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S3, E7 The Career Coven: MBA in an episode
21 Plays17 hours ago
Get a notepad and pen as this week's episode is a little different again - as Bec talks us through what’s covered in an MBA. This is in response to a lot of listener questions that Bec gets, about whether an MBA was really worth it. Well, Bec gives it to us in a single episode so buckle up. She covers:
- SWOT analysis
- PESTLE analysis
- Porter’s five forces framework
- Business Model Canvas
- Value Chain analysis
- Profit or issue tree analysis
- BCG growth matrix
- RACI - responsible, accountable, consulted, informed
Bec shares her view on whether an MBA is worth the considerable investment, and candidly talks through which parts have been the most useful and applicable in her career. We hope you enjoy this insightful overview from Bec.
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Transcript
Introduction to 'The Career Coven' Podcast
00:00:06
Speaker
Welcome to The Career Coven, the podcast for serious careers with unserious chat. I'm Bec, a coach, corporate citizen and recovering perfectionist. And I'm Annie, a workaholic slowly learning boundaries. Each episode, we unpack career challenges and workplace wisdom through honest conversations, practical tools and a healthy dose of real talk.
00:00:25
Speaker
So you can thrive on your own terms. Let's get into it today.
A Day with a 14-Year-Old: Social Media and Musical Discoveries
00:00:29
Speaker
re Rebecca. How are you? I am great. This week I spent a day with a 14 year old and was looking after a friend's daughter who she was at conference visiting from Australia and I just just didn't really deeply know what the life of 14 year old was like these days.
00:00:49
Speaker
Talking about social media bans in Australia that was kind of interesting, had a really informed opinion on it. I was extremely impressed. And I also learned a lot about musical theatre. Ooh, right. Not something I've professed to have loved for actually my entire life, but actually it turns out I secretly probably have loved it for a long time and just not told myself that. But we watched Matilda and she gave me 90-minute car ride DJed playlist of her favourite musical songs. And I have never watched it, but I think I need to watch six.
00:01:24
Speaker
Okay. it No, we're we're well out of my comfort zone. We're well out of mine, but I had a bit of musical theatre exposure therapy. And um Six is about Henry VIII and all of his wives, but like retold from the perspective of the wives and like a modern feminist retelling. So I think we should go and watch that.
00:01:48
Speaker
Let's do that because I'm immediately into that. I was big into history at school, you know, almost did a history degree. My favourite subject. I have bloody hate history. oh Dropped it as soon as I could.
00:02:01
Speaker
How are you? What's happening in your week? What is happening in my week?
Annie's Summer BBQ Adventure
00:02:04
Speaker
Bit of a weird one, I would say, this week. Some ups, some downs. just been home to norfolk to um collect a barbecue though so i think that's this that's a sign of positive barbecues to come you know the start of the summer if you get a big old barbecue that your mum has given you that's dirty and you have to go and pick it up i think like that chore the what you get back from doing that chore is loads of great barbecues and obviously as you know i won't be touching that barbecue because i do not cook But my partner does. and And I'm sure that that will be the start of great things. So I would say I'm moderate, but um barbecue excited. oh there we go.
00:02:41
Speaker
Barbecue season is upon us. Absolutely love a barbecue. Great.
Is an MBA Worth It?
00:02:45
Speaker
Today we're going to talk about MBA. We are. We're going to do something a little bit different where it's really all about you. I'm basically going to grill you for all your and MBA secrets back.
00:02:57
Speaker
So, I think this is going to be a very practical episode for our listeners, but we thank you in advance for the wisdom and advice that you're going to give us about ah doing an MBA. So, to kick us off, remind me, when did you do your MBA?
00:03:13
Speaker
And why did you do it? Do you know what? You know, in the pandemic, when like you can't tell any years apart, I think it was 2021 that I started, January 2021. Did it for two. Yeah, that's right. Did it for two years on top of my work.
00:03:26
Speaker
That was a crazy decision to do when I was doing crisis response work at the same time. But we live in- When you say on top of your work, what does that actually mean? So the way that I did it was through an apprenticeship scheme. I don't know if they still run it at the time, but it was a level seven apprenticeship. And the organization that I worked for had a relationship with a university offering that. And it basically meant I got my and MBA for free.
