Decades later, longtime HBS marketing professor Malcolm McNair voiced what by that point had become gospel at HBS: Cases were what made it special. They made its graduates special, because they’d learned in a superior fashion. They made its professors special, because in the writing and teaching of cases, they were showing themselves to be . . . artists. Or at least that’s what he seemed to say: “I think it is fair to say that a case is really a distinct literary form . . . it’s highly important that the case develop a great deal of interest on the part of the student . . . and then bring about ‘the willing suspension of disbelief’ . . . i.e., . . . the willingness to take at face value the situation which the case presents . . . and become the person concerned with it. Then there must be plot, narrative structure, an issue that the student must discover for himself, a disguised problem, the problem of people—all so the student . . . is really putting himself into the shoes of a particular individual.”4
The truth of the matter is that HBS cases are not a distinct literary form. They are a mishmash of poorly written summaries of business situations, on top of which are piled page after page of tabular data, charts and graphs, and other miscellany. That’s not to say that there’s nothing special about them. But what’s special is pretty much what’s special about law school cases. To study via the case method is to engage in busywork that acts somewhat like Basic School in the Marines, where newly commissioned Marine officers are indoctrinated into their future jobs. In particular, cases do a very good job of forcing on the executive-to-be the corporate version of a marine’s need to be able to decide, communicate, and act in the fog of war.
By throwing more material at students than they can possibly read during the time given, HBS forces its students to multitask, to prioritize, and to figure out the 10 percent of their assigned work that they’re actually going to focus on, because there isn’t enough time in the day to get through it all. That’s also a big part of the job of an executive, and HBS has long argued that it does a better job than any other School at teaching those skills, as well as weeding out those who won’t be able to handle the kind of information overload that they will invariably face.
By focusing on teaching via cases, HBS is trying to achieve what John Stuart Mill argued for in 1867 when discussing the role a university should play in the education of professionals: “What professional men should carry away with them from an University, is not professional knowledge, but that which should direct the use of their professional knowledge.” In other words, they should be taught how to think, and to exercise judgment.
But are they really managing to pull that off at HBS? William Deresiewicz, author of Excellent Sheep: The Miseducation of the American Elite and the Way to a Meaningful Life, doesn’t think so. “Elite schools like to boast that they teach their students how to think,” writes Deresiewicz, “but all they mean at this point is that they train them in the analytic and rhetorical skills that are necessary for success in business and the professions.”5 To many, that might actually be enough. Successful executives from Jamie Dimon of JPMorgan Chase to Tom Murphy of CBS all point to the case method when asked about the most lasting thing they took away from their graduate education at HBS. But as to the question of whether or not HBS has ever provided its graduates with the ability (or the desire) to link their actions to wider societal concerns? Not so much.
HBS being HBS, though, the School is unable to simply accept the case method for what it is—a novel and powerful pedagogical tool, in the right context—and has gone to elaborate lengths to convince themselves and others that it is actually the answer to any and all questions. Occasionally they find themselves advocating for it in surprisingly banal terms. In a 1994 article in the Harvard Business Review, “Whatever Happened to the Take-Charge Manager?,” the School’s now dean, Nitin Nohria, offered up this case-scented bromide: “Being able to judge the parameters of a particular situation and decide what ideas and actions will work in that context is what distinguishes the truly effective manager.”6 Likewise, being able to judge the parameters of a particular pitch and decide which swing will work in that context is what distinguishes the truly effective hitter. Likewise, “Duh.”
One of the more notable weaknesses of the case method is an illusion that it has long cast over HBS students in Aldrich Hall, the main classroom building on campus. In Inside the Harvard Business School, former HBS insider David Ewing parrots the conventional wisdom on case learning when he says that it “has a profound influence on students, forcing them to take responsibility for decisions.”7 But that’s ridiculous. The case method allows students to imagine that they are taking responsibility for decisions. It also deludes them into thinking that experience isn’t experience, but rather something that can be accumulated through a simulacrum of such, via the case method.
When describing the case method, the faculty also loves to trot out another chestnut, the so-called bias for action that the case method is supposed to imbue in its practitioners. “[More] often than not,” wrote Nohria in the same article as above, “managers are thrown into situations in which they must act quickly and without certainty. To quote economist Kenneth Arrow, in many situations, ‘we must simply act, fully knowing our ignorance of possible consequences.’” Likewise if the forecast calls for a 50 percent chance of rain, we must simply choose to take an umbrella or not, fully knowing our ignorance of possible weather. What Nohria is arguing is that the case method gives one the ability to choose how to proceed in a given situation. With all respect to Kenneth Arrow, most of us don’t need an economist to tell us that we don’t always know what’s going to happen next, and that we sometimes have to make a decision before we’d like to. That’s called life, and it hardly merits bragging about. Imagine a physics department claiming that its graduates have the ability to conduct experiments.
