MBA module experience: killer robots and calamity cashflows on the Corporate Reporting and Decision Making module

Executive MBA participant Alastair Burroughs reflects on his experience on the Corporate Reporting and Decision Making module, highlighting how he’s already applied key insights from the module to drive impact in his workplace.

Three things I thought would never happen:

1. Tottenham Hotspur winning a European trophy (or, indeed, any trophy) in my lifetime
2. My youngest son, Aidan, eating his carrots with dinner
3. Me using the words “I’m really enjoying playing the role of CFO…”

Yet here we are. Tottenham have won a first European trophy in over 40 years and I admit to saying those immortal words in a moment of sleep-deprived, caffeine-induced hysteria towards the end of my Corporate Reporting and Decision Making module (“CRDM” for short). We’re still working on the carrots, but let’s not be greedy.

To rewind: I am a Marketeer by trade. I began my career at a London media agency, spending millions on national press advertising while living what I thought was an exciting life that involved creative campaigns, media parties and long lunches.  I liked to imagine myself as a young Don Draper, without the seediness. Those were the days.

Fast-forward a number of years, and I’ve somehow scraped through a Financial Management exam and I’ve recently celebrated the completion of CRDM. So, how did we get here?

I enrolled on the Executive MBA at Warwick Business School with the intention of giving my career a much-needed shot of adrenaline. Having moved ‘client-side’ around the time that the 2008 financial crisis ended the London media-scene, I began to realise the importance of a 360-business perspective. Successful Marketeers need to work hand-in-hand with Operations, understand the language of Finance, and find a way to co-exist with Sales. The MBA was an important step on this path to a better me.

Naturally, the Financial Management module was my nemesis (spoiler alert: I won’t be making a career change into investment banking), though I entertained hopes that CRDM might be manageable.  After all, understanding a Profit and Loss is not rocket science, even for me.  What I didn’t expect, and my Cohort colleagues will undoubtedly roll their eyes in my direction, was that Corporate Reporting was not just manageable, but, dare I say it, enjoyable. What has happened to me?

The module was structured around a business simulation, Accounting Bissim, whereby the class was divided into 8 teams, each responsible for a fictional robotics company set in the not-too-distant future.  Beginning on an equal footing, with our companies all in crisis and making a loss, we assumed Board positions and were tasked with making key business decisions.  At the end of each ‘round’, we received the company’s financial statements including a detailed P+L, balance sheet and cash flow statement, as well as consumer feedback, media reports, share price and market share data (we competed against the other teams, therefore one group’s success could be another team’s loss).

Initially, these decisions were simple: set the production quantity, the selling price and the staff salaries.  With each ‘year’ of the simulation the input grew more complex, with decisions to be made around R+D investment, environmental initiatives, issuing of share options and bargaining over trading terms.  And each ‘year’, we would see the impact that our decisions had on our companies’ finances and our performance versus the other groups.  Don’t tell me this was only a game; we got seriously competitive.

My group’s company, Electroserve, had a rough time of it.  In Year 1, we tried to save money with a small round of redundancies.  Whoops!  Turns out employee morale crumbled, our product quality declined and we lost sales through defects.  Won’t be doing that again.  We re-hired them in Year 2, at considerable cost, meanwhile ramping up production and investing everything we had in the most exciting R+D project we could find (robots programmed with enhanced AI, one step closer to The Terminator becoming reality). Electroserve nearly went bust and our competitors Fujisaki attempted an aggressive takeover!  After that, things started to improve: we achieved steady growth, returned to profitability and were commended for our environmental leadership. The R+D project was suddenly a financial risk worth taking, and still no robot had harmed a human.

The Accounting Bissim simulation was a fantastic way to engage a class on corporate reporting. Seeing the immediate impact of our decisions on Electroserve’s financial performance was strangely addictive, even if the safe space of a business simulation led to some questionable gung-ho tactics (“It’s our last year, let’s just double the advertising spend and crank the price up further!”).

Beyond the rollercoaster of Electroserve’s finances, CRDM has enabled me to learn more about my own business, and involve myself in financial discussions I would normally not participate in.  Part of this is being able to speak the language of finance teams. Having written extensively about Net Present Value for my assignment, I joined a meeting to discuss the investment appraisal criteria for an innovation project. After learning about the Balanced Scorecard, I’ve introduced this to my organisation as an alternative measurement tool.

A lasting memory from CRDM was the line “Revenue is vanity; Profit is sanity; Cash is reality”. As the Board of Electroserve discovered, we could make millions in unprofitable sales but without cash, we risked bankruptcy.

The next module was Marketing – back to my happy space. But out of all the modules so far, learnings from CRDM have been applied most to my day-to-day role and I can honestly say that the Accounting Bissim business simulation was a real highlight of the MBA programme so far. And, while I may not make CFO in my career, I can at least understand some of what they’re talking about.