In Class...

My notes may be too long since it was an 80 min-business class.

In today’s business lesson (October 4), we started by discussing whether “profit” could be a business’ purpose. To make it more clear, Mr.Sen compared the food with profit and made a metaphor; he said that we don’t live to eat. We eat to live. Eating is not our purpose, however, we must eat to survive and reach our goals. Just like eating, businesses need to make profit in order to achieve their goals. They must make profit to keep their work going and to survive in the business world. After this metaphor, it was clear to me that “profit” can never be a business’ goal, it is only an essential element for the business to survive, and required as a mean to the purpose.

Moreover, we began analyzing the terms “long run” & “short run”. Mr.Sen said that businesses often have to make a distinction between what is happening in the short time and in the long time. For instance, by educating their workers and spending time on them, a good company knows that even though the way they acted decreased the profit in the short run, it will provide growth in providing service in the long run. In other words, companies should be prepared to sacrifice the loss of profit in the short run, since their efforts will provide them good opportunities and better values in the long run. I used to think that a company should never risk losing money, but now I understand that even though it may seem wrong and reduce the profit in the short run, it will eventually pay off and be worth taking that risk in the long run.

Furthermore, we began discussing how could a business be successful. The answer was to fit the opportunity with something the business wants to offer. It has to find an opportunity that fits not necessarily to their strengths and qualities, but to the strengths and qualities that they had access to. Again, to make the discussion more clear, Mr.Sen explained it metaphorically. He said it was exactly like “fitting a plug into a socket”. Then he held a Turkish plug in his hand and said, “Have you ever tried fitting this plug in an American socket?” The answer was obviously no. This example revealed that if a business tried taking the skills to a wrong market, it would fail. What I learnt from the discussion was that businesses should try to find the right market that fit their skills in order to be successful.

Then, the discussion shifted to entrepreneurs, who they were and which skills they had to have. I knew that entrepreneurs were the ones who organized and operated a business, and in order to do so, they had to take risks. So when I said they should be brave to take risks, Mr.Sen made me say it louder and wrote “RISK TAKING” in capital letters. I didn’t know it was that important, but the more we discussed about entrepreneurs, I learned that risk taking was the key point. Then, we made scheme that demonstrated the skills entrepreneurs had to have :

We said that an entrepreneur should be a brave, creative and innovative person who is also disciplined and patient. He/she should be able to bring together people and resources for a particular purpose. From this scheme, we can also see other people such as stakeholder, customer, partners etc and Mr.Sen pointed out that those people are as important as money and that one can’t only say “me, me, me!” and should consider about others too while running a business.

Moreover, we started discussing the term “creativity”. It was seeing something everybody sees and looking at it from a different point of view. It was the same rule with businesses; to spot an opportunity in the market counted as creativeness. Then Mr.Sen asked us what were some creative products we saw in Turkey. Even though at the time we couldn’t find much, we could think of “akbil”. All the world has pass cards for trains and buses such as akbil, however, in Turkey, akbil is available to use almost everywhere; in buses, trains, museums etc. So the creativeness in akbil was that, they adapted the standard pass-card into a more useful thing. We also mentioned web sites such as yemeksepeti.com, tatilsepeti.com which are also adapted from sites like ebay and amazon. Then, we talked about innovation and gave Sultanahmet Koftecisi as an example, which combined Turkish food with the fast food understanding and created a new notion.

Then, Mr.Sen asked a question; “If you were to look to the purpose of a company? Where would you find it?”. The answer was “the mission part of its website.” Then, we figured out that purpose of a business is the reason for its existence. Depending on your purpose, you do certain things and don’t do certain things; for instance, FedEx’s purpose is to post whatever you want on time. It thinks of different ways to help the customer. Also, we discussed why in a school’s mission it doesn’t write: “Prepare students for the OSS, SAT, IB etc”. The reason was that purpose always defined the “bigger picture”. All those details are included to the smaller picture. Mr.Sen also warned us by saying “If you lose the side of the bigger picture, the smaller pictures won’t make sense,” meaning that if we get stuck on the details, we will forget our mission and follow a whole different path. Additionally, Mr.Sen gave the example of a “quadratic equation”. It’s the smaller picture, there’s almost no meaning in solving them unless you’ll become a math teacher etc. He said that in a conference, the speaker asked “How many of you have solved quadratic equations in school? –Everyone raised their hands. Then he asked, “How many of you have used it after graduating from school? –Approximately 20 people raised their hands. And when he asked “How many of you have solved it in a non-educational context?” –Only one person kept his hands up. This example shows that by making the students solve quadratic equations, the system gets stuck on the smaller picture and doesn’t contribute to the idea of the mission –the bigger picture-. Mr.Sen also told us to question our teachers and ask them “Why are we learning this?”

Besides, we went back to Friday’s lesson’s topic, which was “specialization”. Mr.Sen added that if you specialize too much, you can’t connect the field to other things. For instance, if an otorhinolaryngologist (ear-nose-throat doctor) specializes on his field too much, he may not see that patient x’ problem is with his lungs, not with his throat. It’s a proof of the liabilities of specialization if he can’t connect the problem to something else other than his specialization field. Specialisms have to connect in order to make sense.

Then, we talked about department formation. We figured out that departments only exist because you have specialization fields; the bigger the organization, the more you need specialists, and the more you need departments. For instance, Mr.Sen exemplified a small school in Afyon; since it’s not big, they don’t need any departments, the principal is the one dealing with finance and everything –with the help of an assistant-. He has to be the specialist of so many things. He doesn’t have the right to say “Well, I’m an accountant, not a principal.” Because the school is not big enough to make room for deparments. We understood that specializm has to do sth with SIZE (SCALE). Running the koc school, in contrary, has to have a financial department etc. Large scale organizations can often employ specialists because they find it cheaper to find specialists than to find generalists (everybody doing everything=chaos), that’s why it makes economically more sense. We also mentioned that families don’t have departments.

Then, Mr.Sen drew a “system” on the board :

Let’s think of this system as a “school”. The inputs(sources) are; buildings, students, teachers, books, finance etc. The outputs are physical things such as money, educated students etc. Feedbacks are a whole different thing. I learned that unlike outputs, the feedbacks are generally in form of information and all the outputs are counted as feedbacks. For instance, the schools the graduates went to, what they are doing are the feedbacks that then can become the input, they return back. Plus, we discussed the term value added. We saw that a business company’s added value is profit. However, I realized that determining the value added in a non business company is not that simple. You have to see whether the graduates make a big change in the world, in order to know if the value is added. And this process requires a long time to pass. Also, we said that the Pinar company’s primary purpose of accounting was to give feedback.

In the last 5 minutes of our lesson, Mr.Sen said that these blogs give him an idea about what is going on, whether we learn from our mistakes. He’s using this input to provide an output. We –as business students- have to add value to our blogs; write what difference does it make us think about things, what are we unclear about and so on. In our blogs, we should ask questions, say our confusions and reflect what is going on in our minds.