In its favor, the case system does seem precisely the kind of thing Edmund James had in mind when he wrote, “Certain aspects of the calling can be systematically treated in such a way as to give a youth much knowledge in a short time which it might otherwise have taken him years to acquire. It is possible . . . to call his attention to many things and train him to habits of observation through which he can acquire experience much more rapidly.”8 Or, as one MBA student put it nearly a century after that: “[The] past (whether genuine or simulated) cannot tell you what will happen in the case of the one particular event you’re trying to predict . . . but by giving you patterns and averages, the past can give you at least a feel for what might happen; it can tell you what the likely consequences will be. Which is a lot better than leaving things to chance.”9 But again, that’s suggesting that the case method be given all the credit for something that most of us have known all along—that more knowledge is better than less. By the above logic, the case method (detached experience) is better than the idiot’s method (ignoring experience). It’s hard to argue with that. But the tried-and-true method (actual experience) still wins out in the end.
That’s not to say that there is no value in cases. There is a lot, and that value is so intrinsic to the HBS experience that I will return to it more than once. Suffice it to say that in 1912, Edwin Gay made a decision that would put HBS on a trajectory all its own for much of the next century: “We are pushing as rapidly as possible toward the discussion method of instruction, but this is attended with a number of difficulties,” he said at the time. “One of the chief difficulties is the obtaining of proper case material for discussion. Time and experience will, however, solve this difficulty.”10 Indeed they would. But they would also create new ones. In 2015, the School suffers not from a dearth of cases, but from an obscene surplus of them. Every graduate of the School has worked his or her way through some five hundred cases by the time they’re done. Some swear by the overwhelming experience. Others, to quote Bob Dylan, think it all adds up to “too much of nothing.”
6
The Idealist: Wallace Brett Donham
If Ralph Waldo Emerson was cor
rect in his supposition that an institution is the lengthened shadow of one man, then for HBS that man is not Edwin Gay, its founding dean, but his successor, Wallace Brett Donham. As dean of the School during its rise to greatness (1919–42), Donham provided the warp and weft underlying everything that the Harvard Business School has become.
He cemented the use of the case study method as the School’s signature pedagogical tool, he clarified its definition of what it meant to be an “administrator,” he hired (and promoted) dozens of faculty who left intellectual footprints in which today’s faculty still walk, and he planned and then secured the funds for the building of the School’s iconic campus within a campus. But his most enduring contribution was the articulation of the School’s moralistic sense of its own purpose. In doing so, Wallace Donham provided HBS with the justification for its existence, rhetorical cover it still employs nearly a century later: The rise of modern business had presented society with an unprecedented roster of human problems; HBS was going to solve them.
Donham was not an academic by trade, but he was a Harvard man through and through. Born in 1877 in Rockland, Massachusetts, he graduated from Harvard College in 1898. Given financial constraints—his father was a country dentist—Donham commuted the fifty miles to and from Cambridge every day instead of living in a dormitory. He pushed himself to graduate in just three years to keep a lid on expenses.
Although his was far from the cushy college experience of his peers, Donham made the right connections during that time. He studied under A. Lawrence Lowell, and when the future president of Harvard asked the younger man about his plans for after college, Donham told him that while he wanted to attend Harvard Law School, he could not afford it, and was therefore leaning toward teaching. Not wanting to see that happen, Lowell offered him a two-thousand-dollar no-interest loan to pay for law school, which Donham accepted, and during his first two years at HLS he worked as Lowell’s teaching assistant in Government. After he graduated in 1901, Donham told Lowell that he was engaged to be married, but wanted to pay his debt to Lowell beforehand, so that he might embark on his married life on firm financial footing. Lowell offered to forgive the debt, on the condition that the marriage actually happen.1 It did, and Lowell did, too.
Impetuous, forthright, and of stocky yet cherubic appearance, Donham began his career in the legal department of Boston’s Old Colony Trust Company in 1901. He rose through the ranks swiftly and was promoted to a vice president position in 1906—only five years into the job. Two years later, he lectured to the inaugural HBS class on the topic of “Underwriting Syndicates and the Purchase and Sale of Securities through Banking Houses” as part of its Corporation Finance class.
In 1917, when the Massachusetts-based Bay Street Railway Company went into receivership, Donham was named court-appointed receiver, a thankless task he took on for the next two years. At that point Lowell again inquired about his plans, broaching the idea of Donham’s taking over the deanship of the still-struggling School. Donham was introduced as the School’s new dean on October 7, 1919.
Donham arrived at HBS just as the era’s “declensionist narrative”—the postmodernist’s euphemism for decline and fall—was reaching a crescendo. As the calendar turned to 1920, a post–World War I economic boom had collapsed, and Americans were grappling with high inflation, high unemployment, high cost of living, and continued labor strife. And the finger of blame was pointed directly at business, whose economic might was threatening to eclipse that of the state, and ever-larger concentrations of wealth and corporate power were threatening the very notion of American democracy itself.
