This article is the first in a series of interviews with this year’s Harvard Business School Entrepreneurs-in-Residence. Sponsored by the HBS Arthur Rock Center for Entrepreneurship, the Entrepreneur-in-Residence program invites accomplished entrepreneurs to commit to either a semester or full academic year working with faculty and students on campus.
Second-year (EC) students will likely best remember Jim Sharpe as the intriguing, entrepreneurial TEM case protagonist who was handpicked by Jack Welch to “tryout” for General Electric upon graduating from Harvard Business School in 1976.
During his years at HBS breitling superocean replica, Sharpe’s campus contemporaries included SEC Chairman Christopher Cox, Intuit founder Scott Cook, and former U.S. President George W. Bush.
A decade after graduating from HBS and having obtained significant operational experience running businesses in turnaround situations, Sharpe made the leap to business owner through the purchase of Extrusion Technology, an aluminum extrusion fabricator. With Sharpe at the helm, the company experienced dramatic growth – revenues quickly grew eightfold from $4 million to $32 million through savvy strategic activities such as the development of niche products.
Sharpe recently returned to HBS to serve as an Entrepreneur-in-Residence (EIR).
The Entrepreneur-in-Residence program, which was launched six years ago, invites accomplished entrepreneurs to campus to collaborate with and participate in an ongoing exchange of ideas with faculty and students.
“My goal is to be available to students – both first- and second-year students – with the experiences I have had. I am happy to talk to people or answer any questions they have tag heuer replica for sale ,” said Sharpe, who will be available for office hours during the latter half of the week (on the Y-schedule).
“The objective was to bring in people who can spend time with students and can offer them valuable perspectives based on their own experiences, to have the EIRs work with faculty members on projects of mutual interest and to have them engaged in the intellectual work of the school,” said Mike Roberts, Senior Lecturer and Executive Director of the Rock Center.
In addition to Sharpe, this year’s EIRs are Jeffrey Bussgang (MBA ’95), general partner of Flybridge Capital Partners, Susan Decker (MBA ’86), former President of Yahoo! Inc., and Jeffrey Walker (MBA ’81), ex-chairman and CEO of CCMP Capital, the successor to JPMorgan Partners, the bank’s private equity arm.
To schedule a meeting with an EIR, HBS students are encouraged to reach out to Alice Moses in the Rock Center.
Note: Susan Decker will be residing in Silicon Valley while helping to organize January’s Rock Center IXP to Silicon Valley.
HARBUS: EC students will probably always remember you as the entrepreneur who left General Electric and did something really gutsy in purchasing Extrusion Technology. In your opinion, are entrepreneurs made or are they born? You sounded very entrepreneurial in your early years – selling turtles, running a paper route, and launching other ventures.
JIM SHARPE (JS): I think they are born. I also think 30 years ago I might have thought they were made. Today, I think it is some spirit in you that lets you see the opportunity that you are willing to take a risk for. Now the classic definition of an entrepreneur also has an element of starting something from scratch. I’m not a starting-from-scratch guy, but I’m my own kind of entrepreneur. I think it must have been something in me. I did a lot of things as a kid, and I always wanted to do things my way.
But the dichotomy is that I spent 10 years not doing anything truly on my own. I worked at a big company with GE, on a staff position, and later running businesses. Now running the businesses gave me the taste of “Whoa, this is like my own business.”
GE wanted me to and the next place I worked wanted me to run my own show but with them overlooking me. It was like, “Oh, this is great! I get to run my own show, but on someone else’s nickel.”
HARBUS: A lot of people follow different trajectories in moving from a big corporation to becoming an entrepreneur versus coming right out of the MBA program thinking, “I want to go off and start something!” Is there an ideal route?
JS: I suspect that it’s either way, because there are examples of people right out of business school who went off on their own and either started something or got into something they could run and were successful at it. Now, I would think that if you looked at some data, the longer you develop your capabilities and skills, the more probable you will be successful at doing something on your own. For me, the longer I did it – practicing talking to customers, practicing raising prices, practicing dealing with a union, or practicing dealing with difficult employees – was really helpful when I had to do it on my own.
HARBUS: You made reference to your HBS years. I understand you were a member of the Class of 1976 here. What stands out most about your HBS experience?
JS: The first thing that comes to mind is my study group. My study group formed in my first year and we stayed together for the two years and I am still in touch with them 30 years later. In the real world, so to speak, I replicated that with the Young Presidents’ Organization that has a format like study groups called Forum where 6 to 10 people get together once a month, so it’s not every day as you would in a study group, to share ideas and talk about problems and wrestle through issues whether it be business-related or personal-related.