00:03:51
Speaker
And my organization had to give me 20% of my working hours to complete my MBA. okay In terms of like attending modules and stuff like that. However, in reality, what happened is like you would do, you just, you just do all your work and you do your MBA, but you would have those lecture days. as and MBA days and then people would just be pinging you the whole time. So it's like not for the faint hearted to do a master's degree whilst working full time. very intense I would say on top of like the lectures, you also have like every six weeks a new module and every six weeks you'd have two pieces of assessment. You'd have to submit like writing essays, doing accounting stuff, doing a presentation, et cetera, et cetera. So that was like a lot of weekend time as well. So that's what i did. i as you know, I've spoken on this podcast before that i don't think that if I was doing it again, I'd do an MBA. And I thought I needed to do an MBA because I was like, there's gaps in my knowledge and there are things that I don't know. And I just want to pad out my expertise. And I forget which one this is, but this is definitely one of the types of imposter syndrome of like, if I don't know everything, then I'm i'm not good enough. yeah Yeah. So that was definitely, I'd say, at the root of that. And actually, all through my 20s, every job that I wanted to do and saw a job description for said MBA preferred or required.
00:05:17
Speaker
so i was like, well, if I want to do the job I want to do, it I have to do one. I just don't think that's true. I've not looked for a new job since I've finished my and MBA, but I actually think it's kind of irrelevant now. So that's my kind of full journey into it. I've also said on the pod before, people who really love and MBAs, where they have made an amazing network, brackets paid like £100,000 for their MBA.
00:05:41
Speaker
And they have met fellow rich people. That's probably how I would categorize that. And rich people can be useful, let's be honest. ah I mean, a network of rich people is is very valuable. Yeah.
00:05:55
Speaker
I wish war knew more. I wish I knew a lot of rich people. You'd have so many nice, like just going to my friend's holiday home. That's my vision of having rich friends. But I didn't have a hundred grand and I didn't want to borrow a hundred grand. And I also just didn't want to take the time off work because I've got a mortgage to pay like a normal person who owns a house and you know, you have bills to pay. So that just wasn't a reality for me. So That's why I did it, how I did it.
Learning on the Job vs. MBA Education
00:06:23
Speaker
And to be honest, the quality of the education experience definitely showed because of that, I would say
00:06:31
Speaker
Interesting. Even so, i'm sure all of the frameworks that we learned were the same as the ones in the other places anyway. Yeah. probably wasn't as as quite a robust or kind of intellectual experience as you might have got if you'd gone to like an INSEAD or something.
00:06:47
Speaker
yeah But like literally, who's got that much money? If you have that much money and you're listening to this podcast, I'd be like, you don't need this podcast. Just go and don' and bring your parents and go be a nepo baby. That's what i would say. For sure. For sure.
Strategic Planning Tools: SWOT and PESTLE
00:07:01
Speaker
Okay. So if you had to summarize in in few words or a few sentences, what do you think an MBA is really trying to teach you?
00:07:10
Speaker
i think it's trying to teach you the basics in a lot of things. And that's, i think, probably why I didn't find it that helpful. Yeah. I was really surprised at going through the basics that actually I'd learned lots of this just on the way, on the job. And I do think that that having gone through the kind of modules and curriculum, I can now confirm is much more effective to use to learn it on the job than it is to just learn a framework. You can also just learn frameworks on the internet. So we're going to go through some frameworks today yeah we get to it, just to kind of help listeners feel a bit more comfortable. If you, like me, felt like you felt like you were probably missing something really obvious. So we'll go through those frameworks, but I just don't feel like you deeply get to understand something in an MBA. And that's, I think, probably why it just wasn't that valuable to me. Yeah. So you basically think it's like teaching you the groundings of a lot of parts of like business, but not necessarily like more so than you have to learn if you've been in business for like 10 years doing stuff.
00:08:17
Speaker
Correct. I'd say that's exactly right. I'd say it's the basic training of being like a super generalist. But for me, the the depth of education wasn't enough to be practically useful in a day-to-day workplace. So as an example, the accounting module, which was an absolute pain in the ass.
00:08:34
Speaker
Even though I hated my year working in finance, I found it was muchness with just like the work that I do with working with a finance partner now. And it was also so niche. Like they were like, yeah, let's do accounting for an airline. And I was like, well, I'm never going to fucking use that and look at fuel costs and like how often you have to replace plane.
