New Comment from "The Secret" of Management

I just finished an excellent book about servant leadership called "The Secret." It contained a statement that I really liked; "with every pair of hands you hire you get a free brain." Let's make sure we are not ignoring the power of all those brains we have working for us, at every level of the organization!

When I was at New Madrid last week a mechanic offered his thoughts on preventing a repeat equipment failure. This item had been reviewed by the OEM and recommendations had been made, but I think his suggestion was excellent, not just from a practical functionality standpoint but it was also very inexpensive, almost free!

Don't forget to ask the question - someone just might have a better idea.

Is it 1979 All Over Again?

(Is History Repeating Itself in the Power Business?)

1979 may offer a glimpse into 2009, and we may learn something about the current recession by looking back at how the industry fared in post-1979 recession of the early 1980s.

Life in the late 1970s
In the mid-1970s, electric utilities in the United States were struggling to keep up with the growth in electricity demand. Nationwide demand was creating shortages of critical plant equipment such as turbines, generators, and large transformers. Prices were increasing rapidly, and with rapid load growth utilities found it hard to keep up with demand. As a result, they were making commitments for ever-larger plants, more frequently.

At Associated Electric, each generating unit was larger than the last. The 1960s ended with the completion of Thomas Hill Units 1 and 2. In the 1970s New Madrid Units 1 and 2 were completed in 1972 and 1977. So, at the end of the 1970s it was not at all unusual to consider adding Thomas Hill Unit 3, Associated's largest generating unit, planned to come on-line in 1982. In addition to the coal-based projects, Associated made commitments for a share in a large nuclear power plant, the Black Fox Nuclear project.

In the last 50 years in the U.S. there has never been a significant rise in the price of oil that was NOT followed by a recession. The Iranian Revolution of 1979 was just such an event. Oil prices shot up, driving inflation, and the US Federal Reserve enacted a tight monetary policy in response. This led to the extended 22-month recession of 1980-1982.

Increases in energy prices led to increased conservation by consumers, with the result that, by the time Thomas Hill Unit 3 was completed in 1982, not a single megawatt of its output was needed to serve customer demand. The 670 MW unit was entirely surplus to Associated's needs.

We weren't the only utility in this situation. Many of our neighbors had also made commitments for large generating units and the entire region found itself with extreme surplus capacity.

Moving into the 1980s
In order to pay for the increasing fuel costs and unneeded generating capacity, Associated enacted a series of rate increases throughout the early 1980s. The rate increases in turn resulted in further reductions in the rate of growth of customer demand.

In the years that followed in the early- to mid-1980s, Associated found that it could replace the output of its coal units at a price equivalent to running them. There was no longer a reason to spend extra money to shorten scheduled maintenance outages. Policies were enacted to suspend the use of overtime to shorten outages. A program known as “intermittent operation” was initiated at the New Madrid plant, in which one of the two units was shut down for economic reasons, and some of the workforce experienced a layoff.

Then and Now
Compare this situation of 1979 to our current situation. Since 1999 we have been building new generating capacity at a rapid pace. Intense worldwide competition for equipment such as turbines, generators, and transformers resulted rapid escalation in the cost of new plants. Strength in the rural Midwest economy kept customer demand increasing at a constant, reliable pace. Associated planned its next large generating unit (first Norborne, then Chouteau 2) and considered a commitment to a share of a large nuclear unit.

To cover increasing fuel and environmental-control costs, Associated enacted a series of rate increases over the past four years, putting additional pressure on customer demand.

There was not an Iranian Revolution, but in 2008 U.S. oil prices reached an all-time high following the announcement of Iranian missile tests. While the recession that followed is largely blamed on the collapse of the housing market, collateralized debt obligations and mortgage-backed securities, the increase in energy prices was a significant trigger to the mortgage meltdown.

Now one year later we find that customer loads are no longer growing at their former pace. The large generating unit under construction at Chouteau 2 is now expected to be entirely surplus at the time of its completion in 2011. Our participation in a previously planned nuclear unit has been suspended, and the equipment for our planned 100 MW peaker at Essex 2 has been placed in storage.

It is likely that we will find our neighbors with similar surplus capacity. New large coal-based units were recently completed in southwest Iowa and southeast Nebraska, and other units are nearing completion in Kansas City, southwest Missouri, northeast Arkansas, and western Illinois.

Even today our coal-units do not have the same value they had just a few months ago. Natural gas prices have collapsed, driven by low demand and high storage reserves. While we cannot yet buy energy for the same price as production, we are getting very close to those levels.

So, is it likely that we will see the situation of the early and mid-1980s repeat itself in 2010 through 2015? Might we see years of low customer demand growth? Might we find ourselves with the ability to buy surplus energy from our neighbors at prices competitive with our existing units? Might we find ourselves shutting a coal unit down for economic reasons? How might this impact utility negotiations with labor unions, railroads, and coal companies?

Exceptions
There are two additional significant factors that were not present in the 1980s: shale gas and carbon-dioxide regulation. Massive domestic reserves of natural gas trapped in shale formations, formerly considered uneconomic to recover, are now being extracted at very low incremental costs, a result of improved horizontal drilling technology. These reserves will put a price cap on natural gas, keeping our fleet of high-efficiency gas-based units competitive with some coal-based units. And the currently debated cap-and-trade bill, if passed, will further increase all energy prices, further depressing demand and placing coal-based units at an even greater disadvantage.

This future may NOT come to pass. This current recession could end and we could return to business as usual. But, if the current forces continue, we will need to maintain tighter cost control and top-tier unit performance in order to remain competitive in the market. Those who can do this well will survive. Those who cannot may find themselves looking for work. We want to be the former.

What do you think – are we back in the 1980s or will the roaring 1990s return? I would love to hear your comments.

So now that I'm back, what next?

Ok, I’ve been attempt to reintegrate my life at AECI for a week now, so where am I going? What are my current priorities?

Emphasis on our core mission – maintenance and reliability of our power plants, especially our coal-based units.

Emphasis on cost consciousness – this is a key part of our mission and vision. I want to make sure we are all living it. One objective of my training was to gain a broader industry perspective. After all the case studies and exposure to classmates from 160 businesses in 44 countries I have developed an increased appreciation for the importance of continued vigilance on costs.

Exploring the application of Social Networks – I had the opportunity to experiment with social networking tools such as Facebook, Linkedin, and blogs during my training, and I have seen how these tools work to improve communication and “flatten” the organization. I see a high potential for using these and similar methods for online collaboration across multiple locations. I am very excited about some new Sharepoint tools that will soon be available on our office intranet. They will provide us with in-house capabilities similar to those available today on the unsecure commercial sites.

