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HBX Business Blog

How Do Companies Keep Track of Their Monies?

Posted by Christine Johnson on March 28, 2017 at 3:01 PM

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From small mom-and-pop shops to multi-million dollar corporations, knowing who you’ve paid or who owes you is vital for a successful operation.

Here is an overview of how companies use accounting to keep track of their money.

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Journal Entry

When a company has a transaction (i.e. buys a piece of equipment, sells inventory to a customer, etc.), they will record this transaction by creating a journal entry. The journal entry shows the date, the accounts that are involved with the transaction, as well as the amounts of money.

Below is an example of a journal entry. There are two accounts involved in this journal entry, Accounts Payable and Cash, and there are two amounts, $900 and $900. Notice that those amounts are the same—this should always be the case! Depending on the size of the company, there can be hundreds, thousands, and even millions of journal entries made each year!

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General Ledger

Have you ever heard the phrase ‘on the books’? This is referring to a company’s general ledger, which used to be a large, hand-written book containing all of the financial accounts of an organization. The general ledger is basically like the diary of a company, showing a chronological listing of transactions.

Below is an example of what a general ledger used to look like. Thankfully, most of this is done on computers now!

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Trial Balance

The trial balance contains a listing of a company’s financial accounts along with their balances. It’s a tool that helps check the clerical accuracy of transactions that have been recorded to date. As its name suggests, it’s a trial or a test to see if all of the entries add up, or balance, properly before creating the financial statements.

Financial Statements

Financial statements are prepared reports that represent the financial operations of a company. They can be used internally by managers to make strategic decisions; they can be used externally by stakeholders to make investment decisions. The most commonly known financial statements are the Balance Sheet, The Income Statement, and The Statement of Cash Flows.

The Balance Sheet shows a company’s assets, liabilities, and shareholders’ equity for a given point in time (usually year-end).

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The Income Statement summarizes the revenues and expenses over a given period of time (usually one year).

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And, The Statement of Cash Flows summarizes a company’s cash flows related to operating, financing, and investing activities.

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It can be helpful to think about this accounting process like a funnel. As we move down, the information gets less detailed and more concentrated.

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Each of these processes play an important part in accounting and help businesses to understand, track, and improve how they earn and spend money.


Interested in learning the language of business? Take HBX CORe and discover the basics of Economics for Managers, Financial Accounting, and Business Analytics.

Learn more about HBX CORe


christine

About the Author

Christine is a member of the HBX Course Delivery Team, focusing on Financial Accounting and Disruptive Strategy. She holds a B.S. in Management from UNC Asheville, an M.S. in Accounting from Northeastern University, and an MBA from Northeastern University. In her spare time, she enjoys reading business journals and watching NFL games.

Topics: Business Fundamentals

5 Tips for Tackling Productivity in an Open Office

Posted by Stephanie Jones on March 23, 2017 at 10:21 AM

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With startups, technology companies, and even century-old corporations moving toward open workspaces instead of private offices, it is no surprise that some employees are less than thrilled with the arrangement. Modernist architects originally devised the open office concept as a way to breed collaboration and increase organizational awareness in the 1950s, but some would argue that it has resulted in frequent interruptions and reduced employee productivity at a time when technology has enabled us to do far more in less time.

While many companies are re-evaluating their decisions to be wall-free, roughly 70 percent of workers in the United States currently report to an open office daily according to the International Facilities Management Association.

Here are five tips to stay productive in an open office environment (even as your co-workers are busy scheduling their dentist appointments and recapping their weekend plans):

1. Invest in good headphones

If your employer allows it, the easiest solution to your productivity woes it to purchase noise canceling headphones. Music can increase focus and headphones often signal that you’re not open to interruption. Prices vary greatly so do your research and find a pair that best fits your needs.

Some employers even have budgets for staff supply requests, so consider asking your employer if they are willing to purchase or subsidize your productivity efforts.

2. Create a routine and stick to it 

Establishing and sticking to routine allows you to maximize your time spent in the office. Carve out established times to work on projects and “Office Hours” where you are at your desk and available to collaborate. Discuss your plans with your team and watch yourself chip away at that to-do list you’ve been avoiding all week.

