ABSTRACT
Many years ago, before I traveled across the country to attend Stanford’s Graduate School of Business, my father, perhaps a little too gleefully, told me the following story:
From their small business, a shoe store, this couple had managed to save enough money to give their son and daughter a college and postgraduate education. They both chose Harvard Business School. When they finished they returned home energized by all the wisdom they had learned and took over the store so their parents could retire. They used inventory control models, game theory, financial forecasting, and clever marketing techniques. They computerized the information systems, empowered the employees, organized teams, and instituted a performance-based salary system. They identified their core competencies and matched them to every conceivable scenario to prepare themselves for any future. Within 12 months they were bankrupt. They went to their parents saying, “We don’t understand. We had the best business education. Yet, we failed at the business, while you managed to succeed for so many years. What’s the problem?” The parents replied, “All we know is that we bought shoes for $10, sold them for $20 and made ourselves $10 per pair.”
