What they don't teach you at Harvard Business School

2 
years ago
  by Valeriy Novytskyy  at Lewis River Falls/ 6 min
to read

Reviewing the classic 1984 text by Mark McCormack

introduction

We now know that the sum total of all human knowledge is contained in just two books by Mark McCormack and Philip Delves:

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The sum total of all human knowledge is contained in these two books
— James Kirkpatrick on Twitter

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The sum total of all human knowledge

Not wanting to be the one to miss out, I decided to investigate this claim. I love business and marketing books so I started with “What They Don’t Teach You at Harvard Business School”.

This book sold more than a million copies after being published in 1984 and got a raving review from Rupert Murdoch, the chairman of News Corp that the popular TV show “Succession” is based on.

Succession

McCormack addresses four main topics in his book:

  • Advice for executives and managers
  • Advice for closing sales deals
  • Corporate survival and getting promoted
  • Advice for entrepreneurs

I will go through all the major sections and call out interesting tidbits.

communicating

The cornerstone of any business is Sales, and Sales as a profession is not based around facts. It’s an art of influencing others by leveraging emotions and other motivational forces present in the human psyche.

In order to improve any outcome, the first step is understanding the processes involved and building an accurate mental model. In other words, becoming more aware of the surrounding environment.

Since the environment includes yourself as well as the people you are trying to influence, measurable improvement requires attacking the problem from both ends: understanding both yourself and others better.

McCormack therefore kicks off his book with advice on communicating effectively and improving emotional maturity.

be genuine

Dealing with people requires trust. Consistently displaying your real self will reduce the cognitive load of people you are talking to as they distill your personality into a stable pattern and stop anticipating unexpected changes.

Not having to think about something too hard produces a feeling of pleasure in people’s brains, which makes them “like” the person or object they are interacting with. Put it another way, being genuine reduces information processing overhead and increases the efficiency of information transfer.

pay attention

Effective communication skills and emotional maturity are not something you learn. It’s something you “uncover” like an archeologist who patiently excavates an ancient statue with nothing but a brush.

Echoes of this truth can be heard in stories like “The Wizard of Oz” where characters search for personal qualities only to discover they had them all along but never exercised them, leaving no opportunity for them to develop.

This brings us to the first and foremost way to succeed in communication: paying attention. This means:

  • Do not assume, instead test and observe. Most people are biased toward certain conclusions. As in applied science, the only way to arrive at the correct conclusion is to measure.
  • Use your insight. Humans have an automated facility in their brains that reads other people constantly and involuntarily, like breathing. Skillful readers of people learned to use this facility. All that’s required is quieting the intrusive parts of your mind, listening to what the insight is telling you, and taking it into account.
  • Listen actively. The only thing people like more than being listened to is someone repeating what they said — according to the Negotiation Masterclass from Chris Voss, who calls this technique “mirroring”. How would you do this without making an effort to listen?
  • Remember useful details to use them strategically later. This requires active listening according to “Superbrain” by Jim Kwik on Mindvalley.
  • Take the forces of ego into account. Just as physical objects are influenced by forces like inertia, gravity, and friction, human decision-making is influenced by the forces of the ego. Those who model people by drawing a straight line from “evidence” to “action” will almost always be disappointed, much like someone who throws a rock and expects it to fly straight to its target without taking wind and gravity into account. Harness the forces of a person’s ego instead of working against them.

negotiating

Since communication is an exercise in awareness, competing with others comes down to “out-awaring” them.

