Harvard's business school (HBS) has been celebrating its 100th anniversary this year. And it looks to be at the peak of its power. That's unfortunate because five of its most powerful graduates have made significant contributions to absolutely wrecking the global economy. HBS admits people who are natural leaders. Unfortunately, many of the most powerful of these leaders have followed the path of destruction.
Here are five Harvard MBAs who wrecked the economy:
* George W. Bush ('75). The best thing I can say about Bush is that he said he was sorry for all the problems that occurred while he was in the White House. Unfortunately, he seems to believe he was a victim of events outside his control. One of his HBS professors said of Bush "He showed pathological lying habits and was in denial when challenged on his prejudices and biases. He would even deny saying something he just said 30 seconds ago."
* Hank Paulson ('70). As Treasury Secretary Paulson has consistently ignored the severity of the financial crisis — In June 2006 he gave a speech at HBS in which he said, "this is by far the best global economy that I have seen in my career" — but this September he was able to sell Congress on an ineffective plan to fix what he finally realized was an imploding economy — a plan has kept changing. The economy has continued to crash despite his bone-headed efforts to save it.
* Stan O'Neal ('78). This former Merrill Lynch CEO bulked up the bank with mortgage-backed securities which led it to take a $2.24 billion loss in the third quarter of last year. The loss was Merrill's largest ever, an event that led to O'Neal's departure — with a $161 million pay package. And on December 5, Merrill ceased to exist. But the Harvard Crimson quoted a teacher who remembered O'Neal as a person who "had a tremendous interpersonal sensitivity, well beyond what students his age typically have."
* Rick Wagoner ('77). Since taking over as CEO of General Motors (NYSE: GM) has overseen a 95% collapse in GM's stock price, billions of losses, tumbling market share, and a corporate near death experience which remains unresolved. In an interview with The Harbus, an HBS publication, Wagoner said "it is important to find the best answer that can be implemented." At GM, he has done neither.
* Jeff Skilling ('79). As I posted, Skilling is serving a 24-year jail sentence for fraud, conspiracy, insider trading and lying to auditors in connection with the 2001 bankruptcy of Enron. At a 2004 HBS reunion of Skilling's class (which he did not attend), then-HBS dean Kim Clark, a Mormon, said his highest priority was a new course on values and leadership, and his pledge to "live my life and lead the school in a way that will earn your trust" earned a standing ovation. Too bad that course was not around when Skilling was there — not that it would have made a difference to him.
While the implosion Skilling led started off Bush's term, the one spurred by Wall Street and the auto industry is putting an end to it.
Of course, not all Harvard MBAs produce such poor results. Consider John Paulson ('80) who made $3.7 billion in 2007 and is on track for another great year in 2008. He had the brilliance to foresee the problems created by his fellow HBS grads and to place big bets to capitalize on them.
Harvard runs America — right into the ground. Happy Birthday HBS!
Peter Cohan is president of Peter S. Cohan & Associates. Portfolio will publish his book about Boeing, You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing, on December 26, 2008. He has no financial interest in GM securities.