Out of laundry detergent? Just press an Amazon Dash Button. Out of trash bags? There’s an Amazon Dash Button for that too. What might appear like a seamless way to allow users to order common household products is a new source of data for Amazon to better understand consumer behavior.

How? By using predictive modeling. Predictive modeling is a statistical modeling technique that forecasts an outcome or behavior. This type of modeling often uses historic or current data to predict a future outcome, which can be validated as more data becomes available.

The data collected by the Dash Button is valuable to both Amazon and the manufacturers of products. Dash Buttons give insight into individual patterns of frequency of purchase into a sample of Amazon’s users. Pair this consumption data with Amazon’s rich demographic data, and Dash Buttons are giving new insights to fuel future growth for Amazon.

With this type of data available, perhaps a predictive model could anticipate future consumption and ordering behavior of customers. The future of shopping for household items could mean enrolling and letting predictive modeling take over from there. What if Amazon could accurately predict the amount of laundry detergent and trash bags to ship to you based on your past behavior? This is the future of retail with predictive modeling. 

While the verdict is still unclear if Dash Buttons are a viable, profit-producing technology for Amazon, the data they produce may be more valuable than the products they sell. Every product sold through a Dash Button is a valuable data point that will contribute to Amazon’s next generation of services and products.

To learn more about Amazon’s Dash Button’s data here, check out this article from Fast Company.

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Want to learn more about predictive modeling and other business concepts? HBX CORe will teach you the basics of Business Analytics, Economics, and Financial Accounting using Harvard Business School's renowned case-based methodology!

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In part 1 of this post, HBX Excutive Director Patrick Mullane spoke about his transition from military to civilian life. In part 2, he offers additional tips on how to make a successful career transition.

Tip 3: Network, network, network

Technology not only helps educate you but it can help you to connect with others. HBX has built peer help features into its platform and uses closed Facebook pages to foster cooperation, communication, and networking, so connecting to others happens while you are learning. LinkedIn is another critical tool. Next to the magnifying glass icon at the top of the LinkedIn home page is the word “advanced.” Click on this and you are given power to search the larger network with precision. Use the search area on the left side of the screen to find people who share common experiences with you. Typing my alma mater’s name into the “school” field and the abbreviation “Lt.” in the “title” block yields 80 graduates of Notre Dame that were some sort of Lieutenant during their career. You can do the same for job titles, locations, and the like. If you are transitioning out of the military, sending a note to fellow alums through the LinkedIn system explaining that you are a veteran leaving the service and are looking for introductions into a certain industry or region can be very, very effective. You may have to pay a monthly subscription to get some of the messaging features on LinkedIn, but they are well worth it to expand your network and gain the help and trust of others.

Tip 4: Don’t forget about your alma mater

Most colleges and universities maintain a webpage where recruiters can post jobs, and Alumni usually have access to these postings. Don’t be shy about calling the career development office of your undergraduate institution to see what sort of services they offer. If there is a strong alumni club in the area where you live or will be moving to, think about joining that as well. When finishing a meeting with alumni, ask them, “Who else would you suggest I speak with to learn more about [fill in your industry or career interest].” Phrasing the request this way has a way of keeping the conversation moving forward and increases the likelihood that you will leverage one meeting into others. And always follow up with a thank you note. While hand-written is always a nice touch, email works as well. But just be sure you do it!

Final thoughts

There will always be trepidation when making a change. And moving from the military to private sector, can, at first glance, look daunting. But rest assured that almost all of your military skills will translate nicely into the private sector. Brushing up on business fundamentals, resume prep, networking, and using your alma mater are not exhaustive steps to take in an effort to land on your feet in the civilian world, but they are foundational in many respects. Working on them while seeking the diverse opinions of others who have gone before you will increase the chances that things go smoothly.

It’s been 20 years since I left the Air Force and during that time I have called on my experiences as a JMO in jobs that were in sectors about as diverse as you can fathom: distribution, manufacturing, software, Internet, for-profit education, non-profit education, and telecom. In all cases, the foundation the military gave me was instrumental in making the right decision. Rest assured, the same will be true for you.