3. Seek out quiet space in the office 

With recent studies suggesting open office spaces hinder productivity, companies are beginning to diversify their spaces. If you are fortunate to work in an office that has conference rooms, seating areas, or lounges, be sure to seek these spaces out when you need interruption-free time away from your desk to complete your work. If you do not have designated spaces like these, be sure to step out of the office for coffee or lunch to help refresh your mind and refocus.

4. Discuss your work style with your team and manager 

It is no secret that everyone has different work styles. While some may be okay getting tapped on the shoulder when absorbed in a task or can completely tune out conversations and background noise, others may find this brings their work flow to a halt. Open communication can help avoid unproductive resentment or frustrations with co-workers who may have different work styles.

When joining a team or working for a new manager, be sure to let them know how you prefer to work. Similarly, it makes sense to revisit the topic when someone new joins your team so you can reaffirm or adjust team norms. By discussing work styles openly, you can strengthen relationships with your co-workers and have more productive work days.

5. Set boundaries

The most important open office productivity tip is to set boundaries. Set boundaries for when you are going to socialize with you co-worker about weekend plans. Set boundaries around the lunch hour as a mid-day break enabling afternoon focus. Set boundaries on what hours you are open to holding meetings. While you may feel cold turning away someone who has come to you looking for an answer, the biggest detriment to work flow is allowing others to determine how you spend your time.

Evaluate your company’s culture, and see if placing a “Do Not Disturb” sign on your desk or asking someone to come back later makes sense while you are chipping away on a project. Pop in your headphones and let your team members know you need the next hour to complete a task.

You will find that setting boundaries allows you to be more productive. You may even end up with more time to get to know your co-workers or schedule that dentist appointment you’ve been avoiding.


Steph_bloground.png

About the Author

Stephanie Jones is HBX's Business Operations Specialist. She onboards new HBX team members and enjoys serving as a team resource for all things operations. Stephanie graduated from Bryant University’s International Business Program in 2015 and aspires to work internationally in the future. When she’s not welcoming new team members and arranging staff events, Stephanie can be found on the Cape enjoying the beach or hiking in Vermont with her two terribly behaved terriers.

Topics: HBX Insights

Get to Know Professor Mike Wheeler

Posted by HBX on March 21, 2017 at 11:08 AM

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We recently sat down with Harvard Business School and HBX Negotiation Mastery Professor Mike Wheeler to talk about negotiation, close encounters with sharks, and his internal timekeeping superpower.

What’s the biggest misconception about negotiation?

That it's an innate skill - something that you're either born with or that you'll never have. That's ridiculous!

The hardest part about developing my HBX course was ______________.

Making sure the passion that my colleagues and I have for negotiation is understood, and ultimately shared by, the students who will take our course.

What’s your favorite part of your job?

I love learning from my students, especially when they spot issues or raise questions I hadn't anticipated.

Finish this sentence: When I’m not at work, you can find me _________________.

In my hometown of Gloucester, MA, where I still see friends I went to kindergarten with years ago.

Mike Wheeler Sailing on a boat

How would you describe yourself?

I'd say that I'm curious, optimistic (for the most part), and a bit of a contrarian.

What’s your personal motto?

“For every complex problem, there is a solution that is simple, neat, and wrong.”

– Journalist and essayist H.L. Mencken

What's the best book you’ve ever read?

Right now I'd say Sarah Bakewell's How to Live: Or A Life of Montaigne in one Question and Twenty Attempts at an Answer.

What was your favorite subject in school?

I was an American Studies major in college. I loved the mix of history, literature, economics, and the arts (and still do)!

Where do you get your news from?

An eclectic mix of sources. I probably spend less time than most people on so-called breaking news. I'm more interested in longer-term developments.

What’s the most unusual or interesting job you’ve ever had?

In the summers when I was in high school and college, I worked on a commercial tuna boat. The striker would harpoon these giant fish (mostly 500-800 pounds). Then, another guy and I would be put into a dory to haul them in. I've had some interesting encounters with whales and one particular shark.

