From cookies to coffee: Getting the Harvard experience
From cookies to coffee: Getting the Harvard experience
Compounding skills, networks, and knowledge
Last week’s Nabisco case was the appetizer to this week's main course. Ramping up quickly from the case interview activity we did, students were given the week to prepare for a full Harvard Business School case study. This means students got to experience what students in HBS experience as part of a strategy class using a real case these students would be reviewing!
With some resources on how best to prepare for a case discussion and the full case itself (11 pages + 12 pages of exhibits), students dove into a case about Starbucks' growth in China. They tried to understand their role in the case, the decisions to be made, what the case facts and data were telling them, and finally what they might do in this scenario.
In the session we led the discussion on a few different areas within the case, trying to get a full understanding of the context we were working with.
Competition: Who were our customers? Are we seeing anything change here?
China/Market: What was happening in China more broadly? What might the trends imply?
Competition: Who are our competitors? What are they up to? Is there any cause for concern?
Business/Product: What's happening with us at Starbucks? What are our goals? Are they reasonable?
And finally, what should we do given all of this?
Jamming out on Figma
As students were working, we did a live whiteboarding exercise in Figma to keep track of case facts, our goals, and the discussion. Some students were intimidated to participate so we had to do our best to call people in and ask their thoughts on the conversation. The fun thing about a case discussion is there aren't really bad questions or right answers. We are trying to see how each person is interpreting the information in front of them (we correct those who are way off) and how they are using that to make decisions.
For many students, this was their first introduction to "business" and the types of decision-making and analysis that needs to happen. They told us it was a different experience than they were used to in the classroom and many loved this type of problem-solving.
I was brought back to my time in school doing cases day-in-day-out and always feeling this sense of "why didn't I think of that?" Everyone in my class was looking at the case in a slightly different way, noticing things that I totally missed. We tend to notice things we didn't think of that others share, but rarely pay attention to the things that we think of that others missed. It was a good lesson in paying close attention to the details and seeing how we interpret them.
Rationale > Recommendations
One of the biggest surprises for students in how case discussions are run is the amount of time spent on ideas and recommendations. It's relatively little! The discussion is not meant to be a brainstorming exercise so much as it is one in sensemaking and analysis.
Sensemaking, a term introduced by Karl Weick, refers to how we structure the unknown so as to be able to act in it. Sensemaking involves coming up with a plausible understanding—a map—of a shifting world; testing this map with others through data collection, action, and conversation; and then refining, or abandoning, the map depending on how credible it is. (source)
Sensemaking, which comes from organizational researcher Karl Weick, is one of my favourite ideas. It's quite literal in its definition – it's about gathering all of the information you have (or need) and trying to make sense of a complex landscape before moving into decision-making mode. Students got their first taste of sensemaking during the case as they interpreted large amounts of information and tried to form a coherent picture. It can be overwhelming but it was a great opportunity for practice.
Here are a few coaching moments that stood out to me:
Rationale > Recommendations: Students are used to jumping into ideas and decisions. Ideas are still important, it's ultimately what clients want. But your rationale needs to be more than "because I think it's a good idea".
Facts not opinions: If it wasn’t the case, we didn’t want to hear it! This wasn’t the time for speculation or opinions. Everything we discussed needed to be in the case.
Frameworks give you structure: There’s a ton of information to work with — using a framework will help you organize it so it’s easier to start to understand the full context. This is one of the keys to sensemaking.
Align on the baseline: The numbers you choose to work with (target goals, dates, growth rates) are important. We spent a lot of time discussing how we might pick these numbers and the reasons we do so.
Compound your way into a better life
I was first introduced to compounding when learning about saving money and the effects compound interest has. I was able to understand it intellectually but I don't think it fully clicked intuitively for quite a while if it even has at all. And yet as Geoffrey West covers in his book Scale, so much of the natural world is governed by exponential scaling. Exponential growth is one of those things that we humans really struggle with.
“While exponential growth is a remarkable manifestation of our extraordinary accomplishments as a species, built into it are the potential seeds of our demise and the portent of big troubles just around the next corner.”
Geoffrey West (Scale)
Since first learning about it, compounding has become one of my favourite ideas. It's the promise of a better future while only requiring small "contributions" over time. It's a great illustration of leverage, a key idea we discuss at TKS.
When introducing students to the power of compounding, one of the things I try to emphasize is the amount of time they have ahead of them. With so many years, as long as you're compounding positively, it becomes inevitable that you achieve great things. But here's the thing, we have a tendency to do things that are not only neutral but can actually negatively compound over time.
Staying up late one night to hang out with friends? That's fun! It helps build relationships and is a small short-term sacrifice to your sleep/health.
Staying up late every night and sacrificing sleep? That's negative compounding at work. Each day you miss sleep is going to start to stack up and bleed into other areas of your life like focus, energy, diet, and more. Not only does sleep compound over time, but it's also one of the high-leverage areas of our lives that impact many other things.
A few years ago I wrote a post about compounding, inspired by the notion that the second half of your life can be better than your first. Most of us, myself included, assume the best parts of our lives happen in the first halves, but why is that? And more importantly, does that have to be true?
Growing old, better
My dear Scipio and Laelius, old age has its own appropriate defenses, namely, the study and practice of wise and decent living. If you cultivate these in every period of your life, then when you grow old they will yield a rich harvest.
Marcus Tullius Cicero (How to Grow Old)
If you approach life with the lens of compounding, you can start to see how it's very possible to set yourself up. I wrote this when I was 29 so you might be like "wtf why is Steven thinking about his second half of life already?". As with most things in my life, it was because of a book.
One weekend in March of 2019, I picked up a translation of How to Grow Old by Cicero, an old Roman philosopher. He outlines how to age gracefully and the beauty that exists in the second half of life. This was the first spark. A few months later I was (finally) reading Poor Charlie’s Almanack where he mentions Cicero (coincidence?) and praises getting older. Not only that but compounding is what made the Berkshire pals their fortunes.
There were signals coming at me from all directions that now was the time to take compounding more seriously. I think what attracted me to compounding was its branches in both personal finance but also personal growth. Up until this point, I had only thought about it from a financial aspect though. And so, I cataloged my life and considered the activities where I think compounding can be most effective:
Financial
Health
Wisdom
Emotional
Relationships
I would expand relationships to include your network here as well. My final one, the missing category, would be about your work. And what I mean is that the more you create (whatever it is you choose to create), the larger your surface area for luck. Each of your creations compounds over time and increases your potential for opportunities.
With students, we want them to think more deeply about things that compound. At TKS, we've been intentional about creating a program that pushes students towards activities that will compound over the year and their lives. It's why we want them to write newsletters (work), meet new people every week (network), and learn new skills and technologies (knowledge).
As I talked about in Shattering The Ceiling, there are different ways things grow and if we invest more deeply into them and allow our skills and knowledge to compound over time, we will start to see that exponential growth ourselves and be able to position ourselves uniquely in the world.
Interesting Links
🎵 Leukocyte (music video) – If you’re a biology fan and a BTS fan, this is the collab you’ve been waiting for. Tim Blais creates acapella science lessons and his latest is an overview of the human immune system set to the tune of BTS’ Dynamite. I’m here for it.
🌐 Your life is driven by network effects - A perfect complement to compounding, NFX is a venture firm that does a lot of work educating people about the power of network effects. There is a confluence of two key models at work here: feedback loops and compounding that create incredibly powerful effects. You’d be surprised to learn how much of your trajectory and life is impacted by them, especially seemingly invisible ones!
✌🏼