How much are you willing to pay for the right to pollute? If you drive into work like I do, maybe you would be willing to pay quite a lot. In reality, most individuals do not directly pay for the right to pollute. Instead we pay via the price of oil, coal, natural gas, and electricity.

In some cases individuals are paid to not pollute as with subsidies and tax rebates given to households that install solar panels as a form of clean energy. In light of the recent climate talks in Paris, we are taking a closer look at pollution markets and their role in today’s climate.

In many industries, the idea of paying for the right to pollute is increasingly prevalent. There is world-wide agreement on the need to limit pollution, specifically by reducing carbon emissions, but there is no such agreement on the policy or mechanism to do so.

One mechanism that has been used in the past is the creation of a pollution market, also known as cap-and-trade. In this system, companies are allotted a pollution allowance and then are allowed to trade those allowances with other companies. In this way, the market decides how much a pollution allowance is worth and distributes these allowances efficiently among all companies.

The major benefits of a pollution market are that the market creators, governments, or international organizations decide the total amount of pollution they wish to allow but do not have to figure out how to most efficiently distribute these allowances. Pollution markets have been in use since George H. W. Bush implemented them in 1990 to curtail sulfur dioxide emissions and the resulting acid rain.

More recently, there was a loud call from industry leaders for a cap-and-trade system to be discussed at the Paris climate talks. On the other hand, some argue that a cap-and-trade system is outdated and won't work in today's economy.

What do you think? You can read more at Marketplace here.

Here are answers to some of the top questions we got from prospective HBX CORe students during our Facebook Q&A session last month, including the difference between the non-credit and for-credit versions of CORe, the application process, and financing options. 

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 1.  I have no background in business. Will I be able to keep up? Will CORe help me get a job?

We don't expect you to know anything about business going in, but you should have a deep curiosity or interest in it. The course work starts out with the basics and works up to more complex concepts. The diversity and richness of the CORe community is one of the aspects that truly sets it apart from other online courses; here's what a few of our past students shared about their own backgrounds and experience in the program:

 

2.  I have a degree in business. Is CORe appropriate for me? What will I get out of it?

If you're on the fence, we recommend reviewing the syllabi on the HBX website to see what is covered. Many CORe students who hold undergraduate business degrees have reported finding the program to be quite useful as it serves as a great refresher and focuses on real-world applications of business using a case-based pedagogy, which sets it apart from most undergraduate programs. 

Here's what some of our past students said: 

3.  Will CORe help me prepare for an MBA program or enhance my chances of being accepted?

The CORe curriculum was developed by Harvard Business School faculty as a way to prepare incoming students for the MBA program, and we've had a number of CORe students go on to enroll in an MBA program after earning the credential. A great example is Lauren Hall: http://www.abouthbx.com/student-profiles/lauren.

That said, MBA program applicants (at HBS or elsewhere) will have an opportunity to inform the Admissions Board of non-degree preparatory coursework like HBX CORe. This is one of many application elements and will be considered in the larger context of a holistic selection process.

4.  What is the difference between the non-credit and for-credit options?

For some cohorts, we offer an undergraduate credit option through Harvard Extension School. The next for-credit cohort will be offered in May 2016. When you start your application, you can select whether you are seeking admission for the for-credit or non-credit option of CORe. The course content, deadlines, and grading process are all the same whether you choose to enroll in the undergraduate credit ($3,600) or credential-only ($1,800) version of CORe.

Upon successful completion of the program, all students will receive a Credential of Readiness certificate from Harvard Business School and HBX, and an official transcript will be made available to verify your mastery of the skills. If you enroll in the undergraduate credit option, you will also earn eight undergraduate credits from Harvard Extension School or Harvard Summer School.

Different financing options and needs-based scholarships are available depending on the way you choose to enroll. More information is available at http://hbx.hbs.edu/hbx-core/financing-options.html.

5.   How is CORe different from other online courses, and how do you encourage a high level of interaction between students and professors?

All of the course content was developed uniquely for HBX and does not correspond to courses taught at HBS. The professors continue to be involved in refining and improving the courses but do not regularly interact with students on a day-to-day basis. However, HBX does feature a robust peer-learning model (all students are expected to participate) with a support desk to answer questions that cannot be adequately addressed in the Peer Help system.