Mike as a Cornell hockey player in the movie Love Story

People would be surprised if they knew ______________.

If you look quickly, you can spot me in the movie Love Story as a Cornell hockey player.

Do you have a hidden talent?

It's not exactly a talent, and it's both weird and utterly worthless: when I wake up in the morning, I usually know what time it is almost to the minute without looking at a clock.

If you could travel anywhere in the world (that you haven’t yet been) where would you go?

Sailing around Cape Horn - though I'm mindful of the adage, "Be careful what you wish for."

What's the best advice someone has ever given you?

A professor in college, Henry Steele Commager, told me, "Do what you most love, and everything else will take care of itself."


Want to learn from Professor Wheeler? Apply to his new HBX course, Negotiation Mastery: Unlocking Value in the Real World.

Learn More

Going Beyond the Stats: Cinderella Teams and the Anscombe Quartet

Posted by Jenny Gutbezahl on March 16, 2017 at 10:36 AM

basketball and a bracket

As we head into March, watercooler discussions naturally turn to the NCAA basketball championship and who's going to win the office bracket pool. The popular statistics site FiveThirtyEight has generated win likelihoods for all teams as they have in the past, but this year predictions are less certain than ever.

Even the top-ranked Villanova is given only a 15% chance of winning. As you may recall, last fall FiveThirtyEight garnered a lot of attention by being relatively uncertain about a Clinton win in the general election – this skepticism proved to be well-founded.

To make datasets more comprehensible, statistics summarize datasets with one or two numbers; this can obscure patterns. In college basketball, the entire complexity of a team's season performance can be reduced to the Rating Percentage Index (RPI), a ratio based on the team's wins and losses, and the strength of the teams played (based on those teams' wins and losses, and the wins and losses of the teams they played). Interested readers can find a fuller explanation, including the computational formula here.

Last year, Michigan State's impressive RPI of .6272 led to a No. 2 seed position. Middle Tennessee State on the other hand, with an RPI of .5562, was seeded at No. 15. And yet, on March 18, Middle Tennessee won 90-81 against Michigan State. Middle Tennessee turned out to be a Cinderella team; while it looked like they might end up as the belle of the ball, at the last moment, they choked and their carriage turned back into a pumpkin.

This year, Middle Tennessee is seeded as the underdog in the 12 spot, with a somewhat stronger RPI of .5960. Many pundits (though not FiveThirtyEight) are looking at them to do better than expected in the postseason, which would not be too unusual for a No. 12 Seed.

However, just looking at RPI (and last year's performance), may not provide enough information. While looking at all the specifics of a sports season, a national election, or a data distribution can be daunting, it is often necessary to do so if you want a full understanding of what's going on.

In 1973, the English statistician Francis Anscombe came up with an elegant way of demonstrating this. He created four data sets, each containing 11 data points with two values. In all sets the means and sample variances for the two variables are identical, as are the correlation between the two and the regression line predicting y from x:

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You'd think these four distributions would be pretty similar, with only minor differences due to random variability. You might also think that linear regression would be an effective model to help make predictions based on the data, in all cases.

But you'd be wrong. These are the four data sets:

image showing Anscombe Quartet
Source: Wikipedia

The upper left graph shows a distribution which is about what we'd expect from the statistics, and the linear regression model is a good fit for this data set. The upper right graph clearly has a curvature. There's likely to be a great model for prediction, but it's NOT linear (the best model probably includes x2).

The two bottom models are more problematic. The one on the left shows a linear relationship – but that one outlier near the top is pulling the regression line away from the rest of the data. And the one on the bottom right is a real challenge. It looks as though, in general, x is a poor predictor for y. That is, almost all cases have an x-value of 8 and the y-values vary quite a bit, untethered to x. And one strange case, all by itself, is driving the entire model. 

