Tag: business school

• Money and beauty

  I’ve told versions of this story before, but I was reminded of it again today.

  When I was in grad school studying both architecture and real estate, I used to walk back and forth across campus and jump between two very different kinds of academic experiences. On the one side of campus, it was taboo to talk about money. And on the other end, the only important thing to talk about was money. (I am exaggerating in both cases, but I think only slightly.)

  Given that I was studying and genuinely interested in both, this always felt like a weird false dichotomy. I mean, why not care about, you know, multiple things? But that’s generally not the way it was. Talking about money tainted the purity of design. And talking about things like design and beauty felt out of place and less serious in a room where cap rates were being debated and serious financial models were being honed.

  This is not to say that nobody was thinking across disciplines. I was in a joint program, after all. I can also remember attending a lunch & learn where a student asked a seasoned real estate executive what he should study in addition to finance. The response he got was something along the lines of, “the furthest thing from finance. Study something that will give you a different perspective on real estate.”

  I remember this really resonating with me — probably because I was searching for breadcrumbs to make me feel like less of an outsider at Wharton. Still, this came across as a unique perspective at the time.

  Knowing how money stuff works is absolutely fundamental. (We need to teach more of it in schools to young people.) And as a developer, it all starts with managing risk, executing (i.e. doing what we said we would do), and being an honest steward of other people’s money. Don’t do this, and you likely won’t be a developer for very long.

  But then, what else? What unique insights can we bring to the assumptions that feed a finely honed model? Fast forward to today and this is now the basis for how the Globizen team aims to look at real estate opportunities. We want to cover all ends of campus. And that means we are more than okay talking about unserious things like design and beauty.

  2024.08.02

• Writing business memos

  One of the important things that I remember them drilling into our heads in business school was about how to write a business memo. This might not seem like a big deal, but it is. Emails, decks, and recommendations are ubiquitous in business.

  I remember three main points.

  One, use clear and concise writing. If you can use fewer words, do that. Two, be decisive. In fact, they used to tell us that being decisively wrong was always better than being vaguely correct. And three, be as quantitative as possible.

  If you can replace words with numbers, you should do that. For example, instead of saying that something recently increased significantly, it is far more effective to say that something increased by 27% over the last 18 days.

  I was reminded of this earlier today when I came across this:

  

  Supposedly, it is what Amazon used to tell its employees back in 2018. I don’t know the source, but the tips sound right and make sense. Be concise. Use data. Eliminate weasel words. And make sure you’re communicating a “what”. In other words, be decisive.

  2024.05.27

• Unlearning our biases

  I had coffee this morning with an engineer who is going back to business school in order to segue into real estate development. This is a fairly typical journey. Lots of people come into development from a related discipline. In my case, it was architecture (even though I never practiced architecture). It was also the case when I went to Rotman that something like a third of the class had a background in some sort of science or engineering field.

  However, one thing I did mention this morning was that he will likely find that he will need to unlearn certain things as he moves forward. Every discipline tends to indoctrinate us with a certain way of thinking about the world. Lawyers tend to be a certain way. Engineers tend to be a certain way. And architects tend to be a certain way.

  In my case, I found that architecture school taught me to be, among other things, an intense perfectionist. The modus operandi in design studios is that your project is never ever complete. The more you work on it, the better it will become. And as a result, you should feel a deep onus to work on it as much as humanly possible. But in business, this isn’t practical. In the vast majority of cases, speed over perfection will serve you better.

  I believe wholeheartedly in multi-disciplinary backgrounds, and maybe this is one of the reasons why. It shows you what you should unlearn. What would you say your biases are?

  2024.05.08

• Sam Zell dies at 81

  Sam Zell, the billionaire real estate investor, died this week at the age of 81. That seems young to me. Or maybe I’m just being overly optimistic about life expectancy. This is around the US average.

  Whatever the case, if you work in real estate, you likely know/knew of Sam. In my case, he spent a lot of time at Penn after he permanently endowed the real estate center (under both his name and his late business partner’s name).

  I used to go and listen to him speak at least twice a year, and I would hang off his every word as a young student of real estate. “So wait, how does this all work?”

  It was also at this time that he sold Equity Office to Blackstone for $39 billion (back in 2007, it was the largest private equity deal in history). Sam’s explanation for doing this deal was that Blackstone offered him more than what he thought the portfolio was worth, so he sold it. He took no credit for good market timing.

  If you’ve ever heard Sam speak, you know that he’s incredibly direct. Generally, he also didn’t seem to give a fuck, and was happy being the only person in a Hawaiian shirt among a sea of blue and black suits.

