The professors stood in the pit, with a desk for their notes and three sets of blackboards and projector screens to play with. The more adventurous ones could play videos or use a polling gizmo. Students could vote on any issue by pressing one of the buttons built into their desks, red or green, and see the results instantly displayed on a screen up front. The professors could stand close to the front or roam up and down the aisles and rows, spurring their students to talk.
Harvard Business School had adopted the case method of teaching from the Harvard Law School. Classes begin with a cold call, in which the professor picks out a student to introduce the case we prepared the night before. This can be a harrowing experience for the student, lasting anywhere between two and fifteen minutes. Once the cold call is over, any student can raise his hand to comment. A comment can be a question, a response to something the professor or another student has said, or an example from one’s own experience that clarifies the current problem. The only requirement is that the comment advance the class’s learning.
Our first professor, David Hawkins, was a bluff Australian who had swum in the Olympics in the early 1950s and still had the broad shoulders and blond hair of a Bondi Beach lifeguard. Arriving in class, he unfolded his newspaper and read out a story from the front page of
The Wall Street Journal.
It was about a company that had been ordered to restate its earnings because of years of accounting errors. He then rested on the edge of his desk and leaned back, his mouth falling open as he thought. In one hand was a scrunched-up piece of paper, scrawled with his notes for the day’s class. In the other he held a piece of yellow chalk that he would soon be hurling from one blackboard to another to highlight a specific point. “You see,” he said after a moment’s pause, “accounting really does matter. Now, on to this baron.” He hunched his shoulders and began shuffling around the front of the room, dragging one leg, baron-like. “How can it be so hard to tell which of these blasted peasants is the better farmer?” A sense of relief washed over the class. As students were called on to explain their numbers, it became clear that no one had cracked this case. In fact, cracking it was not the point. The purpose of the baron case, Hawkins explained to us, was to demonstrate the difficulty of divining economic truth from even the simplest-seeming situation. In accounting, it was more important to use common sense than to cling to rules.
During Analytics, the teaching was more casual than what we would face in the RC, but the schedule was identical. Classes began at 8:40 A.M. and each one lasted an hour and twenty minutes. There was a twenty-minute break between the first and second class. On Monday, Wednesday, and Friday there was a third class after lunch, at 1:10 P.M. On Tuesdays and Thursdays we were free at 11:40 A.M. We were then expected to spend a minimum of two hours preparing each case. In addition to accounting, Analytics included crash courses in finance and TOM, that is, Technology and Operations Management. The three subjects were the most mathematical we would be obliged to take during the first year, so we needed to get comfortable with them.
After Hawkins’s class came finance with Mihir Desai, a young Indian professor, tall and elegant with long, delicate fingers. He ingratiated himself with us immediately by saying that the ideas in finance were simple. It was only the explanations that got complicated. We were not to spend his class staring into our computers tinkering with spreadsheets. Rather, we were to learn finance in such a way that we could explain it to our mothers. Desai promised to come down hard on any Wall Street mumbo jumbo and encouraged us to strip away any preconceptions we might have. Those of us who thought we knew any finance were to relearn it from the bottom up. Those of us who knew nothing were setting out on a great adventure.
I met up with Justin for lunch. He had grown up in New York, where his father ran a successful investment business. After graduating from college, he had taught in Los Angeles as part of Teach for America and then worked in the New York City mayor’s office. He had come to HBS in large part because the people he most admired in public service had come from successful careers in business. An MBA would be useful whatever he chose to do next. I asked him if he knew what that might be.
“Not yet,” he said. “I’m going to be looking. If you find anything, tell me.” All around us we heard the same conversation. Where are you from? What did you do? Why did you come to HBS?
