“There are no unimportant jobs …”

… is a motto any great leader should live by. That every person in your organization, on your team, and in your community is important.

In an interview with former Dean Kim Clark a few years ago, he shared the same idea. I’ve posted parts of it once before, but see this 3 minute clip on the role of good leaders.

Below is the text. Below that is the video.

“Not all of us in the world have the privilege of working in something that itself is inherently passionate.  Some of us work where it`s like work.But everybody can be in a place where their work is valued, where they have opportunities to grow, where they are respected, and where they can see the connection between their work and the larger purposes that they serve. And that has been something I’ve tried to do at this place.

And so I gave a little motto: There are no unimportant jobs at the Harvard Business School. Everybody has an important role to play. And you work in an organization to help people understand that`s not rhetoric. It`s real.

And help them understand, “I am in media services and my job is to set up the equipment in the classroom, and make sure its functioning. And I kind of do my job and its work” You help those folks understand, yeah you’re in media services but you are critical to that student there, whose name is Jeff Immelt. And 25 years from now he is going to run General Electric and he’s going to have 250,000 people working for him. And he’s going to be important and your work as a media tech is going to make that class go well, which means hes going to learn and he’s going to be a great leader.

So you go to work, and say yeah, I’m in media services but that’s important. And I can see how what I do has a larger purpose. And you get passionate about that. You may not be passionate about making the cords work together, or making sure the equipment is right. You get satisfaction out of it because you’re doing a good job. But you get passionate about the purpose of the organization you work for.

And that is what leaders do. Leaders instill in people a sense of purpose and they inspire people. They inspire people if they are good. They inspire people, because they connect people to the larger purpose.

Tuesday, November 20th, 2012 Business School No Comments

Ask Jeremy: “Can you give me some interview advice?”

In a recent question, a reader asked me about interviewing. Specifically, the reader is interviewing for both jobs and possibly for MBA programs.

See below for the question and below that for my video response.

 

Hi Jeremy,

Congratulations on all of your success! Thank you for the website as well. I am looking to join an MBA program and also doing some interviewing for jobs currently.  I wanted to ask about specific challenges to expect during the interview process, and also ask for any tips you might be willing to share. What were some of the key things that you thought helped you enter the program? Thank you.

 

See below for my video response.

 

In short, I talk a little about 1) Framing your answer, 2) Content of your answer,  3) tips on interview style and  4) general tips.   Note that the answer here is pretty high level given the general nature of the question.

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Monday, November 19th, 2012 Education No Comments

The ideal scenario we hope for …

…  isn’t always that.

Often times, our knowledge is limited. And we can try to do better, aim for higher and hope for more.  This is what great leaders help us realize.  And when we open up our minds to see what’s possible, we’ll see that there are other jobs, schools, careers, ideas, products, and situations that we never imagined.

Then we won’t stop until we get to our ideal scenario.

Saturday, November 17th, 2012 Business School No Comments

Ask Jeremy: “Social enterprise and how to bridge gap between the nonprofit and business?”

In a recent question a reader asked me about the Social Enterprise world and about getting an MBA, or JD/MBA.  Her question was a bit complex and long, but I wanted to answer in the very first take.

As always, we’re working on improving the formatting of the response video, but for now:  “Done is better than perfect.”  See below for the question and my video response. And see below that for a few follow up links that I provided.

Hi Jeremy

I hope you’re doing well. I came across your blog while I was researching the JD-MBA program at Kellogg, as I’m currently applying. Great blog! I just had a few questions about the program and school in general, hopefully you can help me out. I have an international background, having lived in 5 different countries in the past 7 years, working, volunteering, and studying in the fields of education, journalism, human rights, and nonprofits. I’m looking to bridge the gap between the nonprofit and business sectors with my JD-MBA. I wanted to ask you about the SEEK program, in particular. I understand that almost every school has a social enterprise program/club, but why do you think, if you’re familiar with it, Kellogg’s is different? I know that they have an annual conference on social impact and innovation, but are there any other programs or even specific classes that are unique to Kellogg in this field? And as a JD-MBA, are you able to take classes at the Medill School of Journalism for elective credit? I know those are some charged questions I’ve asked, but any insight would be greatly appreciated.

Thanks so much!

