Carl Fransman is one of the more active MBA Solvay alumni. His drive and commitment are behind the Alumni Newsletter and he is also sharing his knowledge in the Business Voice seminars. If you are an alumnus and would like to publish in the blog, contact MBA Solvay and we will arrange for your participation.Over the couple of the last quarters I’ve come to deal with several companies where a strict “no cash out” rule has been enforced. While cash-flow rightly rules during credit-crunch times, these non-discriminatory decisions should raise some eyebrows. All too often do we see that during upbeat times no expenses seem barred whereas during tougher times the rule is simply inverted.
I believe management is slightly more complex than that. Investments should always serve a purpose and, when they do, they should lead to competitive advantage, which in turn should lead to a better position in the market. Therefore, I’m very surprised to find that even very cash-laden enterprises seem – let’s put this lightly – reluctant to even consider investments.
Queries to find out why this is the case typically lead to either one of the following answers: “this is a decision made at the top” or “this is dictated by the market”. Dictated by the market? What sort of investor turns down an investment with a positive ROI? And decision made at the top? Either these companies are headed by people who turn down opportunities because of what they read in the papers or the people at the intermediate stages are incapable (or even willing) of making a serious case with top management to justify the proposed investment.
Luckily, there are exceptions. If the corporate world mimics the natural world- then in the race of survival of the fittest- these are the companies I chose to bet on to emerge on top of the food chain. Not only are they more likely to catch a lucky strike (how can you win at the lottery if you don’t play?), but also they show that no matter what, they keep looking for ways to outperform. And that’s what true managementship is about: evaluating, sensing and, above all, taking action.
Let’s take an small example: a company running above industry-standard level could chose to invest in a cost-saving project. This would cost them roughly €3 million and would lead to an inventory reduction of roughly €70 million, whilst maintaining service levels this is important as during the downturn, most companies just burned off inventory to then find themselves in a situation where they could no longer serve their customers!). Now, it would be too easy to say they would save €67 million! No, eventually, the inventory would get sold. Therefore, if that company had a WACC of 8%, they’d still be saving €5,36 million – and that’s without considering other benefits than the capital expense. That’s still a positive ROI within one year!
If this weren’t spectacular enough, let’s now go back to the argument that “the markets” want the company to maintain it’s cash flow. Well, an expense of €3 million would lead to a non-expense of €70 million! Who wouldn’t wish to be the CEO able to announce the news that internal efforts have lead to this result? Not only would you be pleasing the investors but the freed up cash should allow you to make other strategic decisions in times when most competitors are standing still.
The best of it all is that the above-mentioned example is real! There is real potential in many businesses and with these sorts of return, many possible financing scenarios can be thought of.
So, if MBA should stand for something, it should really be Management By Acting!
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Trinh Dang is an exceptional woman, who has managed to combine an intensive MBA with giving birth to her first child in the first month at MBA Solvay. A thrilling and intensive experience she has really enjoyed, to the point of highly recommending taking the MBA Solvay challenge.
Of Vietnamese origin, Trinh completed her university studies in London before moving to Belgium, where she quickly learned French and Dutch, and started working for a wholesale distributor of specialty technology products.
When Trinh was considering to apply for an MBA she had some doubts about it bringing value to her. But then she spoke to a friend and alumnus who had really enjoyed the amazing learning experience of MBA Solvay. With this insight she took the decission to apply. Having 5 years of professional experience she considered it was time to stop for a year and learn new management skills, taking into consideration her long term goal of starting her own company.
What does she think of her MBA? Its been just amazing. During the 10 months of the full time program she has worked with people from around the world, who have very high intellectual skills and who are very down to earth at the same time. Another highlight for Trinh is the faculty: amazing professors from top schools around the world, most of whom are also active professionals with current experience in business.
The interview was recorded right before the end of her MBA, during our Alumni Day 2009. Trinh Dang has graduated with her class and celebrated the end of a great 2008-09 year.
If you want to speak to a former student of MBA Solvay, you can contact Chiara Battistelli, our Admissions manager.
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Thanks to Sergio Barbarino, our Alumni Day 2009 was hosted by Procter & Gamble. He is a very committed alumnus and was very easily convinced to leave his testimonial about why he attended MBA Solvay.
Sergio came to Belgium in the midst of a difficult personal and professional moment. He was forced to move due to the closure of the company’s office in Italy where he used to work. He wanted a change and decided to apply to MBA Solvay. His new managers made a big effort to keep him in Procter & Gamble and with his MBA he has changed jobs into a more technical career. After the MBA program Sergio is working on innovative areas for his company such us the redesign of the supply chains and making small and flexible manufacturing processes for developing markets.
Today, sergio feels that he fits perfectly into the company, is proud of it and says that he owes that to MBA Solvay, because of all the experience and external freshnes that it brought to him.
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This post is not only a testimonial but a presentation. I am Ramón Suárez, the person writing this blog, current Recruitment and Communication Manager of MBA Solvay and also an alumnus that graduated with the class of 2008.
When I started recording interviews and testimonials of the alumni of MBA Solvay I did not think of including one of myself, but alumnus Cristian Catanescu rightfully retaliated when I was to record his testimonial during our Alumni Day 2009.
It was painless and very quick, and all I had to do was to answer the same questions I was asking :
- Why did you do an MBA at Solvay?
- What did you get out of it?
The main reason for me was to do a career change from public affairs to new media marketing in the private sector. I have managed to do it after a great full time experience in MBA Solvay.
During the MBA I was elected President of the Student Government and as such had an opportunity to live an even fuller experience. It was a very intense year where I also had a lot of fun and where I have developed a great professional and personal network.
Now, I am working for MBA Solvay and also consulting for other companies, vamping their marketing efforts with the use of new media and bringing the business perspective from my MBA studies.
This video is the first of a series of testimonials that will be published in this blog, so don’t forget to subscribe if you do not want to miss them.
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It was great to spend the morning with Chiara talking to possible...