“The economic power in the hands of the few persons who control a giant corporation is a tremendous force which can harm or benefit a multitude of individuals, affect whole districts, shift the currents of trade, bring ruin to one community and prosperity to another,” wrote Adolf Berle and Gardiner Means in The Modern Corporation and Private Property, their seminal portrait of the corporate economy of the time.2 While class conflict was still front-and-center in the national debate, that debate had at least become a little less heated than it had been in previous decades. “The eighties dripped with blood, and men struggled to get at causes, to find corrections, to humanize and socialize the country,” Ida Tarbell wrote in her 1939 memoir, “for then as now there were those who dreamed of a good world although at times it seemed to them to be going mad.”3
In 1910, those men were gaining power: that year, fifteen unionists were elected to Congress. While Social Darwinism had reigned during the Gilded Age, the Progressives were ascendant in the mid-teens. Casting a wary gaze across the Atlantic, the American establishment suddenly decided that it was time to grapple with the labor problem.
In a mere decade and a half, the political part of the establishment redrew the regulatory and legal road map of the United States on matters ranging from fiscal and monetary policy (the creation of the Federal Reserve and the income tax in 1913); consumer protection (the Food and Drug Administration and federal meat inspection in 1906, the Federal Trade Commission in 1914); environmental protection (the national forest system in 1905, the national park system in 1913); labor (child labor laws, the eight-hour day, and workmen’s compensation in 1916); campaign finance (1907); and antitrust (strengthened in 1903, further clarified and enhanced with the Clayton Antitrust Act in 1914). “Taken as a whole,” writes Robert Putnam in Bowling Alone, his sprawling survey of American civic engagement, “this package of reforms constituted an impressive achievement within a constitutional system that is built to thwart radical change.”4 You might even say that they’d demonstrated a bias for action.
Still, as social critic Thomas Frank points out in One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic Democracy, “From the 1890s until World War II the free-market system, with its extremes of wealth and poverty, came under fire repeatedly for its offenses against democracy; on several occasions it seemed to lose its very ability to provide the American people with the necessities of life.”5 Or, as columnist Walter Lippmann put it in 1914, “We are not used to a complicated civilization, we don’t know how to behave when personal contact and eternal authority have disappeared. There are no precedents to guide us, no wisdom that wasn’t made for a simpler age. We have changed our environment more quickly than we know how to change ourselves.”6
Into this breach stepped Donham and his large-bowled pipe, stuffed to the brim with Leavitt & Peirce’s Famous Cake Box Mixture. And at least one part about his timing was good: Gay had spent a decade attemping to convince the business world of the merits of getting into bed with the academy, largely without success. But it was suddenly in a mood to be convinced. And that was for two reasons. The first: Even those convinced of their own piety and the righteousness of their cause (see: John D. Rockefeller) had been unable to sell that fact to the public, and there was a belated realization that a crusading HBS dean was probably a better front man for the job. What’s more, Donham’s background as a “practitioner” (he was a Boston banker, not an academic) made him all the more compelling in that regard. The second: With antitrust legislation finally beginning to curb market power gained by traditional methods (mergers, collusion), it was dawning on the business establishment that the surest path to increased profits might actually be to improve their operational efficiency. And for that, they turned to Harvard and its MBAs.
If the faculty stayed focused on the elusive notion of a “theory” of business that they saw as the ultimate end of the researching and teaching of cases—“adopt[ing] longitudinal methods, recording the facts, classifying them and searching for the generalizations which might lead to such theory inductively”7—under Donham they refined the rationale for studying cases, which was to develop students’ “ability to handle novelty . . . to synthesize situations, to take an ‘all-around look.’”8 In other words, while they were still holding out hope that a pseudo-scientific search might actually produce a scientific outcome (that is, a
theory of business), they began putting equal emphasis on the benefits that would come as a result of that search, its ultimate success notwithstanding. It’s not quite the same thing as knowing to appreciate the journey as well as the destination, but in a way, it’s more crucial—after all, when the thing you’re searching for doesn’t even exist, the benefits that arrive from your search are pretty much all you’ve got.
By 1924, most courses at the School had been converted to the case system. And the rest of the country was following their lead. Companies with a savvy sense of public relations and recruiting started asking to be the subject of cases. In 1922, Donham offered General Electric twofold praise. In the first instance, he congratulated the company for “its far-sighted vision of the value of this type of material for training young men.” In the second, for covering the expense of HBS faculty researching and writing cases about GE, Donham hoped other companies would fund their own hagiographies, too, but it wasn’t to be. Although AT&T followed suit in 1923, HBS has never found a patsy—corporate or otherwise—willing to cover the costs of its field research and thus relieve the School of the challenge of raising it themselves, year-in, year-out. Donham arguably showed a talent for the task, raising more than $2 million to support case writing during his two-decade tenure. Fifty years later, in 1979, the School was spending $6 million annually on case production.
The best salesmen (or women) tend to come armed with two traits. The first is that they truly believe in the product they are selling. The stronger that belief is—say, approaching a religious fervor—the better. The second is that they never stop searching for new ways to sell it. Wallace Donham came armed with both, and his record as a salesman on behalf of the School is unrivaled.
The Golden Passport Page 7