 

 

—  FOLLOW UP QUESTION

Hi Jeremy,

Thanks for getting back to me. No worries about the delay. I haven’t applied to any just yet … If you could still shed some light on the Kellogg experience, that would be great and much appreciated. Thanks so much and looking forward to hearing from you.
Best,

 

—  FOLLOW UP RESPONSE

Here are a few noteworthy things to keep in mind with the SEEK department at Kellogg specifically.

Hope this is a good start

#AskJeremy

Tuesday, November 13th, 2012 Education No Comments

Ask Jeremy: “Can you give me quick resume feedback?”

In a recent question a long time reader asked me how she could improve her resume.  Specifically, since she is applying to the MLT program for the upcoming year.

Hi Jeremy,
My name is Hashima and I am applying to MLT third round which is next week. I am not sure if my resume format is good enough. I have attached my resume, so you could view the format. I was wondering if you have any advice on how I could improve my resume. I will appreciate any advice you have on improving my resume because I always find useful information from your blog. I look forward to hearing from you soon.

Thank you,
Hashima

Below is my video response.  The video quality isn’t perfect yet, but the lighting and formatting do continue to get better.

#AskJeremy

 

Monday, November 12th, 2012 Education No Comments

The morning after

All eyes and ears have been tuned into the elections up until November 6 which all culminated in a big night of the announcing of the new president. While the night had many celebrations and gatherings all over the country, the morning after offers up something different.

On one end of the spectrum you have the Obama campaign team that won. The night after winning they celebrated together and finally saw the fruits of their labor after more hard work than you can image. But the morning after, campaigners had to pack up and figured out when they were going to head for home (though not before this thank you speech from Obama)

On the other end, you have the Romney campaign that did not win.  The campaign will spend the next day reflecting and casting doubt on what they could have done better. But not for too long-they have to pack up too since many campaigners spend a lot of time in other cities.

Of course the media has continued talking about it but at a much lesser rate than the day before. They did the math and compared it to past elections.

Articles are being written about the political savvy of Obama.

And people are already talking about the prospects of 2016 and 2024 elections, throwing out names like Clinton and Booker.

But more important than all of this is people will have to start thinking about the world again.

Mayor and Governor campaigns are starting to pick up the pace.

#Sandy has left more devastation than ever imagined.

The ed system will get back to its bargaining and organizing for rights of teachers in schools and the lives of students who need support.

People all have to get back to work because the economy definitely won’t stop. For the lucky campaigners, they may stay on the campaigns with a paid position, but not most.

And as for you and me, we all had to be back to work the very next morning. Even if we did stay up the full night watching to see how things turned out.

The irony is that no matter how important something is, how much time it takes up, and how many people are watching, the morning after, most people have to move on.  It’s a skill that is very difficult but worth getting better at.

Sunday, November 11th, 2012 Business School No Comments

You are an average …

of the 5 people you spend the most time with. Heard the saying before? Maybe not perfect in every case, but there’s definitely some truth to the idea.

So when possible, choose your 5 people wisely.  And not just in terms of success but also values and goals.

Pick your mentors wisely.

Choose your friends wisely.

Apply to college after lots of research about the people and departments they study in.

Work hard to get into business schools (and law schools) that are a good fit for you.

Select your study groups carefully.

And pick the right significant other.

Don’t just choose half-heartedly. And don’t let the good ones get away. Otherwise, your average might change.

Just a thought.

 

 

 

Saturday, November 3rd, 2012 Business School No Comments

If you only saw what I see

You would know it was obvious. You would change your mind and buy in to the plan today.

It’s what Barack Obama is telling the nation about his vision for change and about the hundreds of hours he’s been spending on policy revisions. He’s been spending the past year trying to show the world before November 6, 2012.

It’s also what entrepreneurs tell funders about the game changing idea that can disrupt an entire industry if they can just garner support.

It’s what CEOs tell their teams a year before the next big product comes out, when nobody understands why he’s changing his plan in the middle of the year.

It’s what great nonprofit leaders tell their constituents. About the millions of lives they are going to impact three years from now.

It’s what a good MBA applicant sees, when she spends hours and hours on her essays, trying to show the school why she’s the perfect fit.

And it’s what a guy tells the girl he sees a future with, even though she might not know how it could possibly work out.

