Category Archives: MDS

The Blogger Sees The Light at the End of the Tunnel

With 2 weeks left in the MBA program, my year at INSEAD is quickly coming to an end. Not being especially nostalgic, I already have one foot out the door. I’m ready to move on. I booked a flight to leave France early, so I will miss the graduation ceremony that INSEAD chose to convene in a Big Top Circus tent that has been erected in the parking lot. (If the Dean is reading this, please find a more glamorous venue for next year!)

If there’s one realization that I’ve had lately, it’s been how expensive my year has been. When you take your post-INSEAD salary, deduct the cost of rent and loan repayments from your net after-tax income, the numbers can be scary. The luckiest few are those headed to tax-free countries in the Gulf. Those of us who will work in the developed world, will be happy to finish each month with a few dollars in our bank accounts.

A classmate asked me why I felt the need to leave early and start working. “Loss mitigation”, was my answer. I’m keen on changing that negative sign on my personal balance sheet, to a positive sign. Yes some will argue that my INSEAD MBA is a revenue generating asset, blah! blah, blah!, but unfortunately no mortagage bank is willing to securitize it, to help me buy a house. I will need a $40,000 to $80,000 cash downpayment for that.

In a recent Career Services panel, a recruiter from a leading global headhunting firm observed that MBAs are often surprisingly naive about their own personal finances and career development. I’ve gone 9 months without a salary, since my last paycheck in September 2007. High up on my action list are starting work, maximizing my pension contributions for 2008, and repaying my debt. If I had taken my $107,000 USD opportunity cost of coming to INSEAD, and invested it in a global stock index fund earning an average 6% net inflation-adjusted return, I would have saved $822,411.29 at retirement in 35 years from now. This would have translated into a $41,120.56 annual retirement annuity payment, in constant 2007 dollars. I am however optimistic that I can recoup my opportunity cost in after-tax dollars in a short enough time frame to render the present value of my INSEAD investment positive.

But part of that optimism means making smart choices.  Vacation will have to wait until the holidays, next December. Why take one now, when I can earn a full salary while using my vacation time? My year at INSEAD has been one long vacation. A costly, stressful roller coaster, yet a rewarding vacation. And now I am eager to finish my remaining school assignments, get back to the real world, and start using the skills I learned here at INSEAD.

My Own Private Boxholm

“On Monday, March 13, 1967, 31-year-old Arthur Keller, who graduated from Harvard Business School two years previously, entered the office of the Hedblom Co. in Boxholm, Sweden, for the second time in his life. He had just been appointed managing director of the company.”

Back in September, the INSEAD MBA program began with an introductory management seminar taught by Prof. Gareth Dyas. We studied a 40 year-old case featuring the pseudo-named Arthur Keller, a young Harvard Business School grad who graciously accepted the challenge of a general manager position in the isolated Swedish town of Boxholm at a moribund women’s dress factory that was bleeding money in the face of cheap imports.

Prof. Dyas used the example of Arthur Keller to question whether any INSEAD MBA participant was willing to accept the risk and challenge of a general management position upon graduation, or whether we preferred to take more glamorous consulting and finance jobs that would pay well but be devoid of any real management responsibility. Boxholm, Sweden served to represent the literal and figurative ‘end of the world’. Arthur Keller left his glamorous life in the big city for a small manufacturing town with no opera, no professional sports team, and had it existed back then, no Starbucks! But what Boxholm lacked in amenities, was more than offset by the long-term upside in Arthur Keller’s job. By choosing the road less trodden, Arthur benefited from immediate responsibility and the chance to prove himself as a manager.

As I went through the recruiting process in P4, I faced the difficult choice between what I would term PowerPoint/Excel jobs vs. Boxholm jobs. It wasn’t simply a question of consulting and finance jobs vs. industry jobs– PowerPoint/Excel jobs also exist in industry. The dividing line is whether a post-MBA job will consist of managing slides and tables, or managing departments and having P&L (profit and loss) responsibility.

PowerPoint/Excel jobs can be tempting. I remember stepping into the offices of one company with whom I interviewed in Boston last month. They had a panoramic view of Boston Harbor, a professional chef’s kitchen, a gym overlooking Cambridge, and a 100 inch plasma TV in the marble and walnut boardroom. I was seduced by the glamorous atmosphere, but at the end of the day, the content of my work would have been to support senior management.