6.  What do you look for in the application process?

We look for two things in the application process: aptitude and motivation. For aptitude we ask for your academic background and for you to answer five mathematical skill check questions (in order to get some insight into your ability to be successful in the program).

We also included two short essays - one required and one optional - to give us a window into your motivation to contribute to the CORe learning community and complete the program. The application is free and should take about 20 minutes to complete.

7.  Is CORe really worth it? What financial aid or financing options are available?

We don't want to speak for our students, but many of them have expressed their satisfaction with the course on our blog, in various student profiles, and in our CORe Credential Holders album on Facebook.

US citizens who are currently enrolled in an undergraduate or graduate degree program may qualify for institutional need-based scholarships. The online HBX CORe application features an "Institutional Need-Based Scholarship" section that will assist in determining your eligibility. 

HBX also offers scholarships to students who attend one of our U.S. collaborating colleges. These colleges have entered into agreements with HBX to help expand access to scholarships for their students.

Additional financing options are available through third party lenders: http://hbx.hbs.edu/hbx-core/financing-options.html

Seven HBX CORe participants share tips to help incoming students avoid procrastination, balance the course work with other commitments, and position themselves for success.

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First, be prepared for a time commitment. The material is challenging! It takes time not only passing through the modules, but also participating in peer discussions, both of which are extremely important for mastering the material.

I've noticed that it is equally important to get your loved ones on board - it can be your family, your partner, your best friend, or your manager at work. Make sure you clearly communicate the time commitment you'll need to complete CORe.

Keep up with the rest of the cohort. At the beginning of the course, I'd finish the modules just before they were due. But when I completed the modules earlier, I was able to participate in more real-time discussions with other students for two reasons: 1) because people were still online and 2) because we had more time to talk about concepts rather than scramble to quizzes before the deadline.

How do you calculate the time needed to complete HBX work? Try module timing: work on a module with your best effort for an hour and see what percentage you've completed. Then it is a simple matter to do the math that will give you an estimate of how much time you will need in order to complete that module.

I was able to balance CORe material with my full-time teaching schedule due to the accessibility of the CORe platform. Even if you only have 45 minutes free, you can log in from anywhere (home, coffee shop, library, etc.), make some progress through a module, and then get back to your daily tasks feeling like you've made some headway.

Look at the course syllabus beforehand and try to set aside appropriate time to be able to digest the material and to be able to interact with others in the discussion tabs. It is important to offer help to those who might not be as quick as you, for you may be in the same boat down the line!

Allocate "hard" study hours each day. Put a pad between each module's targeted completion date and the quiz deadline. Stay focused and remember that there is no freeze button once HBX starts - the clock is always running.

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Materiality. Can you use it in a sentence please? No, it’s not related to the accumulation of physical wealth or some obsession with material possession. That’s materialism. Materiality is a key accounting principle utilized by accountants and auditors as they create a business’s financial statements.

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Materiality: an accounting principle which states that all items that are reasonably likely to impact the decision-making of investors must be recorded or reported in detail in the financial statements of the business.

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Why does it matter? In essence, materiality is related to significance. Is some transaction or business decision significant enough to warrant reporting to investors or other users of the financial statements? If it is, we say that the information is “material” to the business.

What’s considered to be material will differ based on the size and scope of the firm in question. For example, while a small mom and pop grocer may need to record a small expense for promotional coupons, Whole Foods may not need to record a large one for a similar customer offer. It’s all relative.

Material items can be financial (measurable in monetary terms) or non-financial. So a business might need to report a pending lawsuit to the same degree it reports its revenues. Indeed, of late there has been a big push to include more non-financial material information in financial statements.

For example, with a bigger investor focus on sustainability nowadays, a business might want to include information related to its environmental, social, and corporate governance (ESG) practices to assure shareholders that the business itself is a “green investment.” In fact, as Professor Robert G. Eccles discusses in a recent HBR article, there has even been talk of creating new accounting standards to better measure material information related to sustainability.

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Interested in learning more about materiality and other topics in finance, economics, and business analytics?

Ever wonder why so many New Year’s resolutions fail?

Three words are to blame: resources, processes, and profit formula -  or, RPP, for short.

