Accounting, my old friend

There is nothing like having an old friend over for coffee. Today I am with Accounting, my old acquaintance from Building Block 1. We are discussing the same things that we talked about back in March, cash flow statements, ratio analysis and a little bit of Balance sheets. A few new topics - management accounting and relevant cost - have also sneaked into our conversation.

Yes, the exams are here. Five of them within the next four days to be exact. We kick off with a double tomorrow, Accounting in the morning and Global Political Economy in the afternoon, four hours of each. Then it is Marketing, Finance and Strategy over the following days. That does not leave time for in-depth preparation of all of them, so it is all about focusing your resources on the things that are right for you!

Finance is the big one for me this time. The biggest chunk is about assessing the financial health and the value of a company. Not really rocket science, but just an awful amount of details to understand and memorize.

I have said it before and I will happily say it gain: The exam period is a piece of cake compared to an ordinary week at IMD. Yes, the pressure is still there and so are the many hours with your head in the books or in your laptop. But you have much more control of your time as you don't have to coordinate your work across three groups and balance a million other things at the same time. I have slept a lot since Friday and I am getting some real quality reading done now that my head is not pounding from lack of sleep.

I have had a couple of other things to take care of as well, though. I have spent part of today finishing the end-of-course innovation paper, which is due tomorrow and I had lunch at the school with the other Scandinavians. We are arranging a mid-summer party on the last day before the class goes on summer vacation in a little more than two weeks. In the Scandinavian countries mid-summer calls for a bonfire. Whether we ever will get that through the Swiss authorities remains to be seen, but we will definitely give it a try!

Thorsten


The campus is so tranquil these days. People are just hanging around during the lunch break enjoying their Mövenpick ice cream or a coffee from the café.


Even the MBA students crawl out of their dark dungeons during lunch time to enjoy a few energizing rays of sunlight. From left it is: Stefano Cazzulani [Italy], Oliver Freiland [Germany], Seif Shieshakly [Saudi Arabia / Germany], Sebastien Guery [France], Wouter Naessens [Belgium] and Johan Jansen-Storback [Sweden/Finland].

2009 meets 1979

I was standing outside the auditorium yesterday around lunchtime when I heard someone saying 'Here is an MBA 2009 student'. I turned around and found myself being introduced to a gentlemen some 30 years older than me. He was from the MBA class of 1979. 'So how is life?', he asked. 'Life is good', I replied, my standard answer to that question. I had just come out of the powernap room, so I actually did feel quite OK at that very moment. 'Well, then you are not learning enough', he said. From that I gathered that the workload around here is not something that was invented yesterday. It was here in 1979 as well. 'But the volleyball court is missing', he continued, 'it used to be between the old building and the restaurant.' I afterwards realized that I don't even know which building that is the 'old building'. I assume it must be the building with the reception. If that is the case then the volleyball court must have been where the table tennis is now.

Reflecting on that conversation afterwards painted a picture in my mind of what this place is all about. Although the buildings and the sports we play may change, the fundamentals remain the same: Hard work and good fun.

The dungeons are buzzing these days. Everybody is running flat out trying to coordinate the work across the groups each person is in, getting the piles of cases read and the numerous assignments in on time. Despite the insurmountable workload the class still chooses to prioritizes Accounting with Professor Stewart Hamilton. I have read tomorrow's case on the Mannai Corporation twice and made an effort to answer the questions. I really look forward to an interesting discussion with my classmates whom I know also have been working hard on this.



Table tennis is a favorite pastime during lunch breaks. Apparently volleyball played the same role in 1979.



The MBA 2008 Ultimate Frisbee team is preparing for the MBA tournament that will be held in Paris mid may. Here Cathinka Scheie [Norway] shows the talent of the team. Left-to-right it is Wouter Naessens [Belgium], Chia Chia Lim [Singapore] and Ilya Syshchikov [Russia] watching.



Carsten Bremer [Germany] selling the idea of Micro-finance to Valeria Pavlyukovskaya [Russia] in the IMD café.