Today I received an offer from what I would call a Boxholm job. It’s not an MBA Leadership Program, it’s not located in a sexy world-class city, and no one’s eyes are going to light up at a cocktail party when I tell them about my new employer. But on the other hand it’s a real general management position. I feel passionate about the industry and by the chance to roll up my sleeves and manage people, budgets, and real deal negotiations, as opposed to modeling them in the abstract and advising others on how to manage them.

In describing this job to some of my MBA colleagues, I have received mixed reactions. Some Wharton MBAs friends were horrified when I told them about the job. They couldn’t fathom that I would actually be working for a real company with revenues, expenses, employees, and budgets, as opposed to a private equity fund, finance firm, or consultancy. Undoubtedly, part of their opposition is rooted in money. Although the base salary will be similar to my colleagues’ pay, I won’t be getting 6 figure bonuses each year (probably not even 5 or 4 figure bonuses)! My financial reward will come slowly. My friends mourned the fact that I was moving towards a career path devoid of shortcuts. When I described this job to an INSEAD professor, he looked at me and warned that life would be tough out there in the ‘real’ business world, away from the bubble of banks, consultancies, and Fortune 500 companies.

It might seem surprising to the uninitiated, but elite business school graduates today seem less interested in becoming managers. Everyone wants a fast-track to wealth and success, with finance and strategy roles seen as the preferred route to get there. I remember attending an INSEAD cocktail party in Paris during P3, where I met Hélène Ploix, the first female INSEAD MBA graduate. Hélène runs her own investment fund and sits on the Board of Directors of BNP-Paribas and Publicis. At the cocktail party, one of my French classmates approached her with a very blunt question– How could he achieve her level of success? Without hesitation she responded that her general management experience was the decisive factor in opening doors to the boardroom.

I must confess that part of my attraction to general management jobs resides in a depressing C.V. that I came across at work, early on in my career. The C.V. in question belonged to a guy who graduated with an M.B.A. from N.Y.U. 5-7 years previously. He had gone into finance and worked on Wall Street for several years. But 2 layoffs later, he was just another faceless banker who by luck, circumstance, or mediocre talent, had failed to make it. Being a pessimist by nature, I looked at the resume and immediately understand that this guy was doomed. He was just too senior for jobs in the $100,000-$200,000 range, yet he lacked the experience and skills for jobs in the $200,000+ range. No Wall Street bank wants to hire someone from his class who hadn’t earned the expected career promotions, and no real company would be interested in hiring a Wall Street reject with no operational or management experience. Sure he had some options to set up his own investment fund or try to join a small one, but seeing this poor shmuck’s C.V. left an indelible mark on me. It made me realize that an M.B.A., even from a top school, is a rapidly depreciating commodity. You have a few years to translate it into valuable experience, usable connections, or a nest egg. This imperative seems all the more necessary in the high risk/high reward financial world. Am I too timid to risk everything on such a course, preferring instead a ‘safer’ career track that will give me practical management experience instead of a ‘brand name’ on my resume? Maybe.

It is both exciting and intimidating to face the decision whether to accept a general management position or to pursue a traditional MBA job. I am still going through the recruiting process and I have several more second round interviews coming up. I won’t make any decisions until I exhaust the other possibilities.

By the way, I received a ding this morning from a job I had applied to over a month ago. When I get a chance, I have to remember to ring the recently re-installed ding bell at the INSEAD campus bar.

The Blogger Puts on His Game Face

INSEAD Career Interview Preparation

“There are 3 masks:
The one we think we are,
The one we really are, and
The one we hold in common.” -Jacques Lecoq

French Theater legend Jacques Lecoq’s smartest career move occurred in 1948 when like many present-day INSEAD participants, he successfully made both a geographic and functional change. In Lecoq’s case he traded the physical education field in post-War Paris for the study of Commedia dell’Arte in Italy. Indeed his fateful decision to go to Italy would bring him in contact with his collaborator Amleto Sartori, the craftsman who helped Lecoq revive the iconic Neutral Mask. Pedagogically, the Neutral Mask was employed by Lecoq to endow acting students with an emotional honesty and economy of movement that had been abandoned over the years in favor of a more craft-style acting technique. Of course, a more critical reading of the Neutral Mask reveals its repressive qualities which demand a forced balance and unnatural receptivity from wearers.