“If you only saw what I see.”

Often times you think that these people are just trying to convince you. But that’s not always true.  They are trying to show you what they see. To stop and look for just one second.

Its hard to show you because what they see is a little bit further out there.   But the great ones will try until they figure out how to get you there.

Think Barack Obama in 2008 when nobody thought he stood a chance.  Steve Jobs who proposed a new design for the MAC computer after being fired from Apple years before. Wendy Kopp who proposed Teach For America in her undergrad thesis all the way back in 1989. Sal Khan who posted YouTube videos of school lessons for years before getting a single bit of recognition for it.

If we only saw what they saw.

Tuesday, October 30th, 2012 Careers No Comments

Ask Jeremy: “What career should I discuss in my MBA application?”

It’s that time of year again, MBA application season. As such, I’m getting a lot of questions about applying to MBA programs and to MLT.

In a recent question from a new reader named Stanley, I got a question abouthow to approach the essays.  Specifically, he asked about what career to discuss in his MBA application. See his question below.

Hello Jeremy,

My name is Stanley and I met you at the MLT happy hour earlier in the week. I want to personally thank you for the advice that you gave me on both the MLT process as well as the MBA admissions process. I think those pieces of information will go a long way in helping me complete my essays during my attempt at going to business school. I believe the main thing you said was to answer what, why, and how when addressing your essays: with the most important area being the focus on the why.

I also have a follow up question on essays around the idea of if it is better to create the most complete story for business admissions counselors on what your background most relevantly points towards rather than create a story about what you really truly want to do if your background work doesn’t strongly support that field or work (ie currently doing financial consulting and aspire to get into management consulting/ as appose to currently in financial consulting and aspire to become an entrepreneur in the field of education). What do you think? Should I go for the story all the websites say works or should I go for the story of my true passions despite not having the strongest backgrounds to support wanting to do this. Finally I know you said that you had two blog entries that you wanted me to read and I am eager to find out what they are because at this point I welcome informed advice.

Otherwise, I think what you are doing with the education matters project as well as this website and you work with MLT is admirable. Please keep it up, you have no idea of the positive impact that it brings. Thanks for all the advice and I hope to hear from you soon.

Kind Regards,
Stanley

 

Below is my video response.  And apologies for some of the noise in the background — we’re still working on sound and lighting issues but wanted to get a response out sooner than later.

Monday, October 29th, 2012 Business School No Comments

#AskJeremy: “Can I go from Engineering to CEO?” “Should I get an MBA?”

One of the defining problems of our students today, is what to study in college.  In today’s world not only are there more options than ever before but there are also more paths to success than ever before.

Past generations don’t understand the dilemma quite as much. In times past, they could “Study a more traditional major”, “Go get a good job!” and have the security of staying in one or two jobs for the rest of their career.

In today’s world, that’s simply no longer the case. Students think more about their majors, more about their first jobs and more about what they “want to do when they grow up.” Well, in a recent question from a long time reader named Jennifer, I got a question about just that. She asked about starting off in Engineering and about the value of an MBA.

Jeremy:

Thank you very much for your great insights! I have learned a lot and enjoyed the reading. I am from engineering background as well, and I am currently studying in my final year at school. I am planning my path towards CEO, but I chose engineering as my starting point. What do you think about that? I also wonder if an MBA plus finance and accounting studies (or any other relavant studies) will increase my chance in getting to the CEO position one day too?  I would love to get your opinion.

Jennifer

 

Here is my video response:

 

 

In short, an MBA is valuable for some people, and engineering can be a great starting point. See my video for the rest of the response.

Saturday, October 27th, 2012 Business School 2 Comments

Too much technology

How much time do you spend every day checking email, logging into Facebook, sending text messages, and surfing the web for things you don’t really care about? Probably way too much.  Many of my MBA classmates did too.

But don’t get me wrong, it happened to me last year as well. As a fairly known MBA Blogger who gets as many emails as most people I know, I woke up one day last year and realized I had the same problem.

I’d put my head down on campus sending dozens of texts and emails when I had friends sitting right in front of me.  I’d write multiple blog posts on a Saturday morning and realized I was getting behind on all my afternoon work. And I’d search stories online only to realize 90 minutes went by in the blink of an eye. And it happened often.