  In fact, he’s largely the reason that, as students, we used to all joke that the richer the speaker, the more funny and honest they would be. “Come on, let’s go to this one. She’s rich.” I guess this is just what happens when you no longer have anything to prove.

  But none of this is to say that he didn’t care. He cared a great deal about the school and about helping young students. And for that, I say: thank you Sam. Thank you for being generous with your time.

  2023.05.19

• Applications to US business schools are declining

  Applications to American business schools, including MBA programs, have fallen for five straight years according to this recent WSJ article.

  Compared to last year, business school applications to US schools are down about 9.1%; whereas they have been rising in other parts of the world. If you look at the change in applications from international students, the drop is even more significant — about 13.7%.

  Here are two charts from the WSJ:

  

  

  There are a couple of possible explanations for this. Tech is/has been hot. I would imagine that space has been absorbing many people who would have historically gone to do an MBA.

  But perhaps more significantly, stricter immigration policies are making it harder for international students to come to the US. At the same time, top tier alternatives are emerging around the world, such as in China.

  China exports more business school students than any other country and they are by far the largest international student base in the US. But the numbers are coming down. At the peak in 2015, the US issued nearly 275,000 student visas to people from China. By 2017, that number had more than halved to 112,817.

  Out of curiosity, I decided to look up the class profile for the most recent Rotman MBA cohort (my alma mater). 70% of the class was born outside of Canada. That’s not surprising.

  Charts: WSJ

  2019.10.21

• [Video] Gang of Four

  Scott Galloway, professor of Marketing and Brand Strategy at NYU Stern, recently delivered a presentation on the Gang of Four: Apple, Amazon, Facebook, and Google. These dominant companies are also often referred to as the “Four Horsemen.”

  The video is about 16 minutes long and I would highly recommend that you give it a watch.

  It’ll be like drinking from a firehose, but there are so many fascinating takeaways. You’ll also quickly discover how far reaching the societal impacts of these companies have been and will likely be in the future.

  If you can’t see the video below, click here.

  [youtube https://www.youtube.com/watch?v=jfjg0kGQFBY?rel=0&w=560&h=315]

  2016.02.06

• Products people love

  

  https://500px.com/embed.js

  I recently heard someone say, in a pejorative way, that all real estate developers think of what they build as “products.” I imagine this is in contrast to thinking in terms of buildings as spaces for people to live, raise a family, do their life’s work, and so on.

  When I heard this I immediately thought to myself, yeah, we (or at least I) do think of our spaces as products. But I also didn’t see it as a negative thing.

  In my view, there’s no reason that classifying something as a “product” has to make it any less beautiful, functional, and/or filled with design intent. My iPhone is a product. The wine on my shelf that somebody labored over is a product. The chair I’m sitting on right now is a product. All of these items were produced by people and then I consumed them because I liked what those people had made.

  When I was completing my first master’s in architecture and real estate, I used to walk back and forth across campus between the design school and the business school. And in these two places, we talked about bricks-and-mortar in very different ways.

  In the business school, buildings were the proverbial widget. How much does this widget cost to produce? How much can I sell or rent this widget for in the market? And how do I scale up my business so that I can sell/rent more widgets?

  On the other hand, in the design school we weren’t all that concerned with the cost of the widget or even what people would pay for it. Instead we were concerned with making it something so much more than just a plain old widget. These weren’t buildings. This was capital “A”, Architecture.

  I don’t think either school was wrong in their thinking. I just think they were missing each other. 

  Business is business. If you don’t make a profit then you’re not going to be around for very long. And while many companies can survive by making shitty products, those aren’t great businesses. The best businesses also deliver products that people absolutely love.

  So whether we call it architecture, a product, or even a widget, the goal should be to delight people. (Am I allowed to say “customer”?) Make people so happy that they have to tell their friends about it. If we’re doing that, then frankly I don’t care what we call it.

  2015.09.23

• But what about integrative thinking?

  After yesterday’s post about speed, price, and quality, a friend of mine from Rotman emailed me and said: but what about integrative thinking?

  When I was doing my MBA at Rotman and Roger Martin was the dean, integrative thinking was a significant part of the curriculum and the messaging for the school. 

  Here’s how Roger explains it:

  Over the past six years, I have interviewed more than 50 such leaders, some for as long as eight hours, and found that most of them share a somewhat unusual trait: They have the predisposition and the capacity to hold in their heads two opposing ideas at once. And then, without panicking or simply settling for one alternative or the other, they’re able to creatively resolve the tension between those two ideas by generating a new one that contains elements of the others but is superior to both. This process of consideration and synthesis can be termed integrative thinking. It is this discipline—not superior strategy or faultless execution—that is a defining characteristic of most exceptional businesses and the people who run them.