The 'cruising' season has started!

WACC, ROIC, RONA, ROOA, EVA, COD and EBIT. If Accounting was a world of rules, then Finance is a world of abbreviations. Add 'Amortization of Goodwill' and 'Net Working Capital' and we have the same challenge as in Accounting: Figuring out what it all means. It is actually not that hard to understand the principles behind it. The math as such is very simple. It is more a matter of getting the terminology right and building vocabulary. More often than not, there is more than one term for the very same thing. And to complicate things a bit more, some of the terms have different meanings depending on whether you are in the world of accounting or the world of finance. If you were in doubt: The Finance exam starts tomorrow at 8.00!

Just like Kristin and probably many others I took yesterday afternoon off. I have had my motorbike standing in the basement since I arrived in Lausanne, but had decided that the completion of the accounting exam should be celebrated with kicking off the 2009 motorbike season. I had charged the battery one last time overnight and mounted it for the first time this year. You are always a bit excited the first time you start in the spring. You never know whether the bike will start after several months in the garage. You can then add that my bike is an old 'slow-rider'. A distinguished lady with a personality. Some would even call it an attitude. Sometimes it just decides not start at all for no real reason. Just because it feels like it.

This time there was also the added anxiety of being in a foreign country, where you are not as familiar with the roads, the rules and the customs as you are at home. I was lucky, though. After a few minutes the bike fired and I could leave the dark basement and take off into a bright - but cold - Swiss spring afternoon. With fellow Dane, Simon Sundboell, in the back seat, we took off down the old lake-side road in the direction of Geneva. We had no destination; just cruising up, out and away with the old and flat Jura mountains on the right and the lake and the snow covered pointy alps on the left. A fantastic feeling for two people from a country almost as flat as the Netherlands.

I had forgotten how much I missed cruising on my bike. It is one of the few things that I know I will be doing the rest of my life. The sense of freedom is unmatched by anything else I have done. You just feel how gravity and and the power of the engine pulls you through the curves and you immediately forget all the things that normally fills your head. This year that feeling was probably even stronger because we have been so severely 'locked down' in the vicinity of the school for almost three months.

Thorsten

Debit and Credit

Debit and credit, retained earnings, accruals, provisions and appropriations. I barely knew those words were part of the English language, but after two days of studying accounting I will undoubtedly be dreaming about all that tonight. If it isn't obvious already: Our accounting exam starts tomorrow morning at 8.00. If you need someone to calculate your return on assets or give you a quick overview of your cashflow situation then I know 90 people that I can do it in their sleep.

Although the exams does add some pressure I like the simplicity of 'just' having to do exams. Instead of having to balance a dozen things at the same time you just have to focus on one thing: The next exam. You can manage your own time and take things in the order and speed that suits you best. For me that has meant two nights of proper sleep. It is amazing what it does to your physical and mental health. I would also claim that you learn better, when your brain gets enough time to shut down and process the inputs.

'The MBA Survivial Guide to Accouting' that we have been given became just that: A guide to my survival. Yesterday I started on page 1 and read through the chapters on Balance Sheets, Profit and Loss Statements, Cash Flow Statements and Financial Statement Analysis that we will be tested in. One by one the things we have learned over the past two and a half months started to click into place. A few exercises on the same subjects and I now feel much more confident than I did just two days ago. Anyway, I better not celebrate too early. There is usually lots of 'red herrings' and other 'tricks' in the tests that are meant to throw us off course.


Yet another sunset picture from the beautiful Lausanne harbor. I took this earlier this week, when I was riding my bike along the lake.

Friday in the spring

The day started with a two-hour Entrepreneurship session with Professor Benoit Leleux. In that period of time we managed to finish the session on valuing entrepreneurial companies AND to debrief an entire book. That is just the pace that things are moving at and you just have to hang on as much as you can.