One post on HBR put it this way:

The definitive Internet act of our times,” she adds, “is a perfect metaphor for the promise of reward. We search. And we search. And we search some more … clicking that mouse … looking for the elusive reward that will finally feel like enough.

In 1997, one Nobel Prize winner Herbert Simon put it this way (also from HBR)

A wealth of information creates a poverty of attention.” And retention. Taking in endless bits and bytes of information is akin to pouring water into a glass already full — in this case our severely limited working memory.

In some ways, we’re all guilty. Millennials have been doing this for years now–even the President’s campaign is centered around the use of technology.  Emailing friends when other friends are right in front of them. Texting other people, even though they are standing right beside them.  And scanning through Facebook to see the latest news, even though the last ten times you were not fulfilled by anything they found.

What I’ve come to find, is that in high level work environments this doesn’t fly. Not only is it looked down upon but it’s also not as productive. Especially when your job is demanding and in jobs where you are forced to account for your time (i.e. a law firm and consulting firm).

While you don’t have to turn off your technology entirely, at some point we’ll all have to do better. We’ll have to consciously ignore it during times that matter. During your most important projects. In the time leading up to important meetings. During your most productive times.  And of course when you’re with people whose attention you care about.

Of course, if you don’t do it now, life will force you. Friends will notice you are not engaged enough. Jobs will notice you’re not productive enough. You’ll come to find that you’re having a harder time focusing.

All things that have happened to me in the past.

And all things that can happen to anyone.

Friday, October 26th, 2012 Networking No Comments

Please vote

In the last presidential election, fewer than 57% of voting age Americans actually voted. And this was one of the most watched events in history.  In 2010 it was fewer than 40% Surprised? Don’t be.  The numbers have been low for years.  This year,  we can all step up and do something about it.

There are a lot of reasons why it never makes sense to abstain from voting.

From the legal angle, if you don’t vote, then you aren’t thinking enough about the issues. The policies at stake are not only important, but they impact you profoundly.  If you consider the rules and policies of healthcare, education reform and unemployment a little more, you’d know just how much your voice mattered.

From the business side, I’d say this is a serious marketing problem. Not just from the candidates but from state government too.  How can you not exercise your most fundamental right to vote, to have a say, and to take part on the day that more people will be tuned in than any other time this year? On November 6, 2012.

If you don’t vote because you’re confused, then that doesn’t make sense.  There’s enough information out there to get more informed quickly and make a choice.

If you don’t vote because you think your state is already determined, then you might want to think again.  Because if everyone felt that exact way, then the numbers could swing in either direction very quickly. It’s the voters paradox. More importantly, the margin of victory in your district could still be a factor in the momentum any candidate gets during the election.

If you don’t vote because you don’t have the time, then make the time. I’m busy too, but spending a few minutes to register and vote is well worth the time.

If you don’t vote because you don’t like the game of politics, I understand, but don’t agree.  Don’t be fooled. Half of the “game” of politics is a ploy by the news channels to get more eyeballs and make more money.  Another part is paid TV ads trying to get their party an advantage over the other.  Sure maybe some of of the hooploa comes from the candidates themselves.  But nothing unexpected given what’s at stake in two weeks.

The good thing about voting is this.

  1. Voting is free. Or the price of a stamp if you mail your ballot in.
  2. You can vote from anywhere, and send in an absentee ballot if need be.
  3. You can take part in the outcome.
  4. You can help shape the next four years of our nation (or of your local geography in other elections)
  5. You can join the other thousands of people that will be doing the same.
  6. You can influence other people in your community to vote.
  7. You can exercise a right that people have fought and died for.
  8. You can get smart about the issues.
  9. You can take a stand for what you believe in.
  10. You can get started learning and have a stronger voice next time.

The candidates are different. So are their policies, motivations and stories.

Every single person, in every state, city, district and county should absolutely exercise their right and privilege to choose.

In short, please vote.

Wednesday, October 24th, 2012 Business School No Comments

Send it already

Sending things today is one of the hardest things to do.

Every time you consider putting your hand up in class, hit the send button on email or hit the “order” button online, you never know how it’s going to turn out.  Will your message be accepted? Will people judge your mistakes?  Will they like the gift you send?

