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AMP Participants Dig into Customized Research

Published: 01/15/2006

Each spring and fall, 150 senior executives temporarily leave their jobs to enter Harvard Business School's Advanced Management Program. And waiting for them from Baker Research Services (BRS) is a four-page analysis of their own company that offers unique, customized insights into corporate performance.

"Throughout the program, as we are learning analytic techniques, each participant receives relevant financial data about his or her firm on the program Web site," says William Fruhan, who holds the George E. Bates Professorship and teaches financial management in the program.

The ability of BRS to offer customized learning tools contributes much to the success of AMP, he says.

The spreadsheet contains ten years of financial data on the first page, which is used to make financial performance ratios and graphs on the subsequent pages, says BRS' Chris Allen, who supports Fruhan's financial management course in AMP. "It is all dynamic, so if the participant makes changes on one page, the ratios and graph all reflect those changes."

As participants review how the ratios have changed over time, they can see whether these changes have added to or subtracted from the amount of value their management teams have created for shareholders, says Fruhan. Similar reports are developed showing each participant's firm-specific cost of equity capital, stock option value, and expectation of future profitability and revenue growth rate implicit in the current stock price. (AMP participants who don't work for public companies, and thus can't have customized spreadsheets built for them, use data from public firms.)

In addition to providing customized financial information, Allen updates two dozen exhibits used in the course that show how capital markets operate and track the sources and destinations of money.

"The combination of highly firm-specific and unambiguous financial performance information delivers a very powerful learning experience," Fruhan says. "Participants are delighted to discover that we are committing the resources necessary to personalize the learning experience they gain from other firms' case studies."

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