The MBA Experience

Friday, March 05, 2004

Rejection

No, not rejection from an MBA program... a story of how my girlfriend rejected me the first time I asked her out.

Rachel, my girlfriend, has been spying on me on a business trip to Boston. I made the mistake of telling her about this blog and she asked me talk about her so that I don't get it into my head to use it to meet girls. Be careful what you ask for!

We met in a bar.

Okay... so it was a work function, but it was still in a bar. She was the accounting manager for the contracting company I worked through during my first year at Company X. BTW, dating the girl who writes the checks is the way to go. Most of my expense checks were hand delivered. :-) The on-site recruiter for the contracting company introduced us and I thought we got along very well. She laughed at my stupid jokes and I thought I was getting some pretty good signals from her. So I asked if we could go out the next day. She says, "no." Hmm... no maybe some other time or I'm busy tomorrow. Just no. Maybe I hadn't read her right after all.

But I played it cool... like Steve.

A month later, we're having another night out after work at the same bar and she shows up. Once bitten, twice shy, right? Oh yeah... I'd already been shot down; I wasn't going to risk my neck out for her again! She asks if the bar has darts and I knew they had some boards set up in a far corner. So being the gentleman that I am, I agree to entertain her. However, she isn't the best dart thrower in the world and the only way she could win was to distract me with a kiss.

One thing led to another and we started dating. It'll be two years in May.

I posted a picture of her at the Venetian on Yahoo Photos. There's nothing quite as sexy as a girl paying for breakfast. :-)

Wednesday, March 03, 2004

A new razor

Apparently, the TSA swiped Mark's razor. He's contemplating a switch to the Quattro, but I'm holding out for a five blade razor. The onion did a great piece on it:

Fuck Everything, We're Doing Five Blades

What part of this don't you understand? If two blades is good, and three blades is better, obviously five blades would make us the best fucking razor that ever existed. Comprende? We didn't claw our way to the top of the razor game by clinging to the two-blade industry standard. We got here by taking chances. Well, five blades is the biggest chance of all.

Unfortunately, their search feature sucks or else I would link directly to it.

I know what all of you are thinking... what do we call it? Easy - the Pinto.

Roth or 401k?

I'm a pretty cheap bastard (see the comments on my post on MBA application expenses)... or at least I've become so in the last three years. A nice benefit of all that cheap behavior has been that I was able to pay off my credit cards and start socking money away into retirement accounts. Along the way, I've managed to pick up some tips that I'd like to share.

To start with, start saving now... if you start saving for retirement in your twenties, you won't have to worry about it in your thirties, fourties, fifties, and sixties. A bit of forethought now will save you four decades of worry because you won't have to change your behavior later in life to meet your savings needs. It's a shitty state of affairs when you realize you have to work an extra five or ten years because you can't afford not to.

I started with a Roth IRA because when I was starting to think about all this, I was a contractor and wasn't eligible for a company 401k plan. Once I became an employee of company X, I signed up immediately for the plan because it offered matching money (100% of the first 2% and 50% of the next 4%). If you do the math, it meant that the company put 4% of my pay into the retirement plan if I put in 6% so I got 10%. To put it another way, it was free money. It's stupid not to take advantage of matching funds.

However, if you're eligible (<~$95K in income if you're single), a Roth IRA is the way to go. Your 401k money is tax-deferred which means you use pre-tax (gross) dollars to fill it, but you use post-tax (net) dollars to fill a Roth IRA. What's the benefit? Everything you make is tax free. My Roth is up 60% in the past two years and the gains are all tax free. Of course, I can't take any of my gains out till I'm 59 1/2 (there's a penalty and taxes due if I do), but I can take out the principle tax and penalty free if I need it.

So to sum up, put in as much money as you need to max out your employer match, fill up your Roth IRA contribution, and then contribute more to your 401k.