On the other hand, there’s also liberation in just sending it already. You can move on to the next task. Often times people don’t care anyways. And you can stop pouring over small details that don’t really matter.  Or details that you can’t control.

A few weeks ago, I was sending a small but important gift to someone using an online retailer. I wanted to make a good impression so spent time making sure the message was good. After spending more time on the message (and figuring out the delivery time) than I’d ever like to admit, the website completely messed it up anyways. Not only did the message have typos but it also wasn’t even the version message I sent and it didn’t arrive until the next day.  After all that time planning, I had no control over what happened.  Fortunately, the mistakes didn’t make a difference in the end.

Likewise, I also recently sent an email at work. I spent over 30 minutes on an email that wasn’t even important but that went to someone who I needed to do well for.  So after pouring over my message for over an hour and proudly hitting the send button on a well-crafted, thorough yet concise email, I came to find that the person never even read it. I was in shock.

More often than not, we don’t know how people are going to respond so we have to put our best foot forward.   And I’m glad I did in both cases above.  On the other hand, time is limited, our To-do lists today are longer than ever, and spending life hiding in the corner afraid of criticism is not the best of your time, no matter what your position at a company is.  Especially when it’s a situation where it’s the thought (not the words) that counts.

Sometimes you just have to send it already. Whether send the email at work, submitting your application to a program, or sending a gift online . Because none of your effort matters until you hit send.

So what are you waiting for? Hit send. I just did.

Tuesday, October 23rd, 2012 Business School No Comments

Poets

In the midst of all the chaos and noise today, the world needs poets.

No, I’m not talking about the Kellogg Section (e.g that was my section) although I loved all my poet classmates. Instead, I’m talking about people who have a way with words. People who can cut through the noise and articulate their vision so that other people can hear.

In times past this was much easier. Without all the noise, people were more focused, they had less distraction, and people could rally around them much easier.

But today’s world makes this more challenging. Today we have more soundbites to filter than ever.  We also have more messages in our Inbox and more people in the world than ever before.

Meanwhile, we also see news channels that spend 95% of their time talking about the bad news.  Websites using enticing headlines fighting for more eyeballs. And social media  putting out more quantity than quality.

In today’s unfocused time, we need people who focus on the positive. People that can capture the imagination of their companies. People that can touch the hearts and minds of their communities. And people who can inspire the spirits of people to create change from the other side of the globe.

In every industry and organization imaginable, we need to have poets.

 

 

Friday, October 19th, 2012 Careers No Comments

Tuesday’s Pre-MBA Conference Call

MLT’s Pre-MBA Conference Call 1.5 days ago was a huge success. More than 100 of you showed up and got to hear from one of the top education nonprofits I know. My apologies to everyone that technical problems kept me from being able to answer questions at the end. But I do have one alternative for you now.

Everyone on the call considering applying to MLT and to MBA programs, I’d love to answer your questions now. I’m starting a new segment here called #AskJeremy where you can Ask Me Anything on Tumblr or on my blog. I’ll answer anything I can help with related to careers, MBA and law school admissions or anything education-related that might come up. I don’t have all the answers but I do have my perspective and the perspective of people I know.

I want to respond via video so I can respond more quickly and concisely.

You can ask by sending in a video question or written question.

I’ll do my best to respond to anyone that writes, but from time to time may give priority to those from my own communities, including those from MLT and anyone  interested in sharing your story with education matters should I get more questions than I can respond to quickly.

I look forward to hearing from you all.

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Thursday, October 18th, 2012 Education No Comments

The kind of bravery that everyone will notice

The true story of Felix Baumgartner’s act of bravery can be seen everywhere you look online. Just this past weekend he became the first person ever to break the speed of sound with his record-breaking skydive from 23 miles.

Jumping from higher than 23 miles meant he had enough time to reach a speed of 833.9 miles per hour. That translates into 1,342 kilometres per hour.  And that roughly translates into Mach 1.25, which is faster than the speed of sound.

Sounds unbelievable right?  No one has ever traveled at that speed in clothing alone.  And no person has ever jumped from so high before either.