I have caught myself wearing my own Neutral Mask all too frequently during the current P4 recruiting season as my self has become muted. It catches you by surprise when evil HR people quiz you with loaded questions– “How would you feel about starting out in a sales position?”… Is this a trick question? Does she want me to say “Yes”? If I say “No” will I torpedo my candidacy? Should I mold my answer to what she wants to hear? (assuming I can successfully guess what she wants to hear). For me the psychological stress of recruiting lies in having to adopt a new mask for every interview.

“Sure I’ve always dreamed of living in [an isolated town in Germany/Ohio/ China/Siberia].”… “Sure I look forward to travelling 5 days a week.”… “Sure I’m happy to accept an internship with no guarantees of a permanent offer.” These sentences start to effortlessly roll off your tongue until you wake up one morning unable to recognize yourself.

The moment came after a fantastic first round consulting interview. I had nailed the 2 case interviews, charmed the pants off the male and female interviewer, and was really impressed by the firm. But then the HR coordinator started to piss me off. They stuck algebra problems in front of me and demanded to know my standardized test scores– in short, they didn’t trust their own judgment and preferred to rely on external measurements. My GMAT score is over 700, so I had nothing to hide, but I graciously jumped through all their hoops like a trained dog. Yet inside I started to resent the fact that they were simply searching for a reason to shoot me down as a candidate. Companies will defend themselves by claiming how hard it is to distinguish from so many qualified candidates, particularly at a school like INSEAD, but from the candidate’s perspective, it raised questions about how this organization would treat me after I was hired. Would one partner take charge of my career development, or would I simply float along through the machine, constantly being pushed and pulled by an inhumane system?

And then it happened. I went to an interview last week with a company that didn’t require me to wear a mask. I was myself, they were themselves, and no one had to put on any airs. It was such a feeling of relief. From the moment I walked into this company’s office I felt at home. I can’t say that about any of the other companies who I’ve interviewed with during the recruiting period. For the first time I met a company that wasn’t interested in making me jump through hoops. They had a real hiring need, I had the qualifications they were looking for, and no time was wasted on artificial HR interview parlor tricks. It felt so liberating to finally take off the masks, abandon my game face, and at last be myself.

Lecoq with Neutral Mask

The Blogger Receives Interview Invitations and Interview Rejections

INSEAD’s Career Link Jobs Board, Circa 1982

Recruiting has started and so have the rejections and interviews. I will try to keep score and at the end of the process I hope to provide you with the final box score numbers of jobs applied to, 1st round invites, 2nd round invites, and offers (hopefully there will be at least one!) but for the moment, I will only say that I have received both good news and bad news.  Yesterday I saw a poster on the door of a Philadelphia McDonald’s that read, “Now Hiring Store Managers, salary up to $57,000”.  When I have a chance, I’d like to run a net present value simulation to calculate the break even point between working at McDonald’s vs. going to INSEAD.

The big Wharton Studio 54  party is coming up on Thursday. The theme is Jungle Love and I suspect (fear?) that many Wharton MBAs are planning to dress in loin-cloth or body paint. I think I will just wear club clothes. The party will feature shooter-boys in thongs and shooter-girls in bikinis, pouring shots. Who says only INSEAD MBAs know how to have fun? The following day I have a Goldman Sachs conference in New York, so I hope I can recover in time.

The Blogger Finishes His First 2 Exams

Mission Accomplished

I’m sitting on the second floor of the library looking out at the tree canopy which surrounds INSEAD’s Fontainebleau campus and marks the boundary of the Fontainebleau National Forest. Today we wrote the first 2 of 5 final exams for the P1 semester. I feel average about both of them. In INSEAD-speak that’s good. Because grading is relative, you only need to perform at or slightly above the mean. Another 1.5 days of exams, and then I’m off to London for the break by air on the aeronautical SUV. I would have preferred to take the Eurostar train, but it was more expensive. The December 2008 promotion will be in Fontainebleau next weekend for their admitted participant open house weekend. Suffice it to say that none of us will be around on campus. We’ll all be on vacation, detoxing from P1 and mustering the courage to face P2. I’ll see you all on the other side of the tunnel…