After lunch, we had Technology and Operations Management, taught by Frances Frei, an energetic woman with a boyish thatch of spiky brown hair and a uniform of men’s shirts and dark pants. Our first case with her involved constructing a decision tree, a means of assigning probabilities to the outcomes of certain investment decisions. If I drill for oil in a certain spot, I will have to spend $10 million with two possible outcomes. There is a 30 percent chance I will find nothing and a 70 percent chance I will make a $20-million find. You multiply the percentages by the outcomes to get zero and positive $14 million. So the estimated value of this investment is $14 million minus the $10-million drilling cost, to get $4 million. The usefulness of decision trees depends on the accuracy of your probabilities, but the idea is not to find certainty but to deal more comfortably with uncertainty, to find handholds, however tenuous, in the otherwise sheer rock face of financial decision making.
In the classes that followed, Frei hustled us on to regression analysis, a means of weighing the importance of different factors on a particular outcome. The case we studied dealt with a bank trying to use customer data to decide what to do about its online services. The bank knew all kinds of things about its customers, from their dates of birth and zip codes to their average balance size and use of online banking. Using Excel, we were required to organize and graph this data to establish behavioral patterns among customers. If they lived close to a branch, were they more likely to visit it? Did their age influence their likelihood of using online services? To what extent? Did customers’ behavior vary by zip code? The bank wanted to use this data to help decide on the size of its investment in further online services, which were cheaper to offer than fully staffed branches. As an Excel virgin, it took me hours to organize thousands of cells of data into neat graphs. But even as I flailed about, I could feel my excitement building at the amount I might learn here. Why did banks send me different mailings from those it sent my neighbor? How did you decide how much money to invest in a project with uncertain outcomes? Having spent most of my life interpreting the world through words and language, it was startling to witness the power of numbers, models, and statistical tools. The full range of my ignorance was becoming apparent, and the prospect of spending two years acquiring an entirely fresh perspective invigorated me.
On the final day of Math Camp, study groups were pitted against one another in a mock financial negotiation. The subject was the acquisition of a tractor company, and my side was the potential acquirer. We met into the night, preparing our strategy, trying to decide what we could get away with paying. The next day, some groups dressed up in suits to try to assert themselves over their opponents. In our group, the military guys took charge and turned out to be convincing liars and brutal tacticians. We did very well. By the end of Analytics, I was exhausted. I had been working from 7:00 A.M. to midnight every day just to keep up. When Margret, my wife, and Augie, our one-year-old son, arrived, I was delighted to see them. But I was also tired and testy. I had been warned about the HBS bubble, in which even the most trivial tasks assumed the most absurd proportions, and it was absolutely true. And this was just the dress rehearsal.
The first year of the MBA course at Harvard Business School is called the required curriculum, or RC. It is broken down into ten courses, five each semester, intended to cover the fundamentals of business. The first semester courses are finance 1, accounting, marketing, operations, and organizational behavior. The second semester brings finance 2, negotiations, strategy, leadership and corporate accountability, and a macroeconomics course called Business, Government, and International Economics, known to all as “Biggie.” During the second year, the EC, or elective curriculum, we could choose from a wide variety of courses or pursue independent research.
We would be graded on a forced curve, based on our performance against one another. At the top of the curve would be the academic cream. At the bottom, the stragglers. If everyone gets 95 percent on a test and you get 94 percent, too bad. You will be at the bottom of the curve. In each subject, the top 15 to 25 percent of the class receives a 1, the middle 65 to 75 percent a 2, and the bottom 20 percent a 3. Fifty percent of our grade would be determined by how we participated in class, the quality and frequency of our comments. The remaining 50 percent would be based on our performance in midterms and end-of-term exams. Halfway through each semester, our professors would provide evaluations of our class contributions so we would know how we were doing. After two years, the top 5 percent of the class would be awarded Baker Scholarships, the highest academic honor. The next 15 percent would receive honors. If at any point our academic performance fell below a certain level, we would be warned. Consistently poor performance was known as “hitting the screen,” and would result in suspension or expulsion. If we attended every class, prepared our cases, and spoke in class, this should not be a problem. Except, I wondered, how was I, with no experience of business, supposed to compete academically with students who had studied finance or business at university and then spent several years honing their skills?
