Harvard Team Ranks First in Telling AOL What to Do
By SETH SCHIESEL
Lisa Diane Bourne, Tjada P. D'Oyen, Sitella A. Glenn and Panya Lei Yarber say that AOL Time Warner, the world's biggest media company, should focus not on integrating its far-flung divisions but rather on running them more or less separately. Do they know something that Richard D. Parsons does not?
The $20,000 that Goldman, Sachs & Company paid the four women yesterday say that maybe they do.
Ms. Bourne, Ms. D'Oyen, Ms. Glenn and Ms. Yarber, students at Harvard Business School, won a Goldman-sponsored contest that asked students to examine the challenges facing AOL Time Warner and to devise a strategy for Mr. Parsons, who is to become chief executive next month.
The Harvard team faced off against finalists from Dartmouth and Yale at a Goldman conference center in Manhattan yesterday. But though all three teams came from Ivy League schools, the similarities stopped there.
Sounding a fair bit like the executives of AOL Time Warner, the Dartmouth and Yale teams spent most of their time explaining how the various AOL Time Warner divisions should work with one another.
The Harvard team, however, attacked that concept from the start. It argued that "each business unit should focus on being best in class," working to increase its own profitability rather than concentrating too much on reaching out to other divisions. Under the Harvard plan, the corporate mothership would set financial targets and direct lobbying activity, but each division would essentially try to improve its own profitability in its own way.
That has been heresy at AOL Time Warner.
In fact, the Harvard team argued that Mr. Parsons, a former president of Time Warner, was precisely the right person to carry out the strategy because Time Warner itself was largely run as a collection of unconnected fiefs before the America Online merger.
John A. Thain, a Goldman co-chief operating officer who was one of the judges yesterday, said that Harvard's victory "was based on the quality of the presentation and the quality of the analysis and how innovative it was."
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