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A question for all of you MBAs reading this: remember how great it felt when you finished the GMAT test? After you got into an MBA program, you probably never thought about the test again.

So how would you feel if you had to re-take the GMAT… after receiving your MBA acceptance letter?

That is exactly the situation some new MBA students are finding themselves in as their schools advise them to retake the GMAT to better position themselves with job recruiters.

As BusinessWeek recently reported, “For a select group of companies, mostly top consulting, finance and banking firms, employers routinely look to MBA graduates’ GMAT scores as a reliable standard measurement of academic prowess.”

Of course, a high GMAT score isn’t prized by every competitive firm as an indicator of job performance. BusinessWeek quotes Bain & Co.’s global recruiting director Mark Howorth as saying, “It’s easy to look at a score like a GPA or a GMAT, but in fact, what we teach our people is not to focus on those. Those scores don’t capture the type of problem solving we do in our job.”

However, some companies do look at GMAT scores as a normalizing factor, as MBA programs have various grading scales or use a pass-fail system. Others see GMAT scores as a counterweight to widespread grade inflation.

The takeaway from the article seems to be that while a great GMAT score itself won’t land you a job, it may be a factor that companies look at when deciding who to bring in for an interview. In today’s competitive job market, a strong GMAT score may be the thing that helps you get your foot in the door.

So if you’re considering really going back to b-school, enrolling in one of those GMAT prep courses may be money well spent.

Image courtesy of get-mba-info.com.

When New York City mandated last year that chain restaurants had to label the calorie content of items on the menu, many assumed that restaurants would lose business as customers saw how many calories were in their burgers and fries and opted to stay home and eat a lighter meal instead. At the very least, it seemed that lower calorie options would gain popularity.

However, a study from the Yale School of Management found that this hasn’t necessarily been the case.

Victoria Brescoll, an assistant professor of organizational behavior at the Yale School of Management, and Brian Elbel, Rogan Kersh and L. Beth Dixon, all from New York University, studied the fast food purchases of participants before and after the calorie labeling mandate. They focused the study on low income and minority neighborhoods in which residents face a greater risk of obesity.

Here’s what they found:

• After calorie labeling, 54 percent of New York City participants reported noticing the new information.
• 27.7 percent said the calorie labels influenced their food choices; 88 percent of that group reported buying fewer calories.
• But here’s where things get interesting: When researchers looked at food receipts, they found that participants did not purchase fewer calories. In fact, the calorie average went up slightly, from 825 pre-labeling to 846 post-labeling.

According to Brescoll, this doesn’t mean that posting calories won’t have an effect: “The take-away isn’t that menu labeling doesn’t work, it’s that it might not be effective in isolation. There needs to be other concurrent interventions, such as educating people about daily caloric intake.”

However, I’m guessing that some of these consumers are already educated about how many calories they’re supposed to eat, and that’s why they told researchers they purchased foods with fewer calories even when they did not. Most consumers today know what they’re supposed to buy, be it the hybrid car or the salad with light dressing on the side. But if this study is any indication, the Big Macs of the world will continue to have their place in the gap between consumer knowledge and consumer desire.

Burger image courtesy of Flickr user avlxyz, CC 2.0.

Don Sull of the London Business School is a popular and familiar voice on the Back to B-School blog.  He was recently cited by Fortune as one of the “ten new gurus you should know.” In today’s post, you’ll get to know more about him and his new book, The Upside of Turbulence: Seizing Opportunities in an Uncertain World.  In the final installment of our four-part conversation (you can start with the first part of our discussion), we discuss the role that managers at different levels in an organization can take to adapt to turbulence and how luck affects a business’s success.

BNET: What are the first few steps a manager might take to reform an organization if he or she recognizes a hardening of strategies and practices during turbulent times?

Sull: That’s a terrific question. First, of all, it depends who you are in the organization.  If you’re on the board, there are many things you can do to help if you introduce the discussion about hardening of practices. I think outside directors in general don’t do nearly enough in their role as a check on institutional blind spots. If you are a CEO — especially one brought in specifically to make changes — you have to quickly find out who among your direct reports gets this issue of hardening of processes and practices, realizes the danger, and sees the importance of fixing it. If they don’t see what you see, you may have to let a couple of people go and bring new people on.

The tricky place is when you’re a middle manager: You’re running a good-sized piece of the business, but you are three to four levels down from the CEO. A lot of people think, “There’s nothing I can do.” That, I think, is complete nonsense; it’s a cop out. You should start to look for a cohort of people and articulate your combined story on what you think the priorities of the company should be and what you should do to react to the turbulence you face. That’s the first step to finding sympathetic executives more senior in the organization. There are also great opportunities to have an impact from this kind of position when a CEO is replaced. Often when a new CEO comes in, he will meet with the top 50 to 100 managers to get a read deeper into the organization. I know of some people who have had great impact on these occasions when they had a compelling analysis prepared.