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Business is a constant process of keeping your guard up […] while encouraging others to lower theirs. — Mark McCormack

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The previous section talked about the importance of being aware, but how do you “encourage” others to be less aware? Try the following.

environment

  • Relaxing environment. Find out what the other person loves or considers relaxing and attack them there while blending in with the environment so as not to “take them out” of their unaware state.
  • Overwhelming environment. When people are overwhelmed by a “fish-out-of-water” situation, dealing with that situation will reduce their awareness of you.
  • Violating expectations. Most people can be caught by surprise outside of the “battlefield” where they expect to be attacked. That includes breaks between meetings, having lunch, and so on. Expectations can also be violated by synthesizing distractions, interruptions or emergencies to put things onto an unexpected track.
  • Candor. Assuring the other party that you will do whatever is necessary to get them on your side shames them into a “reset”, and makes them focus on similarities when they are busy picking apart the differences.

insights

Insights discussed in the previous section can also be weaponized:

  • If you learn to detach and take things slowly, another persons’s heightened emotional state could be used as an advantage.
  • Insight about others is like military intelligence: if you let them know what you noticed it will blow your cover.
  • Never give away insights about yourself, such as by talking about your accomplishments.

impressions

If the point of negotiation is to influence someone that you can’t control directly, a successful negotiation leads to someone wanting to do what you need them to do. This is best accomplished by controlling impressions.

The impression you make contributes to your influence disproportionately. Con men take advantage of this to create a fake impression, which influences you to want to do what they are asking willingly, without coercion.

Take advantage of every opportunity to create an ongoing impression of competence, effectiveness, maturity, and fair-minded toughness.

getting ahead

Getting ahead reqires combining work-related experience with inter-personal skills and understanding the framework of promotions.

Getting ahead

In McCormack’s words, getting promoted comes down to playing multiple games:

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You have got to be able to jump up several notches, to alert those several rungs above you to your talents.

At the same time, you must make the middle guys think that by supporting you and building you up to the top guy they will look better as managers.

You must also prevent these middle managers (who are looking out for their own interests) from stifling you or from appropriating your contributions […] Meanwhile, you must keep your peers as friends and maintain the support of your subordinates.

It is not only complicated, it can also get pretty unpleasant and is one of the big reasons so many people become turned off by working for a company. — Mark McCormack

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In “Paying More To Get Less: The Effects of External Hiring versus Internal Mobility” by Matthew Bidwell (published by Administrative Science Quarterly), the author argues that companies often prefer hiring external candidates rather than promoting because of stronger observable indicators of ability despite significantly higher risk of poor fit and higher pay.

This makes it more rewarding to build a strong external image than perform well. Turning this the other way around, internal workers are typically not promoted because they don’t take time to advertise their abilities: they prioritize performance in their current role.

Sources like CHRON and QUARTS note that a decision to promote restarts the whole decision-making process: promote again to fill the role that is now open or hire externally?

This makes promotion appear disruptive: a well-functioning and efficient team might get “broken” as the new leader is unable to handle increased responsibilities while other team members feel alienated because they were not chosen.

sales

Mark McCormack’s sales advice boils down to paying attention to insights about others, which has already been covered in the previous section on communication. Effective sales requires focus on the following:

  • Timing, Patience, and Persistence. Successful sales happen when the customer is prompted at the right time for them, and in a way they respond to. Waiting until the right time, and iterative testing to find the right way requires tons of patience.
  • Empathy. You must believe that you are trying to make their life better.
  • Dealing with failure. Sales is an endless cycle of rejection, experimentation, and eventual success. You can’t bury or avoid the pain of rejection, but you can become more effective in letting it run its course.
  • Listening and paying attention. Your insight about the other person is always there but you must pause to listen and have enough self control to avoid doing anything not in concert with it, like rushing, talking over the other person, and otherwise acting impulsively.

enterpreneurship

Selling a product requires marketing. The centerpiece of marketing is positioning, or understanding what you are selling and who you are selling it to.

This concept is so important that it appears in many other entrepreneurship books like The Passion Economy by Adam Davidson.

Some examples that appear in Mark’s book:

  • Rolex is not a watch business, it’s in a luxury business. Customers are buying an appearance of status and luxury that is shaped like a watch.
  • Car sales have not been based around product features for some time. It’s all about making a personal statement. Car companies look for recurring classes of people: college professors, outdoorsmen, street racers, fancy executives, suburban parents trying to “keep up with the Joneses’”, and build products around those identities.
  • Athletes who are not the best at their game can still be marketed and sold by connecting this to another related strength, like their appearance and a fake persona built specifically for the market.

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