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Back in the waning days of the Cold War, I entered the US Air Force as a newly-minted second lieutenant out of the University of Notre Dame’s ROTC program with a degree in mathematics. I was assigned to an intelligence-related unit in California and served for a little over four years, loving every minute of my time. When the time came to explore the world beyond the military, I found myself well-prepared in some ways, but under-prepared in other ways. Read on for tips on how to prepare for your own career transitions, be it from military to civilian life, or from school to the "real world."

During my time in the US Air Force, I managed a team of around 20 contractors and military personnel operating satellite systems, getting fantastic leadership experience while being entrusted with more than a billion dollars of hardware that informed senior decision makers in Washington on a daily basis. With 25 years of general management experience behind me, I've often said that I had more responsibility during those four years than I’ve had since. The US military’s trust in young men and women is unsurpassed and, in virtually all cases, that trust is well placed. Officers and troops often succeed in ways that belie their experience.

My search for a soft landing

As a junior military officer (JMO) exiting the service at 27 years old, I was terrified of how my military skills would (or, more fearfully, would not) translate to the private sector. But like all of those separating from the service, the time came to make the leap and I took a job at an auto parts manufacturing and distribution company, managing a location in Omaha, Nebraska where I quickly realized that in so many ways, I was much better prepared than I thought.

Leadership aspects of the job came naturally to me as did decision-making. But I couldn’t shake this nagging feeling that I was missing some key skills and so began considering returning to school. I researched what an MBA was and ultimately decided that business school was likely the best path for me.

So apply I did, to several MBA programs. To my suprise, I was accepted at the Harvard Business School (HBS) and spent two years there from 1997 to 1999 getting my MBA. It was one of the most amazing experiences of my life, truly transformative.

If I was afraid of how competitive I’d be in the private sector coming out of the military, I was even more afraid of the rigors of an MBA program. I prepared as best I could, taking an accounting course at the University of Nebraska in the months leading up to my matriculation at Harvard. I was also required by HBS (as were many others from non-business backgrounds) to complete some work before beginning the program that ostensibly got me to a level of expertise that would put me, if not on par, close to on par with my classmates who would be coming out of banking and consulting. The extra preparation helped and, two years later, I had my MBA and was ready to dive back into the private sector pool.

After stints in a startup and as the CEO of a manufacturing company (among other things), I am now the Executive Director of HBX, the Harvard Business School’s digital education initiative. I often think back on my days as a JMO worrying about how to best have a “soft landing” in the private sector. Specifically, I think of how much easier it is today to prepare for that landing in an age of online offerings that aim to educate people from all walks of life.

Tip 1: Brush up on business fundamentals

MOOCs (Massive Open Online Courses) such as EdEx and Coursera offer courses that teach an array of business disciplines and they can be a good option for getting some fundamentals down and showing potential employers your seriousness and intellectual curiosity. Some of these courses are offered at no charge but provide for the option to receive a “verified certificate” upon completion of the class for a nominal fee. Others charge when you register. The quality and depth of courses can vary substantially so it’s worth studying the syllabus and, to the extent possible, sampling the course to be sure it will meet your needs.

At HBX, our Credential of Readiness (CORe) program is another fantastic option to learn the language of business in one, integrated program. The course covers three fundamental disciplines: Economics for Managers, Business Analytics, and Financial Accounting. While the practices learned are important, perhaps more impactful is how students say that the course gave them a confidence and a language they never had before. 

As HBS has done for more than a century, instruction in CORe is accomplished through the case method of study. This pedagogy relies on real-world issues addressed by real-world managers (we call them protagonists since they are central figures in a story) that require the student to learn by discovery in concert with his or her peers. Just as in the HBS classroom, students learn from others who have different experiences and expertise through an online peer help function. Unlike MOOCs, which are generally a standard platform that content “slots” into, HBX is a platform custom-built to facilitate the case method and the student community necessary to make such a method of teaching effective.

Tip 2: Get your resume ready for prime time 

If you are just getting out of the military, it’s likely been a while since you created a resume. Take the time to do it well. Besides the usual advice to ensure you have correct grammar and spelling, there are several other things that JMOs (and anybody else for that matter) should keep in mind given the mistakes I’ve seen people make when I was the hiring manager. 