00:08:56
Speaker
So yeah yeah, yeah. That's not the stuff you needed at at that at that point in your your journey for sure. Yeah. Okay. Let's get into some of these frameworks then. Talk me through some of your favorites, or maybe I should just say some of the ones that are more more important and more prominent in an MBA.
00:09:14
Speaker
Yeah. Okay, fine. So SWOT is like 101. SWOT comes up everywhere. yeah If you haven't come across SWOT at work, it's just a classic. It's a classic. thing To be honest, if you haven't seen at work, what are you doing in at work?
00:09:29
Speaker
it's It's an absolute classic. Maybe if you were working in academia, you might not have seen a swap, but it's basic, but good. Sometimes oversimplified, but really good. Pestle, also a banger. We'll go through that. But I think when you're doing an overall assessment of something, Pestle's pretty good. Business model canvas is also like that's That's, I'd say, like 101 entrepreneurship or innovation, maybe. Is that fair? I mean, I first came across it on the program that you and I had both done in separate years. Did you do it there?
00:10:04
Speaker
I did do it there, yeah. You look really bored by even just thinking about it. It actually is useful. You're right. Everything you've mentioned is useful to structure a problem. But with the business business model canvas, I'm like, just fucking get on with it. you know what mean? Yeah.
00:10:21
Speaker
Don't spend too much time canvassing, like spend some time like doing something and getting some learnings. But i actually, that's a bit harsh. But yeah, the reason I did that like groan was I think that it did, it threw me back to that course because I feel like we did quite a few business model canvas type exercises on that course. And I was like, I've got it.
00:10:42
Speaker
you know what mean? I know what you mean. I know i know what you're going to ask me to do. Fine. Anyway. Yeah, ah it does sort of inspire a bit of, for me, a 2014 eye roll. So I'd say those are like the main ones. There are some other useful ones, but we'll go through them one by one. i will say I'm not going to cover any financial models here. That is because I just don't think audio is the right way to teach that. But also i couldn't if I tried. And so I'm just not going to. but I would just like, maybe we can find one to put in the show notes, but would just like YouTube, like how how to read a P&L, which is a profit and loss statement. I'm going try and not use acronyms or explain them when I do, but there are a lot in here. This is also the kind of episode that if you're a note taker, which I know a few of our listeners are, you might want to, but maybe we can also release the transcript so that people can refer back to it. But Let's get going. How many have I prepared here? Let me refresh my brain. Okay, we've got seven here and I've got a bonus eight, which wasn't on an MBA, but I find really useful as a framework. And I'm going to try and go through these in as snippy snappy way as possible.
00:11:52
Speaker
SWOT. So SWOT stands for strengths, weaknesses, opportunities, and threats. It is generally a good way at getting a zoom out quick view of how a business is doing.
00:12:05
Speaker
And you have to kind of do that analysis yourself, but it's typically done as a quadrant, four quadrants, and it's strengths, and weaknesses in the top row, opportunities and threats in the bottom row.
00:12:17
Speaker
And basically what you're looking for with SWOT is both your internal capabilities and your external environment. So strengths and weaknesses are what are you internally good at and external is opportunities and threats. So that's typically looking at market forces and competitors. In terms of what you do to fill it in, you just put some bullet points in. It's really straightforward. I would say this is just really helpful at getting like a one slide snapshot. I think it came out in the 60s by someone called Albert S. Humphrey from Stanford. So I think, you know, when you think about types of things that you would put in there, internal strengths, you could say like oh, we've got a really amazing talent pool or
00:12:59
Speaker
You know, I work at the BBC, an example would be it's the number one trusted news brand. Those sorts of things give you an advantage. Weaknesses, typically, you know, you might have sort of tech that is legacy, for example. or So often I would say legacy tech.
