If I Knew Then Advice on careers, finance, and life from Harvard Business School's Class of 1963

It is easier to make the correct decision when you have extra cash. If your company is short of cash, it is easy to make the wrong decision, although sometimes cash shortage is a fact of the job.

A strong team around you is critical. Loyalty of your direct reports is important, especially if you have earned it.

Never use the pronoun “I” except when taking responsibility for a problem or mistake. When success occurs, it should always be “we” or “they.”

Communication with all employees is critical. Strategies must be explained repeatedly — as many as 20 times — before most people really understand them.

The right culture is also critical. It takes a long time and an exceptional amount of effort to change a bad culture. Most companies fail because they do not have the right culture. 

All competitive advantages last for a very short time. You have to be paranoid to stay as the leader of a successful company.

Great companies invest in their people. They encourage people to achieve the seemingly impossible, knowing they are allowed to fail so long as they make intelligent decisions and do not put the company at significant risk without the consent of their management.

Pay people well. Provide profit-sharing. If you care about them, they will care about you.

I have joined a company that was wedded to a dying industry and old technology; one that was grossly undercapitalized and yet in a high-fashion industry fraught with miserable ethical practices; one where the CEO nearly sank the company with extraordinarily bad acquisitions and then tried to become larger than life; and one that was highly successful with very large free cash flows, three-piece suits and black-tie Christmas parties, but was unable to devote the focus and resources to remain competitive. All were taken over by better-managed firms.

I learned that a company is simply people with a purpose and the resources to achieve them. Losing sight of the customers — no matter who they are, what competitors are doing, or what the cutting edge of technology is in your industry — is a recipe for disaster. Cash is king and must be conserved. Internal politics cannot be tolerated.

People have to believe what they are working on is important to the company’s success and they will be treated fairly and with respect. The boss is the servant of the organization — not the opposite.

With the advent of our society’s love affair with technology, especially in the younger generations, my wish is that those generations understand that communication screen-to-screen is not the same — by a factor of 1,000 — as communication face-to-face. That goes for the classroom, the living room, and the bedroom.

Success in business relies a lot on making sure your colleagues or employees share a good part of any success you may have. The mistake is to believe that you are more important than anyone else in the business.

Surround yourself with the smartest, most ethical people you can find. Set clear goals, communicate them clearly, and delegate.

Knowing that all people are complex in values, motivations, and objectives, and that groups of people are complexes of complexities, all of which are hidden from view, you will be surprised by wrong behaviors — including your own.

So maintain active reconnaissance and objectivity to catch misbehavior early. Flood the system with positive ethics to prevent or discourage bad or mediocre behavior.

Nobody who has lived by self-demanding high standards has ever said, “I wish I hadn’t.”

It’s a mistake to credit success in business too much to one’s own skill. My experience is that good timing and luck contribute as much or more to success as does skill. The same is often true of failure. My advice is to stay humble, patient, and persistent. Over time, timing and luck tend to even out.

Debt sucks.

Mistakes:

• Greed
• Dishonesty
• Self-delusion
• Lack of an ethical compass

Mistakes:

• Acting too slowly
• Waiting until all is understood
• No (or low) risk

Act fast. Take risks.

One mistake is to stick with a highly profitable business model too long when the world is changing. Another is to abandon the old for the next new thing, particularly if the path to profitability is not clear.

Hire the best people.

Mistakes:

• Fear of hiring people who are smarter than you are
  
• Borrowing too much money
  
• Growing a business too quickly
  
• Failing to let people grow by not delegating enough responsibility
  
• Not emphasizing the importance of reputation and good ethics

Pursuing random opportunities diffuses one’s efforts. Exceeding one’s resources gets you into trouble when times weaken. If you’re always overspending and trying to do too much, you can be successful 10 times in a row and be wiped out on the 11th time. 

As time goes by, it’s become clear that people skills are very important. Ultimately, a business and a career will be successful if you understand how to motivate and work with other people.

“The harder I work, the luckier I get” was and is my philosophy in business.

I too easily accepted advice of professionals (lawyers, accountants, etc.) when their advice led to an easier or more financially advantageous path, when this ran contrary to my instincts.

Aspire for the heights but prepare for the depths.
Always do due diligence.
Respect your colleagues.

Creating success in business has to be “a shared learning experience.” I believe that all employees need information — not only about the total company but also their particular division or department. Transparency is the key to a successful entrepreneurial company.

The hubris that comes from success leads one to believe one’s next venture will also succeed, given the same hard work and leadership skills. This is not the case. The circumstances are different, the business is different. Never assume one success automatically leads to another.

When starting a new business, be sure you understand the quality characteristics required by the market. Otherwise, you’ll efficiently produce millions of a product that somehow fails the customer taste test.

When you are trying to create success, make sure the business has the potential to succeed. Is there a market for your product? Are the people willing to work very hard to succeed? Do you really have a fair, clear shot at success?

If the game is “no longer worth the candle,” get out pronto. Hanging around and taking a thousand arrows because you believe in an endeavor is done too much. I did it myself.

One of the best things that can happen is to get fired. It forces change and if managed correctly, can result in improvement.

I never would have started a family business unless I’d been fired from Wall Street.

• Not all decisions turn out well. Be prepared to deal with problems over which you have no control.
  
• Almost everything will require more money and more time than you think.
  
• Never settle for “good enough.” Always strive for excellence.
  
• Set high expectations for yourself and those with whom you work.
  
• Move quickly to deal with people issues.
  
• Hiring smart, driven people is a ticket to your own success.
  

It’s a mistake to stick too long — for whatever seem good or necessary reasons — in trying to make an effort successful when there are clear signs it isn’t really viable.

I sometimes fell prey to the management fads of the time, and tried to push the future too fast. 

Keep your costs and financial commitments low and short-term. Don’t underestimate your capital needs over time.

One of the biggest mistakes is to think you know it all — or even have to know it all. Learning to surround yourself with people who know more than you do and learning to accept their advice is a big step — especially for people with Harvard Business School-graduate egos.

To succeed in business, show people that you appreciate their contributions with public and private praise and financial reward. If your company does well financially, be sure to share that with your key people.

The biggest mistake I’ve seen in my own experience is diversifying away from one’s core business and strengths.

Treat employees well. Beware of sympathetic business decisions. They always need to be fundamentally sound.

I made some mistakes in running one of my small business endeavors. Had it been my first business, it might have been excusable. But it was not. In fact, it was my last. From it, I learned how important it is to think clearly about the fundamental purpose of the enterprise. Among the most important ingredients is the need to establish a principle of being fair to all the stakeholders.

I think a good businessperson must understand capitalism and the philosophy that underpins it. I think a faith is all that is needed to chart the ethics, the respect for others, the proper position of doing good, and the self-discipline to perform at a high level.

I have made many mistakes. I don’t dwell on them. ‘Fess up to them reluctantly and move on quickly. It is the cover-up that always is fatal.

The first requirement is to work in a field where continuing success is possible. If there are no barriers to entry, a profitable business will be overwhelmed with new competitors as soon as it begins to make money.

Stay tuned to local sensitivities. Very few are fit for a career anywhere in the world.