Think of it like this: every day each of us prioritizes certain outcomes that we’d like to optimize (eating well, getting more exercise, meeting new people). To achieve these outcomes, we adopt a certain set of routines (or “processes”), which deploy the resources we have on hand (i.e., time, money, etc.), in order to help meet those outcomes.

Over the course of a year, as we continually reinforce these behaviors, we effectively engrain ourselves with specific RPPs, which are designed to achieve certain outcomes.

The problem is, once we decide that we want to optimize a new outcome – or resolution – we fail because we don’t yet have the right RPPs in place to achieve this goal. For this new resolution to succeed, we’d need to establish a new set of RPPs, specifically designed to that goal.

So, if you’re looking to get fit in 2016 and you’ve spent the past year refining processes that efficiently deploy the resources of Netflix, pizza, and your couch, now may be a good time to start re-thinking your 2016 RPPs.

For more on resolutions, check out this Washington Post article: New Year's resolutions often fail. Good thing the year is full of fresh starts.

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Want to learn more about RPP and strategizing for success? Check out HBX Disruptive Strategy with Clayton Christensen.

This post is an excerpt from an article originally posted by The Harbus. To see the full interview, click here.

Greg Laudick (HBS MBA 2016) sat down with Boeing Chairman Jim McNerney for an in-depth conversation about building a successful career from MBA grad to CEO. The conversation has been lightly edited for clarity and brevity.

Greg Laudick: What do you wish you knew when you were 30 that you now know today?

Jim McNerney: When I was 30, I thought it was more a matter of design on how you motivate people and how you pay them, but people want more than that. People want career growth. They want to be part of an ethical organization. They want to be part of an organization that’s doing important things. I’ve learned that is as important a part of the Boeing story when I’m talking to people who are going to join or are part of the organization. It’s more holistic.

Forty years ago it was sort of a transaction between an individual and a company. Today, it’s more of a merger. So, it’s a more holistic discussion and a more holistic set of things that motivate people, and so I pay more attention to those things. Are we an ethical company? Do we care about the environment as well as do great things and important things? Do we care about people where they live and how they live? It’s a different environment today that I probably didn’t appreciate as much at 30. A sign of the times when I was 30 but also a sign of youth.

Greg Laudick: Throughout your career, you've likely seen many people's careers go off track. If you were speaking to a newly graduated Harvard MBA, what would you advise them to look out for and how would you advise that they try to avoid those derailers?

Jim McNerney: Staying in one function or one location, while 30 percent of the time is good because that’s what people want, 70 percent of the time is not good. Diversity of experience is helpful. Insularity is always a problem, whether you’re in a job for too long or you’re in a function for too long. It hurts your ability to interact with the outside world.

I think there are other human traits, like self-righteousness. You can’t always be right and be part of an organization. You have to make other people right as many times as you’re right.

Greg Laudick: How do you look at balancing being in one function and development expertise there versus getting a breadth of experience?

Jim McNerney: It depends on the potential of the person. For a person who can eventually be a significant leader in your organization, the test is not have you mastered something. The test is have you shown the ability to do it. Are you on a trajectory that you will master it quickly but then enable you to move and then move again? And then you want to make sure they have the diversity of experience that will allow them to stitch it all together when they’re in jobs that ask them to integrate all of it. The value of them being to integrate it exceeds the value of mastering any one of them now.

Greg Laudick: In the 787 program, you inherited a lot of challenges and really turned it around. What are maybe some of the big challenges that you've faced in your career. What have you learned and how did you overcome them?

Jim McNerney: In the case of the 787 we overestimated our ability to manage risk on the technical side and on the supply chain side. Fortunately, we built the right airplane. We had the right competitive thought and we had the right product thought, but we let that dominate the discussion, and we had some immature technologies, and we overestimated the capabilities of some of our supply chain. It’s one thing to see something on paper. It’s another thing to understand the risk associated with it, and, therefore, the variability of outcomes. It’s very hard, but we were not as good as we should have been at assessing risk. But we did a great job of assessing opportunity.

I would say many times that is the general management challenge: understanding underlying risk. That gets down to not only understanding the people and the technology but also to asking questions that probe at the distribution of outcomes, not just the mean. That was not done rigorously enough in the case of the 787.

Greg Laudick: I can imagine as CEO, everyone's trying to meet your expectations. How do you, in addition to asking the probing questions, really get to the truth?