Continually explore alternate and divergent ideas –it is easy for a business to fall prey to groupthink and complacency and miss significant opportunities and threats. We studied a number of examples of human-system failures, from Everest mountain climbers to NASA engineers to managers of financial services companies. In every example, humans are humans, and we share some common biases that often prevent us from seeing events outside our expectations. I will be using some new techniques to lessen the likelihood of becoming the next Harvard failure case study.

I am eager to hear from each of you on these ideas. Please feel free to share your comments online or by email. Think of it this way: if you hesitate to share an idea that you think could help us improve, you may be delaying our progress!

I'm not saying I work with a bunch of turkeys, but...

This turkey and her friend keep walking by my office window every afternoon.  Are they lost or what?

Back Home!

I want to thank everyone who made this trip possible, all my staff and colleagues at AECI who continued to work on all the challenges the coop faces, my friends for their support and encouragement, my family and my beautiful wife Lisa who always amazes me with her strength, wisdom, and kindness.  God bless you all!.

Final class, final day, final advice from Harvard (alternate title: Why would I ride a motorcycle to Boston and back?)

To laugh is to risk appearing a fool,
to weep is to risk appearing sentimental,
to reach out to another is to risk involvement,
to expose your feelings is to risk exposing your true self,
to place your ideas and dreams before a crowd is to risk their loss,
to love is to risk not being loved in return,
to live is to risk dying,
to hope is to risk despair,
to try is to risk failure.

But risk must be taken because the greatest hazard in life is to risk nothing. The person who risks nothing does nothing, has nothing, is nothing.

He may avoid suffering and sorrow, but he cannot learn, feel, change, grow, or live. Chained by his certitude he is a slave who has forfeited all freedom. 

Only a person who risks is free.

-William Arthur Ward

Nearing the End (one day more, one more day, one day more)

It’s almost over. Eight weeks, eight professors, a number of other guest faculty, 160 peers from 45 countries, current and former corporate CEOs, and over 100 corporate case studies. We have covered a lot of ground. For example, we just concluded our ethics and corporate accountability track (one of eight learning areas) in which we discussed independent cases studies that covered each of the following issues:

• whether to take personal advantage of a “corporate opportunity”
• responding to a fire that destroys your manufacturing operations
• handling a strike over labor contracts at a newly acquired plant
• managing environmental, community, government, and human rights issues
• how to reward top management for closing a proposed merger
• responding to a low-ball hostile takeover bid
• dealing with a potentially serious health risk in a major product line
• responding to a serious global health crisis
• formulating an investment strategy that advances sustainable development
• preventing organizational drift and creating an effective governance system
• deciding on executive pay and responding to activist investors
• dealing with illegality and fostering organizational compliance
• whether to accept a “politically connected” candidate into an internship program (List courtesy Professor Lynne Paine.)

Also today we completed our track on managing innovation and change that I have found personally rewarding. To influence the outcome of a business, a manager has four tools that can be modified: the people and their skills, the process under which they operate, the formal organizational structure, and the informal organization which is influenced by culture, cliques, and coalitions. We spent a lot of time on this last point, focused on the impact of corporate culture, how to assess it, and even how to facilitate change in it.

Steve Jobs - Commencement Address to Stanford University

http://www.youtube.com/watch?v=D1R-jKKp3NA

As we wind our coursework down this week, we were invited to watch this Youtube video.  Several classmates found it inspiring.  If you have an extra 15 minutes to burn, you might want to watch it. 

His advice?  "Stay Hungry, Stay Foolish".

What do you think?  Comments?

Michael Porter on the Competitiveness of Nations

Michael Porter is the superstar professor of Harvard Business School. He is the author of Competitive Strategy, in which he developed “Porter's Five Forces” that are frequently taught in business schools and MBA classes (google Porter's Five Forces). In a class session this week, he shared his thoughts on his latest book, Competitive Advantage of Nations.

His main idea on national competitiveness is that it is not what you do, but how productively you do it that determines success. While national prosperity can begin with natural resource endowments, such as oil reserves, simply selling your endowments will not necessarily make your nation rich (the average per-capita annual income in Saudi Arabia is only $3000). To succeed, nations need a good social infrastructure in terms of education systems, health care systems, and good law enforcement. A stable national government, with sound fiscal and monetary policy, is also essential.

Relying on endowments can actually hurt an economy. The easy access to trade revenue allows for low productivity and bad government practices to be masked, leading to continuing inefficiency. In resource-rich countries, the fight is often over how to divide the revenue pie, not over how to make the overall pie larger through greater efficiency.

These same concepts can be applied at a more micro-economic level. Consider the competitiveness of a state, or even a region such as the Missouri bootheel. It is not enough just to have great farmland that can grow cotton and beans; the people of the bootheel will not be prosperous as a whole until their institutions (education, law enforcement, etc.) are also prosperous.

Leading Change

You may have noticed that I haven’t had too much to say in the past few days. This is for two reasons. One, we have been very busy with extra “optional” classes each day, and two, I’ve been doing a lot of thinking about how all this can be applied to help Associated succeed.

Today we are completing a series of classes on leading organizational change. We have had the privilege to hear from senior executives at several firms that have completed sensational turnarounds: a major South African bank, a Japanese car manufacturer, the largest maker of set-top boxes for cable and satellite reception, a European beer manufacturer, and the UK’s largest newspaper company, to mention a few. These sessions have given us the chance to hear from these individuals, not only regarding what worked well, but also to hear from them and question them about the part that doesn’t always get discussed in the business books, which is where they made their mistakes in implementation and what they learned from the experience. I am very excited about the opportunity to apply these lessons to our plant maintenance activities. At Associated we have made fantastic advances in plant performance from the late 1990’s through about 2004, but since then we have struggled to break records, and our competitiveness with our peers has slipped. When I return I hope to begin the process within our division which will return these plants to a position of excellence. This effort will require cooperation from our entire team. Our employees are the day-to-day guardians of the members’ assets, and they will be the people who will ultimately enable us to succeed.

Investment advice from an old business book...

Blessed is the man who finds wisdom, the man who gains understanding, for she is more profitable than silver and yields better returns than gold.

Proverbs 3:13

What is equity worth to a cooperative?

We have often debated the appropriate discount rate to use in our long-term capacity expansion and capital budgeting decisions. In the past I have argued for a "risk premium" over the cost of debt, but I could never justify a number. If we could somehow determine the value that our members would place on their cash, we could determine a better discount rate. 

How should we value the member’s equity held by AECI?  One approach would price the equity as if it were being held by a publicly traded, investor-owned utility.

When we retain earnings at AECI we are essentially investing our member’s money in the cooperative for them. Our returns that our customers expect from their investments depends on the riskiness of the investment.  If they choose to invest their money in a savings account, they would expect very low returns, but they would be taking very low risk. An investment in a startup company may provide high returns but presents much greater risk.

We could estimate a value for the members’ equity by comparing it with an alternate investment of similar risk.  Imagine if, instead of investing their cash in AECI, our members could have invested in a neighboring investor-owned utility, an investment which should present risk simlar to an investment in AECI.