BNET: Your book takes on the role of luck.  Could you lead us through how much impact than can have?

Sull: The role of luck in business is systematically under-discussed in management books. In Good to Great Jim Collins does a good job of consolidating some common sense observations. But he claims he’s discovered the eternal laws of physics of organizations, stating, “If you do these things, you’ll have a great organization.” I think that’s half the equation. The other half is “what threats and opportunities are presented to you by the external context?”  I think the reality is, for most managers, you can’t predict or dictate the timing, magnitude, or form of opportunities.

In The Upside of Turbulence, I’ve tried to bring luck and external opportunities back into the equation. Listen, there is stuff you just cannot predict; luck can help you or hurt you. However, there are things you can do to increase the odds that you’ll spot an opportunity that others miss — and increase your organization’s ability to seize opportunities in a timely and effective manner.

BNET: What are some of those things managers and companies can do?

Sull: In broad strokes there are three approaches: anticipation, agility, and absorption. Anticipation is a firm’s ability to collect and process real-time data on the situation, explore surprising results, and identify emerging opportunities and threats. Agility is a firm’s ability to consistently identify and exploit opportunities more quickly and effectively than rivals. Absorption refers to the structural factors — including size, diversification, resources, balance sheet strength — that allow firms to weather shocks in the market, and live to fight another day. At a time when few firms have a triple A credit rating, companies that can master anticipation, agility, and absorption will be well positioned regardless of what the future brings.

Last week, I posted excerpts from my recent conversation with Tuck School of Business at Dartmouth professor Ella Edmondson Bell, author of the forthcoming book Career GPS: Strategies for Women Navigating the New Corporate Landscape, about some of the challenges women face in today’s workplace, such as continued exclusion from business networks and new pressures brought on by factors such as technology and globalization.

However, Bell says that despite these issues, now is a great time for women in the workforce: Read the rest of this entry »

If you’re worried about whether or not your employees behave ethically, a pair of MBA professors have come up with a simple solution: spray a little citrus-scented Windex in their work environments.

TIME reported recently about new research finding that clean smells promoted good behavior. The research was conducted by Katie Liljenquist, a professor at Brigham Young University’s Marriott School of Management, and Adam Galinsky of Northwestern University’s Kellogg School of Management.

The researchers conducted experiments testing subjects’ honesty and generosity. One group was tested in a room cleaned with citrus Windex, and one group was located in an unscented room. In one experiment, each group was given a set of tasks to complete. In their packet was a flyer asking for charitable donations. Of those in the clean-smelling room, 22 percent said they wanted to donate money; only 6 percent in the other room agreed to give.

“Economists and even psychologists haven’t been paying much attention to the fact that small changes in our environment can have dramatic effects on behavior. We underemphasize these subtle environmental cues,” Galinsky said in TIME.

As someone who can’t concentrate when my desk gets too messy, to me this makes a degree of intuitive sense. However, others are skeptical that clean smells specifically trigger more moral behavior. TIME also spoke to Brown University psychologist Rachel Herz, who said that participants who liked the smell of citrus might have simply been in a more positive mood, not necessarily a more ethical one.

What do you think?

Image courtesy of Flickr user zsoul, CC 2.0.

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In a recent interview with Ross School of Business professor Jeff DeGraff posted on the University of Michigan’s web site, DeGraff urges companies to consider downtimes the best for pursuing innovation, even if that means spending more money than on the surface seems wise during a recession.

He shares three key reasons why this is the case:

• Investing in innovation when costs are low will pay off in the future: “At some point, U.S.-based firms are going to come out of the recession. And there will be a shakeout of those who have invested in the last development cycle and those who have cut back,” says DeGraff. Read the rest of this entry »

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For a long time, marketers have assumed that when consumers fail to gamble on a new product or service in place of their regular one, it’s because of their fears of loss. However, research from the Kellogg School of Management at Northwestern University finds this may not be the whole story.

The recent Kellogg Insight article “Should I Stay or Should I Go” details the research of Kellogg marketing professor Alexander Chernev, in which he asked people if they would consider investing in funds with higher yield potential than the funds they already owned. He categorized respondents as prevention-focused, those who more often stayed with the status quo, and promotion focused, those who would try something new if it seemed profitable.

With the prevention-focused group, Chernev found that their reluctance to try new products couldn’t be solely attributed to simple loss aversion; if that were the case, then they would have chosen the higher-yield investment. Read the rest of this entry »

Don Sull of the London Business School spoke with me recently about his new book, The Upside of Turbulence: Seizing Opportunities in an Uncertain World.  In the first installment of our conversation, Sull defined “turbulence,” and in the second post he discussed how Nokia took advantage of turbulence to redefine itself as a company. Today he explains how managers at all levels of a company can take advantage of opportunities that arise from turbulence.

