That sounds pretty good, right? Well, probably. After all, in doing so, companies are returning capital to owners. And the markets seem to like it; the activity has helped drive stocks to new highs.

But, on the other hand, it might also mean that companies can’t figure out anything better to do with their money. And that could signal that they’re not thinking about acquisitions or investments in R&D.

Participants at PriSim classes in the Northwestern MEM program wrestle with a similar decision. As they manage the capital structure of their simulated companies, they must decide to pay or not to pay dividends, whether or not to buy back stock, or whether to make further investments in their business.

And believe it or not, even more cash is building up at U.S. companies:

1)      Much of the current investment seems to be replacement spending, not new investing.

2)      While stock repurchasing has increased, it’s partly offset by new stock-options paid as compensation.

3)      Cash is still being stockpiled in the international operations of U.S. companies rather than brought back to the U.S. where it would be taxed.

For more information check out this WSJ article that looks specifically at Apple and Chase. 

As always, we welcome your ideas and comments.

PriSim Business War Games Inc. runs and designs customized business simulations that teach decision-makers about business, strategy, finance, and leadership.

“Often in business, asking questions in the right way brings clarity to the answers and renewed purpose to an organization. Frameworks do just that — provide analytical structures from which businesses can gain perspective on where they fit within their own business environment and reveal exploitable competitive advantages. The trick is to know the most insightful frameworks, when to apply them, and how to fill them with the right data to bring clarity to your business strategy.

“In this presentation, Sean Campbell, national speaker, teacher and successful consultant, will not only share with you the most useful frameworks for today’s businesses, but he’ll show you the secrets of how to reach into the web beyond Google to collect the data you’ll need to fill your framework with relevant data. Don’t miss this foundational topic and fabulous speaker.”

Accenture chose the topic of challenge because of the importance and usage of Wi-Fi in the United States. According to an Accenture report:

Statistics and trends point to the growing importance of Wi-Fi. In the United States, for example, Wi-Fi connections account for more than 37 percent of digital traffic over mobile phones, and about 90 percent of Internet access from tablet computers is done via Wi-Fi, not through a 3G or 4G network. . . . With the rise of digitization, Wi-Fi network operators and owners have amassed terabytes of information about their user base and their behaviors.

The enormous store of Wi-Fi data is the perfect ground for experimenting with Big Data. The groups will have the opportunity to analyze data sets and examine trends in ways never before possible with traditional market methods. While exploring the many unique new uses of Big Data they hope to discover real world possibilities for new business opportunities.

Each team will submit a problem statement halfway through the competition and a final deliverable on May 24. The final teams will be chosen to present a Powerpoint presentation with a strict 12 slide limit to a board of Accenture executives and Accenture partner participants for final evaluation. The winner and their project will be announced in a press release with Northwestern at the end of the competition, so keep an eye out at the end of May. Pictures from the information session can be seen below. If you missed out on the event, make sure to attend an upcoming event hosted by inNUvention, a group that runs a startup competition on campus in the Fall. Best of luck to all our MEM participants!

On April 2, 2013, three Northwestern MEM alumni, Director Mark Werwath, and Associate Director Sue Fox met via teleconference to discuss plans for the Chicago regional MEM Program Alumni Council (MEM-PAC). The meeting came after months of initial outreach and contact as Sue Fox solicited interest in forming a stronger MEM alumni community in Chicago. Less than a month later, the Chicago regional planning committee now includes graduates from Duke, and Dartmouth with plans to expand to Stanford, Cornell, and USC soon.

While the Chicago MEM-PAC will have a chance to meet and greet at an informal mixer this summer, all four groups, including the Palo Alto community, Boston, and NY will host simultaneous events around the country in the fall. The Chicago team already has big visions for the young organization. “We want to build a community and have new opportunities to interact in professional, social, and educational settings,” Sandra Waters, a 2007 NUMEM graduate and head organizer for the group, explains.

Ms. Waters currently works as a consultant in the non-profit healthcare sector. She and her husband moved to Evanston specifically for the MEM program. ”I love education and Northwestern is a great environment for learning,” she adds. They eventually purchased a house in the area because of the proximity to Northwestern and the incredible learning environment it creates. Although the ultimate goals of the Chicago MEM PAC  are still forming, Ms. Waters sees ongoing education and professional development as central pillars in an active MEM community.