00:13:17
Speaker
Everywhere has legacy tech and it's a real pain, but that's what pays my salary. So thanks everyone. Like limited budget or resources, all those sorts of things. Those are classics. Opportunities is really just like, oh, here's a new business segment that we could go out or we could increase the price point based on like competitor analysis and and say like, oh, we think we can make this much more margin if we charge a bit more where we're the lowest price in the market. those sorts of things, or or just like demand for your product. And then threats is external risks. So this tends to be like kind of nebulous. And it sounds a bit like, as my therapist would say, catastrophizing. But it will be like, you know, an example of me working in an advertising and industry is like Facebook and Instagram are taking all the advertising spend. people don't want to spend with publishers. So that's the kind of thing that you put in there. So it's a really helpful layer of land. It's good around just like educating people, I think, in a business on on kind of what you're looking at. I think the challenges and limitations of this is that it's not obvious when you're reading a SWOT that all bullet points are weighted the same. They're not prioritized. So...
00:14:27
Speaker
You could have a really big thing and a really minor thing and they look kind of equal and it's not really action orientated. So at very high level, I actually think it is very, very useful. I think you've said like at but at the start of things, think it is good to assess, you know, a high level, like this is what we have, but this is what we're seeing. i think it's a nice, easy one.
00:14:46
Speaker
You know, I've used a slot, not often, but I have used one. Whereas there are definitely ones on your list that I've never even heard of. But yeah, I like a SWOT. I think it's simple. I think it's easy. And I think sometimes stepping to that high level can be very, very useful, actually. It was also the first thing I learned as junior management consultant. agree. It was strategy pack six weeks into the job that I'm in now. I think it's just, it's a helpful communication tool as well. I can confirm. Yeah.
00:15:12
Speaker
So I'd say, yeah, I'd say a lot of these management consultant territory for sure. Yeah. But yes, what's in your sort of entry level strategy consulting vibe?
00:15:23
Speaker
Okay. Number two, PESTL analysis. Again, this is another framework that is quite descriptive. It is quite the point of a PESOL is to look at the external factors to the business, like macroeconomic factors and how that might affect what you're doing. Again, this is just kind of getting a lay of the land rather than being action orientated. These, I feel, are much more long term. Typically, if you were doing PESOL analysis, and And when I say PESTLE, it's P-E-S-T-L-E. That is an acronym, not like a mortar and PESTLE. This is the type of categorization that you might do for something called horizon scanning.
00:16:02
Speaker
Another stupid phrase, but that is looking at like what's happening in five to 10 years time or or longer. How might you cut looking at horizon scanning? Horizon scanning is also known as no strategic foresight. I know it's, I know it's, yeah. But whenever you see someone on LinkedIn who say they do work on futures or thinking, that is the same thing. They all they all have slightly different phrases for exactly the same thing. So PESTL is just considering what are the macro factors across different categories. So it originally wasn't all of those six categories. It was E-T-P-S, s rolls off the tongue.
00:16:41
Speaker
1967. Thank you, Francis. And it's been expanded and reorganized to make it a nice word. But um P is per political. So you're looking at things like government stability or tax. And then economic, which obviously relates to political, is about kind of what are the inflation rates, interest rates, exchange rates, cost of living for an organization, like cost of capital, those sorts of things. You know, when I was doing my MBA, it was the middle of COVID. And so COVID, this was a really good framework to COVID.
00:17:11
Speaker
So like, oh, kind of political, a lot of governments kind of locked in economic, totally destroyed, and so on and so forth. Social is really about kind of cultural trends and what's happening with the people that you're looking at. Then T is for technological. So, you know, I think if anyone was doing a PESL now, they probably have like chat GPT in there. You know, what does chat GPT, chat chat gpt do in terms of impacting how you do work and and what your customers expect and so on what innovation is there what can you automate l is for legal a lot of that is just around like regulation basically or any particular type of law that might affect the work that you do and e is environmental so that is looking at kind of principally climate and sustainability and a lot of these can intersect so it's a bit subjective in kind of deciding where you put it but these are the sorts of things that you look at it's it's really broad it can be a little bit speculative you know you don't know if these things are going to manifest and I think also it's not necessarily specific to your company it's probably more industry level than kind of company specific so for you for example you could do one on
00:18:21
Speaker
You definitely do one on health in general, but then you might drill down into women's health specifically. It might be a bit hard to do one on, for example, menopause. I've definitely never, for for me, I've never had a use for this one. I did know it before you talked me through it.
