We’ve been learning a lot in both strategy and marketing classes about how adjusting your perspective can yield insights into how you can market products in new ways. Product centred business mentality – where products are designed with the producers’ tastes or perceptions in mind – hardly ever yields great returns. I’ve posted below about the dangers of marketing, but in an example of great marketing thinking, customer focus and diligent research could help get electric cars ‘off the ground’.

Electric cars are currently bought by the “affluent, environmentally conscious, or technically enamored”. McKinsey suggests that electric car makers could widen their market by focusing on the trips that drivers actually take. Different trips, say commuting as opposed to driving around town, call for different battery requirements.

“The optimal battery size required for a plug-in hybrid driven around town is one-quarter that required by a sales rep.”

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Had a session on the causes of the credit crunch in finance. Very good though I’d worked most of it out myself from things like this: the great sub prime primer:

I thoroughly recommend you look at it for comedy value alone.

The lecturer pointed out that the british public seemed to get much more distressed about the recent MPs’ expenses ‘scandal’ than the greatest financial crisis since the thirties. I think that’s because the effects are so diffuse and because so many people share the blame: mortgage brokers; loan defaulters; investment banks; credit rating agencies; insurers; regulators; politicians etc.

The lecturer said he was mystified by the fact that people got so angry with the hedge funds when they began ‘shorting’ banks after the government stuck loads of money in. I think the answer is related to frustration with a dose of resentment. The HFs were essentially undermining a hugely expensive policy intervention – they speeded up the fall in the banks share value which meant there was less time for the policy to work. At the time they said they were just doing their job: exposing risk in the markets. But that is disingenuous to say the least. Everyone knew some of the banks were sitting on massive toxic debt – the HFs were making a quick buck while they could, with no regard for the wider good. They didn’t need to expose the risk by doing what they did!

Not to say that a lot of hedge funds haven’t gone to the wall (compared to only a few banks) but I can’t say I’m that sympathetic – their job was to take on risk, which they did and had to pay the downside to that. Unlike the investment banks – who have got away with it!

When I was fifteen I did two weeks work experience at my local branch of RBS. A nice guy who worked there sat me down and explained how banking works. Not long after I completely forgot his explanation and have only now had it explained to me again (and the rest of the MBA class) in a recent macroeconomics class.

Banking enables a roughly ten-fold increase in the amount of money in circulation! To explain how it does this I’ll go through the example we were shown in class:

Suppose someone deposits £1000 in a bank account. Because banks hold a large number of deposits and expect that most of those deposits won’t be withdrawn at the same time, it can lend out 90% of that money – £900.

The person who borrows that money borrows it for a reason i.e. to spend it on something. Therefore that £900 ends up in the bank account of the person he spent it with. Then that bank lends out 90% of that too – £810.

The person it lends it to then spends it on something, and it ends up in another bank account. And so on, so it ends up like this:

This is called fractional reserve banking. Now obviously this is a simplified example. It doesn’t take into account the costs of the process or the interest payments the bank receives but you get the picture. This process also acts to decrease interest rates by increasing the money supply and therefore the availability of capital for lending – which in turn stimulates growth.

When you see the amount of money ‘created’ I begin to appreciate what all the pundits are actually talking about when they say banking crisis - if this amount of money dropped out of circulation the economy would seize up.

I (re)learn something new every day. Actually I learn lots of things every day – most of them a lot harder to understand than this.

We talked about how this sort of banking appears to be a utility – like a water company that pools water in a reservoir and channels it off to people who need it. It’s not that complicated (obviously it is really, but then so is supplying water – probably more than banking).

We had a session where we worked out our Myers Briggs personality types. The lecturer started with the question:

Have you ever got irritated with someone because they aren’t doing things your way?

If you have, then Myers Briggs can help understand how you and other people work. You fill in a questionnaire and you are assigned to a type. I’m ENTP – Extraverted Intuition Thinking Perceiving.