Certainly the biggest skill that I learned was having to make a choice and support my choice and having to articulate it and talk about it in a classroom setting over and over and over again, because in business later on, right away, you have to do that. People would ask, “Jim, what do you think about this?” That skill-set of being under fire every day having to think through: What’s my position on this? Am I going to argue that this is why I want to do this? And then having to develop an action plan. I remember developing a lot of action plans and that was great practice for business and for life.
HARBUS: A close friend’s mother, who went here, was a member of the Class of 1975 – one year ahead of you – and was a section-mate of George W. Bush. Do you recall having any colorful, interesting section-mates or other figures on campus here during your time?
JS: Chris Cox, who was the head of the SEC and a politician from California, was in my class. I would say that it was clear back then when he was in class that he would make a good politician. He was smooth and articulate and impressive even back then. Now, he and I may differ in our politics www.replicabestsale.co.uk, but that was someone who was memorable.
Another person in our class was the founder of Intuit, Scott Cook. I think what’s important about Scott Cook is that I met him ten years later in the Young Presidents’ Organization and he was very successful with Intuit, but was dealing with the same kinds of personal issues – kids, dealing with the business – those same issues that I was going through running my business.
HARBUS: One thing that struck us as special in reading your case was that a lot of protagonists seem to really struggle in balancing their personal and professional lives. You seem to have found a great balance. What key decisions or what considerations did you make along the way that allowed you to reach that balance?
JS: We decided to have children later on in our marriage, so the balance didn’t have to occur until later on when the children came along. Having children was a big push for me. I think one of the big considerations at least for me was having kids.
Backing up, Debby and I had some tough times, 6 or 7 years into our marriage. Now that was a good way to for me to think more about balance. Debby would say, “I don’t think you’re balanced. You’re spending too much time at work. We’re not together as much as a couple as we should be.” So we went through some challenging times, so 1). Sometimes it takes a fairly strong external push to remind you that balance is important. Then, the kids came along and that was another wake-up call reminding us that, “Okay, there’s more to your life than your work. Now there’s kids.” And for me, being available for the kids was very important.
We have a daughter who was adopted, that has been very challenging, and challenges help you focus on balance. We adopted her when she was five years old and she just turned eighteen. We’re very proud of her moving on to college.
HARBUS: I wanted to reminisce about HBS more. Were there any particular cases that struck a chord and why did they resonate with you?
JS: Butcher Wax Case was a marketing case where the professor made us think through the process of buying a product as a consumer, so just the thought process of having to think about you gotta wax your floor, what do you need to wax your floor, what kind of product do you get, what kind of questions do you ask, where do you buy it, what do you ask the guy at the hardware store, what kind of answers do you get, what kind of equipment do need – that whole process was something I hadn’t spent a lot of time thinking about. It was good for marketing to think about, acting like, and putting yourself in the consumer’s viewpoint. It was great.
There was a case about making steel product that Paul Marshall, a second-year professor here, taught that was a real eye opener for how you make a very difficult product and what goes on in making it. It involved huge pieces of equipment. Hot, dirty, smoky. The opportunity for big mistakes if the batch goes bad, and just to sort through how all of that works, was just amazing to consider especially with my background. I never knew anything about that.
HARBUS: What was your reaction to receiving the call saying, “Hey Jim, we want to write a case on YOU”?
JS: Kent Bowen, who was the professor who wrote the case, said “We’d like to do this.” And, I said, “I’m not sure what anyone could learn from all of this, but I would be happy to tell you what I did, so my reaction was: If you want to know the story, that would be great, but I don’t know if it has any value when he first talked to me about it. And he said, “Nope, just talk. I’ll ask you some questions. And I just want to use your words in my case to describe what you did. And that’ll be enough. And I was surprised. “Is that how you write a case, you just listen to what people say?” And he said, “Yup, what you’ve done is enough. That’ll do for me.” I felt like I didn’t do anything special. What have I done? I did these things. This is just my life. I didn’t realize it was anything special.
But after all these years of doing this in class, it is much clearer to me now that my experiences, which he described in the case, are useful – that just people hearing and seeing examples of how to raise prices or how to deal with a customer or how to deal with a union problem from a real person who lived it, not disguised, is useful for people and is one of the reasons I am interested in being an Entrepreneur-in-Residence, because there are some experiences that I have that may be useful to students who want to go a little bit deeper than just reading the case about Jim and Debby did.
HARBUS: Can we flashback to your years at GE for a second? Jack Welch is famous for a lot of things. I think that people will find it fascinating that you were handpicked by him for your position. What was it like working for him?
JS: He was very demanding. He told all of the candidates from the Business School when we interviewed to make sure to keep our other job offers open. He said, “If it doesn’t work out in the first couple of months, you won’t be in this position.” So that set the tone. There was no other job interview I went on where the company said if it doesn’t work out, in two months you’ll be gone.