00:18:39
Speaker
I'd heard of it in that consulting pack. But i never I've never actually put that one into practice. Whereas the one you're about to come on to I certainly have. Have put into practice. Yes, yes, yes.
00:18:52
Speaker
I'd say this is one of the biggies of consulting. of the OGs. You have put into practice? I'd say this is... arguably the biggest.
Porter's Five Forces: Analyzing Industry Competitiveness
00:19:02
Speaker
So framework number three is Porter's Five Forces. I will say, if you'll allow me this generalization, every MBA can thank Porter for really, really kind of nailing the thinking around what they're selling.
00:19:16
Speaker
Porter comes up multiple times. He is the big dog of of kind of MBA frameworks. Porter's Five Forces comes up in every module in an MBA. And it also... It is actually useful.
00:19:30
Speaker
I think when you actually apply this framework, it can actually bring insights into your organizations in a way that like a SWOT or a PESTL can feel slightly distant. Porter's Five Forces really feels like you get to the crux of, is the business going to work? So you'd kind of use it when you're assessing an industry. it's particularly helpful if you're entering an industry or you're a new entrant or you're kind of an existing organization in an existing industry that is changing or there is something happening in the market dynamics and it's useful to look at. So I would say probably everyone can use this one regardless of industry kind of size or structure. And when markets are changing, it's really helpful to just do this again.
00:20:17
Speaker
So the kind of purpose of it is to look at the competitiveness and the profitability of an industry. And there are five market forces that you look at. If if people are really interested in this, maybe we can put something in the show notes about a diagram that kind of accompanies it, which for visual thinkers makes it slightly easier. I'm a visual person, so i I like a diagram, but there is a nice diagram that goes with this one. But the five forces are competitive rivalry. So what is the intensity of the competition? A really basic example is kind of Coke versus Pepsi, but you can get quite, you know, I think in women's health, for example, you could say there's ah ah there's a lot of really small players. Then the next force is a threat of new entrants. So
00:21:03
Speaker
How difficult is it is it to enter the market? If you have to have regulatory approval for something, that's an example of something that is a high barrier to entry. Whereas is us if you want to become an influencer, for example, that's a very low barrier to entry. If you want to start podcast, it's quite a low barrier to entry. Agreed. Okay. but yeah I'd say sometimes, sometimes maybe podcasts should have a higher barrier to entry. So the third market force is threat of substitutes. So what is there available as an alternative? A really good example of this would be if you were looking at the kind of online communications industry during the pandemic, there were a handful of like Zoom or Google or Google meets or Yeah, or teams or blah, blah, blah. So you had sort of online alternatives and there wasn't necessarily a market leader, but there was a bit of consolidation amongst those providers. You know, it was the big tech firms largely, but in-person meetings weren't possible. So that kind of really forced, at that substitute was removed. So you removed it a set of those substitutes and you intensified the competition amongst amongst those ones. The bargaining power of buyers is a force.
00:22:19
Speaker
force. And that is really about how much influence do your customers have and kind of who's in control. And then the fifth one, which I think is really interesting, is around just the bargaining power of suppliers. An example of that is computer chips. There aren't that many people who make computer chips and they can charge a higher price because there's no one else to go to. Yeah. So I think this is really useful when you are looking at developing something new, whether that's like a new service line or something that you think is a good idea.
00:22:56
Speaker
i think it's really useful to like step back and use this to before you do something new. So I've used it in terms of looking at like new market entry, definitely often look at the top three of these actually. So competitive rival rivalry, threat of new entrants and threat of substitutes. I think like those are kind of core things that whenever you're thinking about anything new, I would say you should always be thinking about that because yeah, it's just really kind of foundational thinking.
00:23:25
Speaker
And I definitely, yeah I think when when we were evaluating maybe certain parts of organizations rather than but rather than a full organization itself, but like certain business units in consulting,
00:23:39
Speaker
like this was often that we looked at. So yeah, that's when I've that's when of used it. To be honest, like I probably haven't thought about it in a structured way for quite a few years.
00:23:51
Speaker
But it was only when seeing here, I was like, oh, yeah, I should probably actually use this more. Do you know what mean? it The whole framework. i think the top three come quite naturally, whereas the bottom two are actually super, super, as you say, both interesting and important. So supplier power and buyer power.