The value (cost) of equity in a publicly-traded company is determined using this formula:
Cost of Equity = Risk Free Rate + Relative Riskiness of IOUs * Average Stock Market Risk Premium

The Risk Free Rate (T-Bill rate) is currently near zero, but over the past 80 years it has averaged 3.8%. In just the last 20 years (ending 2008) it averaged 4.25%.

The relative riskiness of a stock relative to the market can be computed using regression and is known as the stock’s “beta”. The beta of our neighboring utilities is 0.72 for Ameren, 0.79 for Great Plains Energy, and 0.77 for Empire District Electric (showing that Empire and Great Plains are considered a higher risk investment than Ameren). The overall average beta for utilities over a 30-year period has been about 0.75.

The average large company stock market return over the last 80 years has been 11.7%, which represents a 7.9% Average Stock Market Risk Premium (the difference between 11.7 and 3.8).

Using these figures, the long-run cost of equity for a large Midwestern utility should be:
Cost of Equity = 3.8 + (0.75 * 7.9) = 9.725% (say about 10% in round numbers).

What do you think of this approach?  Does it make any sense?  Should this be our new discount rate?  This higher number would bias us toward shorter-term projects, but maybe that is a better approach.  I would love to hear your comments.

Outsourcing, Offshoring, Anti-Trust and Integrity

We covered a lot of ground today.  Outsourcing.  Off-shoring.  Anti-trust law.  And the best part was a visit by Ben Heineman, former Chief General Counsel for GE (he worked for both Jack Welch and Jeffrey Immelt).  Now retired, he has written the book “High Performance and High Integrity.”  A group of us had a working lunch discussion with him, talking about governance, trust, and the fiduciary duties of the Board.

Bill George on Authentic (True North) Leadership

Today we had the privilege of Q/A with Bill George, Harvard professor, former Chairman and CEO of Medtronic, current director to ExxonMobil, Goldman-Sachs, and the Carnegie Endowment, and author of the business best-sellers Finding Your True North and Authentic Leadership.

Here are some highlights from this discussion.

Command and Control Leadership is dead, or it should be.

·        Your subordinates know (or should know) more than you.

·        People want a chance to make a difference.

·        People are motivated by meaning.

To Achieve Values-Centered Leadership (True North Leadership in his book):

·          Align people around the mission and values of the company.

·          Empower people to step up and lead.

·          Serve customers and employees (and in doing so, you will be serving your shareholders).

·          Collaborate within your organization and with other organizations.

Leaders are not perfect.  Admitting mistakes is a two-way street.  Leaders cannot get buy-in without honesty.

His 7 Lessons for Leading in a Crisis:

1.      Face reality, starting with yourself (admit your mistakes)

2.      Don’t be Atlas, get the world off your shoulders (share the load with your team)

3.      Dig deep for the root cause (don’t blame others)

4.      Get ready for the long haul (it won’t be easy or simple)

5.      Never waste a good crisis (it is easier to drive change then)

6.      You’re in the spotlight, follow true north (this is your chance to demonstrate your values)

7.      Go on the offense – focus on winning now (see the crisis as an opportunity)

Energy Information

They were handing this book out at the Student Union.  I’ll see if I can pick up a few tips for when I return.

CEO Compensation Discussion

Today we talked about executive compensation, a topic debated in Board rooms around the world.  Overall, the gap in compensation between entry-level employees and CEOs has been widening in the last ten years (especially in the investment banking sector).  This has caused lots of concern, and prompted proposals for new legislation to put a limit on compensation.  Our case centered on efforts by the AFL-CIO to force boards to submit compensation plans to a shareholder approval vote. 

In our discussion, the Europeans were generally much more willing to entertain a cap on executive pay than the Americans.   One common practice that gets close to a cap is to use a programmed structure where a maximum 60% gap exists between senior management and the CEO, for example, if the CEO makes $300,000 the top senior manager would make 60% or $180,000. 

 

Net Promoter Score

Here’s a quick and simple idea for getting customer feedback on satisfaction and loyalty. Ask the question, “would you recommend X to a friend?”

On a scale of 1 to 10, those answering 9-10 are “promoters”, 7-8 are “passive”, and 0-6 are “detractors”.

This one simple question can give you a quick read on satisfaction, for retail products, for services, for conference presentations, and for employers. Jeffrey Immelt of GE uses this as his number one tracking metric.

Paul Volcker, former Fed Chairman, and currently Chairman of the U.S. Economic Recovery Advisory Board

Tonight's special guest lecturer was Paul Volcker, speaking at the Kennedy School of Business at the Harvard Business School.  He discussed the current financial crisis and took Q/A from the audience. 

He doesn't mind protecting banks, but thinks the U.S. should have allowed some of the engineered financial firms fail in the wake of the crisis.  As it was, only Lehman was allowed to fail.  He doesn't believe that banks should be running hedge funds and CDOs.  He mentioned that he had a recent discussion with a Harvard professor and former Nobel prize winner.  Mr. Volcker stated that he believed that there was no correlation to show that the massive financial engineering products (that led to the financial crisis) had contributed positively towards U.S. economic performance.  The professor replied, "No, but intellectually it is a lot of fun."  Too bad that this intellectual economic experiment led to a crash in the world economy.

When asked about the future value of the dollar, at first he dodged the question, on the basis that the former Fed chairman should not offer his opinion of such things.  Then he relented and stated that he did NOT believe that the dollar would drop, because China and other nations own far too many (they own 1/2 of our treasury debt) too let the dollar fall.  He said, "they may not like the dollar, but where else are they going to put it?  In the Euro?  No.  The Yen?  No.  The RMB?  I don't think China will allow that.  So the dollar is going to remain the world currency, because there is still no better option."

On the Fed, "the Federal Reserve Board should not be an economics seminar, it should be a policy-making body."  He believes that the Board should not be dominated by economists, but should include non-economists and business leaders.

In case you are wondering (we were) he believes we are in for a long, slow recovery.  No quick fix.  No surprise.

FBI Director Robert Mueller III

The director of the FBI, Robert Mueller, addressed our class today.  We had been studying the efforts they have made to reform the FBI following the 9/11 terrorist attacks.  Creating change in a large Federal bureaucracy like the FBI is an extraordinarily difficult task.  We had a frank Q/A session with the director following his presentation, in which Mueller discussed what has worked and what is not working in their reform efforts.

He said that following 9/11, he established ten priorities for the FBI:

1) combat terrorism

2) counter intelligence

3) cyber security

4) public corruption

5) (he was talking too fast and I didn't catch 5-8)

6)

7)

8)

9) white collar crime

10) violent crime

So, if you are going to commit a crime, make it a violent one, since the FBI has it on the bottom of the list!