I first saw the class in its entirety at the end of August, when they arrived for a one-week course called Foundations, intended to ease us into the RC. We gathered in the Burden Auditorium, a cavernous hall half buried in the middle of campus, with seats sloping steeply down toward a stage. As the students poured in, Analytics suddenly seemed very cozy. The director of the RC program, a short, thick-shouldered man called Rick Ruback, took the stage. He spoke in a Boston accent and told us that we should think of him as the plant manager, the man walking the shop floor making sure the employees aren’t bunging up the machines with chewing gum or taking illicit cigarette breaks. He was not to be confused with the chairman of the MBA program, who acted as a kind of company president, offering advice and oversight, nor the chief executive officer, the dean, Kim Clark. He said that our class consisted of 895 students, chosen from 7,100 applications, reflecting a 12.6 percent acceptance rate. We were very fortunate to have gotten in, he said. Thirty-four percent of our class was women and 32 percent international. The average age was twenty-seven, which put me, at thirty-two, on the high end. The course chairman, Carl Kester, followed Ruback and said how happy he was to welcome a diverse class. Within our ranks were Olympians and consultants, gay activists, the former assistant to J. Paul Bremer, the head of the Coalition Provisional Authority in Iraq and a Harvard MBA, and even the “former Paris bureau chief of
The Daily Telegraph.
” Me.
Next came the dean. I had read his biography on the school’s website. He had arrived at Harvard as an undergraduate and never left, acquiring his doctorate and rising through the ranks of the business school. He had been a scoutmaster and a bishop in the Mormon Church, and had seven children. He wore a pair of half-moon spectacles on a chain around his neck and spoke in a sepulchral whisper. He oozed seriousness of purpose and offered us three pieces of advice: work hard; be humble, or rather “cultivate the habits of humility”; and when you pass the dean on the street or on campus, don’t panic. Apparently some foreign students don’t understand him when he says, “How’s it going?” He said it’s fine just to reply, “Hi,” or “How are you.” He also warned us not to become cynical.
After Clark, we heard from Margie Yang, the CEO of Esquel, a Hong Kong shirt manufacturer. HBS had been reevaluating how it taught business ethics since Enron collapsed under the leadership of one of its most fêted MBAs, Jeff Skilling. Yang’s talk was part of the school’s response. She told us that when doing business in as lawless a place as China, it was more important than ever to have a set of values to anchor you. But any business person operating in China over the past thirty years who told you he hadn’t done ethically dubious things, she said, was lying. Ethical lapses, she said, were sometimes necessary to survive. Her larger point seemed to be that behaving ethically in business was less about following a graven set of principles than about adapting to changing situations in as decent a way as possible. Business ethics were dynamic rather than static, and until you tried to do business in a place like China, there was no use pontificating about the subject.
Finally a second-year student rose to welcome us and to reiterate the importance of values to our future in business. He told us that simply by getting into HBS, “You’ve won.” From now on, it was all about how we decided to govern our lives. There was something creepy about his Kennedyesque cadences and his well-practiced call to arms. But what he said would be repeated throughout my time at Harvard. HBS was a brand as much as a school, and by attending, we were associating ourselves with one of the greatest brands in business. We were now part of an elite, and we should get used to it. I struggled with this idea. It seemed so arrogant on the part of the school, and somehow demeaning to those of us who had just arrived. Regardless of who we were when we arrived, or what we might learn or become over the next two years, simply by being accepted by HBS, we had entered an überclass. It was HBS, not anything that came before it, that conferred the “winner” tag on all of us. At the end of Analytics, Frances Frei had explained that now that we were at Harvard, the professors were at our disposal. They would help us to learn and build businesses. They would even help our children get into HBS, if needed. It was a brutal acknowledgment of the legacy admissions system, whereby the children of alumni are preferred, and it immediately set me thinking: How many in this room were here simply because someone had pulled strings? What kind of capitalism is going to be taught here? The meritocratic, level-playing-field, competitive version? Or another kind?