00:24:08
Speaker
But I don't necessarily think about those so naturally in the types of businesses I work in. But when I saw the whole framework together, I was like, this is is's a goodie. Yeah, that's one to learn.
00:24:20
Speaker
Let's be honest. It is a really good one. Put that one in. I'd say put an asterisk next to that one, guys. that's i'd say Yeah, I can give it a go. i can give it a go. So, I mean, how it was introduced to both of us was literally like one page tool to step by step, like create a business plan.
00:24:37
Speaker
And it was created by this guy called Alexander Osterwalder. And it definitely is that, you know, it is useful way to structure things. an idea or or an interest that you have.
00:24:50
Speaker
So there's kind of different segments and they're generally laid out on, you know, a bit of paper if you're doing things the old school way by hand. And you will just populate each segment of the canvas until you have got basically a little kind of plan together. So one is your customer segment. Who are you going to serve?
00:25:11
Speaker
Ideally, that would be spot quite specific. So not like women, like women of a certain X doing this that are interested in this. Then you've got the value proposition. what is it that you offer? Then you've got the channels you're going to use to reach your customers.
00:25:24
Speaker
You've got customer relationships. So how are you going to do your sales or do your transactions? And then you think about revenue streams. What are the different sources of revenue coming into the business? And like, where are you going to start and how are you going to build on them? Because most businesses ultimately have multiple revenue streams rather than just one. The critical resources you would need to get started. The key activities and essential actions that you need to get something going.
00:25:49
Speaker
Any partnerships that you think will be useful. I would probably say that... I think that could be taken off the business world campus, but um there we go. And then like a really basic idea of like, what are the costs that you think you would need? Usually because this is about an initial idea, to get something going. And I think from my perspective, the best part of this is that it actually can be used very quickly to get to something that is like, oh yeah, that is how you would roughly go about doing this if you wanted to.
00:26:29
Speaker
i think that's therefore got to be given some credit to Alexander Osterwalder because that's quite a good practical thing to do that in like one or two bits of paper for most people. I think it is very, very useful at the beginning of something. It can also make sure, i think you've put in your notes that it's good prepare when you're preparing for a pitch. And I think it is a good way to think through these the questions that people will ask me about this business because they basically are.
00:26:57
Speaker
the questions that you will get asked in a pitch or they are the topics in which you will get asked specific questions where I don't love it. It's like, yeah, I think with key partnerships, when you're at like zero, I'm like, well, no one is going to partner with you.
00:27:11
Speaker
zero So if you, if you like need a partnership with, you know, the government to get your idea going. It's like, well, no, you're going to have to think of some other people because that's not, that's not going to happen when you have nothing. So I think there are certain parts that are like less strong than it. And yeah, it's very much a, I would say it's like a dreamer's canvas, right?
00:27:32
Speaker
There's not much of like, oh, but what's, what's going to happen when you can't do that? Or what's going to happen? Because like, this has happened in the market. There's nothing external. It's all just like, how would you get going with your idea? And that's a really nice thing, but it's not always, I would say, practical and realistic because doesn't take into account really the market at all. What do you think of it?
00:27:54
Speaker
ah So I ah completely agree with you. It's best use case for me is like an ideation stage where you're like, I just need to sort of map out how this might work. You know, you've got an idea, like I've come up, like, let's say like, I've just been I'm going to create the next post-it. And then you can start working through like in more detail, but it's also like, you could do it super quickly. You could do it in an hour. yeah And you could do it for like five businesses back to back, totally different and sort of just get the rough shape of the business. I think that is where it's helpful. I think it's much harder to do for something that's actually quite complicated. It's sort of overly simplified if there is a layer of complexity in your business. But I do think it's a really good kind of summary tool.
Value Chain Analysis: Creating Business Value
00:28:38
Speaker
And also it's like from that era of like videos where they used to do like lots of cartoons and stop animations and like everyone thought that was really cool. So got a soft little spot in my heart for that. Number five, another Porter one. His name does not appear in the title of this one, which I'm sad for him, but it's it's called Value Chain Analysis.
