Selected 3rd & 4th Quarter Books

It seems that with each new quarter I have a new favorite Darden class. Given my engineering background, I expected that the quantitative courses such as finance, accounting, and operations would be my favorites. And indeed, this was the case during my first couple quarters at Darden. It was also no surprise that I earned better grades in these quantitative courses.

By the first quarter of my second year it was becoming clear that despite my lower grades in the leadership and strategy courses, I was learning far more in these ’softer’ courses. I have since embraced the leadership and strategy classes and am taking some of the most demanding offerings. The photo above shows a subset of the books I am reading in the 3rd and 4th quarter of my second year for these ’soft’ classes. I have now read about two thirds of these books from cover to cover and will finish the rest before graduating in May. There are five additional books for class that I have read on my Kindle (love the Kindle). My pace of reading has increased from about two books per year prior to attending Darden to my current rate of a little over two books per week.

Some of my favorite Darden classes include:

Business Ethics Through Literature – in this course we read modern literature and discuss the underlying ethical business implications in class. Some of our reading included: The Great Gatsby, A Thousand Splendid Suns, Never Let Me Go, and Things Fall Apart.

Managerial Psychology – this course covers 14 books on psychology. Thus far, the books have focused on core psychological principals rather than the best selling ‘pop’ culture type books. Some notable readings during my third quarter included: TA Today, You Are What You Say, The Evolving Self, Mans Search for Meaning, and Social Intelligence. I’ll probably write another blog entry on my key leanings after finishing the course.

Readings in Sustainable Business and Creative Capitalism – the term ’sustainability’ is a buzzword (again) and whenever this happens some of the meaning behind the concept is lost. The idea of sustaining business performance or investment returns is age old. This course begins with a historical review of how business and societies have failed. We then discuss ways to structure businesses with sustainability in mind. Some of our readings include: Collapse, Hot Flat and Crowded, and The World Without Us.

The business elements taught at Darden naturally break down into two groups, as follows:

Technical skills – this includes elements such as creating an income statement, performing a discounted cash flow valuation, or analyzing the effectiveness of a marketing campaign. Most people first think of the case method in terms of technical skills and wonder how these skills can be effectively taught with class discussion. Generally, most technical learning takes place before class and we use our discussion time to review the material and learn from our mistakes. (see my Case Method post for an example)

Business background - this includes the broad knowledge and the general skills required for effective management. Examples include teamwork skills, industry knowledge, communication skills, and concepts like business acumen.

Both of these groups are taught throughout the Darden program. Naturally, some settings are better suited for building specific competencies. Below is my analysis of how Darden students learn these elements:

In addition to learning from the formal curriculum, I have developed my business background through involvement in co-curricular and extra-curricular activities at Darden.

Class schedule – the general belief is that Darden students prepare 3 cases per day, 5 days per week.  This perception falls somewhere between the actual workload and the workload from when Darden was founded.  In 1954, classes were taught 6 days per week and there were 3 cases every day.  I’ve even heard rumors that exams were administered on Sundays so they wouldn’t interfere with the class schedule.  The first year program for the class of 2009 averaged about 12 cases per week.  Our schedule alternated between 4 and 5 teaching days per week and 2 and 3 cases per day.  I’ve provided a snapshot of a typical Darden week in my weekly schedule post.

Case method – most classes begin with the professor selecting a student at random to present and defend their analysis of a business case.  With participation accounting for about 50% of final course grades, Darden students prepare for every class session.  In comparison, lecture format classes found at other schools may not require any preparation.  One advantage of working through cases during the quarter is the limited amount of studying needed for exams.  In fact, many Darden students only spend a couple hours studying for each exam.  I’ve written more on Darden’s teaching style in my case method post.

Attendance policy – students are allowed to miss two classes per quarter without a valid reason.  This policy helps ensure high attendance, which is necessary at a school where classroom discussion is an integral part of the learning process.  I remember the class of 2009 being generally supportive of this policy when it was introduced during first year orientation – apparently there was no expectation of skipping class.

Learning teams – part of the case method, these teams generally meet the evenings before class is taught.  Although these meetings take time, they ultimately reduce the total time most students spend preparing for class.  In my team we assigned each individual one case to analyze for the next day.  Each team member would then share the results of their analysis in the evening learning team meeting.  Therefore, on any given night I only analyzed one case in depth and then reviewed my team members’ work on the remaining cases for the next day.  In addition to their efficiency benefits, these meetings provided a great environment for learning how to effectively review other people’s work – an important skill for MBA graduates.

Image promotion – Darden’s students, alumni, and faculty often promote the ‘Darden students work harder’ perception through their own personal dialogues.  It’s often with a sense of pride that someone from the Darden community discusses the rigors of the program.