First, if you use a personal statement or “objective” statement of some kind at the top of your resume, ensure that it’s about the employer and not about you. Having an objective statement that says: “To find a job that allows me to further develop my leadership skills and one day become a senior manager in a manufacturing firm” is much less appealing to an employer than: “To use my leadership skills to build, train and drive a high performance manufacturing team that delivers on time and on budget.” The first statement is about what you want. The second is about what you can do to help your future employer.

Second, keep it short. In general, no matter how many great things you have to say about yourself, if it takes too much room to say them, people will lose interest. For most JMO’s I’d argue that your resume shouldn’t be more than one page if you’re exiting the service as a 26-year-old O3. Of course, if you have more experience, dipping into two pages is fine but beyond that I think little is gained and you risk turning off the reader.

Third, spend time taking the jargon out of your resume. This also applies to people changing industries. Thinking back to my military experience, a government description of my duty would have been something like “Managed a team operating national security assets providing 24/7 intelligence coverage used to inform the national command authority.” While accurate, much will be lost on somebody who has not served. Saying that I “operated satellites that gathered intelligence used to inform the President daily” was much shorter, simpler, and impactful. 

Click here to see part 2 of Patrick's post!

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This post was originally published on Linkedin Pulse. 

The last couple of months I’ve interviewed a dozen expert negotiators who’ll appear in an online negotiation course I’m helping develop at HBS. Among them are a dealmaker at Microsoft, a couple of entrepreneurs, the head of a real estate investment fund, and the mayor of a mid-sized city.

And then there’s Chris Voss, a former FBI hostage negotiator. What, you might ask, can a hostage negotiator like him teach the rest of us about making business deals or negotiating in our daily lives? Plenty, it turns out.

Chris is skeptical about a lot of conventional wisdom about negotiation. And on some important points, I’m convinced he’s right.

Specifically, he thinks the focus on win-win outcomes and expanding the pie has things backwards. To him, the process—not the result—is the heart of negotiation. In order to get something done, you have to connect with whoever it is that you’re dealing with. And if you can do that in a life-and-death situation, as he has done, then you can connect with anyone.

I found three of Chris's negotiation strategies particularly striking:

1. Employ Tactical Empathy

Chris says it’s not what you do or even say that drives success. Rather, it’s how you behave, your general demeanor, and your delivery that really matter.

Chris has perfected what he calls his “late night FM voice.” I heard it during our interview. He slows his pace and brings the pitch down.

There’s nothing threatening in his tone. He’s comfortable with silence. The idea is to get the other person to relax his defenses. It’s almost hypnotic.

Chris draws people out by asking how they are feeling, though he is ultra-careful in his phrasing. He wants to take any hint of aggression out of the conversation. In his experience, the singular pronoun ‘I’ gets people’s guard up. So Chris would never say, “I’m hearing that you think . . .” Instead he’d observe, “It sounds like . . ..”

2. Embrace a Negative Response

Rather than striving to get to yes, Chris loves it when the other person says “No.” It gives that person an active role in the conversation. They can feel a degree of control and security. And for Chris, who is listening, it opens up an opportunity for him to probe—delicately—for what it is they really want. According to Chris, “Great negotiators often seek ‘No’ because they know that’s where the real negotiation begins.”

Chris treads lightly when probing the other person’s mindset. He avoids asking any questions that might sound like cross-examination. For instance, he would never ask, “Why did you do it?” Instead, he’d say, “What caused you to do it?” In his view, the former phrasing invites defensiveness and self-justification. Instead, he prefers questions that begin with “what” and “how” because they are more open-ended.

3. Lead With Potential Objections

Chris believes the reasons why a counterpart won’t make an agreement with you are often more powerful than why they might. So, deal with objections first.

That’s akin to my post last year “To get a YES, expect a NO.” But in our interview, he took the idea further by describing the importance of doing an accusation audit in preparing for negotiation. I’d never heard that phrase, but his explanation seemed right to me.

“List the worst things that the other party could say about you,” he said, “and say them before the other person can.”  Starting out a negotiation by acknowledging the other person’s objections and resentments, takes them off the table. And it’s also disarming.