00:28:57
Speaker
And this is an internal framework. So you're looking at basically everything that you do in the business and you work out where you're creating or losing value. I have to say, i just couldn't really find a use case for me where I would apply this, but it is kind of helpful. If you feel like you don't understand how business works, just understanding these different elements is kind of helpful. So the first sort of bit,
00:29:24
Speaker
And again, for the visual people, there's like a diagram that accompanies this, but it's actually not that interesting. There's the kind of primary activity. So that's when you're basically producing a product. And, you know, that will be like how you create it and how you market it and your operations and your logistics. And then alongside that, the next bit is the support activity. So that's sort of like your central functions in a big organization. That's like finance, ah HR, procurement, IT, t those sorts of things.
00:29:56
Speaker
To be honest, I don't necessarily always feel like looking at those elements is really that important unless you're looking at kind of like efficiency and cost saving. But I think the kind of product part of it is a bit more interesting in terms of...
00:30:11
Speaker
understanding your costs and your value and and your margin overall. I'd say what you're trying to get at in a long-winded way is your margin for your business. And that is, for those who don't know, that is that's like your profit basically. So I think for me, this model, struggled to apply it in in the business that I work in and the kind of industry that I work in. But I think it's particularly difficult if you have a service business that you're looking at. It's better for product businesses, but kind of interesting. I'm going to roll straight on to number six because we're on the topic of profit. Profit, I actually learned this before in MBA on ah on a strategy training day.
00:30:47
Speaker
And this one is for people who are like really visual or or who like maths. this can be a really good one. This really works with my brain and it's called a profit tree. You can also look at different issues, not necessarily profit. and So you could do an issue tree or a driver tree, but it basically breaks down profit or or whatever your issue is into profit.
00:31:11
Speaker
the components that make that thing up. And then you can break each of them down to work out how you could make changes to improve your profit. And the the things that you break it down into have to be something called MISI. MISI is like 101 strategy consulting as well. It's a horrible phrase, but it's really useful. So it means mutually exclusive, completely exhaustive. And so like, it just means that each category is complete and doesn't have a Venn diagram crossover with another bit. The really basic but really helpful way to look at it is say, let's say we want to maximize profit.
00:31:47
Speaker
Profit is comprised of revenue minus costs. What is revenue comprised of? It's price times quantity sold. So if I want to make more revenue, I either increase the price and or increase the amount that I am selling. And then on the cost side, that's made of fixed costs and variable costs.
00:32:05
Speaker
So i can either look at reducing my fixed costs. So, you know, making a slimmer central function i'm in a business or ah reducing my variable costs and variable costs are costs that are associated with what you're selling basically. So I just think that's really, it's it's really basic. It's really helpful, really good at diagnosing financial performance.
00:32:27
Speaker
It's really good for people who are logic minded. Again, it doesn't kind of factor in an external environment, but I think it's really good. Tell me what you think about it. We use this one.
00:32:37
Speaker
This one's a biggie. This is a, yeah, I think an issue tree is kind of a fundamental skill of anyone at a senior level in in most businesses. Like maybe you don't call it an issue tree, but it's like the ability to break down a key problem into its component parts and decide how to prioritize based on its component parts.
00:32:59
Speaker
Yeah, we did it on our offsite. company offsite, everyone had to learn how to do an issue tree. So it's very McKinsey. We were tested on this my first two weeks in consulting.
00:33:09
Speaker
This was a big one. It was a biggie. So yeah, the old issue tree. was glad to see it in there. I think it's a classic for a reason. I actually think, I know that I didn't even mention this at the top on like, which was my favorites, but I think actually this is the one that I use most in my work without even, like I often do this like draft an email where I'm like trying to do this and work it out quickly. This is definitely like,
00:33:35
Speaker
everyday usage. The last one that I wanted to talk through is a BCG framework, which is called the growth share matrix.
Investing with the Growth Share Matrix
00:33:42
Speaker
I think this one's just kind of fun, which is why I wanted to include it. But this is basically trying to work out, let's say you've got an organization that has multiple different revenue streams or business units, and you're trying to work out kind of how you classify them. You would use this when you are trying to work out where you put investment or resources. So typically, you know, you might be appraising a whole business and you say, actually, this is the area of the business that I want to invest in specifically. And then you kind of plot your business units in this matrix. So in one quadrant, you have the stars. So they are high growth and they command a high market share. a relatively high market share. So this is like something that's just booming. You're like, great. I'm struggling to think of what's booming off the top of my head currently because I've just done nothing all day other than look after a baby, which is a lot of work.