Seriously, Director Mueller said that most of his agents would rather catch bank robbers than fight terrorism, and he has fought this by creating the priority list and making performance reviews based on individual's performance on the priorities.  He also has a standing weekly videoconference with area directors to review these priorities.

Another difficulty in fighting terrorism is metrics.  It is easy to measure criminals caught and convicted, but it is hard to measure terrorist acts prevented.

One dramatic move he made was to insist that field office directors be rotated after five year of service.  In order to get champions for change, he has forced his leadership to change. 

When asked about his cooperation with China and Russia, he said, "we know they spy on us, and they might suspect that there is a possibility that we may be spying on them, but we don't talk about that.  We just share information where it is in our common interest."

He felt confident in the superiority of the U.S. intelligence system.  One area in which he envied China:  they have 1.2 million intelligence agents, whereas the US only has 13,000.

A Paparrazzi Moment

Just so you don't think its all work and no play around here, one of my living group members actually went for a run this weekend, and ran into . . . The Tom Cruise Family.  He snapped a picture of them admiring my dorm room.  Seriously.

Clayton Christensen, author of "The Innovator's Dilemma" and "The Innovator's Solution"

We had a special lecture today by Clayton Christensen, author of "The Innovator's Dilemma" and "The Innovator's Solution".  He gave a number of expamples of companies that have been able to sustain success through several business cycles, by innovation and reinvention, and also many examples of companies that did not.  One quote:

"If the capabilities of the past are what you need for success in the future, stick with them, but, if they are not...."

So, what "core competencies" will be important in the future?

Al Gore's Investment Firm's CEO is teaching us . . . Socially Responsible Investing!

Okay, this was quite a mind-bender for me.  As part of our case on business ethics and socially responsible investing, we were visited by David Blood.  He is the CEO of Generation Asset Managment (and the former CEO of Goldman-Sachs Asset Management).  "Generation" is the company that Al Gore has formed to invest in "socially responsible" firms.  Al Gore himself is the Chairman.  I was surprised to hear that they have no formal definition of the term "sustainable", it is up to them to define. 

Our case was a debate on whether this firm should invest in ABB-India as they expanded the electric service in India.  On the plus side, they would be improving lives by providing basic electric service in an improverished are of India.  On the negative, the electricity would be generated almost 100% with coal, increasing global carbon dioxide emissions.  Growth of the business (and therefore growth of the stock's value) was expected to be strong.  Can you guess what Al Gore's sustainability company decided to do?  Wouldn't you think, given their position on global warming, that they would run away from such an investment?  No!  They put the company on their list, and according to Mr. Blood, the only reason they have not yet invested in the company is because the "returns have not yet been high enough."  What do you think of that?

They hope to use their investment position to put pressure on companies to improve their business practices to become more sustainable, "by proxy if necessary."  Hmmm...

IBM Strategy Head - Mr. Bruce Harreld

Today as part of our case studying IBM's competitive transformational turnaround we were visited by Mr. Bruce Harreld.  Bruce served as IBM's Senior Vice President of Strategy until his retirement in 2008.  He created an internal "venture capital" type of structure within IBM to drive innovation.  He discussed the difficulties in merging an innovation culture with the exiting formal IBM structure, which was designed for incremental improvement, not discontinuous change.  He talked frankly about their failures with misalignment of incentives, people, and organizational structure and how they finally created a successful model.

Niall Ferguson - Author of "The Ascent of Money"

Today we had the opportunity to hear from Niall Ferguson, professor of history at Oxford, Cambridge, and Harvard, and author of many books, including “The Ascent of Money.”

His discussed his concept of “Chimerica”, the combination of China and America in trade, and how the financial crisis has changed that relationship.  His talk was titled “Has the Crisis Speeded (sic) Up the Shift of Wealth from West to the East?”

A colorful speaker, he equated the current decisions before the Fed to be a battle of King Kong vs. Godzilla (deflation versus inflation).  The world is changing, with China building submarines, Australia building submarines, China buying up large parts of Africa and Brazil for their commodities.  The Fed will almost certainly have to raise interest rates to stem the fall in the dollar, but doing so will push inflation up and keep the U.S. in a recession even longer.  He put up charts describing an “English-speaking country, recognized worldwide, with an excellent Navy, and investments all around the world, and the standard currency for the world.”  Of course, he was speaking of Great Britian, and how it fell from its level of leadership in the world.  His point was that, he believes it is likely that we are living in the last days of the primacy of the United States, and we are witnessing its fall, and the rise of a new world order.

The members of my living group, none of them Americans, did not agree with this assessment.  They believe that the institutions in the U.S. are so strong that it is not possible for China, through sheer numbers and economic wealth, to overtake the U.S. in innovation, excellence in education, or skill in business management. 

I guess we’ll see.

It's just marketing, it's not rocket science . . . or is it?

Our reading for our marketing class this week included the following paragraph in its discussion of the impact of "free" customers on paying customers (as in some internet sites that offer services for free in hopes of attracting paying customers).  I feel like I'm back at Rolla!

The Future of Business Learning

Today our learning group had the privilege of sharing lunch with Dr. Srikant Datar, the Director of Research for the Graduate School of Business Administration at Harvard. He also serves on the Board of Directors for Novartis and ICF.
Our discussion became interesting as he offered his opinion on the future of business school education. Last year, 2008, was the 100th anniversary of the Harvard Business School. As part of the celebration of looking back at the last 100 years, he and a colleague were asked to look forward to envision the future of Harvard University. They took their task seriously and undertook what has become a two-year research project into the future of business education.

He first discussed the difference in emphasis between existing business schools on the scale of intellectual Rigor versus practical Relevance. Having previously taught at both Carnegie Mellon and Stanford, he suggested that Harvard has a stronger reputation for Relevance among its peers. Of course he may be biased, but I tend to agree with him.

His research involved a review of hundreds of business school programs and interviews with many corporate CEOs. Based on his research, he and his colleague have written a book, to be released within months, called “Rethinking the MBA”. It will discuss the three key teaching areas for future of business education.

1) Knowing (specific book knowledge, tools and techniques)
2) Doing (how to actually accomplish things outside of the classroom)
3) Being (how to lead groups of people)

In his opinion, business education is unique in that it involves more than just knowing. To be successful in business it is not enough to have book knowledge. As a business leader you MUST accomplish your objectives through the efforts of other people. How people react to you determines to some extent how successful you can be as a leader. He contrasted business education to Law or Medicine or Engineering by saying that business education relies more on the “doing” and “being” skills than just on knowing.

Many business schools focus only on the knowledge and Knowing. This is like teaching someone to swim through lectures and reading. You can read, discuss, and watch videos all day, but that still will not help you to swim when you graduate. There is a reason why we do not teach swimming in a classroom. It is because it is a Doing skill. So is business management.

Their research has discovered techniques now in use at a few schools that truly help to bridge the gap between Knowing and Doing. They have even documented ways that some schools are teaching the Doing skill of innovation.

