The Economic Times (National)
November 24, 2003
An Angel Investor in over 80 companies, founder and
chairman of $4bn investment firm Baupost, leading thinker in
the areas of entrepreneurship and investing, senior associate
dean and director external affairs at Harvard Business School…
find a hat and Howard Stevenson probably wears it. Name a person,
and “my bet is that there are very few people in the world
that I couldn’t reach through a chain of four,”
he says. That’s probably why the professor has been such
a successful fund raiser for Harvard University and several
other charitable causes. K Yatish Rajawat and Candice Zachariahs
spent over two hours with Prof. Stevenson, picking up tricks
on maintaining and building relationships, getting into elite
social circles and generally being successful in life. We bring
you excerpts of the talk in small bites.
The Strong Importance of Weak
Links
Everyone knows networking is important but how do you build
networks. It is not as if you can get up one day and say I
will build a network. That’s very different in its efficacy
from saying I’m curious about people and what is of
interest to them. If I sit down and say my purpose is to network
with you, it’s not likely to happen. But if I’m
genuinely interested in who you are, what makes you tick and
believe in a sense of reciprocity, that’s when networking
works.
| It’s called the strong importance
of weak ties: In other words, if you take your group that
you know extremely well, you probably share a lot of values.
But, having a large number of people you know a litter
bit, who you can access and who will basically tell you
you’re |
wrong…there’s
a big
discover is being tied to a lot
important. In my own life,
there’s a great deal of joy in
and doing favours. So I can
pepole that are beneficial to
them I get reciprocity. It’s
create ties, out of which we
experiences. This is the |
| The First
thing you have to know is not ‘Who has
money’, But ‘Who has money and
is interested in your particular field’ |
|
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difference. What you
of people weakly is very
I’ve discovered that
getting to know people
make connections for
them and usually if I call
really helping people
get mutually beneficial
oldest from of trade, |
| reciprocity. Almost all human
societies have very strong norms of reciprocity: if I’ve
done a favour for you, it also works the other way. |
Keep it on Record
This is something you must do deliberately, but more importantly
you have to keep records of the people you meet. The palm pilot
is a very important thing…Fortunately, a long time ago
I started to keep records of just who my students were. I’ve
had 12,000 students and I keep records of them all. One of
the things you can do (to begin with) is when you meet somebody
try and stay in touch, even if it’s only in an e-mail
every three months, saying how’re you doing? I’ve
been thinking about you? Here’s what’s happening
in my life. So, systematically trying to keep the ties fresh
is important.
I think the second thing is learning not to be negative.
Often when you’re young you’re highly judgmental
of other people and it’s amazing how fast they find
out about that. My mother used to say, remember to keep your
words sweet because you may have to eat them. Try to be nice
to people and say nice things about them. If you don’t
have nice things to say don’t say anything. Most people
you meet have something positive, so try to find out not what’s
wrong with people, but what the positive elements of their
life experience are.
Network and Networks
I read the newspapers because it’s a source of ideas
and many people with money are looking for opportunity. The
first thing you have to know (as an entrepreneur) is not who
has money, but who has money who’s interested in your
particular field of interest. Be aware of current events,
read the newspapers, magazines.
As I said at IIT Bombay and IIM Bangalore, it’s not
just your contacts, it’s the 60 people in the room who
also have contacts. If you have 200 contacts, they’re
on the order of 40,000 contacts on a first-order basis and
on a second-order basis it’s got to be 800,000. If you
look at the connections you can make on two levels it’s
a huge number, hundreds of thousands. If you’ve gone
to a good school and were a person who tried to know people
and treat them well, it’s not only your contacts, but
their contacts. My bet is that there are very few people in
the world that I couldn’t reach through a chain of four.
That’s probably lower than most. Experiments show almost
anybody could reach anybody in six or seven – like six
degrees of separation.
So, think consciously, not instrumentally, that these are
people who trust me and they will be able to be useful. By
the way I have to be useful to them too.
Did Someone say Trust?
Trust is something you can build consciously. There are a
variety of rules: You have to be clear about what you’re
agreeing on. If you make a mistake don’t hide it; you
have to say I’m really sorry, how can I make amends.
A mistake is often a way to build trust.
Third, if someone violates your trust you have to call them
down. You have to not accept a violation of trust, but you
have to forgive. There are a series of rules that I try and
teach in the class that trust is really an active thing. You
have to look for opportunities to build trust, you have to
look for opportunities to avoid destroying trust.
Breaking into Elite Crowds?
I think the answer is the reciprocity: If you go in with the
attitude what do you have that I want, it’s very different
that the attitude of what do I have that you want. And most
entrepreneurs, if they’re going to succeed, have to
say, what do you want and how can I give it to you. It’s
an external focus that is the biggest change that can happen.
It seems to me that I hear more stereotypes in India than
in anywhere else…my experience is that stereotypes might
represent the dominant piece, but in any stereotype there
are always out layers on the good and bad side. Look for the
people at the extremes, the sides of the bell curve. If you’re
looking for change it’s always the outlayer that’s
a precursor to change. The central tendency never represents
the future, it represents the present state. And what entrepreneurs
must do is look for outlayers, the things that are representative
of where the future will be. If you’re on the outside,
remember there’s always the least popular member of
the batch and probably they don’t like the others either.
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