Last Thursday afternoon in Paresky Auditorium, Herbert Allen ’62, co-founder of Allen & Company, discussed success, failure and business strategies. When invited by the Eph Business Association (EBA), Allen had one request: He did not want to lecture, he wanted to be interviewed. Three members of EBA, Peter Huang ’11, Evan Skorpen ’11 and Samim Abedi ’10, took on the task of challenging Allen with questions.
“When you cut through it all, you remember your friends,” said Allen about his experience at Williams as a student. When asked if he wished he could change or do something differently in his Williams career, Allen admitted that he had been “relatively lazy” at school and he would gladly go back and do “just about anything.”
On the issue of grades, Allen noted that when he was in college grades did not matter as much as they do now and that “there wasn’t as much pressure.” He explained that grades are relative when one is looking for a job. What is important to him in hiring employees is whether a person knows “how to play the game.” Allen said that there is no science in hiring employees because every employer has an individual style. Based on his experience, he concluded that smaller entrepreneurial firms look more closely into the applicants’ personal qualities than bigger enterprises do.
The EBA kept the serious business tone and moved on to the question of organization and management. Aware of Allen’s distaste for bureaucracy, they asked him about the point at which bureaucracy becomes detrimental. “When you hire the third person” was the swift answer. According to him, larger firms are more difficult to run. “It all falls to management,” he said. “There’s no such thing as perfect organization but you have to be able to recognize and get rid of the rotten apples.” However, Allen qualified bureaucracy as an essential “enemy.”
In this line of thought, the EBA interviewers asked whether Allen was in favor of small boutique firms. “Yes,” he replied, “I’m in favor of partnerships.” Allen expressed that business partners should share both risks and rewards. He blames the failure of this system for the recent issues on Wall Street. “Recently, people on Wall Street only shared the rewards,” he said.
Looking back on his business experience, Allen said the biggest battle he lost was the deal for Paramount Pictures. However, he is certain that there is a lesson to learn from every failure, even while looking forward to the future at the same time. For Allen, the most satisfying deal was one he lost but had fun working on. “You should know what you are capable of and stick to it. Arrogantly, I feel there was nothing we couldn’t do that the bigger firms could.”
Amidst concerns about the future of business, Allen’s opinion was that in 15 to 20 years America will be full of opportunity. The economy is larger than in years past, and women and minorities have chances that they once did not. Allen expressed a conviction that America will offer more opportunities than Europe, since “we recognize capitalism as inevitability.”
The EBA members then asked Allen about philanthropy and morality in business. “Giving is an individual decision,” he said, adding that “Americans give away about three billion dollars every year; we’re an enormously generous country. It’s in our genetic make-up.” As for corporate morals, Allen said that it is very important that businesses are guided by the law. He admitted that he has broken some rules and said that since morality in society often shifts, one should always stick to the laws and his or her personal standards.
As advice to those who want to work in finance, Allen outlined a few simple steps. “First get a job and then try to find the smart people in the organization. Chances are you’ll get lucky.” He added that, generally, there are no guarantees, but America brings rewards to people who play by the rules and do their job.
The interviewers’ last question addressed Allen’s future goals and aspirations. “I’d like to make it to breakfast,” he said. “Anything beyond that is a waste of time.”