All these factors contribute to a culture in which working hard is valued.  The communication of this culture has a reinforcing effect as prospective students looking for an easy or ’social’ MBA generally choose to attend other schools.  The result is a student body that expects to work hard for a well respected education.

This culture applies to our community as a whole and does not necessarily mean that Darden’s academic program is more time intensive than programs at other schools.  From my own observations, the hardest working students at Darden spend less than half their time on the academic program and devote huge amounts of energy towards club leadership positions or multi-industry career searches.

GBEs at Darden generally have a significant academic element and students receive course credit. The Mexico City program consisted of four main components, which are outlined below. More details are also available on the Darden webpage.

Business cases – we discussed 5 cases with IPADE students on issues relevant to Mexico. The IPADE professors made sure to involve us in these discussions and Darden students seemed to receive their fair share of cold calls.

Guest speakers – presentations and Q&A sessions with 5 business leaders from various industries including entertainment, retail sales, and beverage distribution. Some of the speakers used English and others used Spanish along with the translation service provided by IPADE.

Company visits – trips to Barcadi, Grupo BIMBO (an industrial bakery with several brands including Wonder Bread), and Kidzania (an amusement park for kids).

Cultural visits – we visited the Anthropology Museum, climbed the pyramids at Teotihuacan, attended a soccer game, and participated in a wine tasting. We also received some cultural exposure by working on a group project with the IPADE students.

This trip left me with several insights on the cultural and business environment in Mexico. I also gained a new respect for the scale and maturity of the US business school market. There are 4 well know full-time MBA programs in Mexico and the combined graduating class of these programs is around 200 students per year. In comparison, US News ranks 63 full-time US MBA programs and the combined graduating class of these programs was 12,500 students in 2007. While many of the 63 US programs may not be as reputable as the 4 programs in Mexico, and the US has 3 times the population of Mexico, there is still a huge difference in the relative size of these two markets for MBA education.

Another aspect of this trip I really appreciated was Professor Peter Rodriguez’s involvement throughout. Peter participated in every activity including classroom discussions, company and cultural visits, dinner each night, and the soccer game. Since this was his fifth time leading the Mexico City GBE and the Mexican economy was part of his Ph.D research, Peter was able to provide us with a substantial amount of information on the business and cultural aspects of Mexico.

The criteria and weightings used to produce these rankings are as follows:

Before discussing the weightings, let me provide some background on the originally published rankings and my additional criteria. When I first visited Darden it became apparent that the rankings did not capture many of Darden’s key advantages. For example, almost every visitor who observes a case discussion will agree that Darden offers a superior learning method. However, none of the published rankings use learning method as a criteria when comparing MBA programs. I therefore set about developing a more complete analysis that took into account this criteria along with three others. Here is what I choose:

Learning method – captures the teaching style and mix of learning methods employed by the MBA program. My preference was for programs that maximized the use of cases and active learning methods and minimized the use of lectures. This preference would also favor general management programs over more technically oriented programs (see The What and The How)

Class size – getting to know my classmates and having a sense of community within the program was an important objective, and one that would be significantly influenced by the class size. Within the 20 top schools as ranked by US News, the class size ranged from 171 at Emory-Goizueta to 910 at Harvard. Balancing between the advantages of a small and strong network vs. a larger and inherently weaker network, I gave the maximum score to schools with a class size between 250 and 350.

Undergraduate degree – having an undergraduate degree in engineering and a technical mindset, it was important for me to develop the less technical aspects of my business knowledge. Therefore, I preferred MBA programs that had a lower ratio of students with engineering, math, or science degrees. I was a little surprised at how much the MBA programs varied in this category. Within the 20 top schools as ranked by US News, the percentage of students with an engineering, math, or science degrees ranged from 21% at NYU-Stern to 61% at MIT-Sloan.

City size – in addition to the stronger sense of community enjoyed by schools in smaller cities, my wife and I also have a personal preference for smaller cities. Although this criteria is somewhat independent of the MBA program, the comfort of myself and family over the next two years was an important consideration. Therefore, I gave the maximum score to schools with a city size of under 1 million people.

In order to add these additional criteria the weighting of the original criteria must be reduced. This is fine because the reputation, selectivity, and placement scores suffer from measurement error and in some cases intentional rankings management. These are still good criteria, but should only account for about 50% of the total weighting for the following reasons:

Reputation – the US News reputation metric is based on a survey of MBA school deans and corporate recruiters. One drawback of this survey is the lack of a student perspective, which would provide some balance between the research ambitions of the deans and the teaching quality elements important to students. Additionally, corporate recruiters are concentrated on the first 1-2 years of employee performance, which favors more technical schools over the general management schools which are more focused on the long term horizon.