BNET: The are other books out there about surprising event and how they can affect business, including The Black Swan by Nassim Taleb.  What specific new angles does The Upside of Turbulence bring to the discussion?

The bulk of my book talks about “what do you do?” in turbulent markets. Taleb’s focus is: As an investor, how do you deal with turbulence?  The focus of my book is: as an executive or a manager or an entrepreneur, how do you deal with turbulence?  The thing about stock market trades is that you can reverse them overnight; there’s no stickiness.  But imagine if you are, say, Micky Arison running a cruise line.  Your cruise ships last 35 years.  Your brand takes you decades to build. You can’t reverse your decisions so quickly.  When you have long-lived assets like brands, technologies, patents, physical plants, and employees, it’s a very different dynamic.

There have been a lot of books about how you manage risk — how you cope with the potential downside of unstable markets.  But I don’t think there have been quite as many that focus on the opportunities that arise from turbulence.

BNET: How can a midlevel manager — who can affect company practices but is not necessarily “helming the ship” — take advantage of turbulence he sees?

Sull: I wrote this book to make it scalable to folks at different levels of an organization. Some lessons are focused on people in the C-Suite, but there are a set of things that you can do if you are running a business unit, a function, or a region.  One of the points I raise in the book is about the need for agility. There are three different types. The first is operational agility. Within your business unit there are steps you can take to seize opportunities to grow revenues and cut costs. The second type is what I call portfolio agility. That means pulling resources out of less productive or promising ventures and putting them in more productive opportunities. The third is strategic agility. Periodically the environment throws golden opportunities your way — to acquire a competitor or enter a new market, for instance — and you need to be able to see and seize those opportunities.

You see those opportunities at all levels of an organization. Even with portfolio agility, which some people say is a headquarters responsibility. But every manager is making portfolio decisions of some sort; they’re just smaller.  And you’d be surprised at how mid-level folks can affect strategic agility. They can often start the ball rolling for some type of acquisition when they see, say, a competitor on its heels.

If you rely on only the CEO to drive agility in your organization, you are dead. You’re not distributing both the responsibility and the decision-making to take the actions to thrive in turbulent markets.  And, if you’re a big, complex organization, you are dead.

When I teach these concepts in a boot-camp format, about one-third of the attendees are CEOs or managing directors of organizations — but two-thirds aren’t.  You can apply these tools at any level of your business quite productively.

We’ll conclude our discussion with Sull next week as focus on how managers can adapt their organizations to take advantage of turbulence and the role of luck in business.

In her forthcoming book Career GPS: Strategies for Women Navigating the New Corporate Landscape (available Feb. 9, 2010), Tuck School of Business at Dartmouth professor Ella Edmondson Bell discusses the challenges of today’s workplace and advises women how to succeed in the new corporate playing field. I recently spoke with her about some of these issues.

The challenges of today’s workplace…

For men and women alike, technology has changed the way we work, and not always for the better. “There is an expectation on everyone now that work is a 24/7 reality,” says Bell. “Everybody is supposed to work extraordinarily long hours, and even if you’re away from work, you still feel like you’re on call because people can get you, particularly in the world of MBAs.”

Also, Bell cites the turbulent environment in many companies, in which employees are getting blindsided by layoffs. “When people are fearful of losing their jobs, that makes the workplace a little more vicious, more competitive,” says Bell. Additionally, she names globalization as a force that has made the world smaller and, therefore, more competitive.

…And why it can be harder on women

These conditions have posed unique trials for women, says Bell:

Men and women have duties at home, but for women, the second shift notion is becoming increasingly more complicated and harder to manage. As Maria Shriver has been talking about on NBC, many men have lost their jobs in this economy, so women are the breadwinners, but they’re still expected to also carry on the major household duties and raise the family.

It’s harder for women to see themselves actually rising up in a company and succeeding because of the amount of time and effort and because they have other responsibilities. I think it’s harder for women because they feel more alienated. They’re left out of valuable networks and social outlets. So it’s easier, particularly for women of color, to feel more isolated, more vulnerable.

Despite these challenges, Bell says it’s a great time for women in the corporate world. Next week, I’ll share her ideas why, as well as some tips for women to take full advantage of these favorable conditions.

Photo courtesy of Mark Washburn.

When you are considered an expert in your field, does it undermine your authority when you admit uncertainty in your opinion?

Absolutely not, according to new research from the Stanford Graduate School of Business. In fact, this might be a good strategy for increasing your persuasive abilities. Surprisingly, the study found that the opposite was true for non-experts: they can better persuade an audience by expressing a higher degree of certainty.

“We find that when the regular, everyday person is extremely certain, that’s surprising to readers,” said Zakary L. Tormala, an associate professor of marketing at Stanford who conducted the research. “Conversely, when the expert is not so certain, that’s surprising.”

So how does the element of surprise lead to the ability to better persuade your audience? Read the rest of this entry »