Chris gives an example in his recent book, Never Split the Difference. Since retiring from the FBI, Chris has been doing consulting and training. For one particular job, he had teamed up with some other people. But before the deal was struck, the client cut the budget significantly. That meant that the fees would be less than Chris originally offered his partners.

When he called them to break the bad news, the first words out of his mouth were, “I have a lousy proposition for you...” Chris went on to say that he knew that they would think he was a “big talker” and that he had “screwed up completely.”

Essentially, he was anticipating their negative reaction and if anything, exaggerating it, in order to clear the air. But then Chris added, “Still, I wanted to bring this opportunity to you before I took it to someone else.”

And as you might expect, after a little grumbling, his partners agreed to cut their rates.

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During Thursday’s Brexit vote, the value of the British pound fluctuated wildly – starting at $1.47/￡, it climbed as high as $1.50/￡ before dropping to $1.35/￡. What causes these currency fluctuations? 

While the easy answer is “uncertainty” – and there is certainly a lot of uncertainty in Britain right now – the harder question might be “if I were running a business and needed to know what the value of the pound should be, what should I do?” Financial investors do this every day, and thousands were doing so Thursday night – and their actions caused the shifts in value.

The stunning collapse of the British pound, in one chart https://t.co/XaGPqevTMp

— Washington Post (@washingtonpost) June 24, 2016

Before the vote, it was speculated that the appropriate value of the pound if the "Remain" campaign were to win would be $1.55/￡, and the appropriate value of the pound if the "Leave" campaign were to win would be $1.30/￡. By the end of the vote – one of these would be true, but until then, how should they value the pound?

The best way to do this is to consider each scenario in a weighted average of their probabilities. This will yield what in finance is known as an “expected value.” In this case, if we believe the probability of "Leave" to be p%, then the expected value of the pound will be $1.30 * p% + $1.55 * (1-p%). 

Across the world Thursday night, analysts who wanted to know the value of the pound furiously tried to determine what p% would be, and from that, determine what they should do. Let’s say you were such an analyst, and you believed the possibility of a "Leave" victory was 25%. What should you do? 

Well, first, you would figure out what you believed the value of the pound should be, so: $1.30(.25) + $1.55(1-.25) = $1.48.

If the current value of the pound is $1.47/￡, then you believe that it is undervalued. You should buy pounds, because they are currently cheap. If everyone believes that the probability of a "Leave" victory were 25%, then everyone will do the same, and eventually, the increased demand for the pound will increase the price – to exactly $1.48/￡.

You can also take the current price and back out the assumed probability. As the exit polls came out, and a "Remain" victory looked likely, the value of the pound spiked to $1.50/￡. What did that mean about p%?

Consider: $1.30(p%) + $1.55(1-p%) = $1.50. The value of p% is 20%. That means, at that point, investors believed there was a 20% chance of a Leave victory (meaning an 80% chance of a "Remain" victory). Overnight, as voting was counted, the value of the pound dropped to $1.35. $1.30(p%) + $1.55(1-p%) = $1.35. That means p% is 80%. The expected probability had flipped, with "Leave" now having an 80% chance of victory.

Thursday night, financial analysts were constantly revising their figures in an attempt to get ahead of their peers. The questions they were asking – what is the value of the pound if "Leave" wins? What is the value of the pound if "Remain" wins? And what is the probability of a "Leave" victory? – were translated into decisions to buy or sell the pound, which corresponded immediately into changes in its value.

These simple equations, along with your own intuition, can be the edge in preparing for uncertainty and knowing the expected future.

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Want to know more about finance? HBX CORe will teach you the basics of Business Analytics, Economics, and Financial Accounting using Harvard Business School's renowned case-based methodology!

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Every year since 1999, the Madden NFL video game cover has featured an NFL star player from the previous year, similar to an athlete being featured on the Wheaties box. Fans have noticed a trend where these star players end up playing worse or even getting injured the following year. Hence the idea of a “Madden Curse,” and a subset of fans who are adamantly opposed to their favorite players being featured on the cover.

What does this have to do with statistics? Well, there is a concept in statistics called “reversion to the mean.” Reversion to the mean is the idea that if we observe an extreme event (e.g. a surprisingly strong NFL season), we can expect the following event to be closer to the average (e.g. the season following a particularly strong NFL season will be less impressive). This might explain why players featured on the Madden cover generally do worse the following year.

