The Golden Passport

by Duff McDonald

  In 2010, HBS announced a new Executive Education program on Risk Management, with the goal of preparing “senior executives and their companies to expect the unexpected and integrate best practices for risk management strategy into their operations.” One wonders how many executives have availed themselves of the program. After all, of all the things HBS could claim an expertise in, this is certainly not one of them.

  60

  The Next Generation

  In the hundred-plus years of its existence, few members of the HBS faculty have risen to the level of bona fide celebrity. Michael Porter comes close, but the man’s Q-score has still got to be close to zero. Clayton Christensen might have sold more books than any of his contemporaries, but the man on the street isn’t likely to know his name, either. That’s not a criticism of either man; their goal is not to be as famous as Beyoncé, but to be influential in the realm of management, and they certainly both have influence in spades. The closest HBS has to a celebrity in 2016? Associate Professor Amy Cuddy, a social psychologist and TED talk superstar.

  Cuddy’s 2012 TED talk, “Your Body Language Shapes Who You Are,” is the second-most watched TED talk in history, having been viewed more than 30 million times. The gist of it: Your body language isn’t simply a reflection of how you feel about yourself today; it is also a crucial variable in the equation of who you will be tomorrow. It’s persuasive stuff, and Cuddy explores the fact that our body language doesn’t just have an influence on how others will respond to us; it also influences our own minds. Cuddy’s work has shown that “power posing”—using postures that convey competence and power—has the dual benefit of both increasing testosterone and reducing cortisol, which causes stress. In short, your body posture communicates things not just to other people but to your own mind, which can then lead to changes in behavior, which can then lead to different outcomes.

  There’s an irony in Cuddy’s work, which is that the majority of people who attend Harvard Business School aren’t lacking in confidence. While her work crosses gender boundaries, it undoubtedly appeals more to women, but the irony still applies on that front as well; if your goal is to help the women of the world be more confident, and therefore successful, you probably wouldn’t start with female students at HBS. Considered from another perspective, though, Cuddy’s specialty couldn’t be more apt for HBS. There’s a reason that they love the case method at HBS, and it’s that deep down, they understand that management is performance. The Harvard Business School is also a school of rhetoric, and its graduates come out not just knowing how to calculate return on investment; they also come out knowing how to walk the walk, and talk the talk of management.

  If you spend too much time reading the course catalog, in other words, you’re kind of missing the point. Business is more Kabuki theater than it is organizational charts, and its greatest success stories are just as likely to be Machiavellian cutthroats as putative authentic leaders with heartfelt visions for their organization. At some level, the business school experience is a theatrical one, epitomized by professors-cum-acting-coaches rehearsing the “scripts” of the case study with their students in the stands. The presence of Amy Cuddy on the faculty is the closest HBS has come to admitting as much.

  Professor Anita Elberse’s classes are another hot ticket at the School. Her class Strategic Marketing in Creative Industries ranks among the highest-rated among HBS students, and it’s easy to see why. The course, which covers the decision making in big-time entertainment, centers around cases that sound a lot more interesting than the capacity utilization of a cranberry juice maker, with subjects like Jay-Z, LeBron James, Lady Gaga, and Maria Sharapova. This is People magazine for the business school crowd. Elberse asks students to consider which marketing approach is the right one to build a sports celebrity brand—with an agent (Sharapova) or without one (James)—as well as the decisions a talent manager can make that might turn a virtual no-name (Lady Gaga in 2008) into a global star (Lady Gaga in 2009).1 More recently, she wrote a case on the novel release of Beyoncé’s album 2013, which used no advance marketing, and alienated major retailers by restricting initial sales to Apple’s iTunes.2 But Elberse’s executive education classes haven’t just been about celebrities; they’ve drawn their fair share of them as well. Basketball star Dwayne Wade, football linebacker Brandon Marshall, and supermodel Karlie Kloss have all been students. (Are they “graduates of HBS?” That’s a question for the alumni office.)

