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April 21, 2005

Decision Sciences Primer

At Kellogg, Decision Sciences (DS) was essentially statistics, but due to the mastery of professors like Scott McKeon, DS was something more.

His mantra "Verbalize, Visualize, Mathematize" sums up the approach well. First, understand in words what you are trying to solve for. Then try to picture it. Then you get into the equations for it.

The typical Statistics class is replete with mathematize. Typical questions would be something like "Determine the confidence intervals blah blah blah." The typical student answer is certainly mathematizing, but where are the first two - verbalize and visualize? Why are they important?

Verbalize means not just solving an equation for the sake of solving for the equation. It means you understand something of why. Instead of "Use Bayes rule to determine the conditional probability of A given B occured," have something a bit more real.

In Scott's class, you do actually learn this, but it's not dry, to say the least. Instead, you're introduced, verbally, through a game of chance; say, The Monty Hall Problem. Confronted with a real life situation that you can actually imagine and tussle with makes a big difference. Getting the class to participate in an argument about what "should" be the best way to score the big prize, is verbalize in action.

Visualizing is another important concept. If I flip this coin, what's the probability that it ends up heads? Well, is it a weighted coin? What about the probability of a multicolor patchwork misshapen bean bag? What's the probability that a particular color comes up? Should you just divide by the number colors? If there are five colors does that make a 20% chance for each?

Another aspect of visualization is the output of chance events. If you ask Excel to generate random numbers between 0 and 1, and you do it a 1000 times, what will the graph look like (for Excel pros, what would an X Y Scatter look like)? Plot the random rolls of dice on a graph, what will that look like (say the dice aren't loaded)? Do these pictures look the same?

Mathematize is taking these first two and looking at the science underlying them. In the Monty Hall example, you can either use Bayes' theorem or do some tree flipping, but without getting into the math or tree, rest assured that there's a mathematize answer ready for you. In the plots of the chance events, these shapes (visualizes) conform to equations about their nature (whether rectangular or Gaussian).

But, as the Way of Go has shown, this approach should not be limited to DS. Verbalize, Visualize, and Mathematize can be used elsewhere. For instance, say you want to do good in the world. While most people might be comfortable verbalizing and visualizing, could you really mathematize?

One of the ways I did good in the world, IMHO, was to read Kellogg candidate applications. Admitting or denying candidates into the next class is a chore many a Kelloggian has performed and it's practically thankless work. That said, there's certainly a "do good in the world" aspect to it.

One way I mathematized in reviewing applications, especially where I was having problems admitting or denying the applicant, would be to flip a coin. Yes, it's true. I'd flip a coin to recommend to admit or deny an applicant and I highly recommend the technique for people who want to really understand their inner psychology and get at the right answer.

The power of the technique is strong, but it can only be used once effectively for a particular decision... in my experience. Therefore, if you have some big decision ahead of you, try it. I wont give away how to use the flip unless you click to read on. First step is to flip. In your mind verbalize "Heads - Choice A (or whatever one route is); Tails - Choice B (everything else or another choice)." Flip the coin and agree that you'll do whatever fate decides. Probably not how Kellogg would approve of my decision making technique, but terribly effective and quick! Read on for more...

Did you really do it? If not, stop reading and work on a real decision and flip. If you have, please read on...

The result of the flip gives you the answer, but not necessarily the one that came up on the coin. When I was stuck reviewing an applicant and I'd flip a coin, if the coin said "Admit" and I AGREED, then it's as if fate agreed with what I felt internally. It gave me license to Admit, per se.

If I DIDN'T agree with the coin, but wanted to flip again or argue with the result, then that part of you deep down comes out and you get to see it. It's as if you don't want fate to have the final say.

Agreeing or disagreeing with the coin makes all the difference. Use this for most any big and real decision. "Should I buy this house?" Flip comes up Buy, and you are glad that fate has decided on Buy, then go ahead (given you've done all the other requisite due diligence (important caveat)). Flip comes up Buy, and you want to flip again, it might be time to reconsider.

Posted by wayofgo at 01:37 AM | Comments (0) | TrackBack

April 18, 2005

Operations Primer

Operations is really how business is delivered. It's logistics, assembly lines, warehouses, deliveries, cells, inventory, etc. You can barely make a business go without operations. An MBA without some Operations, is like composting without a bio-cycle.

The core tradeoff elements of Operations are: cost, quality, time, and flexibility. Like the game of Go, you can have one, maybe two, sometimes three, but it's hard to get all four at once. Take cars, for instance.

Some cars are bargains; cost. Some need few repairs and perform wonderfully for years; quality. Some are fast and/or can save you from jiggling keys before opening a door or trunk; time. Some are sporty and practical, some can function as entertainment centers and comfortable rides; flexibility. No car really tries to be all these things. Just start with the cars that cost less and ask if you get the rest.

Business is no different. You can be a low cost competitor - like WalMart - and be the cheapest place to shop. You can provide a quality experience - like Nordstrom - and be the best place to shop for moderately priced upscale clothes. You can be Honda and be a flexible competitor with your understanding and prowess in engines and also be fast (time) in getting products to market. But, it's very hard to hit all four elements because you have to focus.

Why focus? One of the big lessons from Operations is bottlenecks. Bottlenecks are where things bog down; where inventory stacks up. One of the key lessons from Operations is to improve throughput by improving capacity of your bottleneck. To do this, you need to focus and not worry about the other business flows that don't affect the bottleneck.

