How to ace the GMAT in 28 days: Day 22 (2nd CAT test: 560)

Ok, my second CAT practice hit an all-time low of 560, with raws of 36V/32Q, barely above average. With a week before the test to make up a sudden 200-point drop in my simulated score, this is serious. Do I have time to recover?

Analysis of an Issue

“In any large business organization, teamwork is the ultimate key to the organization’s success.”

In your view, how accurate is the foregoing statement? Use reasons and/or examples from your experience, observation, and/or reading to explain your viewpoint.

Any large business is a mix of hard and soft skills: solid technical competence in its area of work, combined with the web of relationships between its people. That’s why I agree that teamwork is the ultimate key to business success: I believe that spirit of co-operation between people is the key to effective delivery. Why?

It’s because effective delivery means an effective business. Even the greatest products will languish in the lab without a motivated sales team to get them into the market. Of course, the most motivated sales executives will be those who have a relationship with the white-coated R&D people, who genuinely care about their company’s products and want them to be successful. Contrast this with the situation IBM found itself in during the 1980s: terrific products, yet a train-wreck of a balance sheet, largely due to a dysfunctional culture, sequestered in departmental silos, that didn’t value selling or engagement with the market. As one commentator wrote, “At IBM, products don’t get launched; they escape.”

So what’s the corollary? For the answer, just look inside any government office. An organisation where people’s loyalties are to their pension entitlements and a quiet life, rather than driving themselves and their team forward to greater achievement. In a environment of high job security and little excitement, subject to the whims of politicians who bear no loyalty to them, it’s hardly surprising that government offices are low on teamwork. This shows up in the lack of success shown by many government departments – which are among the largest organisations of all.

To add yet more evidence: over half of large mergers and acquisitions fail, despite some of the world’s top financial brains working on them to make sure every business case and budget allocation makes sense. It’s reasonable to assume that these experts haven’t made many mistakes in their costings or forecasts. So perhaps these mega-mergers fail because the people don’t feel part of a team. Newly merged divisions don’t co-operate, new managers don’t build relationships with their staff, and morale nosedives, leading to a wave of resignations by the company’s top workers.

In sum, teamwork matters because it’s fundamentally about taking responsibility: understanding that you have an obligation to others, that people are counting on you. These bonds matter, and they’re key not just to large businesses, but to every structure involving groups of human beings: family, tribe, village. Teamwork is the mechanism by which knowledge and skills ‘make it to market’, the tacit understanding and mutual trust that let products and services move from the basement lab to the bottom line.

It may not appear on any balance sheet, but strong teamwork is the most valuable asset any business can own, because in the end, any business is just the sum of its people.

FAULTS: I started slow on this one: one of those prompts that you know is important, but can’t immediately imagine how to articulate. Despite this, it’s a worthwhile effort, and follows a good structure. A 5/6.

Analysis of an Argument

(NOTE added 21aug2012: GMAT expert Mark Stewart has asserted his right to be identified as the author of the essay prompt in italics below, and has requested this link to his original source material, which I’m happy to provide.)

The following appeared in a memo from the sales director of Aura Cosmetics Company:
“The best way to reverse Aura Cosmetic’s recent decline in profitability is to require each new employee in Aura’s sales division to enroll in the popular SureSale seminar. Last year, the software company TechAide began incorporating SureSale’s week-long seminar into its training program for all new sales employees, and since that time TechAide’s total sales have increased dramatically. Also, according to a recent article in a reputable business magazine, the SureSale sales system has been widely adopted among the nation’s twenty largest companies, and the employee turnover rate at these companies is lower today than five years ago. Therefore, by enrolling Aura sales employees in the SureSale seminar Aura will also retain its highest caliber salespeople.”

Discuss how logically convincing you find this argument. In your discussion, you should analyze the argument’s line of reasoning and use of evidence. It may be appropriate in your critique to call into question certain assumptions underlying the argument and/or to indicate what evidence might weaken or strengthen the argument. It may also be appropriate to discuss how you would alter the argument to make it more convincing and/or discuss what additional evidence, if any, would aid in evaluating the argument.

My answer:

The Sales Director makes a reasonable assumption: that sales training for sales staff will increase their effectiveness. He backs up his assertion with evidence, citing SureSale’s track record in boosting sales and reducing staff turnover. However, by supporting his argument with examples of first a software vendor and then the top 20 blue-chips, he may be making unwarranted assumptions about whether the same approach will work for a cosmetics company – while his conclusion about retaining the highest calibre salespeople seems totally unsupported.

In the context of Aura’s decline in profitability, the Director’s argument seems strong. If the SureSale system has been effective for a software company, it may well be effective for a cosmetics group. However, it’s unclear whether Aura’s sales force (or, indeed, the software company) sells principally business-to-business, or directly to consumers. Is Aura’s sales department a squad of housewives selling to their friends at sponsored parties? This isn’t how software is sold, so the Director needs to produce evidence that the sales model of SureSale (not necessarily the products it has sold) is a good fit for Aura.

In addition, the Director talks about ‘profitability’, not ‘sales’. Have Aura’s sales actually risen, and the decline in profits is due to lower margins? If so, the problem may not lie in the sales department at all: perhaps the boffins in R&D need to use cheaper raw materials, or Marketing may need to examine its pricing model. To support his argument, the Director needs to back it up with a balance sheet as well as sales forecasts.

Furthermore, relying on a magazine article to support a major change in departmental strategy is a weak support for the argument. The article may have been advertorial (sponsored space) or have been placed by a PR firm, rather than being the output of a dispassionate journalist. The source of the article – and the evidence it contains – needs to be checked if the Director wishes to strengthen his case.

Finally, his conclusion about retaining his top sales staff seems illogical. A week-long seminar for all staff may lead to some improvement across the board, but five days won’t turn mediocrities into sales stars. Nor will it lead to any improvement in the people who matter most – the top sales people. In addition the prospect of a large number of newly-trained sales people all chasing the same leads may reduce opportunities for these top performers. Top sales people are motivated by having a thick stack of hot prospects to sell to, and the adoption of SureSale may demotivate the stars.

However, none of the above means the adoption of SureSale is definitely a bad idea. Indeed, the director may already have answers to all these issues. SureSale may be perfect for Aura’s business model, the magazine article may be a shining example of unbiased journalism, and the market for Aura’s products may be so huge that even a hundred better-trained sales staff would not exhaust its opportunities. The Director’s argument deserves further consideration. But approval of his plans must be tempered by a realistic evaluation of SureSale and Aura’s current finances, since desperation is not a great sales strategy.

FAULTS: Not bad: I’m now comfortable writing these. But this was a bit rushed towards the end: I only noticed the ‘profitability vs. sales’ point with a couple of minutes to spare, so the paragraph was hastily inserted. I’ll score myself a 5.

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