  So what my friend was getting at is why – when it comes to speed, price, and quality – do you only get to “pick any two?” Doesn’t that go against the rules of integrative thinking? Isn’t that a failure to look for a more holistic and integrated solution?

  It’s a great point. And it’s a thought that crossed my mind while I was writing yesterday’s post. The fact that “something had to give” made me second guess myself.

  In general, I’m a believer in integrative thinking. I think there are lots of opportunities to create new hybrid solutions and models that are superior to what might exist today.

  But what I was getting at yesterday was perhaps a bit more low level in thinking.

  Let’s say for instance you’re a developer constructing a new building and you and your construction manager are in the process of tendering for curtain wall. You receive 3 bids back and 2 of them are roughly the same, but one them is $5 million cheaper.

  My immediate thoughts would be: Why is that one bid so much lower? Did they bid on the same scope? Are they missing something? Will the curtain wall arrive on-site on time? And if it does, is it going to leak like a sieve?

  I’ll be the first to admit that the construction process is fraught with inefficiencies and ready for integrated solutions. I’m certain that the trade-offs between speed, price, and quality could be better managed.

  But more often than not, a rock bottom price usually means that something did in fact give. After all, great integrative thinking is a pretty rare trait.

  2015.04.05

• STEM + Art = STEAM

  

  Most of you have probably heard of the STEM subjects. STEM stands for Science, Technology, Engineering, and Mathematics. These academic fields have been the focus of many federal governments around the world as they have been seen as the key to driving innovation.

  But what you may not have heard of is something called STEAM. I hadn’t heard about it until this morning. STEAM is an initiative being led by the Rhode Island School of Design to integrate art and design into national agendas pertaining to STEM. STEM + Art = STEAM.

  Here’s a snippet from RISD:

  The goal is to foster the true innovation that comes with combining the mind of a scientist or technologist with that of an artist or designer. RISD offers endless examples of how art and design education teaches the flexible thinking, risk-taking and creative problem solving needed to solve today’s most complex and pressing challenges – from healthcare to urban revitalization to global warming.

  I couldn’t agree more with this initiative. As somebody who thought a lot about how to combine design and technology in my own career, I believe that there are huge benefits to a multidisciplinary approach to problem solving and innovation. In fact, it’s one of the reasons I decided to go to Rotman for my MBA (see Business Design).

  So if you feel the same way, I would encourage you to add yourself and/or your company to the “STEM to STEAM map” that RISD has created. Click here to do that.

  2015.01.07

• The unmet demand for real estate education in Canada

  

  I continue to be amazed by the unmet demand for real estate (development) education here in Canada.

  Following yesterday’s post on the real estate development process, I received a few emails from readers asking about the best university programs (MBA, MRED, etc.) and the best approaches for becoming a developer.

  I also had a good conversation on Twitter, which covered off some details that I had left out from my post (for simplicity) and which resulted in me suggesting that a real estate development school needs to be started here in Toronto:

  @donnelly_b I’m game. The Donnelly-Hassan Institute for the Dark Arts.

  — SymmetryDevelopments (@symmetrydevelop)

  December 30, 2014

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  @symmetrydevelop @donnelly_b would be your first student. damn! could’ve stayed in Toronto if there was a program.

  — Kuok-Kei Hong (@KuokKei)

  December 30, 2014

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  Now, part of the reason things are the way that they are, I think, is because the real estate industry has been historically dominated by private rich families. People didn’t go to school to learn how to be developers. They learned by doing and that was then passed down to the next generation. All it took was chutzpah.

  But as the real estate industry continues to institutionalize and become run by pension funds and large publicly traded companies, I think the point of entry will also become increasingly institutionalized. And that’s where dedicated real estate programs will continue to come in. 

  I’ve spoken to a few people at the Rotman School – where I did my MBA – and there doesn’t seem to be a huge interest in a dedicated program such as a Master of Real Estate Development (they already offer real estate courses). It’s more of a “longer term” strategy. 

  But I think that’s a mistake.

  I’m confident there’s strong demand from the student side, so hopefully a wealthy donor will step forward to help make this happen. The University of Toronto has both a great business school and a great architecture school. That feels like a great recipe for a first-in-kind joint degree offering.

  Image: Urban Learning (via Flickr)

  2014.12.30