“People with ENTP preferences constantly scan the environment for for opportunites and possibilities. They see patterns and connections not obvious to others and at times seem able to see into the future, They are adept at generating conceptual possibilities and then analysing them strategically. ENTPs are good at understanding how systems work and are enterprising and resourceful in manouvering within them to achieve their goals”

Sounds good eh? However the session also set out “potential areas for growth”. For example, if I neglect my non-preferred Sensing and Feeling parts I may:

• Not take care of the details and routine required to implement their insights.
• Not give enough weight to the impact on others of their ideas and plans
• Be excessively and inappropriately ‘challenging and stimulating’

These ring true for me and I have spent much of my career addressing these either by developing skills or working with others who complement my skills. It’s great to be aware of these and have tactics to sort them. Myers Briggs is extremely powerful when interpreted correctly and it’s always good to be reminded of pitfalls.

One good lesson from Myers Briggs is the difference in the way Introverts and Extroverts think.  Extroverts think aloud and Do then Think then Do. Introverts think internally and Think, then Do, then Think again. It’s worth remembering if you’re an introvert getting frustrated with an extrovert apparently talking before he’s decided what to say (I’m guilty of this).

Of the 51 (out of about 70) Full time MBA students who attended this session, 16% shared my personality type, the equal top personality type (with ESTJ).

This table below shows the distribution across different types.

As an indicator of what the types mean here are the keywords associated with each type:

ESTJ: Decisiveness
ESTP: Energy
ESFJ: Affiliation
ESFP: Enthusiasm
ENTJ: Drive
ENTP: Initiative
ENFJ: Responsiveness
ENFP: Imagination
ISTJ: Dependability
ISTP: Ingenuity
ISFJ: Commitment
ISFP: Sensitivity
INTJ: Vision
INTP: Logic
INFJ: Integrity
INFP: Idealism

My type apparently says initiative, though I scored quite closely to ENTJ as well: “Drive”(!)

I am an angry old man. Today I told two pairs of people off for talking in the silent study area of the library. If you come to the top floor of central library at Imperial and I’m here, don’t even think of talking. Next time it happens Iwill get violent and shouty. I may throw your laptop down the stairwell.

The pair I told off just now, one of the girls was having a webcam conversation with a third person. WTF? In a library? I was polite with the first pair, but verged on the impolite with that little b…. sorry, I’ll regain control. I just asked her if she was, seriously, having a giggly webcam conversation in the silent study area of the library. I then stood behind her and told her webcam buddy that the conversation needed to end. I stomped back to my desk, blood pumping – writing this blog is calming me down.  She carried on her conversation for about a minute – She was speaking in Russian but I assume she was laughing at me.

BTW the first pair looked at me quite threateningly and then moved about three desks away and continued their conversation. Of course I didn’t do anything about it.

Update: now a guy a couple of tables away from me has turned a noisy fan on and has it pointing directly at him. That would be fine, it gets hot up here, but he is clearly wearing multiple layers of clothes including a massive seater. Take the f*&^ing sweater off! Either take it off, or go to a doctor, because you have some kind of strange hot/cold disorder. Or maybe his laptop is overheating.

Sounds like using Apple software is going to get even more annoying:

Apple’s filed a patent on a design for a device that won’t let its owner use it unless that person demonstrates that she has complied with an advertiser’s demands by paying attention to an ad and taking some action indicating her dutiful attention.

When there are more details we’ll know for sure but it sounds to me like Apple is flexing its muscles a bit too far this time. I hope this isn’t a sign of things to come – it sounds like a dystopian nightmare.

Advertising objectifies women? No shit, I hear you say. But I do like the way this website shows the progression in these Reebok ads, from at least at first showing the women as an individual, to purely and simply focusing on body parts and “making  76% women jealous”. It reminds me of the Bill Hicks bit on marketing:

I’ll probably end up doing a lot of marketing in my career and have done previously, but if all I’m  doing is making up reasons to buy stuff, making people feel as if they need some product to make them be as great as the next person, then I think I’ll take Bill’s advice.