“Everyone has responded positively to the proposal of integrating alumni into a regional community,” Ms. Waters states. As the demand for engineering managers continue to increase, so does the need for great MEM education. Each MEM school brings a variety of skills to the table to help each other learn and grow. ALL MEMPC alumni are invited to attend the event this summer. Be sure to join the MEMPC LinkedIn group today to keep track of updates and to start making new connections today!

By Jay Goldstein

As a non-quant, non-engineer type I am amused to find myself on the MEM board. My father is a Northwestern University engineering graduate and I like to say he tried to make an engineer out of me because I was introduced to so many basic sciences growing up. I was also introduced to what entrepreneurialism is all about as he and his NU partner went on to form a business after they graduated which, among other things, created the residential garage door opener industry.

Personally, I leaned more toward the sales and marketing development sides of things rather than the technical but most of my entrepreneurial success has come from working alongside creative engineers. For example I was working with an engineer who had this idea for a DVD vending kiosk that I thought had a lot of possibility. I became their first business development person and opened up many of the first proof of concept chain-store trials, then went about raising venture capital and other early-stage activities. This company would go on to produce over 35,000 Redbox kiosks, which you may have seen around.

As I’ve worked with engineers throughout my career I’ve come to understand the different skill sets necessary in a successful team. Most recently at the IT software development firm that was engineering driven and until I arrived, without business processes or sales and marketing functions and they could not achieve their market potential. Once those business aspects were put in place the growth really accelerated, to about 400% in two years, and is forecasting another 500% growth over the next few years.

Being a serial entrepreneur I love transformational growth and development—developing people, markets, products and services, and the businesses themselves. Today it is interesting that universities are the new incubators (at least according to Donna Fenn’s book Upstarts). At McCormick I have guest lectured in leadership and entrepreneurship classes, acted as a project judge at the freshman and senior levels, and even had a design project for my own company completed by a senior team which came up with an amazing, creative, and even patentable design. As an MEM advisory board member I hope to bring my creativity and divergent thinking to team and help shape students so they can learn to work with non-engineering types before they leave the classroom.

“Engineering (management) is well positioned to make an original contribution to entrepreneurship as engineers and entrepreneurs both are seen as ‘creators.’ Engineering can contribute a systems perspective to understanding the entrepreneurial phenomenon and can offer a well-developed formal and mathematical apparatus to further the understanding of complex non-linear and dynamic processes in the creation of new ventures.”

Next Generation Quality Leadership

Jim Buckman first came up with the idea for a case studies series as a missing resource provided by the Joseph M. Juran Center for Research in Supply Chain, Operations, and Quality, which he helped start at the University of Minnesota. Mr. Buckman, now retired from the university, approached his friend Robert Galvin, former CEO of Motorola and a strong supporter of his wife’s alma mater Northwestern University (including a recent $6 million donation to the music school for a recital hall to be named after his widow Mary Galvin) with his idea for the series and soon a partnership formed between Buckman Associates, Northwestern University, and the American Society for Quality.

From the start, Mr. Buckman took a different approach to the series than most case studies to day. Hoping to present information in a more engaging and effective format, the research is presented in a variety of formats including video, instructor guides, and an in-depth written analysis. The Mayo Clinic in Rochester, Minnesota served as the first example in 2011 because of their incredible approach to health care that could help revamp a currently failing system in the United States. The process beings with interviews and questions during in-person meetings on site for each company. Several months later, company representatives travel to Evanston, specifically the ITW room of Ford familiar to all MEM students, to present material about their leadership session, followed by a Q&A sessions with MEM students providing the necessary expert audience.

The MEM Impact:

MEM students offer a good choice as participants for a variety of reasons. One focus of the case studies is to place an emphasis on systems thinking, which Mr. Buckman believes is a signature aspect of the MEM program and sorely needed–and often missing–from executive education generally in both business and engineering. Students in the MEM program are dedicated to quality in their management skills. They already have work experience, training in technology and science, and a broad range of skills to draw from, so they know what questions to ask and what they would like to see in a case study.

During the most recent Nestle Purina Pet Products presentation, Vice President of Quality Systems Ken Dean and Vice President of Manufacturing in America Bill Cooper discussed the way Purina overcame stagnant years in the 90s to emerge an industry leader with continually growing success with 18 consecutive years of sales growth and five consecutive years of increased market shares in all Purina categories. Mr. Dean and Mr. Cooper focused on Purina’s incredible feedback practices with their customers and internally in the company as well as the “zero” mentality, meaning aiming for “zero workplace accidents,” “zero waste,” and zero tolerance for aiming for anything less than perfect. Student questions focused on attaining a more thorough understanding of the survey methodology and how to balance important business practices such as efficiency and innovation that often conflict with one another.