The Blogger Reflects on his Blog Statistics and “McKinsey & Company” as a Key Driver of Traffic

I generally prefer not to bore my readers with arcane details about my blog statistics, but for those of you who are interested, the following search terms led readers to my blog, this week:

million dollar swimming pools

earning a mba in finance at age 50

renaissance club fontainebleau

Sex capital of the world

But by far, the two searches that I see most common are “thinkpad disable client security setup” and “getting hired mckinsey”. Lenovo, if you’re reading this, you need to make your laptops more user-friendly… As for McKinsey & Company, it appears that internet surfers just can’t get enough about “The Firm”. My all time most popular posting was my analysis of the 2006 INSEAD Careers Decision Report. It would not be an exaggeration to say that I could significantly increase my traffic and page rank if every post I wrote on this blog was about McKinsey & Company and INSEAD.

For the uninitiated, INSEAD is one of the top 3 feeder schools to McKinsey & Company. A significantly percentage of company sponsored students at INSEAD are former McKinsey business analysts and McKinsey remains the single largest employer of INSEAD MBA graduates. Last year McKinsey hired 75 INSEAD MBAs (including returning students) and percentage-wise, a greater proportion of INSEAD MBAs are hired each year by McKinsey than from Harvard Business School. There are several reasons for this, but most significant is the unmatched geographic demographic of the INSEAD class. Simply put, INSEAD draws the best students from around the world, and after graduation they disperse around the globe. As the world’s most prestigious international consulting firm, McKinsey values INSEAD MBA graduates and continues to hire them at an impressive rate.

The Blogger Secures Financing & Pays his Deposit for the $107,000 MBA

“The Cheque is in the Mail”…

It’s done. As you can see from the picture, I’ve sent in my first installment payment for my spot in the INSEAD Fontainebleau Class of 2008.  I have now committed myself to moving to France next year for what will probably be the most intensive year of my life.

Obtaining the necessary financing was not easy. Unlike other top schools, INSEAD doesn’t provide any guaranteed loans. The official position is that due to the diversity of the student body, it is not possible to find a lender willing to provide credit to every student. I find this explanation weak because as the world’s best global business school, you would think that INSEAD had a network of well-placed alumni at top commercial banks, who could help organize a universal loan scheme with preferred interest rates and repayment terms. One of my corporate lawyer friends astutely pointed out that this is marketing and acceptance rate issue for the school. If Joe Student receives an offer from INSEAD with no guaranteed financing and an offer from a U.S. school with easy financing terms, Joe Student could be swayed towards the U.S. school.

Originally I applied for a loan from a bank in the Middle Eastern country where I’ve worked for the past 5 years.  Despite the fact that the INSEAD Alumni Association here supposedly made special arrangements with this bank to provide loans at LIBOR + 2.5% interest for the whole tuition amount, the bank insisted that I provide them with collateral for 100% of the loan.  They were unsatisfied with my guarantor and refused to accept my pension funds and stock portfolio as collateral. They demanded a cash deposit!  If they could have possibly infuriated me any more, they took 3 weeks to provide me with this response. To top it off, the loans officer was not very professional. Although she was ostensibly in charge of the INSEAD loan program, she didn’t know anything about the loan term or repayment conditions. I should have known I was headed for trouble the first time I spoke to her. It could be a Middle East cultural thing, but when I asked her the straightforward and perfectly reasonable question during our first meeting, “What do I need to qualify for this loan?” She responded with a look of horror followed by a dismissive answer, “We’ll see”. I quickly learned that objective criteria, credit history, and savings count for nothing. 

So I started looking at Canadian banks, even though I haven’t lived in Canada for several years. Finally I found success… Within 48 hours I received approval to borrow the entire INSEAD tuition amount at 7% interest. Even better was how the bank treated me. Unlike the bank I dealt with in the Middle East, the Canadian bank was so nice to me on the phone. “Yes, sir”… “Our pleasure”… “Whatever is convenient for you”. Having been treated so poorly by the Middle Eastern bank, I was so taken aback by their kindness that I felt like crying.  What a pleasure to deal with a professional bank.