Accounting has now moved from 'financial accounting', i.e. Profit & Loss, Balance Sheets and Cash Flow Statements, into management accounting, which basically means management reporting. This is, at least to me, much more intuitive and logic, but let's wait and see. We are only a few sessions into it, so it might be too early to say.

In Operations Nikos Tsikriktsis, in his usual turbo-charged style, debriefed yesterdays visit at La Poste and reviewed the material we had been through in order to get us prepared for exam.
Then followed a quick update from Career Services on the status of on-campus recruiting and job fairs.

On wednesday our Startup project group had our so-called 'pitstop'. We met with Pascal Dutheil, an experienced Venture Capitalist, who gave us feedback on the work we had done so far on our Startup projects and some pointers on how to proceed. The meeting was held in a polite atmosphere, but it was easy to sense that Pascal is used to communicate in the no-nonense terms that the Venture Capitalists are known and feared for. Today our group then met with our coach, Professor Stuart Read, to discuss the latest development on the project and to prepare ourselves for a meeting with the startup company tomorrow.


I took this picture from the harbor when we were getting on the bus to go to La Poste yesterday. Coming from a land with no mountains this view is just priceless.


Two Russians at the Swiss Postal service, Yury Vasilkov (left) and Slava Raykov.


The sun is coming out and the temperature is creeping up, so we move the coffee breaks outside whenever we can. Here it is (left-to-right) Bruno Portnoi [Brazilian], Oren Yehudai [Isreli], Satoshi Konagai [Japanese] and Tony Jamous [French/Lebanese].

Motor show and movie night

'Accounting' is the word that is on everybody's lips these days. It is the one subject that almost everybody seems to struggle with and the tension is increasing as the Accounting Exam on 21 March comes closer. A group of people, including myself and my girlfriend who was visiting for the weekend, nevertheless took the morning train to the Geneva Motor Show. Since I was a kid I have read hundreds of magazines and newspapers with pictures of the new car models revealed on the big shows in Detroit, Tokyo, Frankfurt and Geneva. Now that I am living right next to one of them, I am for sure not going to miss the opportunity.

The Hummer was there and so was Rolls-Royce, but it was clear that the two main themes on the car makers agenda these days are 'global warming' and 'financial crisis'. Most of the major brands were showing off their latest hybrid and bio-fuel models. It was interesting to note how all these cars were painted white. It is undoubtedly supposed to make them appear 'clean' and 'scientifically advanced'. It was also interesting to note that the old proxy for fuel efficiency 'kilometer per liter' or 'miles per gallon' has disappeared. Now we are talking about 'Grams of CO2 per kilometer'. One cannot help making a connection to the Economics assignment on climate change that we finished just two days ago.

Rasmus Figenschou [Norwegian] has established a movie club that will show a movie each sunday evening in the auditorium. Today was the first show and the movie was '12 Angry Men', an old black-and-white Henry Fonda movie. The movie is also homework for the next 'Leading People for Performance' class and is about a jury of 12 men that must reach a verdict on a homicide case. As the movie starts 11 men find the defendant guilty and one man, Henry Fonda of course, finds him 'not guilty'. It only adds to the tension that they are locked into a room on a warm and humid evening. From there we follow their discussion on how they reach their verdict. A couple of months ago I wouldn't have thought a lot of this movie, but now it is impossible not to analyze and interpret all the things going on between these men, both on the surface and below. I think most of us found ourselves drawing parallels to our study groups.

Focus!

'Focus' seemed to be the keyword of today although I am not sure that was the intention. Entrepreneurship professor Benoit Leleux kicked off the day with session on 'Opportunity Overload' in start-up companies. The case was about a company who had developed a natural alternative to the chemical compounds used for water treatment. It could just as well have been any one of the companies that we are working with on our start-up projects. My start-up group is no different. We are working with a software company that is facing an abundance of possibilities, but little clarity on the direction. 'Focus, focus, focus', as Benoit said in his usual direct style, 'if you try to do everything then you are dead for sure'.