A similar situation exists in sports. Looking at summary stats for the season might make for a good model, or might overlook a non-linear relationship, or might be slightly (or greatly) misleading, due to a few unusual games, players, or plays, which may not translate to the post-season. That's why creating a bracket is so much fun!


jenny

About the Author

Jenny is a member of the HBX Course Delivery Team and currently works on the Business Analytics course for the Credential of Readiness (CORe) program, and supports the development of a new course in Management for the HBX platform.

Jenny holds a BFA in theater from New York University and a PhD in Social Psychology from University of Massachusetts at Amherst. She is active in the greater Boston arts and theater community, and she enjoys solving and creating diabolically difficult word puzzles.

Topics: HBX CORe

Staff Spotlight: Liz Hess

Posted by HBX on March 14, 2017 at 10:51 AM

Liz scuba diving

We recently had the chance to sit down with Liz Hess, the Senior Managing Director of Product Engineering and Development at HBX. Liz is a self-described serial intrapreneuer, technocrat, and ed-tech enthusiast who has been with HBX since day one.

What do you do at HBX?

I oversee how our learning platforms and course experiences are designed, built, and delivered. I work across several streams of work including course development and delivery, user experience architecture, software development, quality assurance (QA), and synchronous course production (HBX Live) to facilitate learning using technology.

Liz on a boat holding two lobsters

What does a normal day look like for you?

Solving problems, coaching people, talking to customers, reviewing content, and tuning operational resources — I am constantly working across many teams to help people make connections and leverage each others' expertise, creativity, and energy.

Where did you go to school and what did you study?

I attended the University of Pennsylvania where I studied Art History. I later went on to earn a Masters of Higher Education from The Harvard Graduate School of Education. I have also had the opportunity to participate in technology-specific training as well as executive education programs on business, finance, and innovation.

How did you become interested in education and technology?

My first job out of college was working at an auction house where I was responsible for managing a gigantic paper-based general ledger documenting daily sales. I had heard about IBM’s software called LOTUS 1-2-3 and wanted to implement it. Lotus 1-2-3 was a spreadsheet program, and I was convinced it would be a more efficient and effective way to manage and track our sales.

I asked the company’s treasurer if we could try using the software and she said no — so on my own time, I built out the ledger in LOTUS and quickly thereafter won the support of the treasurer to replace the paper ledgers across the company. I really believe that technology has the power to dramatically change the way we work and live for the better, so I was determined to have a career around it.

Several years later I started working at Harvard University in the intellectual property office and began to see the power of technology in academic research, teaching, and learning. Over time I was able to shift my focus at Harvard to working full time in this area.

Liz with flowers grown in her garden

How did you become involved in HBX?

I’ve worked at Harvard for 24 years and across six different roles — all of them involving faculty and their interaction with technology.

In 2014, while leading HBS’s effort to leverage educational technology, I was asked to staff a small group of HBS faculty who were asked by the Dean to make recommendations on how HBS should be thinking about distance learning. Those recommendations turned into HBX, and my special assignment soon turned into a full-time role at HBX.

What’s your favorite part of the job?

Working with the HBS faculty and HBX team to continue to innovate. We have done a lot to leverage technology to facilitate new learning models, but there is more we can do to improve teaching and learning, increase student engagement, and build community. Technology moves so fast that there is always some new challenge or some approach we can leverage.

What’s the coolest things you’ve done at HBX?

Where do I start? It is difficult to name one thing. Pushing the button to turn on the HBX course platform at the initial launch of Disruptive Strategy, walking into the HBX Live studio to see the technology working for the first time, working with the team, faculty, and school leadership to grow the organization... if I had to pick one thing, maybe it is a simple as coming to work every day.

Favorite book?

River of Doubt by Candice Millard.

Liz scuba diving next to a fish

What are your hobbies?

Extreme gardening, ocean conservation and exploration, shark advocate.

What else should we know?

I was the 5,067th person to have a Facebook profile. Kind of cool considering there are over a billion users.

What’s your personal motto?

It changes from time to time but in the past few years some comments from Diane Nyad, a long-distance swimmer, have stuck in my mind; "never give up,"  "you are never too old to chase your dreams," and “it looks like a solitary sport but it takes a team."