So why all this thought on Roth / 401k? Well, you can make up to $3K in contributions in 2003 (goes to $4K in 2005), but it doesn't have to go by calendar year. There's a magic period between Jan 1 and Apr 15 when contributions can go towards either your 2003 or 2004 contributions. As I only put in $1K towards 2003, I need to come up with another $2K by Apr 15 for my Roth IRA. Through a combination of frugality, overtime, and slashing my 401k contribution from 20% to 10%, I should be able to squeeze out the $2K by Apr 15.

Of course, this all goes to hell if I get into Kellogg or Dartmouth ($2500 deposit!).

USC Letter

USC was much more prompt with the admit letter than UCLA... I got it today. It was a single page with a congratulations and promises of more mail later. USC also has pre-term courses - 2 three day sets (July 30 - Aug 1 & Aug 13 - Aug 15). There's a $1500 deposit due by Mar 26, but I've heard that they're open to deferrals if required. Since Kellogg and Dartmouth aren't due till Mar 29, I might just need that.

For those of you applying to later rounds, it took approximately four weeks for both schools to make decisions.

Monday, March 01, 2004

Project Costing & Selection II (continued)

Here's part II of my review of the Project Costing & Selection course (part of a Project Management Certification program) I'm taking at Caltech. Next Saturday - Detailed Project Planning.

Emerging Factors

This section covered factors that are becoming important in cost estimations

-Changes in Public Policy
Stricter rules and enforcement of regulations, increasing safety requirements, and greater inter-agency cooperation are raising the costs of meeting new environmental mandates. Bottom line is that these are more expensive than they've been in the past and the agencies are cracking down on the people, not the companies. People are being sent to jail for environmental violations, even if the government can't prove any intent to do harm. It doesn't matter if you knew you were breaking the laws and the laws are vague and hard to understand, even for the regulators. Managers can be prosecuted for the actions of their subordinates even if the managers don't know about the actions or if the actions were in violation of the manager's policies and orders.

-Audits
Government audits are expensive and tie up your best people. Publicly funded institutions fare the worst. For example, JPL spends 5% of its budget preparing for, conducting, and acting on the findings of audits.

-Contingency (example)
The National Ignition Facility (NIF), a project attempting to ignite fusion using lasers had to build a major facility in Northern California. During the excavation (55' deep), 112 capacitors were found that were leaking Polychlorinated Biphenyls (PCBs). After stopping construction to allow for HazMat teams to clear the area, construction resumed. El Nino pummeled the site with record rain and collapsed the excavation site two times. The next year 16,000 year old mammoth bones were uncovered. The project went from $1B to $4B. And the project was only halfway complete...

-Litigation
40% of engineering firms are sued each year
80% of engineering firms have claims pending against them
40% of claims are settled without any payment to claimant

The instructor did a study of litigation potential by state. Here are the top five:

1. Massachusetts
2. Washington, DC
3. California
4. New York
5. Florida

hmm... four of these went to democrats in the last election and the fifth was a close call. Coincidence?

-ISO 9000
It's a standard for documenting and following processes. In a nutshell, plan what you do, write down the plan, follow the plan. There's no guarantee that you have a good process, just that you have one and you follow it. There's a certification process and audits to ensure you're on track. You need the certification to do business in Europe and even with some US companies (e.g. GE). GE even has its own auditors do inspections at your site to do their own verification.

Updated Scorecard

I caught up on some overdue blog reading and updated my blogger scorecard and added a link to the photo albums. Of course, this means I'll have to post a lot more photos. Expect photos from USC, UCLA, and the Huntington Library (beautiful gardens) in the next month.

We also got some bad news for FMG at UT and LuvShack at Duke. Sorry to hear the bad news guys.

Trojan Man

I called Evan back at USC and confirmed it, I'm in at USC. Not much in the way of details yet, but I do know that there is a $1500 deposit. The packet is going in the mail today.

Here's a post I put on the B-week site about the differences / similarities between the two part-time programs. There's probably a fair deal of overlap with the full-time programs.