Selectivity – GMAT score and undergraduate GPA are the primary components of this category. From my conversations with professors and admissions staff, there is a fairly low correlation between these scores and a student’s performance as an MBA student. In fact, some admissions directors have expressed that students with the highest GMAT scores tend to have weaker essays. Admissions offices are constantly confronted with the moral dilemma of maximizing selectivity scores to improve the schools ranking vs. selecting the best student body.

Placement – this category is generally dominated by the average starting salary and bonus of graduating students. This metric can be further broken down to show that the mix of industries students pursue significantly impacts the placement score. In 2007, Darden students who accepted consulting and investment banking positions received about $21,000 more in first year compensation then the students who accepted general management positions. Thus, the placement category often reveals more about career interests of the student body then the schools overall placement effectiveness.

What’s interesting is how institutions have gravitated towards different levers. The University of Michigan’s undergraduate program has focused on the detection method for assignments. Since the mid ’90s, students have submitted essays (and computer programs) online. These submissions are compared against all previous submissions and a broader internet search. Even though the existence of this detection system is highly publicized, several students are caught plagiarizing every year. I can distinctly remember one student received a failing grade for submitting two lines of plagiarized computer code buried in a program of over 10,000 lines. From my own experience, honest students appreciate the fair objectivity of a good detection system.

Most universities utilize the prevention method when administrating exams. Usually exams are proctored by professors and student assistants. In some cases paper and pens are provided for the exam to prevent students from cheating with crib sheets. By their implicit nature, these prevention techniques lead to a distrustful environment and generate a fair amount of student anxiety. Ultimately, fraud prevention interferes with the learning process.

The Darden honor system is exclusively focused on the penalization method. Given the strong message sent to students by the single sanction system (expulsion), prevention and detection are virtually unnecessary. Students and professors benefit from mutual trust and a healthy cooperative learning environment. Additionally, students are free of the anxiety created by prevention and detection methods and professors do not have to spend time managing fraud.

So why doesn’t every institution rely on penalization? In my opinion there are two reasons:

1. Culture is a hard thing to change. The University of Virginia stands behind the Honor System because it has worked since 1842. For another university to adopt this system would require a significant adjustment. For example, students who expected to receive a failing grade if caught cheating would actually be expelled. Also, the faculty may be comfortable with and unwilling to abandon the prevention and detection methods they have used for several years.
2. Not everyone is comfortable with a single sanction system. While expulsion may seem fair for a student that copied a friend’s final exam answers, the fairness of expulsion for “lesser” acts is sometimes questioned. I think people get stuck here by focusing on the act of fraud rather then the underling dishonesty. If there are no gradients in honesty (i.e. half-honest), then there probably shouldn’t be any gradients in punishment.

Personally, in an environment of trust, a take home exam is certainly more appealing then a proctored exam.

The following tips are based on my own experience visiting Darden and my experience hosting perspective students (about 5 students to date).

Use your student host as a resource – You will be paired with a first year student host for your class visit. Since most student hosts applied to several schools and were accepted to multiple MBA programs, they can provide some advice on how to choose between schools. Don’t be shy about asking your host which other MBA programs they considered and why they choose Darden. Some of us have really great stories on why we came to Darden.

Class visits are non-evaluative – As a student host, I can confirm that your class visit is not evaluative. Of course, if a prospective student does something completely outrageous (use your imagination), word could get back to admissions. But I’ve never heard of this happening. Having non-evaluative class visits allows prospective students to more naturally and openly engage with Darden students.

Participate in the section norms – Each Darden section has its own way of introducing guests. In my section we ask guests to introduce themselves (name, job, where you live) and tell an embarrassing story. Another section asks guests to select a piece of paper from a cup and then answer the question on the slip. Whatever the section tradition, participating will give you a flavor for Darden.

Class discussion is not a good indicator of student aptitude – Before coming to class, students work through the case individually and then with their learning team. The purpose of the class discussion is to validate individual analysis and resolve any confusion on the concepts. Students generally come to class with less than a 100% understanding of the case, as it is generally more efficient to tackle 80-90% of case issues in learning team and then rely on the class discussion to reach the 100% level. Therefore it’s expected that many students will come to class with questions on the case and concepts; this is efficiency not aptitude.

Be cautious about participating in case discussion – Learning how to productively participate in the case method takes time. Over the last three months, my section has evolved in how we discuss cases and some individuals have entirely changed the way they engage in the class discussion. If you have a question or something to add to the case, it’s probably safer to bring it up with your host after class.