Jim McNerney: I think it’s the culture you can set in place as CEO. If you have a culture where everybody knows there’s only one answer when you walk into a room, you’re going to get that answer. I’ve always thought that when you’re creating something new, whether it’s a new product or a new idea, there always needs to be two processes. There needs to be a process where concepts are developed and a second process where concepts are committed to. The commitment is when you’re building plants, you’re assigning engineers, you’re spending the $100 million a month to get it going. That’s commitment. In that world, you don’t want a lot of discussion.

In the development world, you want nothing but discussion. Only one out of 10 ideas are good. You’ve got to be willing to tolerate the messy iterative  discussion where people can put up their hands and feel free to say, “Hey, you guys are crazy.”

It’s when you start with the answer, which is the second process, and then demand it from the people who are in charge of creating it in the right way that you get the wrong answer.

Greg Laudick: What would you say you learned about yourself, your leadership style and your capability to lead through these challenging situations?

Jim McNerney: I think with more experience, you become a little more tolerant in one way and a little less tolerant in another: a little less tolerant in having high expectations of the people that work for you, but a little more tolerant of letting them find their own way to get there. I think good leaders have very high expectations for people but also figure out a way to give them the tools and inspire them to reach for those expectations. You don’t find that in very many people together.

You find inspirational leaders who don’t have the same set of goal orientation, and then you have unreasonable goal setters who just won’t spend any time with you. They’re not willing to walk the talk themselves. So it’s about being more tolerant of the many different ways to roam and investing in people to get there but remaining very high in your expectations of people. A good leader has both of those. It is the hardest thing to find in one person. I think over time I’ve just become more convinced that the blended leadership capability is critical.

Greg Laudick: Do you have any advice for MBAs entering the workforce on finding mentors?

Jim McNerney: Mentors don’t just happen. You create them. I think my message to the readers would be you create mentors with your curiosity, and you don’t create a mentor by just walking up cold and saying, “Will you be my mentor?” You create mentors by being open, curious, asking questions, performing well. Do that and people will want to help you.

Bethany Larsen is a former Director of Development for a Rwandan public health non-profit organization. She signed up for HBX CORe to aid her transition from the non-profit field to social entrepreneurship and to help prepare her for an MBA program.

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Why did you decide to sign up for HBX CORe?

Before HBX CORe, I had no business experience. I graduated in 2013 from a liberal arts school with a BA in Anthropology. I then moved to Kigali, Rwanda to work with a local public health non-profit organization where I spent the next two years. I have always had a passion for international development, but during my time in Rwanda, I felt limited in what I could offer within the foreign aid system.

I began to shift my sights to social entrepreneurship in the hopes of finding the best way to use my skills to create change. I am currently in transition from non-profits to business, so I signed up for CORe because I was looking for a program that would give me the vocabulary and the tools I needed to get started.

What was your favorite part of the program?

The platform was engaging, innovative, and it allowed me to interact with the material in a way that I never expected from an online course. The professors were incredible, and the way they used cases to support their lessons allowed studnets to connect the material to real-world examples that not only aided understanding and retention, but also application.

My favorite part of the program, though, was the peer discussions. I learned so much from asking and answering peer help questions and engaging in debates with other students both on and off the platform. The students in CORe supported me as I learned new concepts and challenged me to question my assumptions about issues like drug pricing and minimum wage. I am truly grateful for their insight and support.

How are you applying what you've learned in CORe?

On a very basic level, I went from having zero accounting knowledge to understanding the language of business, which has been incredibly empowering. I now understand financial statements and can read the Wall Street Journal without using Investopedia every two seconds.

I have also been able to apply CORe directly in the workplace. For example, I do a lot of e-mail marketing in my current position, so I started with A/B marketing after Module 3 in Business Analytics.

"Those skills are all very useful, but I think my biggest takeaway from CORe is a new perspective on complex business challenges. This lens has given me a more balanced perspective on sensitive topics like LIFO reserves, minimum wage, and drug pricing that will make me a more informed citizen and wiser leader."

Any advice for people who will be taking CORe?

First, be prepared for a time commitment. I think there's an assumption with online courses that the material will be less demanding than if it were taught in a regular classroom, and with CORe this is simply not true. The material is challenging, especially for students like me who had no prior business experience. It takes time not only passing through the modules, but also participating in peer discussions, both of which are extremely important for mastering the material.

