Yu (the only two other first years to show up). Neesha and I had previously arranged to meet up at this competition to start discussing building a team and I had met Fei earlier (we share the same Rotman buddy, another good friend of mine). Neesha was an analyst for McKinsey in India and Fei is from the University of Toronto Skoll Program (like Engineering and Management at McMaster). Both are smart cookies and clearly go getters. We'll meet regularly to practice cases and probably enter into competitions together. Neesha has hinted that she might know two more people to fill the last few spots, and I'm looking forward to working with this crack team.