(By the way, please feel free to join my Facebook Group @ https:\/\/www.facebook.com\/groups\/charliemungersays\/)<\/a><\/p>\nHere\u2019s a summary of four\u00a0ways an MBA class with Charlie Munger might be different.<\/p>\n
References:
\n(i)\u00a02011 Berkshire Hathaway Shareholders Meeting:
\n(ii)\u00a0https:\/\/www.farnamstreetblog.com\/2012\/11\/charlie-munger-if-i-were-teaching-business-school\/<\/p>\n
1.\u00a0The Four Rights, Ferocious Customer Loyalty, and More with Luck Thrown In<\/strong>
\n(i)\u00a0Right Managerial System
\n(ii)\u00a0Right Personnel Solution
\n(iii)\u00a0Right Ethics
\n(iv)\u00a0Right Diligence
\n(v)\u00a0Etcetera, Etcetera (eg. Rotisserie Chicken priced at $4.99 since time immemorial.)
\n(vi)\u00a0Luck (which could mean all of the above plus a lot of hard work).<\/p>\nCM: Costco of course is a business that became the best in the world in its category. And it did it with an extreme meritocracy, and an extreme ethical duty\u2014self-imposed to take all its cost advantages as fast as it could accumulate them and pass them on to the customers. And of course they\u2019ve created ferocious customer loyalty. It\u2019s been a wonderful business to watch\u2014and of course strange things happen when you do that and when you do that long enough. Costco has one store in Korea that will do over $400 million in sales this year. These are figures that can\u2019t exist in retail, but of course they do. So that\u2019s an example of somebody having the right managerial system, the right personnel solution, the right ethics, the right diligence, etcetera, etcetera. And that is quite rare. If once or twice in your lifetime you\u2019re associated with such a business you\u2019re a very lucky person.<\/em><\/p>\n2.\u00a0Look At Graphs From All Angles<\/strong>
\n(i)\u00a0What Elements Do You Have Which Adds Costs To Your Business That Your Competitors Don\u2019t
\n(ii)\u00a0What Are Your Competitors Doing including those from Traditional Sources and Non-Traditional Sources (and in some cases especially non-traditional sources)
\n(iii)\u00a0Success Can Turn Into A Disadvantage: So Be Careful<\/p>\nCM: The more normal business is a business like, say, General Motors, which became the most successful business of its kind in the world and wiped out its common shareholders\u2026 what, last year? That is a very interesting story\u2014and if I were teaching business school I would have Value-Line-type figures that took me through the entire history of General Motors and I would try to relate the changes in the graph and data to what happened in the business. To some extent, they faced a really difficult problem\u2014heavily unionized business, combined with great success, and very tough competitors that came up from Asia and elsewhere in Europe. That is a real problem which of course\u2026.. our success turning into a disadvantage\u2014is a big problem in business.<\/em>
\nAnd so there are all these wonderful lessons in those graphs. I don\u2019t know why people don\u2019t do it. The graphs don\u2019t even exist that I would use to teach. I can\u2019t imagine anybody being dumb enough not to have the kind of graphs I yearn for. [Laughter] But so far as I know there\u2019s no business school in the country that\u2019s yearning for these graphs. Partly the reason they don\u2019t want it is if you taught a history of business this way, you\u2019d be trampling on the territories of all the professors and sub-disciplines\u2014you\u2019d be stealing some of their best cases. And in bureaucracies, even academic bureaucracies, people protect their own turf. And of course a lot of that happened at General Motors. [Applause]<\/em><\/p>\n3.\u00a0Watch Out For Barons or Be That Baron (in a positive way)<\/strong>
\nThere are game changing elements or barons (according to Munger Speak) at play in business. Look out for them.<\/p>\nCM: I really think the world \u2026 that\u2019s the way it should be taught. Harvard Business School once taught it much that way\u2014and they stopped. And I\u2019d like to make a case study as to why they stopped. [Laughter] I think I can successfully guess. It\u2019s that the course of history of business trampled on the territory of barons of other disciplines like the baron of marketing, the baron of finance, the baron of whatever.<\/em><\/p>\n4.\u00a0Teach More About IBM<\/strong>
\nIBM used to be the biggest computer company in world with overwhelming leads on mainframes, personal computers etc etc. However, the business scene in the domain had changed so much but still IBM survives and thrives. How did they do it? There’s a superb book by Lou Gerstner, former chairman of IBM, entitled: Who Says Elephants Can\u2019t Dance. Well, Lou, the elephant is still dancing and rocking and thanks for your part in it!<\/p>\nCM: IBM is an interesting case. There\u2019s just one after another that are just utterly fascinating. I don\u2019t think they\u2019re properly taught at all because nobody wants to do the full sweep.<\/em><\/p>\nThere are other areas that Charlie Munger might teach in his hypothetical MBA program eg. psychology, behavior economics, human follies etc etc. For this post, let\u2019s keep it at four.<\/p>\n","protected":false},"excerpt":{"rendered":"
Excellent Book: Charlie Munger For All Seasons Charlie Munger has many views on many subjects:\u00a0 perspicacious, penetrative and invariably right.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[3,5,4],"tags":[],"class_list":["post-230","post","type-post","status-publish","format-standard","hentry","category-investment","category-philanthropy","category-wisdom"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/230","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/comments?post=230"}],"version-history":[{"count":8,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/230\/revisions"}],"predecessor-version":[{"id":916,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/230\/revisions\/916"}],"wp:attachment":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/media?parent=230"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/categories?post=230"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/tags?post=230"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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