GRONK. SPIKE.

Introducing the cover of #Madden17! pic.twitter.com/iCZUwIAuYO

— EA SPORTS Madden NFL (@EAMaddenNFL) May 12, 2016

The player's reversion to the mean does not indicate that they are actually playing worse than they normally do, it’s just that we raised our expectations of them! We can look at a similar phenomenon at the team level. Historically, football teams that do very well (e.g. records of 14-2, 15-1, or 16-0) typically do worse the following season.

This concept relies on there being some randomness to the events. If an NFL season were purely the result of skill, then we would always expect the following season to be as good as the previous one (barring injury or other external factors). But as we all know, there is some luck (or randomness) involved in most human endeavors, and as a result we are all susceptible to reversion to the mean.

The good news is that reversion to the mean applies to extremely bad events as well. So, if you did particularly poorly on a recent exam (compared to similar exams you have taken), keep your spirits up because most likely you will do better on the next one!

Food for thought: Why do you think that when teams fire their coach, they usually improve? Does reversion to the mean play a role here? Can you think of any other situations where reversion to the mean plays a meaningful role? Let us know in the comments!

To learn more about the Madden Curse, check out this piece from Forbes.

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Want to know more about statistics and other business concepts? HBX CORe will teach you the basics of Business Analytics, Economics, and Financial Accounting using Harvard Business School's renowned case-based methodology!

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We sat down with Bob Keeley, Assistant Director of Credentialing and Academic Operations, to talk about his role at HBX, his (potentially illegal) genie wish strategy, and his love of tiramisu and Chalupas.

Are you originally from Boston? 

I’m from the part of New York State that says “pop” instead of “soda" - Rochester. I live in Cambridge now and really enjoy all the greenery. It has a great small city vibe with tree-lined streets, and there’s a lot of opportunity to discover something new just walking down the street.

What do you do at HBX? 

I work on the Program Services team and oversee academic operations. Some of my jobs involve working with vendors who administer the CORe final exam and also managing the digital credentials we send out to students. 

What does a normal day look like for you?

A typical day at HBX for me involves a lot of interaction with people on various teams throughout the office. I work with everyone in Program Services but I also work closely with the content team regarding academic operations. 

During open exam periods, I work with Pearson VUE to field any questions and support requests from participants who are taking the exam. There are approximately 4,500 Pearson VUE test centers authorized to deliver HBX exams around the world, so it’s pretty cool to help HBX learners across the globe.

Finish this sentence: When I’m not at work, you can find me _______________.

At the dog park with my wife Jess chasing after our Icelandic sheepdog, Chalupa.

What is your favorite food?

Tiramisu is my favorite food. I like all forms and types of it, homemade or not!

Do you have a hidden talent?

I speak German, play the banjo, and like to sail.

If a genie gave you one wish, what would you wish for?

I would wish for unlimited genies so that I could have unlimited wishes. Who doesn’t want more wishes?!

What’s your favorite thing about working at HBX?

I like hearing from participants about how HBX has helped them meet their own personal, professional, and learning goals. 

What can you tell us about the HBX CORe final exam?

The HBX CORe final exam is offered to participants after successful completion of the course. The three hour, multiple choice, closed book, computer-based assessment was created by HBS faculty and is administered by Pearson VUE in testing centers throughout the world.

The final exam encompasses all three courses in HBX CORe: Business Analytics, Economics for Managers, and Financial Accounting. Divided into three sections of 60 minutes each, the 3-hour exam will test your knowledge of each individual course in one sitting. The exam is predominately multiple-choice format and delivered entirely on a computer at the Pearson VUE testing center.

Read More about the exam including when to take it and how it is administered in our FAQs: http://hbx.hbs.edu/hbx-core/core-faqs.html

As you've likely heard by now, Microsoft purchased LinkedIn. So why did LinkedIn's leadership decide to sell the company? Many have started to speculate that Linkedin's reliance on stock-based compensation could be a contributing factor. 

So what exactly is stock-based compensation and why has it become so pervasive in corporate settings? 