Topics: HBX Staff Spotlight

6 Things You Didn't Know About Amazon Web Services

Posted by Ryan Frazier on March 9, 2017 at 1:43 PM

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When HBX was launched, there was a need to be fast and agile, which was a perfect match for the cloud-based technology infrastructure services provided by Amazon Web Services (AWS).

When HBX went live, it was one of the largest production implementations of AWS in Higher Education. At that time, I was working in central IT at Harvard, where we developed a number of innovative programs to make it easier for groups across the University—such as HBX—to use services from AWS. Little did I know that I’d eventually work for HBX in supporting their Amazon implementation! All of this work has given me a great opportunity to learn and work closely with AWS as it has rapidly grown.

1. AWS adds as much computing capacity DAILY as Amazon the company had to run its entire operations as an $8.5 billion dollar enterprise in 2005.

This capacity is distributed across a huge global portfolio of datacenters. Each geographical cluster of datacenters is considered a region, and each region is comprised of multiple availability zones, which are themselves at least one—and sometimes more than one—distinct datacenters. In total there are 16 regions consisting of 42 availability zones, with another 2 regions announced and under construction.

2. AWS engineers much of their own equipment.

Given their huge scale of operations, Amazon has taken to engineering and even building many of their own components in order to optimize them for their specific needs. This has included things like hiring power engineers to rewrite how utility-sized power transformers operate, building out their own high-dentisty disk storage design, and now even manufacturing chips. For a fascinating view, watch some of the entertaining presentations from AWS Vice President James Hamilton:

3. AWS has a strong focus on rapid innovation and is frequently releasing new services and upgrades to existing services.

In order to keep this high level of development velocity, AWS services are typically owned by many small teams who are largely independent of each other. And while Amazon teams may get access to features earlier, they make use of internal services in the same way as their customers when the services are public. This ensures a high level of stability and consistency, and has been a key factor in their ability to both innovate and scale.

4. AWS runs a version of their cloud for the CIA.

While one of the early concerns about the cloud was how secure it is, this is rarely a concern anymore—even for the CIA. Running services in the cloud is often more secure than running them in your own datacenters. In fact, many AWS services are certified to comply with some of the federal government’s most stringent security requirements, and have achieved a broad range of other security certifications for health care, criminal justice, financial services data.

5. AWS is working to source 100% of its power from renewable sources.

As of the end of 2016, 45% of their power comes from renewable energy, including from four wind farms averaging over 160 Megawatts of generating capacity each. Including projects currently underway, they soon expect to have over 900 Megawatts of renewably sourced generating. One of their regions, located in Oregon, is supplied entirely by renewable sources.

6. It can still break (but it's usually less painful when it does).

As many people who were using the internet last week know—including everyone in HBX courses—even AWS can have outages that take down your services. But from having spent many years working with on-premise data centers, the frequency and severity of outages tends to be much lower.

While it is still stressful to anxiously await updates from a vendor on a cause of an outage, it is far less stressful than scrambling your own team to identify and fix a complex problem. It is also comparatively easier to build services which can operate out of multiple regions that further insulate you from down time—though it is still a large effort (and something we have yet to tackle for HBX).


headshot of Ryan Frazier

About the Author

Ryan is the Director of Systems Engineering and Operations at HBX, where he is responsible for overseeing the teams which provide technical operations of the custom-developed HBX course platform, the infrastructure for HBX Live, and the HBX data management practice. He is a frequent speaker at conferences on cloud adoption in Higher Education and financial management of cloud services. Ryan lives in Cambridge, Massachusetts with his family and is also co-owner with his wife, Salina, of Diaper Lab, a local retail store specializing in natural parenting products and education.

Celebrating Women in the HBX Community on International Women's Day

Posted by HBX on March 8, 2017 at 2:04 PM

8 Inspiring HBX Participants in Honor of International Women's Day

In honor of International Women's Day, we thought it would be fitting to celebrate some of the diverse, inspiring women in the HBX learning community who are pursuing their dreams, excelling in their careers, and empowering others. 


