Prof. Howard Stevenson’s Five-Year Plan

One of the best things about this school is the quality of speakers that we have access to. Immelt, Dimon and Dalio come and go to vast crowds. On Tuesday, the Entrepreneurship Club gave us a talk with Professor Howard Stevenson, the father of entrepreneurship at HBS, talking about his approach to entrepreneurship and to careers in general. A smaller crowd, perhaps, but certainly the most interesting speaker I’ve seen here.

Having grown up in Utah, Prof. Stevenson attended Stanford and then HBS, where he completed his doctorate, and subsequently accepted a teaching position. After deciding he wanted to be asset secure he went into investment banking, but quickly realized it wasn’t for him and switched to Real Estate because “people would lend him money”.

He was invited to return to HBS in 1982 to create a new department teaching entrepreneurship. The rest, as they say, is TEM (or history, depending on who you ask).

Introductions are often extravagant, but Prof. Stevenson’s was a neat encapsulation of the scale of his achievement: Vice Provost, Senior Associate Dean, Chair of NPR, Board of Boston Ballet and Mt Auburn Hospital, Philanthropist, and co-founder and former President of Baupost Group. On his retirement in 2011, HBS created a professorship in his honor. So far, so massively impressive CV. So what would he say?

A large amount of extremely wise things, as it turned out. Having described his introduction as “embarrassing” he immediately went on to talk about the structure (as opposed to the content) of his career. Using the question “Where do I want to be in five years’ time?”, he anchored his career choices towards the pursuit of a situation he thought would be interesting and fun. “I want to learn more about business” led to a doctorate at HBS. “I want to learn about real estate” led to his teaching a course on it at HBS.

This action-oriented personality absolutely shone through. While many of our classmates are walking over hot coals to get into Baupost for the summer, it was so refreshing to understand that the founding ideal of the company was to answer the question, “How do you get paid for doing a good job managing money?” rather than the Assets-under-Management model that Stevenson thought rewarded underperformance and often stupidity. Rather than thinking about it, he went out to see if it would work.

After seeing classmates go through the interview threshing machine, his observation that “culture trumps strategy every time” offers such a solid framework not only for finding a job, but for choosing investments. “An A person with a B idea is always more likely to succeed than a B person with an A idea” on the grounds that the A person will realize the idea is a B and shift to come up with an A, while the B person will likely stuff up the A idea.

What was really striking was his humanity and his sense of fun. For someone who has clearly been wildly successful, he dresses modestly (cash management – the hallmark of any good entrepreneur), he is consistently self-deprecating, and he understands what makes him happy. This seems to be the key. “Know what you’re good at, and partner with people who are good at the stuff you’re bad at,” he says, and warns against the grass-is-greener syndrome that plagues all of us, especially in this school, and especially at recruiting time.

“Everyone’s outside is better than their inside,” he observed, “we all compare ourselves to other people which is an easy way to make yourself miserable.” Start with your strengths, know what you like, and do what makes you happy. Wise words from an impressive man.