That said, it is definitely possible to complete the course and participate while juggling a hectic schedule. There were rockstars in my cohort who were running their own businesses and had newborn infants at home yet still managed to complete the course while being active participants. You just need to be honest with yourself about whether or not you are ready to make CORe a priority.

Second, connect! CORe brings together a diverse group of students from a range of countries, ages, and backgrounds that have deeply rich experiences in fields ranging from engineering to non-profits. Take advantage of the opportunity to meet so many great peers! Attend (or organize!) a meetup near you, join the Facebook group, and reach out to as many people as you can. I have met so many people who have challenged and inspired me through CORe, and the experience would not have been the same without them.

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The CORe community consists of a rich and diverse group of learners. Want to learn more about other students who've participated in the program?

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One of the benefits of the HBX online learning platform is the fact that you can complete the coursework from anywhere, as long as you have access to a computer and a steady internet connection. We asked students in the September 2015 HBX CORe cohort to share their favorite study spots.

Participants opened up their laptops to connect with their peers and learn the fundamentals of business in all sorts of interesting places around the globe - in airplanes at 30,000 feet, at local coffee shops, and with their furry friends at home.

We sat down with Patrick Mullane, our new Executive Director, to talk about his role at HBX, his best life advice, and Oreos.

What do you do here at HBX?

I am the Executive Director of HBX which means I help the team here in any way I can as they go about being the best course developers, marketers, coders, operators, creators, and support personnel they can be. I hope that I bring some general management experience across all parts of HBX that will help us to further advance the Harvard Business School's mission of educating leaders that make a difference in the world.

What’s your favorite part of your job?

My favorite part of job by far is seeing the pride students take in their involvement in and completion of HBX CORe or Disruptive Strategy.

How would you describe yourself? 

I love to laugh, I don’t take myself too seriously, and I hate missing the previews at the movies.

Where did you go to school and what did you study? 

I went to the University of Notre Dame where I got a BS in Mathematics. I then went to Golden Gate University for an MS in Project and Systems Management. I finished off my formal education with an MBA from Harvard Business School.

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

I’d wish for world peace. And a lifetime supply of Oreos covered in peanut butter and dipped in hot fudge. 

Best advice anyone has ever given you? 

An HBS professor once said to me (and the rest of my class), “It’s okay to be lucky. It’s okay to be smart. It’s not okay to be lucky and think you're smart."

Best book you've read?

Lonesome Dove, the Pulitzer Prize winning novel by Larry McMurtry. The best book you’ll ever read about risk-taking, adventure, love and redemption (and it was a great TV miniseries in the late 80s as well). 

HBX brings together a diverse group of students from a range of countries, ages, and backgrounds to learn about business on our interactive online platform. Much to our delight, students have developed a strong sense of community throughout the program, and some have taken it upon themselves to organize in-person meetups in cities like Boston, London, New York, Tokyo, and Kuala Lumpur! 

We asked one of our past participants, Bethany Larsen, to share some tips and advice for anyone planning an in-person meetup:

1) Use Facebook

Create meetups as events on your cohort's Facebook group. It's the easiest place to access the majority of those in your cohort. Even if you aren't "friends" with everyone, anyone who sees the event posted on the HBX group page can opt-in to attend.

2) Send out invitations early

Make sure to tell others in your cohort about the event as soon as possible! Everyone is busy and schedules fill up quickly. Sending out invitations at least three weeks in advance is a good rule of thumb.

3) Choose a central location

Big cities are best, as are places near public transportation. Otherwise, it isn't very likely that enough people will be in the same area and able to meet at a given time.

4) Choose a fun activity

5) Timing is important

Depending on who is in your area, you'll need to be conscious of the time of the meetup. Weekends tend to work better than weekdays with work schedules. Weekend afternoons are also better for anyone traveling for the meetup as attendees have the time to get home not too late.

6) Just do it!

If you want to attend a meetup and don't see one in your area, host one! There really isn't a formula for planning meetups. It seems like all of the meetups in my cohort were thrown together by people who saw there were other students in their area and just wanted to get together.

It's a bit intimidating, but everyone is nice and is probably eager to meet you too. They're just waiting for someone to take the initiative, so be that person!

To see more examples of past meetups, check out our post here!

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