Bill Sahlman, MBA Class of 1975, is the Dimitri V. d’Arbeloff – Class of 1955 Professor of Business Administration at HBS. He also received his PhD in Business Economics at Harvard. Professor Sahlman’s research focuses on the investment and financing decisions made in entrepreneurial ventures at all stages in their development. He has written numerous articles on topics including entrepreneurial management, venture capital and private equity, deal structuring, and the role of entrepreneurship in the global economy.
In 1985, Professor Sahlman introduced a new second-year elective course called Entrepreneurial Finance. That course has been taken by over 8,000 students since it was first offered and is one of the most popular courses at HBS. Professor Sahlman is the Senior Associate Dean for External Relations at HBS, and is a member of the board of directors or board of advisors of several private companies and not-for-profit organizations.
What was your most memorable experience as a student at HBS?
One of the most interesting things was taking classes with professors who had very different styles. I recall one particular professor was extraordinarily flashy and popular, but turned out to not be very substantive in his teaching. On the other hand, I had Professor Al Chandler and Professor John Lintner, both of whom were not flashy but I learned more things from them than I could’ve possibly imagine. At HBS there seems to be a contrast between substance & entertainment value in the classroom. From my HBS experience as a student and a professor, I recognize there’s a fine line between using humor to make a class interesting and accomplishing educational goals.
Another humorous incident revolved around students trying to find out what happened to one of the companies we were studying. Nowadays we have the internet to get the information instantly. Not so in 1973. I recall one classmate called up the CEO at home to ask how the company did! Obviously the professor was not amused by this.
What has influenced you the most while being a member of the faculty at HBS?
Getting the MBA degree had two lasting effects on how I approach the world:
1) Organizing information & asking the right questions:
Answers change but the right questions endure. I was a finance jock at HBS, and what finance experts think change over time & it flipflops. But there’s a set of questions that one can ask that’ll have important implications. Often I organize problems in the context of a case. For example, I met with the Harvard Stem Cell Institute guys to discuss their problems, and decided to write a case to organize the information & set a context for discussion that would be helpful to the organization. It was great!
2) Every problem can be improved.
Individual analysis is 99.9/100 times not as good as a collective insight. Study groups offer insights that individuals don’t have, and the entire classroom shares insights that study groups don’t have. Bringing multiple perspectives on a common problem and encouraging controversial views can be very insightful. Through the HBS student and teacher experience, I learn to tackle very complex things!
Please share one or more most memorable stories while you were at HBS, as a student or as a faculty.
My greatest joy is the relationships that I developed and maintained with my students. It’s hard to predict who will do spectacular things, but it’s been interesting to watch how they evolve & interact with their peers after HBS. For example, there was one fantastic woman from Montana in my MBA year, when HBS only had 10% women. She was just wonderful! I found opportunities to work with her. She was the first female partner at McKinsey, she was on the Board of HBS Publishing, and she ran the HBS California Research Center. I enjoy cultivating these relationships.
As a professor having taught over 8000 students, what advice would you give HBS students today who aspire to be budding entrepreneurs & venture capitalists?
Well, I tend to have the same view towards careers, that with the economy up & down, students graduate, and none of that matters! Eventually people will find good jobs. Several great companies come from tough economic times because of opportunities. In fact, business opportunities are inversely correlated to the economy!
I believe people need to be opportunity driven: identify unserved, underserved and overserved customers, learn how to assemble resources to have a reasonable shot at the opportunity, and how to manage reward & risk. This does not occur at a moment in time. There’re also many fabulous careers that are rewarding but are not doing anything new outside. If you’re Jeff Immelt working at GE, great! If you’re working for Teach for America, fantastic!
As the Senior Associate Dean for External Relations, I travel around the world and see that the impact that HBS grads have is so extraordinary, that only one component of their impact is their business career. Other dimensions of impact include families, communities, culture, and society.
Where do you see the school heading in the next 100 years?
The core element of HBS will remain the same: get really bright people from diverse backgrounds and expose them to difficult problems, simulating a broad range of real-world situations. I think the section experience is critical, and the second year curricular design is good.
The relationships nurtured here is lifelong. For example, during the 2002 India-Pakistan standoff: both sides summoned business leaders to initiate talks, there were 6 HBS grads from India, 5 HBS grads from Pakistan. In the end they threw a party together! This is amazing!
I think HBS needs to continue to find ways to ask better questions, find common ways to approach problems, and reflect where new management opportunities lie. We need to focus relentlessly on what we hope students learn & what they actually learn.
What’s your birthday wish for the Harvard Business School?
Keep asking hard questions, to stay true to our values. Ask how we get people to learn, and how to stay different from other organizations. There’s constant pressure for HBS to adopt a strategy similar to those at other institutions. But others can’t teach you how to integrate across functions & disciplines, can’t teach you to work with a group of diverse individuals, can’t teach you the consequences of making decisions. And this is what HBS does best.