As for the choice between USC / UCLA, it seems that both will give you a great education.

UCLA has an edge in national reputation.
USC has a closer alumni network (nothing like Tuck, but closer than UCLA's).
UCLA is slightly better at finance.
USC is slightly better at entrepreneurship / general management.
UCLA is closer for me (less driving = less traffic = happier life).
USC served much better food at the info session.
UCLA is higher ranked and has been for a while.
USC has been climbing the rankings.
UCLA is in a better neighborhood.
USC seemed to work much harder to sell themselves (my impression of the two info sessions).

So it's a really close call. If I get the nod from USC, I'm going to visit core classes and ask the current students to sell me on each program. If it comes down to the two of them, I'll decide based on where I feel a better fit.


Also, I found out that someone I work with is finishing her 1st yr with the USC program right now. Another person to ask questions! And my buddy, the med student, agrees with me that USC just seems much hungrier... they want to be the #1 school in LA.

Project Costing & Selection II

The topics in this class were "Managing the Process" and "Emerging Factors".

Managing the Process

Don went over some examples of situations where the schedule had been shrunk significantly and the key factor was finding the critical item. For example, when building a house, the key factor is how fast the concrete in the foundation sets. He also discussed a case where he was asked to shrink the time it took to build a petrochemical facility and they were able to cut the schedule in half by eliminating all the drawings and building a scale model.

Changing organizational structures are resulting in leaner, flatter organizations but this having a negative effect of project costing because estimates are being given by less experience people in a shorter time with less review. You make decisions faster, but they aren't necessarily good ones.

Reorganizations (even successful ones) have a year of decreased productivity before the promised benefits start accruing (if ever). So if you have a vendor / supplier, customer, or company that is undergoing a reorganization, take their decreased productivity into account when setting your schedule.

Key Initial Project Questions

1. What is it?
2. What does it look like?
3. When does it have to be ready?
4. Who will do it?
5. Where will it be done?
6. Are there any special circumstances? (e.g. regulations, hidden taxes, litigation)
7. Who is the customer?
8. Are you or your customer(s) or your supplier(s) undergoing reengineering, reorganization, relocating, or acquisition?
9. Do you have to meet any quality standards? (ISO 9000, CMM)
(Note, my current project is a CMMI pilot project for company X - lots of extra time is being spent on training , audits, etc.)
10. Has anything changed since you did the last estimate?

Contingency accounts for known unknowns. Unknown unknowns (e.g. earthquakes) should be accounted for at the corporate level. Your organization must have a philosophy on contingency that is understood and accepted. It reflects a senior management decision to avoid project cost overruns. If they don't, you get "fat" cost estimated where people build contingency in anyways. This is buried and impossible to track later when you do lessons learned. Contingency is a function of risk... the less risk you want, the more contingency you need. Contingency can be bigger than the project! Don also went over one way to model contingency and generate an estimate. A key part of the model was applying it to past data to obtain the key coefficients. Every industry / company will need a model that suits their own specific situations. And finally, if your company doesn't allow you to forecast contingency, you'll bury it somewhere if you're a smart project manager.

We had a review of Pareto's Law (80 / 20 rule) which states that 20% of the items will make up about 80% of the cost. You maximize your efforts by concentrating on this 20%.

The Remer / Buchanan model gives you a baseline figure on how much it costs to do a cost estimate. The formula is Ce = K Cp^0.35 where Cp is the cost of the project and K is one of the following:

High Tech Projects
K=115 : Definitive
K=60 : Budget
K=24 : Order of Magnitude

Low Tech Projects
K=6.6 : Definitive
K=4.7 : Budget
K=3.4 : Order of Magnitude

Resource allocation is where you set the number of people you'll need at various points. Company X had you do a resource graph where you graphed your expected headcount over the life of the project. It seemed a useful tool to spot potential problem areas. Say you expect to use 10 systems engineer for one month... what is the real likelihood that you'll get 10 of them in one month?