HARBUS: Wow, zero job security?
JS: Zero job security. He was very clear about that. It was his reputation on the line. He was making the selection and God-forbid that you should screw up, because you would be out.
HARBUS: In the months that followed, did you think that was an effective tactic keeping you all on your toes, or was it too much?
JS: Well, it was effective in weeding out two of the candidates that were with me during the interview process because two of them said, “Look, I’m looking for a job for life. I’m looking for a career with a company. I’m not looking for a short-term tryout period.”
And for me, it was a good incentive for me to think about making sure I was successful. It was a brilliant move on his part, in my opinion. Through the year, he was very demanding and it was clear to me that he wanted somebody who would tell him the facts, tell him how I saw something. So he sent me on some studies and he would ask me very directly, “What do you think about this situation?” And there was generally lots of controversy about them. I did, in one particular case, give him an answer that I knew he didn’t agree with.
He sent me off to do a study. I came back. He kind of implied what he wanted the answer to be and I came back and said, “That’s just not the answer.” And I knew that was his answer. I remember being in an office where he said, “Okay.” He called the people in Europe and said, “I have Jim here in my office and he’s told me he did the study and I guess I support him so let’s move forward.”
By and large when you reach the level and are as intimidating as someone like Jack Welch, sometimes you don’t get straight answers from the people who work for you. And it was good practice for me to be willing to say, “This is how I feel and this is what I believe.” He got straight answers from me. That’s for sure.
You can imagine knowing your job is on the line and wondering whether, alright, I’m going to tell Jack Welch what he doesn’t want to hear.
HARBUS: A very gutsy move.
JS: That was probably the beginning of exercising that entrepreneurial spirit: I’m going to try this. And if it doesn’t work, I’ll move on to something else. This can’t be the end of the world. There might have been some of that risk-taking that was described in the case.
HARBUS: While you were at GE, you had experience running a business in a recession – in some ways, resembling the current situation. Were there any critical lessons that you learned as a result that people could keep in mind in these economic times?
JS: One good lesson was when you are running your own business or running a business you are kind of in the forest and you can’t see through the trees. One of the things I learned at GE was people from above me in the GE organization would say, “It looks like there’s going to be a recession.”
I’m in the trees. I don’t see anything. It looks like that’s not the case, so one lesson is that other people can see what’s going on or what’s about to happen – and heed that, listen to that. GE didn’t give you any choice and the British company that I worked for didn’t give us any choice. They would say, “We see this recession coming on and you need to take some action.”
That’s important. Keep listening. When you’re on your own, no one’s doing that for you. External forces can help you see that there are tough times ahead.
Another lesson was to take action early. I developed a rule of thumb, which was if I had two down months it was time to take action. I remember arguing at GE that I really needed four or five to be convinced that something needed to be done and they were really useful in saying – and they were right – if we had waited longer we just wouldn’t have reacted fast enough we would have lost more money. And it was really useful for setting the stage for acting early and quickly when bad news is on the horizon.
The lesson would be if it’s necessary to cut, to cut deeper than you need to – to make sure you don’t need to cut more than once. Because if you think it [the economy] is going to come down, you’re better off cutting a bit deeper – rather than cutting expenses or headcount or taking action a little bit, and then doing it again and again.
I have done the “let’s just do a little bit” and learned the hard lessons of you’re going to look stupid, your employees aren’t going to trust you, your customers aren’t going to trust you.
If you cut too deeply, you can always add back. But it’s very difficult if you don’t cut enough. It is going to be even harder to take the next cut especially during these kinds of times, where it is very important to be focused on surviving.
HARBUS: In terms of business advice, what were the one or two pieces of business advice that you’ve received you thought were fantastic pieces of advice, that stayed with you through the years?
JS: The first that comes to mind is when I owned my own company how important it was for me to get out and to visit customers – for me to be out selling and representing the company. Initially, I didn’t know that much about the business I had bought. I was a bit anxious about, “What if they ask me a technical question that I don’t know?” And a Rhode Island textile manufacturer said, “You gotta get out and be in front of them because they don’t have that many owners of companies come and talk to them. Your customers will appreciate the fact that you came and dealt with them.”
And it was opposed to my gut-level thinking. I don’t know the product well enough. What can I do to actually help them? Just go do it. And that was phenomenal advice.
I think listening to employees took a lot of practice. You have to keep asking your work force: “What do you mean? What do you want? How do you want this? What could be different?” Because what they say initially may not be what they really want, so you have to keep digging and asking especially with people that work in your organization because the first things you might hear are not what are really on their minds.
Kind of like what relationships are all about, too. Keep asking, keep digging, make sure you’re listening well. Ask, “Am I hearing you correctly?”