  Among Elberse’s bestselling case studies: her 2012 case on Alex Ferguson, the longtime manager of the British soccer club Manchester United who is widely regarded as one of the best coaches in sports history. The case was such a success that in 2013, Elberse collaborated with Ferguson on an article in the Harvard Business Review, “Ferguson’s Formula.” It’s a workmanlike article, touching on issues of how to manage overlapping cycles—the rebuilding of a team and individual players’ own careers—through adherence to a few fundamental maxims of management, such as the fact that it always pays to invest in youth. One way that Ferguson managed to field winning teams for so long was by spending less on incoming players than other teams did—the young always cost less, following a maxim McKinsey discovered long ago—while also being willing to part with talent earlier than most, when its price was still high.

  The appeal of such a topic is obvious, especially to sports fans, even if the nuggets of wisdom are buried beneath mountains of platitudinal lessons such as “Set High Standards—and Hold Everyone to Them,” and “Prepare to Win.” At the same time, the article is revealing in another way, which is that when you’re talking about winning, the retrospective accounts aren’t necessarily universal truths, but just the way that one particular winner won. Lesson number four is “Never, Ever Cede Control,”3 a strategy that will ring familiar to anyone who knows anything about Ferguson’s domineering approach to coaching. When a different kind of coach wins in a different kind of way—Phil Jackson and his Zen approach to coaching basketball come to mind—the lesson could just as easily be the opposite.

  Ferguson and HBS announced in April 2014 that he had been appointed to a “long-term teaching position”4 at the School. (Translation: The man is bigger than HBS. He will teach there when it suits him.) Elberse valiantly tried to shoehorn the rationale behind the hiring into the default mold: “We look forward to welcoming Sir Alex Ferguson . . . to share his remarkable leadership journey,” she said, “and contribute to our Executive Education participants’ ability to make a profound difference in the world.”5 But it’s not about that. It’s about Executive Education students getting to tell their friends they’ve met Alex Ferguson. What’s more, considering Ferguson’s lack of academic or teaching credentials, the hiring was another rare demonstration of the School’s nakedness of purpose: HBS isn’t about leadership or social responsibility; it’s about winning, and Alex Ferguson knows a thing or two about that.

  Other standouts on a faculty that now counts in the hundreds include Bharat Anand, a professor in the strategy unit and also faculty chair of the School’s HBX initiative. (More on that in the next chapter.) And Youngme Moon, the popular former chair of the MBA program, a multiple winner of the HBS Student Association Faculty Award for teaching excellence and an outside contender as the School’s next dean.

  As for the rest of them, they remain, as journalist John Byrne once referred to them, as “perhaps the largest single conglomeration of outsized egos and intellects anywhere in business.”6 Of course, it’s not a crime to have a high opinion of oneself, especially if one is part of an institution that has towered over the competition for as long as HBS has. And aside from instances such as Michael Porter believing himself above questions of morality when consulting for dictators, it’s not like the professors of HBS spend too much time lording their sense of superiority over the little guy.

  They do, however, fill the little guy’s ears with a lot more nonsense masquerading as scholarship than they should. That doesn’t make them unique in the business
school universe, but when it comes from HBS, it comes with a little more authority than most. Consider the musings of Professor Linda Hill during a 2014 interview published on the School’s website, with the somewhat incomprehensible title “The Future of Talent Is Potential.”

  When Hill was asked what her recent research had found about the characteristics necessary to lead innovation, the results of which were published in the 2014 book Collective Genius: The Art and Practice of Leading Innovation, her response was indicative of the paucity of scholarship and overabundance of nonsense that is the leadership industry today:

  [What] we found is, four characteristics that we thought you needed to select on. One was, they’re idealistic, yet they’re very pragmatic. And that idealism actually makes them have sort of bold ambition. And because they have that bold ambition, they tend to be willing to do the kinds of things necessary to make sure that ambition gets fulfilled. But they’re very, very practical.