The third dimension of education in future business schools will be Being skills. This is the skill that some people have which allows them to inspire people, to create trust, to influence and to lead. They have also documented techniques for teaching this skill. In our discussion, Dr. Datar agreed that our use of temporary developmental assignments at Associated Electric achieves the same objective, allowing people to test out some Being skills in real-life situations.

He described four types of critical thinking skills: deductive, inductive, analogical, and integrative thinking, and emphasized the need to teach all types.

When describing the Being skill of leadership, he has documented the change over time from a High Authority/Low Conflict culture towards a developing Low Authority/High Conflict leadership culture. This culture, which is becoming more prevalent in business, requires leadership skills that are different from those that have been taught in the past.

He said that the main challenge facing most MBA students in that in their entire life they have only known people very much like themselves – all very successful, driven, intelligent MBA students. This leaves them ill-prepared to understand what it takes to motivate the broad range of employees (factory workers to phone operators to engineers to accountants) that will be encountered in a typical business. As one CEO that he interviewed put it, “most kids don’t know how to have a conversation with a plumber. They just think of him as someone who shows up to fix the pipes, not as a fellow human being.”

He believes that this gap can be reduced through experiential learning and formal, frequent peer feedback.

He also suggested that we watch the commencement address given by J.K. Rowling to the Harvard business school graduates in 2008. The previous year they had hosted Bill Gates for the commencement address, and when the class of 2008 heard that they were getting an author of children’s books, they were vocally unhappy about the selection. Expectations were low on the day of commencement, but J.K. gave “the most impressive commencement speech ever”. This to him was another example of the Being skill; the ability to synthesize, motivate, and lead, and the kind of skill he would like to see become a routine part of business curricula worldwide.

JK’s commencement address can be viewed in three parts on the links below. The amazing thing she talked to the Harvard MBAs about was failure and imagination, something they probably had never experienced in their life.

JK Rowling Commencement address to Harvard, June 2008
JK Rowling Part 1
JK Rowling Part 2
JK Rowling Part 3

Dinner in the Sukkah

Tonight some of us took a brief break from case studies to walk with some of our Jewish friends to a sukkah.  What is a sukkah?  It is a temporary tent that Jewish people construct during the annual festival of Sukkot – the festival of Tabernacles or more literally “tents.”  The Jews celebrate Sukkot by eating together in temporary tents to remind them of their time in exodus from Egypt and their total reliance on God during those times.

 

In the sukkah we met with two Rabbi who explained the Jewish traditions surrounding Sukkot, their thoughts on water and wine, and even some interesting talk about the mezuzah.  The mezuzah is an ornate case containing a tiny scroll with the shema scripture (Hear O Israel, the Lord is our God, the Lord is One, blessed be the name of His glorious kingdom forever and ever.  And you shall love the Lord your God with all your heart and with all your soul and with all your might.  And these words that I command you today shall be in your heart.  And you shall teach them diligently to your children, and you shall speak of them, when you sit at home, and when you walk along the way, and when you lie down and when you rise up.  And you shall bind them as a sign on your hand, and they shall be for frontlets between your eyes.  And you shall write them on the doorposts of your house and on your gates. -Dueteronomy 6:4-9)  As instructed, Jews normally affix this scripture to their doorposts.  I had not seen one on the tent, and asked the Rabbi if I had missed it.  He explained further the tradition behind the mezuzah and the rabbinical tradition that temporary shelters do not need the mezuzah.

 

The Jews welcomed about 30 of us, representing many faiths (Christians, Hindus, Muslims, even Jews) into their dwelling, and we shared thoughts and food together.

Bob McDonald, CEO of P&G

Tonight our guest lecturer was Bob McDonald, CEO of Protor & Gamble, speaking on "Values-Based Leadership."  He suggests that leaders should talk to their employees about their core beliefs. Here are his:

1) Everyone wants to succeed – the leader’s job is to help people succeed.
2) Success is contagious – the leader’s job is to catch people succeeding. One success will always lead to another.
3) Put the right people on the right jobs. People like doing what they are good at.  They are good at doing what they like.  Matching these can lead to better success.
4) Character is the most important trait of a leader. Character means:
- putting the organization’s needs above your own needs;
- taking personal responsibility for failures, giving credit to others for successes.
- Living by your word and actions.
5) Choose the “Harder Right” and not the “Easier Wrong”.  This was a slogan from his time at West Point.

6) Ineffective strategy, systems and culture are greater barriers to success than people. Before you blame people, check the systems / culture / strategy the organization supplies to them. It is the leader’s job to improve those.
7) There will be people who will not make it through the journey. It is the leader’s job to help them find another job. As a leader, you need to get to know the person as a person, not just as an employee.
8) Organizations must renew themselves. Growth requires change, and change requires renewal. A leader should supply training and development opportunities for his people to grow.
9) Recruiting is a key priority. Promoting at P&G is done from within the company and performance based.
10) A leader is measured by his / her organization’s performance when he or she is absent or gone. A leader should build the capabilities for the organization. “We want leaders who build watches, not those who tell the time”.

Typical day

Someone asked me to describe a typical day here. I'd say yesterday was a good example.

After morning exercise at your discretion and breakfast in the cafeteria, we start classes at 8 am. Classes are taught in the "case study" method.. We discuss the business case interactively in class for an hour or so. The cases are usually designed to be gray, not black and white, so there is lots of discussion on both sides of the issue, for example deciding on the appropriate balance of debt and equity in a firm, or how to lead a turnaround, or whether to buy a company or not. The professor moderates the discussion but does not provide an answer. In the last half-hour of the 90 minute class we are usually provided the "answer" (what the company actually did). And then we debate that. The last 10 minutes are lead by the professor in a more typical lecture-style, talking about the relevant theories, pros and cons behind the choices that could have been made.

We then take a half-hour break, and have another 90 minute class, take a lunch hour back in the cafeteria, then another 90 minute class after lunch. In the late afternoon there is sometimes a guest speaker, usually a CEO and Harvard alumnus, speaking and taking questions on their business strategy. Then we get a couple of hours on our own to brief the cases studies for the following day (usually 3 cases with 15 pages plus supplementary exhibits. Financial reports, org charts, market studies, etc).

We then have dinner as a group in the cafeteria and regroup after dinner in our "living group" for two hours or more to discuss the next day's cases.

We retire to our bedrooms, do a little reading or email, and repeat the cycle the next day.

Power for Africa

It’s not every day you get to design an electric supply system from scratch.  I am working with one of my colleagues from Nigeria to put together a model for development of the electric power supply system in his country.  Despite sitting on large deposits of coal, oil, and gas, there is virtually no central station power in the country, and what little there is operates literally only 20% of the time, so it is almost worthless.  The country is running on distributed generation (diesel gensets ) with costs so high that manufacturing is not cost effective, causing high imports and a lack of local jobs.  This project will create jobs and electricity.  (They are not worried about their carbon footprint just yet.)  I am also suggesting a cooperative business model J (couldn’t resist).

