What you will learn in your INSEAD MBA

When I was considering doing an MBA I often wondered what I was going to learn in the classroom.

One of the best articles I read on this question was Ellen Chisa’s overview of her year at HBS “What’s one thing you’ve learned at Harvard Business School that blew your mind?” | by Ellen Chisa | TheLi.st @ Medium | Medium.

But there were some differences in what I learnt at INSEAD versus what Ellen described about HBS. Therefore I wanted to write a similar introduction for potential MBA students looking at INSEAD for their MBA.

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How INSEAD’s Academics are Structured

INSEAD’s year is broken up into 5 periods, each ~2 months in length. If you start in January (D cohort) you have a 2 month break after P3; often used by students for internships. If you start in September (J cohort) you do all 5 periods back to back without a break.

The courses every INSEAD MBA student is required to take are below, along with some highlighted elective courses I would recommend to every student.

  • Financial Accounting
  • Financial Markets and Valuation
  • Prices and Markets
  • Uncertainty, Data and Judgement
  • Organisational Behaviour 1
  • Managing Customer Value
  • Introduction to Strategy
  • Corporate Financial Policy
  • Managerial Accounting
  • Organisational Behaviour 2
  • Process and Operations Management
  • Ethics
  • Public Policy
  • Politics
  • Macroeconomics
  • Capitalism (Elective)
  • Strategies for Asia Pacific (Elective)
  • Negotiations (Elective)
  • Power and Politics (Elective)
  • Managing Corporate Turnarounds (Elective)

P1 Core Courses

This is the core accounting course any MBA will give. It serves as a basic introduction as to how the 3 financial statements (Income statement, balance sheet, and cashflow statement) are constructed, and how they interrelate.

The two metrics that are drilled into INSEAD’ers heads are NOPAT (Net Operating Profit After Tax) and ROIC (Return on Invested Capital).

  • NOPAT is the profit generated from the normal activities of a business, after taxes have been paid. The Operating part of the definition is important because sometimes company profit can be inflated by financing or other weird things e.g. Tesla making a profit by selling pollution licences to other car companies, not by selling cars.
  • ROIC is how much value the company generates from the resources invested in it. If the return falls below the cost of those getting those resources the company will eventually* collapse.

*Sometimes “eventually” can be longer than you think. The market can stay irrational longer than you can keep betting against it.

FMV is an introduction to business finance. It covers company valuation, bond pricing, how to construct a portfolio, business project payoff calculations, and company capital structures. It is full of graphs and equations and is hard to summarise in an essay, as Ellen also found for the equivalent course at HBS.

One of the fun takeaways was how to structure a diverse portfolio. As it is commonly known investing all your money in one stock is risky, but just how many companies should you spread your investments over to reduce your risk. Surprisingly the answer is only ~30 investments gives you most of the benefits of diversification, as long as you spread out the investments.

This is Microeconomics 101 for all the INSEAD’ers that don’t have an economics background. I found it useful, as although I had read popular economics books I had never had to build supply and demand curves.

UDJ is an introductory statistics course, going from hypothesis testing to multivariable regression, but with an INSEAD twist.

INSEAD talks a lot about the benefits of diversity, and a big part of that is using different perspectives to come to better decisions. We spend a lot of time going through the advantages of aggregating diverse viewpoints to increase the accuracy of predictions. Two examples are:

  • In one assignment we were asked to assess the accuracy of a linear regression model using data from 3 analysts, and then asked which analysts you would choose if you could only have 2. It turns out that you don’t want the two “good” analysts, but the “worst” analyst + the “best” analyst. This is because the “worst” analyst brings novel information into the analysis, while the two “good” analysts don’t add much to each others analysis.
  • As a class we estimated the number of beans in a jar. But instead of taking everyone’s first guess we plotted out everyone’s guesses and asked everyone to update their guess. The second guess turns out to be more accurate, as a result of the discussion and updating process.

The INSEAD strategy course is a general introduction into the realm of strategy. One of fun memories from the course was the Disney strategy diagram. Every part of the business feeds in to support the whole Disney Machine. In fact it looks very similar to those flywheels you see from Amazon and Doordash.

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See any similarities? Amazon Feedvisor

The one thing I missed was a focus on digital strategy and disruption. We covered the strategic side of building marketplaces, but not enough on “Disruption Theory”. However with Blue Ocean Strategy being the INSEAD brand and Disruption Theory coming from HBS I am not too surprised.

The first of two people focused courses. OB1 goes through the research on human motivation, how teams work together, and leadership.

The most interesting learning I took away was the importance of assumptions. In many exercises the key to success was ensuring that all team members shared their knowledge with each other, and not assuming everyone saw the world the same way you did. This was shown most clearly in the climbing Everest simulation, where ensuring everyone shared clear information is the difference between life and death.

P2 Core

CFP is the second of the core finance classes, and is split into 2 parts. The first covers derivatives (calls/puts etc.) and the second covers corporate debt and capital structure.