But marketing can be more than that - it’s the process of giving customers what they really want and need (sometimes they don’t know it yet e.g. when chewing gum went from being a sweet to being a breath freshener and teeth protector). Good marketing is not just about the seller to buyer dynamic, it’s the other way round too. Marketers: listen and understand your customer, think about what they need, don’t try and create needs from nowhere, then you won’t have to take Bill’s advice.

A unique part of the Imperial MBA is the IED project. You take a business idea and move it forward, sometimes to the point of launch or financing. It capitalises on Imperial’s status as a treasure trove of science and technology. Pretty much anyone can submit a proposal, but most come from MBA students and the wider student body and faculty. 34 projects were chosen out of about 100.

I submitted a proposal but it didn’t get chosen – I think it was a bit too early and the idea wasn’t formed enough. The full time MBAs get to choose from 17 ideas (the rest go to the executive MBA cohorts) making about 4 students per project. I won’t go into the details here as we’ve had to sign non-disclosure agreements but they range from the wacky and fun, to technology addressing healthcare, international development, climate change and crime.

Will let you know if I get my choice…

It’s got very busy. Half way through the first term we’ve  started four new courses. For strategy, we have to prepare a different case study before each class. In any of those classes there may be a surprise test that counts for 30% of our overall assessment. Before every finance class we need to have completed an online test (also assessed). As well as keeping up with the reading we have three exams at the end of this term, then another four at the beginning of the next. Oh and two major coursework deadlines just before the four post new year exams.

Why is it so much work?

1) it’s good to learn stuff! Why else would we be here? It’ll be useful and good for its own sake too.

2)  One year MBAs need to assert that their courses are just as credible as the two year ones.

3) It’s a badge of honour – at the end of it (hopefully) we’ll be able to say we got through it.

But at this point I have to decide on my strategy – do I just want to pass, do really well, or somewhere in between? What do employers care about? Will breaking my back to try and get a distinction really make a difference? Is it worth it considering the very high probablity I don’t get one? Could I spend the time I save by not going for a distinction on something useful like learning a language or careers development or networking?

Is it worth doing really  well on some papers? (and badly on others) Will I care? Will employers care?

I have to admit to being very lazy during my first degree (9.5 years ago). I think my main driver to do well is wanting to do it differently this time. In subsequent years after my first degree I felt a bit silly for not making the most of the opportunity to learn from some very clever and learned people. So that’s why I’m going to do as well as I can.

I’ll let you know if I actually follow through on this. (clue: it’s unlikely)

Went to a talk by the director of Design London at the business school. Nick Leon told us about some really interesting things happening there – they’ve clearly got  a creative and talented bunch of people. However I didn’t find him convincing when talking about the public sector. He didn’t have much to say about the adoption of innovation which I think is the key issue. I almost think that the design bit, though crucial and requiring talent, is the easy bit. Making it happen is much more difficult – witness the NHS IT project saga. Innovation adoption is a much harder outside commercial contexts. He also said little about the incentives for new design innovation and incentives for adoption.

First of all in the private sector you have well acknowledged product lifecycles, starting with innovators, then early adopters etc. In the public sector you are often talking about essential services so you need to think about things differently – you can’t simply let the market work. Sometimes there are ethical restrictions about what innovation you implement (e.g. if it is not well evidenced) and piloting new ideas in the public sector is often politically influenced. I’m an advocate of wholesale restructuring of the public sector to enable better innovation, perhaps using market principles, but it ain’t there yet.

Secondly you can’t just tell your employees what to do. I understand that private sector workers resist change like anywhere else but fundamentally they do not (usually) own the business and defer to the managers and owners to set direction. In the public sector it’s different. Strong stakeholder groups (e.g. doctors, nurses, policemen) have a massive sense of ownership, huge clout and often much more public support than the managers themselves. Arguably doctors, with their comepting interests scuppered the NHS IT programme through disengagement and criticism.

So great ideas and brilliantly designed services are one thing  – making them happen is much more difficult.