Peter Chou, CEO of HTC

Peter Chou, the CEO of HTC (the 4^th largest cell-phone company in the world with annual sales over $4 billion) visited our class to assist in teaching the HTC case study.   They are struggling with market positioning for their phones against Nokia and the Apple iPhone.  He said, “the last thing we want to be is like Apple.  We want to be the alternative to Apple.” 

His challenge to us?  “What advantages does your business have that you can leverage?”

It IS Rocket Science...

Today we reviewed the NASA Challenger disaster and the organizational dynamics that allowed NASA staff to ignore an ambiguous but real threat to crew safety.  We had the special privilege to discuss the case directly with NASA Chief Structural Engineer Rodney Rocha, who had been involved in the mission.

 

In Challenger, the shuttle managers ignored signs of an imminent threat, despite repeated warnings from engineering staff.  Mr. Rocha share his personal sense of loss and failure, “Until this year, not a single day passed that I didn’t think about the accident. . . I regret not pushing harder, not breaking the door down to get an answer.”

 

In future classes we will discuss ways to insure that our culture and organizational structure counteracts the human tendency to normalize deviations and underestimate ambiguous threats.

My Personal Case Study

I am sorry that this is a longer-than-usual post, but I have a lot on my mind to share.

I have selected a couple of items for my personal case study while here at Harvard.  I will be developing these cases as we complete our studies in the next five weeks.  This development will include a critical assessment of the plans from my learning group members (a diverse group geographically, culturally, and functionally) and also from the Harvard Business School professors.  The professors here are encouraged to take consulting assignments and to sit on boards (such as Coke, Apple, Intel, Shell, Polaris, etc) in order to give them real world experience, so I expect their input to serve as a very valuable “free” consultation.

I will be focusing on two areas.  The first is strategic:  how should Associated position itself to succeed in its mission, given the massive investment required for scrubbers, in light of the uncertainty of Carbon Regulation and New Source Review?  This strategic analysis will include a range of options with direct impacts on our coal-based units.

The second area of focus will address a pressing performance gap in the Power Production Division.  While we have made great strides over the years in improving the operation of our coal-based units, these performance gains are no longer keeping pace with our competitors.  In some cases, we are even losing ground in unit performance.  I believe that part of the reason for this is that our business processes, people skills and corporate culture have not changed to meet the increasing performance requirements.  In order to regain our position as a best-in-class utility, we must make an immediate turnaround.  The details of this turnaround plan will be developed in concert with my Harvard peers and professors.

The management methods that are being taught are not quick-fix “fads.”  Instead we are being trained in a solid process for the analysis of a problem and a development of solutions.  We will be looking at the impact of people, work processes, culture, norms, and organizational structure.  The method is not magic; it is systematic.  We start with the mission, proceed to the strategy, identify performance gaps (or opportunity gaps) and conduct root-cause analysis.  Following this, we go through each element of the organization, checking to determine if this element is in congruence with the desired changes.  If not, we develop the appropriate plans (people, processes, and tools) to support the needed change.  The case-study teaching method employed at Harvard allows us to test these concepts, three times a day, for 56 days.  Good stuff!

Today is Saturday, so what did we do?

We began by studying the Gucci company to learn how they managed brand positioning, which I guess is only somewhat applicable to electric utilities selling a commodity with a virtual customer monopoly.  Still, it was interesting.  I think the electric cooperative should offer premium branded electric power at a premium branded cost.  Wait a minute, we already do!  It’s called “green power.”  Maybe this Gucci thing will be useful, after all.  I’m sensing a need to return to Florence Italy with my special consultant, Lisa.

We talked at some length about how to address poor employee performance and conduct coaching, with special emphasis on the situation of the employee that is a high performer but just doesn’t fit the corporate culture.

We also talked about the issues surrounding 360 degree performance feedback systems, and how best to utilize them.  To this point, we will begin meeting with our individual performance coaches next week, and will each go over the 360 degree feedback that our peers provided before we left for this program.

On Monday we will review the organizational and leadership failures that contributed to the space shuttle Challenger disaster. Harvard has recruited one of the Challenger project managers from NASA to attend our class that day and answer questions. What a great opportunity for us to hear about the issues from someone who was there at the time.

New Poll

I want to show a Great American Movie to my non-American roomates in our dorm lounge this weekend.  What would you recommend?  Please respond to the poll at the right, or suggest your own movie by adding a comment below.

A Boston Perspective on Climate Change

I just finished debating one of my professors on the Cap and Trade program.  He wasn't persuaded to my position.  He thinks Missouri is going to fry!  However, despite this I think he is still going to invite me to speak at an energy forum that he is going to host on-campus next week.  We'll see.

Chick-fil-a Day

Ok, so this is not an intense learning issue, but one of our classmates is the CFO for Chick-fil-a.  She is hosting their products for our lunch tomorrow, so we will all get a taste of true American fast food.  I think I am having french-fry withdrawal so you'd better believe that I am looking forward to this.

What do I miss?

A coworker asked if I missed the Board meetings, staff meetings, plant outages and contractor negotiations.

I guess the answer is no, not too much.

This is a fantastic opportunity, and I am very fortunate to be able to attend this program. The professors are great, the students are great, and everything is very intellectually stimulating. I am getting exposure to many different points of view. The coffee is great and I don't even have to walk to Starbucks. The more I concentrate on my studies, the faster the time passes by. I now have only 40 days left. Only 40 days, imagine that!

What do I miss? I miss talking to Americans sometimes. My classmates tend to criticize Americans as greedy and wasteful, but I noticed that they don’t seem to mind living our lifestyle. I also notice that they all didn't decide to get their executive education in business management in Europe, or Asia, or Africa, or Australia, or South America.

I also miss talking to Midwesterners. Boston is great but it is not the heart of America.

I actually did "miss" attending the AECI board meeting. This was the first meeting I have missed in over 10 years, but I got over it pretty quick. I will only get one chance at being here and I am going to make the most of it.

I have explained what the abbreviation “MO” means about 130 times (it appears on my nametag). No, I don’t know how the post office came up with that one, but it does give me a chance to pull out my business card with the map on the back and explain just where in the U.S. is Missouri, and what we do, and why we do it. I have also enjoyed explaining the electric cooperative business model to my classmates. It is a real mind-bender for them to hear that we sell electricity at cost, and that we are regulated by our customers, not the government. This is foreign concept to most of them.

Tom, Scott, Brent, Steve, Barbara, thank you for covering for me. This is what I really miss . . . working with great people like you.

Global Economic Crisis Day!