Imagine the emotion.  Imagine the thoughts going through his head. Imagine the fear.   In the Washington Post, he noted, “I thought for a few seconds that I’d lose consciousness.” “I didn’t feel a sonic boom because I was so busy just trying to stabilize myself. ”

In spite of that daunting fear, Felix was audacious enough to try it anyways.  Don’t get me wrong –of course he did the math and understood the risk. But he went against all fear and decided to jump anyways. And in the end, he became the first man to break the sound barrier and three other world records.

I’m not saying you should go out and beat his record tomorrow.  Or come up with a new cliff diving record next week. But I am saying you should think about how to be audacious in your own field. Calculate the risks, do the math, and take big risks and see what happens.

Nothing truly great was ever done by someone that shied away from being brave. Instead being brave is how the Wright Brother got started and how airplanes were created. It’s how game winning shots were made. Billion dollar companies were formed.  Insurmountable campaigns were won. And how the greatest stories of our time conceived.  It’s the kind of bravery that billions of people on our planet have noticed over and over again.

In the meantime, maybe try to get Red Bull to sponsor your project too. Perhaps one of the best consumer marketing ideas in a very long time.

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Monday, October 15th, 2012 Leadership No Comments

Moment of obligation

You know exactly what that moment feels like if you’ve had it before. The moment everything changes. The moment you can’t keep your head down any more. That point, when you have to do something about it.

For some people it’s to finally take action in this year’s presidential campaign. For others, it’s about the importance of working on an issue you care about–like moving our education system forward.  It could be helping someone that needs your support more than ever.  And for many, it’s launching that business that has not only been your mind but also your heart for years.

The problem is that the moment won’t last forever. The urges you get might only come once or twice. The resources and time might never be at your fingertips ever again. So you have to grab it. Take it. Compel others to come with you. And take action, regardless of the obstacles in your way. Because people in your community are counting on you. That’s why you feel obligated.

Just about the hardest thing you can do but bravest thing you can is put your head up and take action in the moment.

So what was the last moment of obligation you had? And what did you do about it?

Saturday, October 13th, 2012 Business School No Comments

Stress

Just about most people I know get stressed out. MBA and law school classmates. Friends, family and colleagues.  And other people all over the world. Most of them stress out a lot actually.

We get stressed about money, doing well at work, getting into top schools, passing exams, rushing to the airport, and about our relationships–friendship romantic.

So as we go through our week, our stress rises when we have to spend money, lead the next work meeting, or interact with someone whose opinion we care about.  We spend a lot of extra time thinking about how to do it perfectly and if we can’t then how we can avoid it. And even though we all do it, we almost never talk about it because we think we’re the only ones going through it.

On the other hand, just about everything I stressed about wasn’t worth the time and energy I spent stressing.  The high stakes moment I awaited was a lot easier to navigate than expected. The negotiation I poured over for weeks was a lot nicer than I thought it would be. The test I took was wasn’t nearly as hard (or least not as important) as we all thought.  And the person I was nervous to talk to didn’t turn out to be scary at all.  In fact, more often than not, the discussions went well.

In short, stress usually things worse, not better. You artificially raise the stakes. Increase the odds that you perform worse when the situation comes.  And you don’t enjoy the ride, which often times is just as important as the result.

Easier said than done, I agree.  After all, I stress about interviews, tests, and conversations as much as anyone else.  Further, when you have Wildly Important Goals, sometimes a little bit of stress is inevitable.  Because you’ve been working at your WIG for months, if not more, and the stakes feel higher than they have for a while.

One the other hand, the better you manage your stress and enjoy the process … the better off you will be. The better you’ll manage the process. And the better your odds for success will be in the end.

So what about that interview, meeting, project or discussion coming up? Have you been worrying about it all week? Is it stressful to talk about? Think about? Prepare for? If so, take a step back. Breath. Tell someone. It’s probably going to work out better  than you think.

Something to consider.

One of my favorite quotes in the world:

Fear makes the wolf bigger than it is.

Friday, October 12th, 2012 Business School No Comments

Get past the status quo hesitation

That feeling you had just the other day, that’s the one I’m talking about. The hesitation that all of us have felt at some point.  When it seemed so much easier to play it safe and stick with the status quo.

Sometimes it’s a little whisper you hear in your ear.  Other times, a feeling you have in your stomach. The one that asks you: Why change things now? Why risk doing it again? It didn’t work before.  Are you sure you can handle the stress?