One big takeaway I took is that debt and equity holders behave differently because they have different incentives. One example is equity holders are more willing to take big risks, as they would receive the upside of the bets and the debt holders don’t.

MA is a continuation of the accounting course started in the Financial Accounting course. The key learning is around the importance of contribution margin, the additional profit a company can expect to earn by making 1 more product.

OB2 is the second of the people centred courses. It focuses on how teams and organisations can be structured, and how to use culture and power to drive change.

The big learning was around the importance of networks as a means of driving change. People really dislike being forced to take an action they are against, but by convincing people in their networks you can convince them indirectly! The key then is to develop “diverse” networks which allow you to influence many different people. These diverse networks also give you access to novel information, allowing you to be more successful in your goals.

POM was one of the most interesting courses I took. I come from a factory background, and thought I would know most of what was going to be taught… but I learnt a ton more.

One useful tool we were taught was the newsvendor model. The model allows you to estimate the optimal amount of inventory to produce. This is a critically important question as inventory costs lock up cash that could be spent elsewhere in the business.

One counter intuitive thing we learnt was the idea of revenue sharing agreements. These are agreements where the original manufacturer receives a share of the revenue that the distributor gets with each resale. By sharing the risk and reward of the final customer sale higher profits are available to everyone! Its a Win — Win situation.

MCV is INSEAD’s marketing course. Coming from an operations background my marketing ability was not the best. I particularly enjoyed the deep dive we did on marketing funnels. The idea is to find out why customers are or are not buying from you. Is it because they don’t know who you are? Or because you are too expensive?

Knowing the truth as to why you are getting sales or not is half the battle.

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Develop a Full-funnel Advertising Strategy For Your Business — APS Guide

P3 Core

Probably the course I understood the least, and will need to review when I have a spare weekend in the future. This course is all about how economics applies to countries. From interest rates to sovereign debt to bank runs to how we measure GDP.

Ethics was a case based discussion class, which is unusual for INSEAD. The cases were tied to problems we would likely face in our careers e.g. When should you renege on a contract?

Sadly there is no single answer to what is virtuous in business, the question is a deeply personal one. To get around this problem the course used a version of Virtue Ethics to address ethical questions e.g. always asking the question “What would a virtuous person do in this situation” or “How would I feel if this was on the front page of the NYT”

Public Policy ran over the common reasons we have pollution regulation, tax rules, and labour laws.

An unusual course that was focused on how politicians and politics can alter business strategies and performance. The message I took was employ a lobbyist if you have an important project that the government might take an interest in.

Recommended Electives

Just what is capitalism? Is German capitalism the same as American capitalism? When did capitalism start? What is the future for capitalism in the 21st century?

The big realisation for me was just how different “capitalism” is around the world. I had imagined that globalisation had created a relatively unified capitalism in the Western world, but I was mistaken. From the sources of capital to the importance of cross shareholdings, capitalism is a different beast depending on where you live.

INSEAD has a Singapore campus, and many students who want to work in Asia after their MBA. However Asia is a very diverse and complicated market, and SAP covers the different strategies required for major Asian economies. A big part of this course is history. Understanding the big events in a country’s history, and how these shape their current behaviour.

This was one of the more unexpected courses that I took. CG dives deep into what the role of directors actually is, and how corruption and fraud can take hold within an organisation.

One thing we learnt about was the Fraud Triangle. The diagram below is an image of what types of situation are likely to lead to fraud. If you ever enter an organisation where all 3 elements are in place I would recommend that you run, terribly fast.

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From Anders CPA Advisors

Probably the most important elective you can take at any MBA, in fact it probably should be a core course. Some of the key concepts I took away were:

  • Preparation — People just don’t prepare enough! Negotiations are hard, and to do well you need to spend hours beforehand understanding what the other side wants. You also need to fully understand what you want, which is often something more expansive than you realise.
  • Win Win — When you look at what you want and what your counterpart wants you can often find win-win situations. Often when we go into a negotiation it turns into a bargaining discussion over a single number. This destroys value, as people fight against the power being exerted over them. Look for win-wins instead, and negotiations become much easier.
  • Best Alternative to Negotiated Agreement (BATNA) — The foundation of any strong negotiation strategy is the ability to walk away from the table if necessary. Having a strong alternative means you can aim for a beneficial agreement.

The course title makes it sound more Machiavellian than what is actually learnt. P&P is a continuation of the analysis of networks, started in Organisational Behaviour 2.

The key is building a “diverse” network. This means a network that is not concentrated in one geography, sector, race, gender, or level in an organisational hierarchy.

This is a weekend simulation course where you are asked to rescue the Swedish car manufacturer SAAB. In real life the company went bankrupt, but using actual operational and financial data from SAAB you are tasked with taking decisions to save SAAB over a simulated 6 month time period.

The fun thing is you realise how similar a corporate turnaround is to a startup. Will you have cash in the bank at the end of the month? What is your burn rate? If we don’t invest in R&D today will we be able to compete in 12 months?

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