For instance, let's say you're paid to build a house. You get paid bonuses for low cost, high quality, faster delivery, or more potential configurations of the rooms therein. But, the bonus for building the house fast is the biggest bonus by far. Where's the bottleneck?

When you optimize for speed in building (and can meet the thresholds for quality, flexibility, and cost) then you're only interested in what things keep you from building the house faster. There are actual competitions for how fast a crew can put a whole house together. Indeed, an entire house can be built in a day that is fully functioning and meets quality standards, but such an approach is considerably more expensive than standard approaches (cost). Forget change orders in the midst of the build would throw off the entire chain of events needed to happen precisely in order for it to get built. But, that said, the proper focus on the aspect of time can get the job done.

As the Way of Go would suggest, you can reuse these rules for more than cars and houses. Think about these elements when you go to mow the lawn - do you want to get the job done with as little gas as possible, well, quick, or while you enjoy the sights and scenes of your lawn (not recommended). Optimize on one or two, but don't try to go for all of them.

Posted by wayofgo at 01:05 PM | Comments (0) | TrackBack

April 07, 2005

The Marty Stoller Experience

The best business school in the nation, Kellogg, doesn’t suffer from poorly taught classes (save a few…). Indeed, the number of epiphanies and Eureka! moments are legion across great professors such as Scott McKeon, David Besanko, and many many more. But, if you dared to expend all your points in the class bidding lottery, you would not go wrong to embark upon the Marty Stoller Experience. The Marty Stoller Experience was something 80 exclusive few, out of almost a thousand students, every two years, experienced first-hand.

Paying nearly $60K/year for all the room and board, tuition, beer, etc. while not working, for an average of four classes per quarter, works out to about $500/hr you’re paying to learn, know, and/or experience. The Marty experience was worth every penny.

This treat, this marvel of a class, went beyond simple classification. Proof? Sample material from the first five minutes of the first class:

In a Kellogg classroom
[lights go dark]
[playing on the screen at the front of the class was a clip from The Usual Suspects with suspects standing up in a line-up]
Policeman [not seen]: "Alright, you all know the drill. When your number is called, step forward, and repeat the phrase you’ve been given. Understand? Number one, step forward."
Number One (actor: Kevin Pollak): "Hand me the keys, you fucking cocksucker."
Policeman: "Number two, step forward."
Number Two (actor: Stephen Baldwin): "Gimme the fuckin keys, you fuckin cocksucker motherfucker [as he pretends to be blowing away people with a gun, acting crazed. The others in the line-up crack up]
Policeman: "Knock it off, get back!"
Number Three (actor: Benicio Del Toro) [in somewhat broken English] "Hand me the keys, you cock sucker."
Policeman: "In English, please?"
Number Three: "Scuse me?"
Policeman: "In English."
Number Three: "Hand me the fuckin keys, you cock sucker. What da fuck?"

Marty stops the film, brings up the lights and walks over to one of the students in the class, hands him a note card with something written on it, asking the student to stand up and read the card.

Student: “Hand me the keys, you fucking cocksucker.”

Thus started one of the truly memorable experiences in a classroom ever. As evidenced, there were no bounds of standard classroom decorum observed; everything was fair game.

So, what was this class? What was the formal title recorded in our report cards? I think it was Management Communications, but in reality it was “Stop being so boring and get off of the PowerPoint ad nauseum reading bandwagon and perform.” Not just perform as in act or make what you’re saying more interesting to the listener, but perform in the sense of do your job to your utmost.

You do your utmost by analyzing what the audience wants. If you’re giving a speech to MBAs, make it funny, cheese it up; they’ll get bored otherwise. If you’re giving a speech to kids, feel free to be silly, fun, and/or gross. If you’re giving a speech to the Board, or to the CEO, don’t cower and not take risks. Get to the point quick, but don’t lose the value of the delivery compared to what’s delivered. Case in point…

Peter Norvig’s Gettysburg Address PowerPoint gives you a sample of what the Marty Stoller Experience was all about. Norvig went through the Gettysburg address and applied the standard PowerPoint breakdown of the speech. Scroll through it and you can see what we do with typical management communications; we steal all energy from it. Remove the emotion, the person, and the performance from what you’re saying; antiseptically deliver content. Terrible!

What made Stoller a master at getting us out from the PowerPoint drudgery and into the rhetorical mindset was his fantastic preparation before class. When asked why he didn’t have more classes, he responded, “I can’t do that much psychoanalysis on that many people. 80’s about all I can handle.”

Indeed, Marty would try his best to deliver the value one’s bidding points for a class deserved. The lessons were tailored to the individual. If someone really was too shy or too scared to perform as he wanted him/her too, he’d back off and try to cajole them to open up. He succeeded on a number of occasions.

He also was not scared of getting rather “vituperative.” If someone did not prepare due to a ski trip or hangover, he’d let him/her have it. If someone was not progressing at the pace he felt possible, he’d be on ‘em.

Going to Marty’s class was like going to camp. It was fun. It was informational and based in the rhetorical sciences. It was a challenge. And, it was hard work. But, like camp, it tends to fade to some extent once you’re away from it.

The key takeaways from the class were that you need to take more risks (don’t get stuck reading from notes or PowerPoint slides in life) and you need to perform for the audience by getting into their heads before the presentation.

So, it is with great sadness and remorse that I learned that Marty has died of brain cancer after nearly six years of battling it. I’m sorry I didn’t get to see him again, but the memories of him are deeply etched. My condolences to his family and friends. Thank you Marty!

Posted by wayofgo at 05:57 PM | Comments (1) | TrackBack