Chrysler had big suppliers knocking on their door with accounts payable at $800 million per month. Chrysler couldn’t just say that they would be slow to pay their suppliers but they had to say they wanted more spend per month. If this starts to come undone, the suppliers get nervous and act in their own interests, which is a problem. The solution is to always keep suppliers happy.
Lessons from a Masters In Business Administration: Cash-Flow Management/Expect To Lead
Cash-Flow Management: Butler Lumber is a small business with a problem. It is mismanaging its cash. In order to grow, BL was buying more wood from its suppliers, and then storing it in a warehouse, and then giving customers 30 days to pay for it. Meanwhile BL had to pay its suppliers regardless of whether that wood was sold. So, the company becomes dependent on credit in order to pay the supplier prior to being paid by the customers.
Who Has Solved The Inventory Dilemma?
Dell had mastered the cash conversion cycle in 1996. Whereas other manufacturers built computers then warehoused them, and sent them to stores, Dell waited until an order with the payment came upfront before building a specified computer. Dell required a slick production system compared to its competitors: this ultimately was about shrinking the time and the resource to meet customer needs. Inventory is a bad word in business. Dell added interest on its bottom line, increasing value. Company valuation is very difficult, and forecasting cash-flow is as well.
Be Expected To Lead Some Committee: you will be expected to make a contribution to the student life of your fellow MBAs. These are time expensive activities that you will need to be prepared for in order to succeed.
Once You Are In, You Stay: if you are struggling, the MBA program will try to support you as much as possible. It is not in their interest to acquire your tuition, and then have you fail. The entry is sufficiently rigorous to avoid such an outcome.
[This is a synopsis of several books on the MBA experience including What They Teach You At Harvard Business School by P.D. Broughton]
Lee Iacocca: Directly Pitch The Customer to Enhance Credibility
By the mid 1980s, Chrysler was in a strong position thanks in part to the build up of credibility that Iacocca had earned through his leadership. It also helps if you appear in TV commercials to get your message out. Iacocca did not want to do the ads at first because it would be time consuming. The logic of wheeling out the CEO was that a) Iacocca was well known, b) after you make the commercial, customers know you have to go back to work to improve the cars you just mentioned on air.
The best lines from the ads were: “If you can find a better car – buy it!” When the 1981 commercial came out, people thought that Iacocca was running for president because he was talking about Made in America, and the better days were ahead of us. Iacocca became a major celebrity and would be routinely stopped in the streets. Fame is fleeting for Iacocca. He spent a lot of time denying that he wanted to be president of the United States of America. Across the US, the television set was on an average of 42.7 hours per week. So committing to advertise on TV made huge sense for Chrysler.
This is a synopsis & analysis based on Iacocca: An Autobiography and other miscellaneous research sources. Enjoy.
Lessons from a Masters In Business Administration: Myers-Briggs Type Indicator
Myers-Briggs Type Indicator: is based on Carl Jung’s psychological theory, and looks at possible psychological types, and consequences. People’s minds are always perceiving, taking in information, judging, and processing information. There are two different ways of perceiving: Sensation, and Intuition. Sensing is practical, intuition is imaginative, and Judging is about thinking, and feeling. People are either introverted or extroverted (see above). The questions in this test will ask: Which mistakes would be more natural for you: a) drifting from one thing to the next, or b) staying in a rut that didn’t suit you?
The problem is that the results may be likened to a horoscope which describes a Cancer or Taurus in sufficiently general terms to be correct most of the time. This is further exemplified by the Forer Principle. This test involved asking students to rate the accuracy of an analysis of their personalities on a scale of zero to five: and they on average rated their individual analysis at 4.25. The trick was that it was the same analysis for all of the test respondents; “You have a need to help people….At times you have serious doubts as to whether you have made the right decisions….some of your aspirations tend to be rather unrealistic.” People are more willing to accept positive things about themselves than negatives.
CareerLeader: asks questions to determine which MBA path you might want to take. You will have to sculpt a personal “best-self portrait” and be asked if your current day to day actions correspond with that goal.