00:34:35
Speaker
Number of different AI companies at the moment that are growing very, very, very quickly that people would say r stars, I think. Great. Thank you for subbing me in there. Appreciate you. Then you have cash cows, which are, they're not really growing, but they're reliable in their source of revenue and they've got a lot of market share. I've got one of these.
00:34:55
Speaker
I think in in general, health insurance is a very stable market of of cash cows, I would say. Very few players. They make money. I'm not sure how much, well, some of them are growing, obviously, others aren't. But like, basically, that market has has a few kind of cash cows in there, I reckon. Excellent cash cow. You have the question marks. So they're high growth, but they don't have very much market share.
00:35:19
Speaker
I think this is this tends to be ones where maybe the market hasn't really been validated yet fully, or there's a lot of early entrance into the market. It's not really clear what's going on in the market dynamics yet.
00:35:34
Speaker
And then the last one is dogs, which is sort of a funny but sad name. You'd hate to be in a dog, but a low growth, low share part of the business. So again, i think this is just a really interesting way of just thinking about your business units and organization. You know, I work in a business that is, has not had a huge amount of really high growth for a long time because a lot of the money has gone into different players but you know if we were classified as a dog i hope that would make me sad we still make lot of money so don't get rid of your dogs those are the seven frame marks i want talk through should i just go through my bonus one just do your last one just see your last one last one so much value but the last one sounds interesting give us your bonus This wasn't in the MBA, but it's something that we use all the time. i have used it on basically every project that I have done for the last six years, maybe.
Clarifying Roles with the RACI Framework
00:36:28
Speaker
It's called a RACI framework. RACI stands for Responsible, Accountable, Consulted, Informed. And it is the best way to map out who does what
00:36:39
Speaker
in a project. You could do it just in a kind of day-to-day roles and responsibilities. doesn't have to just be a project, but it is really good at just clarifying who is accountable. Normally, you should only have one person. That is the top of the hierarchy. Responsible, you also ideally want one person there. You might have two, but best practices, again, one, that is the person who's going to do the work. Consulted is all of your stakeholders who need to have input into what you're doing. And then informed is just like, I'm just going to let you know this is happening.
00:37:09
Speaker
And then what you do for either your day-to-day responsibilities or for your project, you break down in like very detailed line items and map your stakeholders against them. It is the most valuable tool we use all the time. Could not recommend enough, which is why I put it in.
00:37:23
Speaker
I've had some mixed experience with racies. I was very, very shocked when I got to my first very large corporate job and there was fucking racies everywhere. And I was like, why doesn't everyone know what their job is?
00:37:38
Speaker
Do know mean? Like, why why there all these documents sort of being like, that's your job? I was like, I know. Like, I know my ah know what my job is. And there was so many conversations where I was like, no, but I'm accountable because I was running a business unit.
00:37:56
Speaker
So I was like, I'm accountable for pretty much everything. And they were like, no, that's definitely not true. And it took me a very, very long time to understand why that wasn't true. However, I do agree with you that especially the bigger the team, the more you need this, in my opinion. Like as soon as there's any complexity or any overlap in role, think this probably is a pretty, pretty big hitter in the old frameworks.
00:38:24
Speaker
Yeah, you're right. It's definitely big org energy. Big org energy, yeah. Big org energy, but like bloody lava racing. It's nice to be clear. do you know what it is? It's nice to leave a meeting.
00:38:37
Speaker
clear and I think that's what a race you can do I agree okay that's it I feel like I've just plowed through those what a dream you're still here thanks everyone who made it this far it's probably a really dry subject but I just wanted to make up sure our listeners understand that if you just went and just watched a couple of videos about these frameworks that would be basically having an MBA that the frameworks come up again and again.
Conclusion and Reflections
00:39:04
Speaker
And if you learn those, don't bother f***ing around with a master's degree. You don't need one. Okay, so that's it. Thanks for joining us as always. If something in today's episode has resonated with you, spread the magic, share it with a friend, post on your socials, or please leave a rating and review on your favourite podcast platform.
00:39:22
Speaker
That's how the Coven grows. Until next time, thank you very, very much, Bec. Thank you. Bye.