Quality Studies and Exceptional Results

For Mr. Buckman as well as members of the ASQ, the series has been a rewarding and exciting prospect. “This has been a lof of fun and a really rich experience for us working with Northwestern,” Mr. Buckman stated. The ASQ is able to reach an audience of over 100,000 all over the world and so far the series has been wildly successful among subscribers. The Mayo Clinic report:

• has had nearly 5000 visits and downloads to date
• is the #1 most downloaded case study in 2012 (with nearly five times more downloads than #2)
• was featured in Quality Progress magazine and was the 13th most visited and 10th most downloaded article

Why has the study been so popular? According to user feedback:

“This is a great article about a great institution. What impressed me most about the article was the description of how their system evolved and clearly was not ‘copied.’ . . . While there are many key points in the article, I believe the point about overcoming a mindset explains why many organizations fail in their attempts at quality.” —Ron Behren

“Fantastic article! I am sharing this with as many people as I can because this really hits the nail on the head. This is what our healthcare system needs more of, and The Mayo Clinic is doing it like a business. Rock on Mayo!” —Dave Wildner

“This article is inspiring in more ways than one. When the driving forces of a company buy into a belief and support activities to proceed and succeed, that is when something concrete and substantial can manifest. I intend to use this case study to raise awareness. Thank you for another fine and extremely relevant article!” —Anisha Verma

Looking Ahead

If you ask Mr. Buckman, he believes the depth of the case studies is what set them apart. Unlike a simple report or technical evaluation, the studies are multifaceted and engaging. The ASQ also provides an instructor’s guide for implementing strategies explored in the reports along with video clips from various executives within the organizations, and in general are presented in an engaging tone that adds a human view in contrast to a purely managerial view. The cases studies also offer an intellectual aspect necessary in an academic setting, which will be more relevant down the road when a book about the case studies is produced.

“We try to select cases that are a real impact on the world,” Mr. Buckman explains. He believes a real renaissance in manufacturing will require strong engineering leadership and a focus on developing both a technical and leadership background will be essential to in a variety of industries in the future, from banking, to insurance  to real estate. The MEM program aims to develop students capable of solving the worlds problems and the case studies offer one more step toward achieving that goal.

You can find the studies online on the ASQ Knowledge Center and see the video online here. Learn more about why engineering managers are growing in demand and how NUMEM is preparing them for the future.

PriSim just conducted a 4-week online business competition between virtual teams from Master of Engineering Management programs at 5 leading U.S. universities (click here to read all about it). The teams never met live, but ran their team completely online, planning their strategies and tactics via webcasts, Skype, and by phone. However, our initial survey of the students in the competition indicates they thought their virtual teams were only about 70% as effective as physical teams.

Live meetings of geographically distributed teams can be expensive, difficult to schedule and set up, and disruptive to the lives of overstretched staff. However, using today’s high-tech tools, virtual teams can be run very successfully, as shown in a study by Dr. Lynda Gratton of the London Business School of 55 virtual teams with over 1,500 team members at companies such as BP, Nokia, and advertising company Ogilvy and Mather (see link).

Erin Meyer, director of INSEAD’s Managing Global Virtual Teams program for executives, describes four keys to success with virtual teams:

1. Take a leadership style that provides clear direction and goals and removes any vagueness in how processes will be conducted.
2. Define how decisions will be made so that cross-cultural differences don’t create logjams in decision-making.
3. Reliability is the currency of “trust” in a virtual team. Specific results produced reliably within a well defined process will establish trust when face-to-face meetings are few.
4. Communicate as if you’re actually alive, not just a voice on Skype. Move around while you speak instead of just sitting like a statue.

What are your experiences with virtual meetings? Do you still prefer meeting face-to-face? We invite you to share you comments and own experiences.

PriSim Business War Games Inc. runs and designs customized business simulations that teach decision-makers about business, strategy, finance, and leadership.

By Mark Werwath

Find out how this Tuesday, April 23, at 4 p.m. in the ITW Classroom of Ford Motor Company Engineering Design Center when Dr. Bernard Meyerson, an IBM Fellow and Vice President of Innovation at the IBM Corporate HQ, presents a Dean’s Seminar entitled “Driving Innovation in a Global Enterprise.”

In his presentation, Meyerson will discuss strategies to ensure the simultaneous availability of the right people, infrastructure, and motivation needed to sustain innovation in a global enterprise. He will also provide examples of the extraordinary outcomes that can result when all three of these attributes come together.