"When I’m in a room with other professionals, now I feel like I have the language that matches my passion, that matches my work ethic, my goals and dreams... 

I hope that as my kids look back on the many pursuits that I’ve embarked on, in particular, HBX CORe, to be brave. Because then that means that they will pursue opportunities that seem challenging, that seem out of reach, that seem hard. And, so I hope that from this experience that they felt mom was just a little bit more brave than I was before I started."

Sheneka Balogun
CORe Participant

"I firmly believe that balanced gender diversity in business is crucial to innovation, success, and a higher collective intelligence. When the decisions of a woman positioned in the corporate world make significant impacts fiscally or culturally, then you begin to see the tangible value of a diverse enterprise. HBX has given me the foundation to exemplify this in the services I offer my corporate clientele."

Leslie Pico
CORe Participant

“One of my biggest passions is bringing opportunities to minorities, to women, in subjects like science, technology, engineering, math, making you change your mind about who it is that looks like an engineer.” 

Daniella Patrick
Disruptive Strategy Participant

"I'm a mom. I work full time. Like others, I have a demanding schedule and struggle with balancing life with work. I'm interested in pursuing a Master's degree, but haven't convinced myself to commit to a three year timeline.

I saw CORe as an opportunity. An opportunity to learn from the brightest and interact with global community who shared a commitment to learning as I did without the long-term time commitment. CORe not only gave me the confidence that I can tackle more, it inspired me to be more and continue my education."

– Kalie Work
CORe Participant

"I am working as part of a project team in India that is working to set up the world's first rural-based social network usable by non-literate persons. A key part of my job is to understand the needs on the ground, and convey the insights to the technology and design teams who are making the product - an activity that CORe greatly helped me with via the Economics for Managers and Business Analytics courses. Both these courses help you to better understand the people you are working to serve as an enterprise and learn how to draw insights from the data in front of you."

– Anindita Ravikumar
CORe Participant

"My strategy and message for my team and how we communicate with our customers has begun to shift. The biggest takeaway is looking at my product on the shelf and always trying to gauge 'what is the job to be done here?'

I have also started to pay a lot more attention to what the other vendors within my stores are doing. I can truthfully say this has already made me a much better listener. When we all have things to say, listening is one of the first things that can get lost, so I have not only found a stronger voice but a much better and tuned set of ears."

Paige Peterson
Disruptive Strategy Participant

"Within 5 days of finishing the course I had a plan of action for a major part of our business and presented it to our corporate executive. It applied the theories of the Customer Job To Be Done and caused us to rethink our strategy to get the customer to “hire” us over the competition."

Robbee Minicola
Disruptive Strategy Participant

"Having a better base for business terminology that is used every day in my work as a business analyst is invaluable. I am also able to offer new ideas for business metrics to our company's leadership and relate to real world examples of how other businesses have implemented improvements thanks to the case studies that were presented as part of the program."

Michelle Headrick
CORe Participant

"I applied it to both my teaching and research. For teaching, after summarizing what I learned from this program, I introduced finance in a 90-minute class to junior and senior college students in order to show them different ways of doing business plans in the leisure and sport domains." 

Jingning Ao
Leading With Finance Participant

 

International Women's Day is a global day celebrating the social, economic, cultural and political achievements of women. The day also marks a call to action for accelerating gender parity. Learn more at www.internationalwomensday.com

#IWD2017 #BeBoldForChange

 

 

Topics: Student Spotlight

4 Ways Managing Your Career Development Made an Impact on Me

Posted by Dr. Nupur Kohli on March 2, 2017 at 2:02 PM

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Participating in the pilot cohort of Managing Your Career Development was a whole new experience for me. When I got selected, I was enthusiastic about the topics we'd be covering and excited to take part in a course held entirely in the HBX Live virtual studio, but the course far exceeded my expectations.

Here are four ways the course prepared me to navigate my career more effectively:

1. It Moves You!

This is not just a class where you show up to just sit and listen. It spurs you into action. You are asked to work together with other students and to reflect on your own life experiences. You come across many familiar situations in the cases you study, but also new ones that encourage you to problem solve in an intelligent way.