Today was dedicated to understanding the Global Economic Crisis. We had three classes addressing the issue from different perspectives, and then concluded with a lecture from Harvard Economics Professor David Moss, a current advisor to President Obama. You should have heard the howls and objections from the international students as they pinned the blame for starting this mess on the greedy Americans.

I think that now even I could explain what happened; how financial firms turned sub-prime mortgages into mortgage-backed securities, collateralized debt obligations (CDOs), and CDO-squared, and in doing so spun straw into gold, turning a heap of near-default mortages into something that could be resold as mostly AAA-rated securities. This was an amazing feat of financial engineering! Well, maybe not so amazing as it almost sent the entire planet into a depression.

We also spent more time talking macroeconomics including the U.S. current-account deficit. Here we are borrowing money from China to finance our current consumption, and our kids and grandkids will (probably) have to pay the debt back sometime (unless we get lucky). The situation was equated to Climate Change and our burning of carbon fuels in the U.S., and it was mentioned that our kids will have to pay for that too. We have a special day coming up dedicated to Climate Change and I can hardly wait. I am wondering if I will be able to change any minds on this subject.

So far I haven’t. I am here with a broad cross-section of nationalities that largely believe that the U.S. is taking unfair advantage of the planet and should pay. Their number one suggestion, which I have heard several times, is that the US should increase its fuel tax. This would have several benefits: reduced oil consumption, reduced carbon emissions, reduced trade imbalance, reduced current-account deficit, a balanced federal budget and greater fuel efficiency. I have tried to explain that I don’t believe Oklahoma and Missouri consumers are ready to give up their dooley-pickup trucks, and they just can’t seem to understand. I’ll keep working on this, though

Coaching

All of you who had the chance to complete the 360 degree feedback on my performance will be glad to hear that I will soon be seeing the results.  Not just me, but me and my coach (gulp)!  That's right, I will get my own personal executive coach.  We will meet a number of times to discuss the changese I need to make to be more effective. 

I had the opportuntity to select one from a number of individuals based on their resumes.  The coach I have selected has experience in working in the energy business, including a recent coaching assignment with the CEO of a large electric utility system.  I don't want to say the name, but can you imagine a large utility system in the east?  Very large.  One that burns 10x more coal than Associated.  Their name starts with "A".  Got it?

Here's an idea - peer coaching.

Peer coaching.  How does it work?

Basically you design a set of key questions that you would like a trusted friend or mentor to ask you once per week.  These should be questions with simple answers, just yes or no or numerical answers.  Your friend is not to provide any feedback or judgment, just ask questions.  Your friend will probably also develop a list of questions for you to answer.

Examples of questions include:

How many miles did you walk this week?

Did you say something nice to your wife today?

Did you talk with each one of your direct employees this week?

You craft the questions based on goals you have set for yourself.  Your peer justs asks the questions to keep the goals before you.  The process forces change on your part because of the need to save face with your peer.

By asking these questions every day you may find that you start holding yourself to a new standard of behavior.  Will this work?  What do you think?

Remembering Doc Blackmore

Darwin “Doc” Blackmore passed away this week. I have learned about faith from a number of great people in my life, but Doc taught me as much as anyone could. I will always remember his example.

Doc worked at one of our power plants. Many years ago he was seriously injured in a bicycling accident, and left paralyzed from the neck down. He could do literally nothing for himself. He even relied on a ventilator to breathe (although in the last year he was making progress on a new “pacer” that allowed him to breathe a bit on his own for very short periods of time).

You would think that Doc would have a poor outlook on life. That he would feel sorry for himself. That he might even blame God, or ask “why me”? He did not.

Doc made it his life’s mission to witness to others about the incredible love of God. Can you believe that? He had so little that most of us would think to be thankful for. But he had a voice, and he used it, in between the puffs of his ventilator, to witness to others. In his last years he introduced a number of people to the Lord, and inspired scores of others to redouble their efforts, quit whining, and make the best of the life they have been given.

Every time I met with Doc I came away so uplifted. Do you think spending time with a paraplegic would be depressing, or difficult? Quite the opposite – I felt as if I had been walking with a prince, a man who knew he had a most precious inheritance awaiting him. He was truly rich.

His wife Cindy was also an incredible blessing, not just to her husband, but to hundreds of others who followed her monthly email updates. Again, wouldn’t you expect someone to complain or feel sorry for herself? Not Cindy. She used this opportunity to share the love of God and the many many blessings that she and Doc shared. Their cup truly ran over. How many of us could consider a tragic accident to be a terrific blessing?

Now Doc has been given his reward. He no longer struggles to breathe. And he has a perfect body (ask me how I know – I have a secret to share on this).

I thank God that I had the chance to know Doc Blackmore.

Saturday classes too...

China and the WTO.  Wow.  How are we ever going to pay off the debt to China?  When will China allow its currency to appreciate against the dollar?  Something bad is going to happen here.  It looks like some form of austerity is going to have to happen in the future - we are collectively spending our grandchildren's money.

Corporate Fiduciary responsibility - the bottom line - watch out, don't forget your responsibility is first to the corporation.

Reading List

We were told by the business school faculty that this week was a light week for reading.  Here is what we covered:

A briefing paper on Capital Investment Project Valuation
General Mills company case (Growth Strategy)
The General Mills Annual Report
Crown Cork & Seal (a classic case study)
Cooper Industries (an Acquisition case)
Briefing paper on how to value a Business Acquisition
Oracle vs. Peoplesoft (dissecting a hostial takeover)
Singapore's growth strategy
International Monetary Principles
A Macroeconomics textbook (I almost have this one finished, its actually pretty fun reading.  We meet the author for lunch next week.)
Analysis of Balance Of Payments accounts for selected countries
How Political Forces have shaped India's development
a Micro-Electronics firm in disarray (a study on corporate strategy and managerial focus)
China and its relationship with the World Trade Organization
China's growth strategy
Legal briefs on several cases involving Corporate Governance and Fiduciary Responsibilty
Psychology of Negotiation along with several negotiation simulations

Tea anyone?

Today we have the priviledge of taking "tea" with the CEO of Whitbread, the UK's largest hotel and restaurant company.  One my roommantes works for him, so he has arranged for the eight of us to have afternoon tea together.

Negotiations and Love Songs

The negotiation unit continues, and I'm proud to say that our team continues to set the bar for (literally) best-in-class performance.  We completed another exercise last night and will see the results this morning.  We aer learning lots of good stuff (beyond the book "Getting to Yes", which the professor dismissed as elementary).

I think some of our contractors have had the same training. :-)

Business Life Cycle (Where are you?)

I liked this summary.

The typical life cycle of a business:

Business is created.

Growth occurs through CREATIVITY.
A Crisis of Leadership occurs as the business grows and creativity is not longer enough, structure is needed.

Growth continues through DIRECTION. Often this involves adopting a Functional structure to the organization.
A Crisis of Autonomy occurs as the business is hindered from further growth by too much structure.