But often, this hesitation is all wrong. Too many people hesitating is why we don’t have a critical mass to move the education system forward. It’s why aspiring artists haven’t even started the first line of the screen play they’ve always dreamed of writing.  It’s why most people haven’t made an inch of progress toward the job  that they’ve been wanting for years. Because despite the profound opportunity that’s right in front of them, it’s easier not to do something scary and to stay with the status quo.

Don’t get me wrong, I understand it. I don’t like failure, stress or rejection either.  And I’ve had just as much of it as you have. Even worse, today’s world teaches us to do exactly the opposite.  School teaches us to “do things by the book.” And incentives at work tell you to put your head down and say, “that is not my job.”

On the other hand, it’s only when you decide to try giving it a shot that you have the opportunity find something better.

When a few dozen teachers in Chicago protested the system last month their strikes made noise all across America.  When my good friend Emanuel decided to stop his full time job to work on city issues her cared about, that’s how his campaign for Mayor came together.  When my long-time mentor finally forgot about his (very understandable) setback at work and started being dynamic again, that’s when he became a real leader and today is doing better than he ever imagined. And when you finally decided to say yes to that decision you’ve been putting off … or the decision you may have already said no to, that’s when things finally had the chance to get more interesting.

In short, we all have the natural reaction of hesitating when new things come along.  But often times, things work out a whole lot better when you get past it.

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Wednesday, October 10th, 2012 Business School No Comments

Sunk costs

One of the less intuitive but sometimes more important concepts we learn in business school is to forget about sunk costs.

Sunk Costs refer to money, time and other resources you spend on a project or  investment. They have been “sunk” into your work and as you’re looking to make new decisions now, you cannot get them back.

Here is the general rule of sunk costs.  When making a choice between two options, you have to forget about sunk costs and instead only consider the future ones. Forget dollars you’ve spent, hours you’ve worked and time you’ve put in. You can’t get them back and they don’t affect today’s decision.  Instead think only about the decision in front of you. Consider the pros and cons. Think about the best return for your money and time now.

Here is the classic example–an investment in your new business.

You’re launching a new company that you hope might be the next big thing. You’ve been funding it out of your own wallet and you’ve been optimistic that it will work out in the end. By now, you’ve spent the past 12 months working hard. You’ve hired multiple employees, contracted a web developer, spent money on bank fees and spent 75+ hours every week trying to turn it into something great. When you add it all up, you’re well over $100K in.  That number, that represents your sunk cost. You’ve spent the time and money and you won’t be seeing that again in your Bank of America Account.

Here’s where it gets interesting.

After all your effort, the project isn’t taking off as quickly as you thought.  Time is more limited. You don’t think you’re getting the right feedback. The website isn’t attracting enough people. And most importantly, the product needs to be updated for your future buyers, or they won’t buy it. And all of this is going to cost you a lot more cash. You think it’s possible to fix it, but that will take another 6 to 12 months to pivot. You’ll also have to hire another person and spend more money on resources. How do you decide? Should you spend the money? And should you consider past costs?

Under the rule of sunk costs, to make the decision to move forward or not,  the money you spent is completely irreleevant. You should only consider the additional cash you will have to spend and the additional value you can create. And if the numbers work out then invest more–if they don’t you pull back.

The same thing holds true in other circumstances too. A project you are leading at work. Time spent trying to win a competition. Time spent trying to woo a customer or a potential significant other.

But it’s all easier said than done. After all, humans are not only tied to their time and money but they also have a tough time forgetting the past. Especially when you’re working hard on something you’re passionate about. When lots of people are looking. And when we think our reputation is on the line.

But conventional business wisdom says you should not include the costs you have already sunk into the project into your decision.

Hard to say that this holds true 100% of the time.  I personally believe deeply in the power of understanding the past.

But definitely something to think about.

Tuesday, October 9th, 2012 Business School No Comments

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Jeremy C Wilson is a JD-MBA alumni using his site to share information on education, the social enterprise revolution, entrepreneurship, and doing things differently. Feel free to send along questions or comments as you read.

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The contents of this blog are mine personally and do not reflect the views or position of Kellogg, Northwestern Law, the JD-MBA program, or any firm that I work for. I only offer my own perspective on all issues.
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