Estimates in work-months have three major problems.
1. A work-month estimate may be a snap judgment
2. You may not be able to split the task that way. Can nine women make a baby in one month?
3. People are different. One can do a task in one week that would take another a month.

There's a book that I've meant to read for quite some time that covers this topic:



Don also gave a few examples where challenging the customer's requirements allowed for a cheaper product. A manufacturing example reduced the cost of production by 63% reducing the tolerance from +/- 0.001 inches to +/- 0.003 inches. Another example was Lucent where 30% of the features in one of their digital switches was never used by the customer. He didn't mention Microsoft, but I can imagine a lot of these sorts of examples there.

Emerging Factors tomorrow!

Sunday, February 29, 2004

A useful tip

If you ever try to cut a garden hose with a knife, use a block of wood or something similar to cut on. That way, you don't have to worry about cutting through the hose and into your finger.

Chuck, a third year med-student friend of mine, was coming over to go biking with me today and ended up bandaging my finger instead. No biking for another week... Grrr.

Outsourcing thoughts

Outsourcing has been in the news a lot recently and I expect that it will be a big part of the political posturing this fall. After WWII, the US dominated the world's industrial output for one simple reason: war hadn't visited our cities and destroyed our infrastructure. With Europe and Asia devastated, it was easy for US companies to dominate manufacturing and we saw a great period of prosperity that led to the US with 5% of the world's population enjoying 50% of the world's wealth.

While that was a great deal for the US, it wasn't a viable position. The end of the cold war and the rise of multilateral trade treaties (NAFTA and the WTO) heralded a future where the US is not guaranteed its preeminent position in the world. What we (US workers) have to realize is that we are facing 5 billion new competitors. Companies / workers that are not aware of this will go bankrupt / lose their jobs.

Recently, Los Angeles saw a 14 month long strike by grocery workers at three major chains. The stores (correctly) saw a danger in Costco and Walmart on the one hand and rising health insurance costs on the other. Their (quite reasonable in my opinion) demands that workers pay for part of their insurance was rebuffed and the strike ensued. Costco saw a 20% rise in membership in the past year. I don't have the data on Walmart, but I imagine they saw similar effects. How many of those people will return to their local stores once the strike is over? As a Costco member, I can tell you that the simplicity of their selections, high quality of their products, and the easy return policy gives me complete confidence when I shop there. It's the first place I go when I need anything.

I guess what I'm trying to say here is that the US and US businesses are under competitive pressures that have never been experienced before. We need government supporting our industries rather than hindering them. I am not in any way endorsing subsidies like we have with agriculture. That's no different from welfare in my opinion and I detest welfare in its current form. I would like to see more flexibility in the application of regulations and an attitude where bureaucrats try to help rather than cover their ass.

For example, there are many drugs that never see the light of day simply because the cost / benefit ratio doesn't make sense when the costs of a full testing regimen is considered. If the testing rules for rare diseases were relaxed and thus made less expensive, more companies would be willing to field potential cures. The FDA should realize its end goal is to save lives by treatment as well as prevention.

The Claw

Mark asks:

What's your secret for "the claw"???

There was one at a grocery store that I could always beat, but I don't remember [what] it is anymore...


There's really no way to describe the loot I walked away with on Friday night so I posted pictures on yahoo. That's the backseat of a Jetta.

The secret is in the machine. Some machines have a claw that you can aim, push a button, and pray. There's very little skill involved. It's the slots of the claw world. Other machines are much more friendly to the user. They allow you to drop the claw a bit, move it around, drop it some more, move it around, etc.

You need to find one of these machines and then it's simply a matter of practice.

You must master using the claw to move prizes around the game (e.g. drag them away from walls) and recognizing which prizes are easy and which are not. Typically prizes on top on their "stomach" are the easiest. Grab them by their booty to maximize your chances. Otherwise, two claws over the shoulder and one in the crotch will get most prizes. For bigger prizes or odd shaped ones you just guess where the center of balance is.