Growth continues through DELEGATION. Often this involves adoption a Decentralized structure in the organization.
A Crisis on Control occurs as the business is hindered from further growth due to a lack of coordination among the decentralized units.

Growth continues through COORDINATION. Often this involves a Segmentation or Matrix structure.
A Crisis of Red Tape occurs as the business is hindered from further growth due to an overwhelming burden of policies, procedures, and processes.

Growth continues through a return to BASICS and the process repeats all over again.

The question is, where is your organization on this continuum?

Back to School

Ok, it looks like the virus stuff is all over now, and I can get back to blogging without selling drugs online. What are we learning this week? We have just completed an intense unit on Accounting, cramming a complete graduate accounting course into three days. Actually, we probably only cover the parts that the average graduate student REMEMBERS after graduation. Ratio analysis. Profitability analysis. Maximum sustainable growth rate. Today we completed a section on finance and capital project analysis - all kinds of arguments on the most appropriate way to conduct analysis of cash flow, net present value, internal rate of return, working capital management, management of trade payables, etc. Generally fun stuff. Seriously.

We also spent some time on the current financial crisis, the subprime houseing market, and credit default swaps. This was a new learning area for me.

Today we started a fascination negotiation unit. We covered research on the psychology of how people approach negotiation. We learned how to analyze the proper time to tender an offer, how to handle another party's early offer, how to analyze their fall-back position. We will continue this unit for two more days, with lots of practice exercise (we practice role playing with each other). By the end we should all be master negotiators. Or at least pretty good. Or at least better than before we started.

I did well in the first exercise, achieving a sales price for my simulated firm that set the bar for our class. I sure hope I can keep this up because now I have a reputation to preserve.

Tomorrow our learning group (seven guys I live with) will be having lunch a professor that is a frequent Wall Street Journal contributor and author of a business strategy book. We have invited several of the professors to meet us this way during the program.

Virus in the blog

This blog got hit with a virus.  I'm trying to eradicate it, but so far no luck.

Thought for the day

One of my learning team members provided an interesting metaphor today that is apparently a popular concept in India. I found it illustrative in many dimensions, both in a managerial sense and as a Christian metaphor.

Imagine a person as a tree. Now imagine that a very successful person is a tree bearing much fruit. We know that when a tree is heavy with fruit, it bends down toward the ground. This is an illustration of that person's humility, in bowing low to the ground, and also of their generousity, since the tree heavy with fruit bends low, making it easier for people to pick the fruit and enjoy it.

To me this sounds like, "to those to whom much is given, much will be expected..." Luke 12:48

On my bookshelf, Harvard recommended reading...

A Thousand Days
John F. Kennedey in the White House

Another book recommended by Harvard

What are we studying?

This morning we are dissecting the Nike company and evaluating their growth problems and leadership practices. Surprising similarities can be found within our own organization. More later.

My Living Group

At Harvard we are divided up into small groups to facilitate discussion of our business case studies. They intentionally seek maximum diversity among the group participants, to allow us to learn from each other while we are here and to avoid group-think. I share a living group with the following great individuals:

The CEO of an investment company in Pakistan,
the Managing Director of the largest bank in Brazil,
the Managing Director of the 2nd largest coffee company in the world (no, not Starbucks),
the Malaysian Undersecretary of Finance & Development (works for the government),
the Manager of Planning for the largest producer of plastic films used in flat-panel televisions, headquartered in (guess where) Japan,
the CEO of the largest computer-services data-storage company in Europe, headquartered in Sweden,
and the CEO of an Asian trading company specializing in growing vehicle and generation sales and services in recovering post-conflict eastern countries.

An international mix of participants

There are 169 participants in this class - massive!

This is how they break down by numbers:
8 Aussies
5 from Brazil
1 Australia
1 Belgium
5 Canadians
3 Chileans
7 from China
2 Denmark
4 England
4 France
3 Germany
1 Hungary
7 India
4 Israel
10 from Japan
1 from Kenya
3 from South Korea
1 from Kuwait
4 from Malaysia
3 from Netherlands
2 Kiwi's from New Zealand
3 from Nigeria
1 from Norway
2 from Pakistan
1 from Peru
1 from Philippines
3 from Portugal
1 from Qatar
1 from Romania
1 from Russia
1 from Saudi Arabia
7 from Singapore
4 from South Africa
2 from Spain
1 from Sweden
5 from Switzerland
4 from Thailand
1 from Turkey
33 from the U.S.A.
1 from Ukraine
3 from United Arab Emirate
9 from the United Kingdom
1 from Venzuela
1 from Vietnam

Maybe I'll learn some new languages!

Arrival at Harvard Business School Gate

The gate guard was shocked when I drove up. He staggered out of his booth and said, "never in six and a half years, never in six and a half years have I seen a motorcycle at this gate." He was almost speechless.

I now have a very nice secure parking spot in a high-security parking garage. It is so secure I can hardly get it. You have to keep your head down if you are on a motorcycle because the ceiling is so low.

A Japan participant said in our group said, "Wow, 1600 miles by motorcycle with your wife right behind you, that must be very romantic!" I said that it was.

Let's get started

I love you darling, goodbye.

So ends a 1600 motorcycle journey across America's heartland.

And so begins an eight-week educational sabbatical at the world's highest-rated business school.

So if this is a learning journey, what have I learned so far?

First, trust in God. He answered prayers for safe travels. He provided great weather for the trip. I should trust him more. Like the song, "let us ever trust in Jesus."

I saw a sign this afternoon near Harvard Square at the Lutheran Church – it said "God is in the midst of the City" – Psalm 46. God is indeed with us.

I am learning an ever-greater respect for my wonderful wife Lisa. She is a fantastic life partner and friend, one with whom I can share every fear and every dream, and on this trip she also proved that she can keep up with the best iron-butt riders around. You never heard a single complaint from her in over 1600 miles of riding. Not one complaint! She is incredible.

I learned how important the heartland is to America. America is not defined by her great cities, although they are impressive indeed. (Especially approaching them by motorbike). I believe that America is best defined by her land and her people; those that were up at the early hours, farming, delivering, and even feeding their chickens. We got to see this first-hand.

I learned I can ride 1600 miles without too much trouble. It was exhausting, yes. Would I do it again – YES! We saw it all, not from behind a car windshield, in a climate-controlled cube, but out in the open, where we could touch it at any moment.

We smelled it all - the musty swamps of Kentucky near the Mississippi River, the maturing corn fields in Indiana and Ohio, the faint smell of coal in Pennsylvania, the smell approaching rain in Indianapolis, the stench of the inner city, and the wonderful smell of evergreen trees in the Catskills.

We would have missed it all in a car.

And what will I learn in the weeks to come? We’ll have to see how that all develops.

Highley Unlikely Views from Harvard

This is the blog where I will post my thoughts on my Harvard sabbatical experience. This is the first post.