The purpose of this field trip was to bring to life some of the operations concepts we have studied over the last few weeks. Even though Darden almost exclusively uses the case method, our professors wanted to make sure we understood the real world application of operations concepts. Also, this visit provided a point of credibility for many Darden students who had never been in a factory.

This operations field trip was a good learning opportunity for Darden students, which seem to have less manufacturing experience on average then students at more technically focused MBA programs.  Given my automotive background and upbringing in Detroit Michigan, the skills and experiences of the student body at the University of Michigan (Ross) would have been similar to my own profile. However, I chose Darden because the student body complimented rather than matched my skills and experiences.

Fit is very important and Darden is a good fit for me based on the demeanor and interests of the student body.  However, with regards to background, fit should be about finding an MBA program that compliments rather than matches ones skills and experiences. By seeking a student body with increased diversity in functional experience and undergraduate education, ones opportunities for cross student learning will be significantly improved. Personally, Darden’s comparatively low ratio of undergraduate engineers is a good compliment to my engineering background.

There are four main components to a Darden student schedule:

Classes (red) – Can be held up to 5 days per week and 3 classes per day, but usually there are only around 12 classes per week. Classes also require case preparation, which isn’t captured on my schedule above.

Learning Team (blue) – Generally meets every evening when there is class the next day. For our Monday classes we try to hold our learning team meeting on Friday. With my schedule above, there are 5 learning team meetings shown compared with 4 days of class because we did not hold a team meeting on the previous Friday.

Career Development (yellow)- How much time you spend on career development is a personal choice, although most first year students spend a handful of hours each week between briefings, networking events, and eventually interviews.

Social / Other (green) - Purely optional activities including social events, leadership speaker series, case competitions, and section sports competitions. The level of involvement in this area varies significantly between students.

Breakdown of my time for the week of October 1st:

In summary, the formal Darden curriculum and career development accounted for 46 hours of my week – a similar time commitment to a standard 40 hour work week. For me, the additional social and development activities consumed a significant amount of time, although I’m counting playing soccer on a Saturday and having dinner my wife and another couple in this category.

1. Not all case based learning is the same. The level of case preparation seems to be much higher at Darden than mixed schools. My friends who attended mixed method schools recall that ‘cases are great because you can do well by skimming the case 60 minutes before class.’ At Darden, if you only skim the case you will not pass! Most classes at Darden start with the professor selecting a student at random (termed the “cold call”) to present their analysis. In an accounting class, this analysis may be very complicated and include identifying cost drivers and reallocating each indirect cost to make a product decision. On average I spend 1.5 hours preparing each case on my own and then another 1 hour reviewing the case with my learning team. After these 2.5 hours of preparation, I’ve already learned most of the concepts from the case. The case discussion is then used to validate my approach, understand other student’s perspectives, and learn how to explain my approach and the case concepts to other students. Learning how to articulate and explain concepts in easy to understand language has been a huge advantage of the Darden program.

2. The Professor makes a big difference. Teaching with the case method requires a different style of thinking. When giving a lecture, a professor presents concepts in a one directional and often highly technical broadcast format. In contrast, when teaching with the case method, students come to class already familiar with the concept from technical notes and have already analyzed a business situation using the concept. The professor’s responsibility is then to facilitate a discussion that addresses student questions regarding the concept’s application. Specifically, the professor needs the students who “get it” to explain the concept to students who haven’t yet grasped the concept. This is often a very difficult task for professors who spend much of their time focused on highly specific or technical research (i.e. proving the superiority of a new commodity pricing equation). These professors would find it natural to present a concept’s proof (via lecture), but have a hard time explaining the concept in easy to understand terms. In contract, my best case discussion professor’s have quickly learn each student’s strengths and strategically select which student to call on in order to keep the discussion on track.

3. Accounting is a great class for the case method. Most applicants that visit Darden ask how accounting can be effectively taught with the case method. To address this question, I consider two dimensions of the course topic – 1) number of acceptable case solutions, and 2) average student comprehension level. For financial accounting the number of acceptable solutions is relatively low, leading to the reaction that accounting would be best taught with a lecture. However, after reading a chapter in the financial accounting textbook, preparing a case, and then reviewing the case in learning team, the average student comprehension level coming into a case discussion is very high. This means that during the class discussion there are literally 55 students ready to explain a financial accounting rule to the 5 students that don’t yet understand. We usually start class by having several students’ complete different portions of the case on transparencies. Then class is conducted by sequentially presenting the transparencies and having students ask questions where clarification is needed. Our professor generally defers all questions to the student who presented the transparency and only steps in when we get stuck as a class.