2. The Real Class Experience

Despite being held in a virtual classroom, Managing Your Career Development gives you a real classroom experience and face-to-face interaction with a number of top-notch Harvard Business School faculty members.

From absorbing insights from different professors, to interacting with your fellow students in discussions and always being prepared for the possibility of a cold call, it is an exciting and engrossing way to learn! It's important to give the class session your full attention, because it's easy to miss valuable information otherwise.

3. Diversity in a Nutshell

Each session is taught by a different professor with their own style of teaching and topic of expertise. This diversity in a short time span makes the experience unique. It also forces you to broaden your mindset and to take all different aspects of each class with you to the next one.

4. A Network to Build Upon

Most students from my cohort who participated in Managing Your Career Development are at a certain point in their career where they want a change or are ready to take the next steps. This is a powerful network. Not only do you interact live with each other in class, but there are also discussions outside of class to prepare for the next session. You learn a lot from the others and also about yourself. It's challenging but fulfilling.

This was a valuable experience, and I'm so glad to have had it. I apply all that I learned time and time again, and the course has enabled me to take the next steps in my career.


Nupur

About the Author

Dr. Nupur Kohli participated in the September 2015 HBX CORe cohort. She is author of the upcoming book Chill! How to Survive Stress and Improve Personal and Professional Productivity. Symptoms and Solutions to Chronic Pressure and is setting up a company, Lead In Shape, to guide organizations on how to manage corporate stress and increase productivity. She is an aspiring MBA student with a focus on medical entrepreneurship.
 

Topics: Student Bloggers, Managing Your Career Development

The History of the Case Study at Harvard Business School

Posted by Yannis Normand on February 28, 2017 at 4:43 PM

an HBS classroom with a student speaking with a faculty member about a case study

Many first time HBX participants are surprised to learn that often, the professor is not at the center of their HBX learning experience. Instead of long faculty lectures, the HBX learning model centers on smaller, more digestible pieces of content that require participants to interact with each other, try out the concepts they are learning, and learn from real-world examples. The professor fades into the background a bit and lets the focus shift to interviews with executives, industry leaders, and small business owners. Some students might be left thinking, "Wait, where did that professor go? Why am I learning about a grocery store in Harvard Square?"

In the words of The Hitchhiker's Guide to the Galaxy, “don’t panic.” These interviews, or cases, feature leaders at companies of all sizes and provide valuable examples of business concepts in action. This case study method forms the backbone of the Harvard Business School curriculum.

Back in the 1920s, HBS professors decided to develop and experiment with innovative and unique business instruction methods. As the first school in the world to design a signature, distinctive program in business, later to be called the MBA, there was a need for a teaching method that would benefit this novel approach.

HBS professors selected and took a few pages to summarize recent events, momentous challenges, strategic planning, and important decisions undertaken by major companies and organizations. The idea was, and remains to this day, that through direct contact with a real-world case, students will think independently about those facts, discuss and compare their perspectives and findings with their peers, and eventually discover a new concept on their own.

Central to the case method is the idea that students are not provided the "answer" or resolution to the problem at hand. Instead, just like a board member, CEO, or manager, the student is forced to analyze a situation and find solutions without full knowledge of all methods and facts. Without excluding more traditional aspects, such as interaction with professors and textbooks, the case method provides the student with the opportunity to think and act like managers. 

Since 1924, the case method has been the most widely applied and successful teaching instrument to come out of HBS, and it is used today in almost all MBA and Executive Education courses there, as well as in hundreds of other top business schools around the world. The application of the case method is so extensive that HBS students will often choose to rely on cases, instead of textbooks or other material, for their research. Large corporations use the case method as well to approach their own challenges, while competing universities create their own versions for their students.

According to Mallory Stark, curriculum services specialist at Baker Library, all this is not a surprise to anyone at the school. For her, what makes the case method truly unique is that it fulfills everyone’s desire for a good story. Mallory recalls how, as an HBS Executive Education student, she encountered a case that focused on the efforts of a hospital CEO in New Orleans and the organization's efforts to respond to the challenges of Hurricane Katrina.