Whether intended or not, Operations Professor Nikos Tsikriktsis had the same message. Focus helps improve the quality and efficiency of the operational processes within the company. The case was on Canadian Shouldice Hospital that for decades had specialized in surgery of hernias. The case may be an example of the extreme, but the point was clear: The fact that they had had such a narrow focus for so many years had allowed them to optimize their internal processes to the benefit of patients, employees and the hospital itself.

In between these two classes Accounting professor Stewart Hamilton swiftly took us on a journey through the complexities of international accounting standards and why it is so difficult to reach agreement on these. There was also just enough time to run through an example of how multinational companies must deal with taxes across national borders and across different business units.


Naoto Tsushima [Japanese] and Vahid Khamsi [Swiss/Iranian] getting some work done in the foyer.


David Rohan [Australian] and Valeria Pavlyukovskaya [Russian] in the dungeons organizing the piles of paper that we are plowing through every day.

Spring is in the air

This morning we had the much anticipated economics test on the material that we have been through so far. Some of our classmates had made some excellent summaries which they shared with the rest of the glass. That was a great help, thank you! It is hard to gauge how we have done on the test, but it was nevertheless nice to actually see a test so we can get a feel for what they will be looking for at the exams.

The economics class continued with Economic Policy, which in Ralf Boscheck's usual fast-paced style covered the fundamentals of classic liberalism, Keynes, Fiscal versus Monetary policies and political communication in no amount of time. We were then split in groups representing the advisors and different stakeholders around Obama; each with there own agenda and with plenty of good advise to the new president on how he should run his country. Jodie Roussell [American] impressed everyone with a very well articulated speech. Perhaps we have a future politician in the class!

Accounting professor Stewart Hamilton finished off the 'Profit & Loss' and took us straight into the 'Cash Flow Statement'. I don't know what it is with accounting. It is the most simple, structured and straight forward subject we have, but for some reason it never adds up the first time.

It is a beautiful day in Lausanne today! It may be a bit too early to talk about spring (it snowed yesterday morning), but the light is definitely coming back and you can feel that the air is changing. This weekend we have a bit of breathing space for the first time in a long time. Everything is relative, of course, and 'breathing space' in IMD terms means no hard deliverables in the next few days. There is, of course, still class all day tomorrow, several projects going on and a ton of reading for next week, but I guess we are learning to appreciate the little time we occasionally have for doing other things. Some of that time will be spent celebrating the birthdays of Wouter Naessens [Belgian] and Coralie Leresche [French/Swiss] at the White Horse tonight.

Thorsten

Economics Ironman

We kicked the day off with Accounting and continued with Operations with Professor Nikos Tsikriktsis. Todays subject was on Process analysis and took us around the concepts of Cycle Times, Throughput times and bottlenecks. 'You are not engineers', Nikos said, 'but you need to know what questions to ask!'

Today was crunch-time for the ICA projects that we have been working on for the past two weeks. The projects were handed in last night, and today some of the groups were picked to present for the class. We got some very interesting presentations on topics ranging from IT and Oil Explorations to manufacturing of helicopters. Another reminder of the enormous collective experience there is in the class.

We all felt relieved that the project was over and we could get back to all the other stuff we need to do. Economics Professor Ralf Boscheck let the air out of that balloon very quickly though with one sentence: 'And tomorrow we start another project.' Well, at least we felt good for about an hour or so.

Class was over at 19.15 and 15 minutes later some twenty of us found ourselves lined up for another round of fitness with Patricia. No time wasted! Neither is there during Patricia's sessions. The program is designed to take us through both cardiovascular and muscular training as well as some stretching in just one hour. There are no breaks, of course!

If last fridays full day of Economics was a marathon, then the coming days are an Ironman. From now and until saturday at lunch time we are basically only doing Economics. Macro-economics that is, starting tomorrow. Ralf Boscheck only gave us one assignment for tomorrows class: 'Get a good nights sleep!'. That's an order I can commit to!

Goodnight,

Thorsten