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01 February 2004 @ 08:09 am
Absence Excuse  
Dear LiveJournal Friends,

Please excuse Bill's absence on Thursday and Friday. He was attending an excellent business simulation class by invitation of his business unit's General Manager.


The class was delivered by a company called BTS, and it involved an Excel spreadsheet and program that we learned to use to make business decisions over 3 years of a fictional software company based on the businesses that HP's software unit is in.

They had done a lot of very impressive ground work, getting not just the descriptions of the businesses but also a very good feel for the customers and how they make their buying and loyalty decisions. The scenarios made sense from a big picture standpoint and, more importantly, from the standpoint of people in the trenches working with each product.

We didn't "play" against the computer - the class was split into 5 teams. The movements of the market and the revenues and profits of each team were driven by the interaction of the customers and the decisions made by each company. We all started out with 20% of the market and the same levels of assets, but from then on it was up to the new management team to drive the company forward.

Having no MBA but having minored in economics, I was fascinated by the approach. No one had problems keeping up - the class was definitely geared toward practical rather than theoretical concepts. It was really great to have a chance to look into all the criticisms I've had of the way we approach markets and see how they stood up against the simulation's assumptions. By definition, the simulation was very much simpler than the real world, and we had some issues trying to understand how certain areas really interacted with one another, but overall it matched up with the real world very well.

The competition was based not on revenues but on operating profit - the team with the most cumulative operating profit after the 3 years would be the winner. Our team was in first place after the first year. No great achievement here, as the first year can be won through short-term thinking and focus on immediate profit. However, we stuck to our strategy and won the second year as well - that was a bit more impressive. In the third year, as a lark, we decided to put some of our extra cash into more marketing - $30 million dollars worth - and ended up losing in the third year by a cumulative difference of a mere $8 million dollars (our cumulative profits for the 3 years were $322 million dollars).

It was fun, there was quite a mix of engineers all the way up to 2nd level management and attended by our GM (whose business approach has impressed me a lot over the last few years - we were the only section of HP not to require layoffs throughout the recent troubles). I'm actually kind of pumped up about the business (and certainly about my own visibility within it).


Signed,

Bill's Mother
 
 
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