One of UD‘s most commonly used categories on this blog is Beware the B-School Boys, in which UD attempts to help you see econ and MBA grads coming. (For details, click on the category’s name at the end of this post.) Two recent instructive cases from Harvard are worth mentioning.
Florian Homm played a little basketball for Harvard when he was an undergrad there, but his big thing was business: econ undergrad; MBA grad. He seems always to have been a cultured crook, an intellectual Bernard Madoff who, after years of hiding from the law, has lately been captured. Bernie crafted crude Ponzis; Florian engaged in portfolio pumping, which takes a finer Italian hand.
As with nutty professor Paul Frampton, the New York Times writer covering Florian’s demise cannot help getting giggly:
Given Mr. Homm’s flair for drama, it was perhaps fitting that he was arrested at the Uffizi Gallery, famous for an exquisite collection that includes works by Michelangelo, Rubens, Tintoretto and Rembrandt…
But it is unclear why Mr. Homm, who is 201 centimeters, or 6 feet 7 inches, tall and something of a celebrity in Germany, would appear in a place where there are many German tourists and he was likely to be recognized.
The seduction of beauty! From Sozzo Tegliacci to the SEC in one shattering second!
But seriously, folks; there’s something about a Harvard and high-style Euro charisma that makes investors unwary… And UD‘s a little worried that you’ll still fall for Florian in his latest iteration:
“The pursuit of happiness is not correlated with the pursuit of money,” [Homm said in a recent interview]… Mr. Homm insisted he was no longer the same person who once owned a stake in a Berlin brothel and lived in a $5 million residence on Majorca with a Russian table dancer. He said he prayed daily and was devoting his energy to charity work.
Okay so I want you to bring a smidgen of doubt to this self-description too, okay? Remember: Beware the B-School Boys.
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Though he seems never to have taken any classes with him, Florian claims to have known and even worked with Harvard’s notorious professor Michael Porter (Porter has said he does not remember Florian). Porter’s now-bankrupt Monitor Group failed to register as a lobbying outfit, did fellatial obeisance to Muammar Gaddafi, and so on and so on. If you didn’t put your money on Florian, maybe you’re tempted to put it on Porter, who remains a Harvard professor, and is not being chased by the SEC. Maybe you’re tempted to make him your business strategy consultant.
Beware!
[Porter’s] picture of CEO-superdeciders helps justify their huge compensation and the congratulatory press coverage, and yet [it] has little foundation in fact or logic. The strategy business … lasted so long in part because it supports and advances the pretensions of the C-suite.
Porter’s strategy theory is to CEOs what ancient religions were to tribal chieftains. The ceremonies are ultimately about the divine right of the rulers to rule — a kind of covert form of political theory. [One observer says] it is “like a ritual rain dance. It has no effect on the weather that follows, but those who engage in it think that it does.” … [Monitor was] doomed from the outset. Its embarrassing debacle marked the beginning of the end of the era of business metaphysics and the exposure of the most over-valued idea on the planet: sustainable competitive advantage.
March 12th, 2013 at 11:00AM
[…] Thanks to University Diaries for her link today to an excellent Forbes article on management guru Michael Porter. […]
March 12th, 2013 at 3:48PM
There really are credible management guru types. Robert Townsend, Alfred Sloan (in his day), many others. There are some academic writers on business who’ve impressed me greatly (wish I could think of a name right now). Some well known management thinkers are unintentionally funny, like the one guy (Covey?) who wrote so glowingly about a local firm’s executive team that no one here knew who he was talking about.
March 14th, 2013 at 1:37PM
Lead and Gold contrasted management theorists of the Porter type unfavorably with the military writer Clausewitz:
“Clausewitz presents descriptive theories, his aim is to help the future commander prepare himself for the challenges he will face. In contrast, Porter’s work is intensely prescriptive. His Five-factor framework and generic strategies are templates waiting for the executive’s implementation.
Porter’s, then, implies that the key to business strategy is “knowing”. The doing will almost take care of itself. Clausewitz never presumed that the science of war (which gets studied in peacetime) could ever supplant the art of war (which wins actual battles and campaigns).”
L&G also cited a comment I made about the mentality of those who are excessively devoted to strategic paradigms and other all-encompassing systems:
“Those who tend to be excessively devoted to particular intellectual systems, it seems to me, are those who concretize abstractions..who think that some conceptual model, which may be useful under particular circumstances, is actually something real and tangible. Falling under the sway of abstractions, when one doesn’t really understand how abstractions work, can be dangerous. Whether a person who thinks this way is “intelligent but uncreative” or really not all that intelligent in the first place is, I guess, mainly a matter of definition.”