  They’re demanding, yet they’re also generous. So even though they’re demanding, and people will describe them as being, perhaps, the most challenging boss they ever had to work for, they’re still generous and caring. And so they create the kind of environment that’s still supportive, and acknowledges that we all make missteps, that we’re all not perfect.

  They also are very much holistic thinkers. They do see the big picture, and they can connect the dots. I think this goes to the issue of the insight, which is a very important piece of the puzzle. But even though they have that big picture, unlike a lot of us academics they’re also quite action-oriented. You often find people who can think very holistically, but then they can’t act. They’re, in fact, paralyzed, by really looking at the complexity of whatever it is they’re trying to get done.

  And finally we see that they’re deeply human. So they’re deeply imperfect, and that makes us all happy because then it means that we can all do it. Yet, they’re also quite resilient.

  So, to recap: idealistic, pragmatic, bold, practical, demanding, generous, caring, holistic, action-oriented, deepy human, deeply imperfect, and quite resilient.

  She forgot to mention that they are excellent lovers as well.

  But it might be unfair to pick on Hill for listing every adjective but the kitchen sink while trying to answer what is, ultimately, an unanswerable question, which is how and why true leadership emerges. Just like charisma, it’s just not the sort of stuff that can be mass produced. It’s also unfair to pick on Hill when other professors at the School are publishing papers such as 2014’s “Learning by Thinking: Overcoming the Bias for Action Through Reflection.” The earth-shattering premise of that paper, which counted two HBS professors among four coauthors: “[One] of the critical components of learning is reflection, or the intentional attempt to synthesize, abstract, and articulate the key lessons taught by experience.”7 If you think about what you’re trying to learn, in other words, you might learn it. What would we ever do without them?

  Even Nitin Nohria, the School’s current dean, has produced his own share of intelligent-sounding obviousness. In his 1992 book, Networks and Organizations: Structure, Form, and Action, Nohria offered up this tongue-twister: “[Relative] to electronically-mediated exchange, the structure of face-to-face interaction offers an unusual capacity for interruption, repair, feedback, and learning. In contrast to interactions that are largely sequential, face-to-face interaction makes it possible for two people to be sending and delivering messages simultaneously. The cycle of interruption, feedback, and repair possible in face-to-face interaction is so quick that it is virtually instantaneous.”8 In other words, communication works better in person than not.

  One of the most tragic things about the place is just how many members of a highly intelligent faculty have to resort to bold claims of discovering that which we already knew—Rosabeth Moss Kanter feeling the need to explain to God-knows-who that “confidence consists of positive expectations for favorable outcomes,”9 and offering trite aphorisms such as “confidence is a sweet spot between arrogance and despair”10 as well as simply ridiculous remarks like “underconfidence . . . leads people . . . to under-innovate”11 and “the context that creates expectations affects outcomes.”12 According to Kanter, the reason the New England Patriots won the 2002 Super Bowl was that they flouted the tradition of running onto the field as individuals to start the game and instead ran out as a team. It’s that simple; but you won’t be able to tap such wisdom if you haven’t bought her 2006 book, Confidence: How Winning Streaks and Losing Streaks Begin and End. “Reading Rosabeth Moss Kanter is like eating cardboard,” says Philip Delves Broughton. “There is no nutritional value whatsoever.”

  That organizational behavior experts as esteemed as Nohria and Kanter use so many words to make such obvious points is partly explained by an episode that occurred at the School’s seventy-fifth anniversary, in 1983, during which it held a series of research-oriented colloquia. The late David McClelland, a professor of psychology at Harvard and author of The Achieving Society, was in attendance during a colloquium on organizational behavior. When someone asked McClelland what he thought about the latest findings in the field, he replied that there had been no good research—at HBS or anywhere else—since the Hawthorne experiments in the 1930s. “You could hear a pin drop,” said one attendee.

