Jack TenneyExtra Point

by Jack Tenney, Publisher

July 2000

How to win big in business

I went to Harvard.

For three days. I’m a quick learner.

The Harvard Business School has a richly deserved reputation for studying the problems encountered in the real world. MIT’s Sloan School might have the economists and Wharton the financiers but Harvard has the problem-solvers.

Their case studies, role-playing scenarios and teamwork are a big part of the Harvard B-school approach. When the university entered the seminar business, it carefully designed the housing around the “can”-model. Bathrooms are known in some circles as cans and can groups are made up of people sharing them. Can groups are recognized small social groups that bond students for life, like the Eton-old-school-old-boy-tie thing, only smaller, tighter and more American.

At the posh digs designed for corporate leaders coming back to academia for polish, inspiration and training (no mention directly of education), 10 folks share a large lounge area equipped with a refrigerator, microwave oven, coffee maker, telecommunications, couches and club chairs. The bedrooms are small; the lavatories, Spartan: so, naturally, seminar attendees spend most of their waking non-classroom time shooting the breeze with other attendees in the lounge area, just like real students. At least one assignment is a group assignment adding pressure and structure to the natural coalescence of the can.

So here’s what I learned in three days.

You want to win in business?

Network. Listen carefully and actively when seeking counsel. Be trustworthy and judicious when it’s your turn to counsel. Share your wit.

You want to really win in business?

Borrow. Borrowing, suddenly it seems, is out of favor in government.

Politicians urge paying off debt when embarrassed by riches. Not surprisingly, they’ve got it exactly backward. The ability to generate excess revenue is a dual signal: throttle back on rates and fully utilize debt to fund capital projects. To restate: Don’t pay cash for buildings, bridges, land, roads and stuff that should last a long time. In business, if your capital projects aren’t bankable, don’t do them. Simple.

You want to really win big in business?

Advertise. Name a successful business that doesn’t. You probably can’t, because they all advertise. Check out the biggest and best known: They have the biggest and most visible ad budgets. General Motors, AT&T, Microsoft, Cisco, IBM, Disney ...

You want more proof, load up a computer simulation game of business. Try this with Roller Coaster Tycoon. The object of the game is to build an amusement park in a desert and attract hundreds of satisfied customers.

You’re given three years to achieve the task of increasing the net worth of the park to $3,000 (I’m sure some number of zeros are omitted). You can do it in five months (20 minutes equals five months in cyberland.)

How?

Advertise to the max.

Understand, do not just promote, advertise! Don’t just give away coupons for free rides. Inform the market and provide real value. Keep your park clean, have tons of trash cans and handymen to sweep and empty. Have information kiosks all over. Food stands, drink stands — again all over the place — plus a few rides and lots of free rest rooms. (By the way, Harvard shies away from computer simulations because everyone just loads up on advertising to win.)

And borrow, of course. Where else are you supposed to get the capital to build all those cans? You can’t just impose taxes! Forget IPOs. If you’ve got a bankable deal don’t get lashed up with a VC (venture capitalist). Remember, equity partners want out if you do well. If, on the other hand, you happen to be a VC, be sure to remind your entrepreneurs to advertise. It’ll hasten your exit strategy implementation.

Now that I’ve told you all I learned at Harvard, consider yourself part of my can group.