One unspoken reason behind the LinkedIn sale https://t.co/tl5APXXdFb

— The New York Times (@nytimes) June 14, 2016

One reason that companies started offering stock-based compensation was to correct what is called the “principle/agent problem.” Simply stated, the employees of a company (the “agents”) may not have the same incentives that the owners of a company (the “principles”) may have. If someone is both the owner and the manager of a business, they tend to be very careful with expenses – they economize by flying coach instead of 1^st class, for example, or they maintain a simple office instead of an expensively furnished one. 

When the manager of a company is not also the owner, they have an incentive to make decisions that benefit themselves at the expense of the owners – they fly first class or maintain expensive offices. Giving employees stock-based compensation is an attempt to make them also part-owners of the company, and align their interests with the other owners.

Another reason, especially for small tech-based startups, is to avoid paying out cash. For many small companies, cash may be exceptionally tight, and paying employees in the form of stock offers payment tomorrow for work today. This can cut expenses for the company in the short-term and can be exceptionally profitable for the employee in the long-term – think about stories of the Google janitor now being worth millions, for example. Obviously, if the company does poorly, this isn’t the case.

So why all the concern? Well, when stock-based compensation is offered, it dilutes the existing shares of stock and reduces their value. If we imagine that the equity of a company is worth a set amount and doesn’t change depending on how many shares are outstanding, then issuing new shares must reduce the value of the existing shares – by exactly the amount given out in new shares. 

In this way, stock-based compensation should hurt Net Income by exactly the same amount as its listed value, just like an expense. But since it’s non-cash, many companies “adjust” their EBITDA to not include it. However, as this dilution effect can be very large, pressure has come from investors for companies to include this as an expense when reporting earnings.

As you can see in this New York Times article, many companies, including Facebook and Microsoft, have started doing exactly that.

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Interested in learning more about Accounting, Economics, and Business Analytics?

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We launched our first cohort of HBX CORe in June 2014. Two years later, we checked in with a few members of our pioneer cohort to see how CORe has made a difference in their lives.

Opening Doors in the Building Industry

I study Architecture, Construction Engineering and Management at Illinois Tech in Chicago. I also work as a design and construction intern at the Duchossois Group. CORe was instrumental in my decision to study construction management and helped me to better understand the potential roles I could play within the building industry.

A plethora of possibilities started to open up after taking the course. Previously, I had only truly imagined myself practicing the technical aspects of my education but CORe helped me see and start to work towards my place as a leader within the building and infrastructure industry.

Economics for Managers was influential in helping me understand how leadership within various industries could make strategic decisions to create value. It was incredibly fascinating to finally understand the constant balance of proactive and reactive decisions and strategies business leaders used to understand markets and as a result people.

Rounding Out Liberal Arts Educations 

CORe enabled me to become more business-focused; I always knew that I wanted to enter the business world, but coming from a liberal arts background I needed to expand upon my experience to understand what that really meant. Competing against undergraduates from business institutions can be intimidating, but understanding even basic terminology can help put your mind at ease.

CORe gave me the background and confidence to pursue a business career after college. It even helped shape an independent study that I conducted during my senior year at Bowdoin, looking at Corporate Social Responsibility Initiatives at four major banks in the United States. I do not think I would have applied this interest to corporate banks had I not had an introduction to the foundations of the business world from HBX CORe.

As I began interviewing for full-time positions during my senior year, HBX CORe definitely helped me stand out among my peers. I truly understand the value of a liberal arts education, and that is something that I would never replace. However, coming out of a liberal arts institution with some sort of an introduction to the business world is unbelievably valuable.

Since HBX CORe was still so new when I completed the program, I really caught the eye of many interviewers and companies interested in learning more about it. The knowledge that I gained helped me tremendously as I interviewed and looked into different companies to join upon graduation.

I know that CORe has set me up well for a future in the business world and I would love to pursue an MBA in the future.

Giving Engineers a Competitive Edge 

When I took HBX CORe, I was in my sophomore year of college and had begun actively thinking about my future career. I had heard of all of the great advantages of having both a science and business background but I was worried that I would struggle if I took business classes in school.

CORe really broke down all of the business concepts I had vaguely heard of and introduced new material in the clearest way with unique examples. My experience with the CORe program gave me the confidence to pursue my Business Administration minor and I plan to apply for an MBA in the future.