Not only did she end up meeting the CEO in person during the class discussion, but she came to the realization that solid management can mean both saving a company and, sometimes, saving human lives. This is what the case method does—it puts students straight into the game, and ensures they acquire not just skills and abstract knowledge, but also a solid understanding of the outside world. 


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About the Author

Yannis Normand interned on HBX’s marketing team in January of 2017 and is pursuing a degree in goverment with a focus on economics and finance. He has worked for various institutions in the U.S. and Europe, and has entrepreneurial experience in both Boston and China. He hopes to pursue a career combining law and education and is always on the look out to learn and experience other cultures and places.

 

Topics: HBX Insights

HBX Student Spotlight: Doug Kinsey

Posted by Doug Kinsey on February 23, 2017 at 11:24 AM

Doug Kinsey stands in front of Baker Library on the HBS campus

Doug Kinsey is a Partner at Artifex Financial Group and an HBX aficionado. We sat down with him to learn more about his experiences in some of our HBX programs, most valuable takeaways, and advice for others.

What drew you to HBX?

Doug holding a fish he caught

Although I've spent most of my career in the financial services industry, and have had the opportunity to be associated with some great companies in the field, I've never grown tired of learning more. A career in finance is at once very demanding and very rewarding, if you apply yourself and seek knowledge. My personal path has led me to the area of personal financial planning and investment consulting. I started my own firm with a partner 10 years ago and we've been fortunate to grow at a pretty rapid pace. Along the way, I've earned various industry certifications and taken tons of continuing education.

When I learned of Harvard's new educational initiative, HBX, I signed up right away. So far I've completed Disruptive Strategy, CORe, and am almost finished with Leading With Finance. All have been taught by world-class professors and an innovative technology platform that encourages participation as you progress through each course.

Why did you decide to sign up for Leading with Finance?

I want to regularly sharpen my skills in the area of finance and financial analysis, as I am responsible for managing client investment portfolios at my firm (in addition to other duties). Given my recent experience with other HBX programs, I am confident that this one will add value to my skills and perspective.

I recently participated in an HBX Live session with professor Desai and we not only discussed some of the key course concepts in a brief case study, but Dr. Desai gave us a sneak peak at his upcoming book, which incorporates finance concepts into everyday life. This hits home for me, as a lot of my work involves making finance work for everyday people, who may not have much of an interest in my chosen field of endeavor.  

What was your favorite part of the program?

Doug and his hockey team pose for a team picture

My favorite part of all of the HBX programs is the case study approach and seeing the concepts as described by people in the real world.  I learn best when applying and observing the concepts the professors are teaching.

I've worked on case studies with classmates as far away as Russia and the Netherlands. I've met others in my cohort online and at the Harvard Business School campus in Cambridge. I've communicated with professors and colleagues during the live sessions, and I feel that I've gained an immense amount by interacting with people from all over the world, not only in the classroom, but through dedicated Facebook pages and offline conversations.

How are you applying what you've learned in Leading with Finance?

Doug and his two sons

I've already found that my perspective has changed on several of the principles, like Weighted Average Cost of Capital, and that I am viewing valuation a bit differently.

I can honestly say that no other post-graduate program that I've been a part of has been as enlightening for me. I've even been able to put new concepts to use almost immediately, and the coursework has helped me see things from a different perspective. The way HBX weaves case studies and real-world applications into the concepts is truly a game-changer for those of us who haven't been exposed to it before.

Any advice for people who will be taking Leading with Finance?

Go for it! Dr. Desai has a great teaching style and the course is extraordinarily valuable for experienced practitioners and people new to finance. 

I tell everyone I know about this program, as it is an undiscovered value, and one that will return to you tenfold what you put into it.


headshot of Doug Kinsey

About the Author

Doug Kinsey is a Partner at Artifex Financial Group and has over 25 years of experience in the financial services industry. In addition, he writes about investing for Kiplinger. You can see his posts here.

Topics: HBX Student Spotlight, HBX Finance