  Whatever eternal or universal truths there were to be learned about business were learned long ago. It’s been window dressing ever since. To be a professor at HBS is in some ways to be an editor at a personal service magazine, whether it’s about eating healthy, investing wisely, or being part of a runner’s world. There’s only so much to say about any of those things, and yet the editors and writers are forced to come up with new things to say, month in, month out. If you found yourself in that kind of situation, you’d probably convince yourself that you’d discovered confidence, too. Unless, of course, you were under-innovating.

  There is movement on some fronts. If HBS demonstrated a remarkable incapacity for understanding the urgency of incorporating ethics into its curriculum over the years, an increasing number of its graduates have demonstrated an understanding that corporate profitability and corporate social responsibility are not, in the end, mutually exclusive goals. Environmental concerns, in particular, have emerged as a focal point for many alumni efforts, and, in the push-pull that is curriculum development, HBS seems to be responding to them.

  The students got there first: In 1990, the School’s MBAs formed the HBS Environmental Club, one of the first orders of which was to convince HBS Publishing to begin using recycled paper for case materials.13 In 1991, with funding from Teresa Heinz, two professors, Richard Vietor and Forest Reinhardt, began developing teaching materials on environmental issues.14 Heinz followed that by endowing the Heinz Professorship of Environmental Management in 1992, in memory of her husband John Heinz (’63).15

  After the hiatus that was the bull market of the 1990s, the Internet boom, and then the post-Internet busted housing bubble, the School again turned its focus to the environment. In 2010, it launched the Business and Environment Initiative, which has achieved at least a modest amount of success at permeating the curriculum with courses and cases that have an eye to the environment, most notably in the second-year electives Building Sustainable Cities and Infrastructure and Reimagining Capitalism: Business and Big Problems.

  The leadership role in pointing MBAs toward a sustainable future was surely HBS’s for the taking, but it whiffed. San Francisco’s Presidio Graduate School, a tiny institution by comparison, hasn’t just added an environmental and sustainability component to an existing curriculum. Rather, it started with those premises, and then built the curriculum on top of them. Dwight Collins, associate dean of the MBA program and one of Presidio’s founding faculty, explained the idea to the website Poets & Quants in 2014: “MBA programs traditionally have an accounting track and a finance track and a marketing track, right? And a sustainability track,” he says. “It’s like one of a menu of items.
For us, the only way to do business on the planet . . . is to have every one of those topics be done sustainably. Our ultimate aspiration is that every MBA program on the planet should look like us.”16 Presidio’s curriculum includes such topics as industrial symbiosis, the search for companies and products that fit together in such a way that the waste of one production process becomes the raw material for another. HBS has a long way to go before it is attacking the problem in such a way.

  That said, a number of notable alumni have gone ahead and jumped into tackling such problems themselves. The list of high-profile environmentalist alumni includes former Secretary of the Treasury Hank Paulson (’70), whose Paulson Institute promotes sustainable economic growth and a cleaner environment around the world; Mark Tercek (’84), CEO of the Nature Conservancy; and John Replogle (’93), CEO of Seventh Generation, which makes environmentally friendly household products.

  When the Sustainability Accounting Standards Board (SASB), an organization with the ambition of convincing the market to adopt nonfinancial sustainability metrics, was established in 2010, HBS professor Robert Eccles served as its founding chair. As of 2016, that position was held by Michael Bloomberg, who may have done more toward bringing the business world around to focusing on environmental concerns than almost anyone on the planet. Starting several years ago, Bloomberg LP began adding a comprehensive data set of sustainability metrics to the Bloomberg terminal data feed. Institutional investors, more than any, make their investment decisions through the analysis of data. One of the major impediments to the addition of an environmental component to investment decisions was simply that the data was not available. Thanks to Bloomberg, it is, and it is becoming even more extensive by the day. HBS, wanting a piece of the action, has a case study on the evolution of the SASB itself.