Having CORe listed on my resume has really helped me stand out to potential employers. Every internship interview I have had since participating in this program has involved me explaining this program and its benefits. Most employers are surprised to find an engineering student with a background in business so it usually makes me seem more impressive and gets me closer to getting through the door.

I plan to become an Industrial Engineer and explore how to improve complex systems and processes. I know that pursuing knowledge of business with my background in engineering will shape my career path in unexpected ways.

Instilling Confidence to Pursue Careers in Financial Consulting

CORe helped me solidify my knowledge of financial analysis and introduced me to the world of business analytics. Coming from a primarily non-finance background, HBX definitely provided me with the confidence needed to continue pursuing a career in financial analysis and consulting.

HBX has been discussed in every single interview I’ve had since completing the program and I’m fairly certain that the HBS brand helped me land a few of those interviews. A few times the program has been met with skepticism, but when you begin to explain how the structure of the program and the platform itself are unique compared to traditional online coursework people begin to warm up to it and ask more questions. It really boils down to it being the best online replication of a real-life classroom that I’ve ever experienced. When I reflect upon the experience, it actually feels like I was in a real classroom.

Creating Relevant Conversations with Prospective Employers

I took CORe for an introduction into the language of business that would complement my STEM education. I was doing mostly technical classes at school, but I was interested in business as well. After the program, I realized I wanted to pursue a career in technical management and business.

I actually decided to apply for my upcoming position partly because of CORe. I got interested in Amazon after the case study about them in one of the program modules. Learning about some of the principles behind their operations motivated me to do in-depth research about the company.

The case study was part of the conversation when I first connected with recruiters during a career fair and CORe also came up during an on-site interview. I explained how the certificate would help me transition from a very technical background into a more business oriented position, and it must have worked because I got the job!

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What can CORe do for you?

Balance sheets are one of the primary statements used to determine the net worth of a company and get a quick overview of it's financial health. The ability to read and understand a balance sheet is a crucial skill for anyone involved in business, but it's one that many people lack.

When it comes down to it, the balance sheet is just a more detailed version of the fundamental accounting equation:

Assets = Liabilities + Equity

You've probably heard at least some of these terms before but what do they actually mean? Let's break it down:

Assets

The assets are the operational side of the company, basically a list of what the company owns. Everything listed there is an item that the company has control over and can use to run the business. 

In a sense, the left side of the balance sheet is the business itself – the buildings, the inventory for sale, the cash from selling goods, etc. If you were to take a clipboard and record everything you found in a company, you would end up with a list that looks remarkably like the left side of the Balance Sheet. The assets are what allow the company to run.

Liabilities 

Liabilities and equity make up the right side of the balance sheet and cover the financial side of the company. This is a list of what the company owes. With liabilities, this is obvious – you owe loans to a bank, or repayment of bonds to holders of debt, etc. The interest rates are fixed and the amounts owed are clear. These are also listed on the top because, in case of bankruptcy, these are paid back first before any other funds are given out.

Equity

Below liabilities on the balance sheet, you'll find equity, the amount owed to the owners of the company. Since they own the entire company, this amount is intuitively based on the accounting equation – whatever is left over of the Assets after the liabilities have been accounted for must be owned by the owners, by equity. These are listed on the bottom, because the owners are paid back second, only after all liabilities have been paid. 

However, unlike liabilities, equity is not a fixed amount with a fixed interest rate. This means that any time the value of assets change – perhaps you receive more in cash from a sale than the value of the inventory you sold, or you were forced to write-down a truck that was involved in a collision and no longer works – the value of equity changes. 

Because the value of liabilities is constant, all changes to assets must be reflected with a change in equity. This is also why all revenue and expense accounts are equity accounts, because they represent changes to the value of assets. 

Make sense?

So, to recap, you'll find the assets (what's owned) on the left of the balance sheet, liabilities (what's owed) and equity (the owner's share) on the right, and the two sides remain balanced by adjusting the value of equity. And there you have it!

Want to dive deeper into balance sheets, assets, liabilities, and equity? Check out HBX CORe, the online fundamentals of business program from Harvard Business School!

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