Why the Consigliere Never Went to Harvard

People often asked me where I studied. They asked in different ways: bankers politely, investigators with interest, young men from good families with badly hidden pity. I always told the truth. At Don Vincenzo Carmuso’s kitchen table, forty years, no weekends, no holidays. They didn’t hand out diplomas there. The exam was every day, and there were no resits. Expulsion was final too.

You’re smiling. Don’t. Our world has always had its schools. They just never put up a sign. Historians who have spent their whole lives on the Sicilian Mafia say it plainly: from the middle of the nineteenth century, the Ucciardone prison in Palermo was something like a university for the Mafia. Men sat there, waited for trial, traded news and contacts. They learned how to talk so outsiders wouldn’t understand, how to ask, how to refuse, how to tell whom to pay and whom you must never pay.

I’m not suggesting you go to prison for an education. Competition for places is low, but the length of the course is set by the judge. My point is different: buildings don’t teach. What teaches is problems you can’t afford not to solve, and people who don’t forgive stupidity.

What a Diploma Really Sells

Now, about Harvard, since it’s in the title. The world’s first business school attached to a university opened in Pennsylvania in 1881. Harvard started handing out the degree of Master of Business Administration in 1908. Since then millions of people have paid for those three letters, MBA, the price of a good house, plus two years of life without a salary on top. In our world that kind of money bought not knowledge but a witness’s bad memory, and people still felt they’d overpaid.

What did they buy? I asked the ones who bought it. The honest ones all gave the same answers. One: contacts. Classmates become bankers, partners, bosses, and ten years on the address book is worth more than the diploma. Two: the stamp. The personnel man at a big company can’t read everybody, so he sorts the pile of CVs by the names of schools. And only third: knowledge. And that knowledge comes as ready-made methods, picked apart on cases from other people’s companies, and half the methods go stale before the graduate has paid off his student loan.

I don’t laugh at contacts. In the Family, contacts are everything; with us, somebody always has to vouch for you. I don’t laugh at the stamp either: people need a quick way to tell one of their own from a passer-by. But look carefully at what they’re charging for. Access to people, and a label. A diploma doesn’t teach the trade. The trade you pick up only on the job, and it’s better if there’s an old man nearby who says at the right moment: “Stop. Think again.”

The Lawyer in the Corleone House

Since these days everyone pictures the Family from The Godfather, let’s take an example from there. It’s Mario Puzo’s novel of 1969 and Francis Ford Coppola’s film of 1972—a story, not a chronicle. But a good deal of it is accurately invented.

The only lawyer in the Corleone house is Tom Hagen, a kid off the street whom the Corleones took in and raised as their own. He’s the consigliere. He can read contracts and talk to Hollywood producers and senators. The Don values him: Hagen is cool, precise, never loses his temper. Then the war starts, and in the film the new head of the Family, Michael, takes Hagen off the council. Not because he’s stupid. Because wartime needs a different man. A lawyer is fine as long as the shooting is done with paper.

I’ve always liked that turn. It holds the whole answer to the question about diplomas. Education gives you tools. It doesn’t tell you which tool to pick up today, in this room, with these people. That’s called judgement. Judgement builds up slowly, out of mistakes, yours and other people’s, and other people’s come cheaper.

The Legend of the Great Reformer

Business schools love stories about geniuses who rebuilt the whole way a business works in a single night. We have a legend like that too, and what makes it instructive is precisely that it’s wrong.

In 1931 a war between two factions of Sicilian families came to an end in New York. First, in April, Giuseppe Masseria was shot dead in a restaurant on Coney Island. Then, in September, Salvatore Maranzano, who had just proclaimed himself boss of all bosses, was killed in his own office. Behind both killings stood Charles Luciano, the man they called Lucky. According to the legend, Luciano then carried out a revolution: in one night he wiped out dozens of old-fashioned Sicilian elders, abolished one-man rule and invented the Commission, a council of bosses that makes peace between the families and settles common business. He turned the Mafia, they say, into a modern corporation.

The historians checked. They found no documentary trace of a massacre after Maranzano’s death. One old mafioso, Nicola Gentile, left memoirs, and according to them the council was being talked about before Maranzano was killed, at a general meeting of bosses, and consultative meetings of important men went back to before the First World War. So Luciano didn’t invent the system from a blank sheet. Men of honour, as one historian puts it, are forever patching up the old rules of their organisation. The Commission was one more patch, just a successful one. And talk of a “new era” is something the winners of every war need: it’s how they explain why the dead man was bad. The dead man, notice, never objects.

So what does that mean for you? Don’t wait for a magic method. Good organisations, ours and the ones in your office alike, don’t grow out of one brilliant decision. They grow out of a great many tested rules that somebody patiently keeps mending. A clever man’s job is to collect those rules, understand where each one came from, and know when it stops working.

A Lattice in Your Head

There was an American investor called Charlie Munger, Warren Buffett’s partner. In 1994 he spoke to business-school students in California and told them something along these lines: don’t keep separate facts in your head, keep a lattice of models taken from different sciences, and test every problem against several of them at once. A man who knows only one tool sees the same nail in everything. We had plenty of those too, only their tool was louder than a hammer and their lives were shorter.

I reached the same conclusions, just without the lectures. Over forty years a lattice of my own took shape in my head. It holds hundreds of simple rules: what people want, what they pay for, why they keep their word or break it, what time costs, how any machine made of people and money works. No single rule answers every question. But each one tells you which question to ask.

Here’s the main thing I want to hand on to you. You don’t need to know everything. Experience comes by itself if you’re not afraid of work. What you need is something else: the right questions. Who will buy this? Why will he pay me, of all people? What am I promising, and how will I deliver it? How much of this stays with us? What happens if I’m wrong? A man who asks these questions in time gets past men with diplomas more often than they’d like.

How to Read This Book

I’ve written down what I know, in order. First the Business itself: what you sell and to whom. Then reputation, the deal, keeping your word, counting the money. Then the inside of people’s heads, yours and other people’s, then power, the Family’s people, and how the machine works, how to check it and how to fix it. At the end of each chapter you’ll find a “Code of Honour”: short lines that are easy to remember when there’s no time to reread.

Read it once straight through, then come back to whichever chapter hurts today. Don’t take my word for it. Check.

One more thing. This book has three kinds of stories, and I won’t mix them up. The first are real: people, dates and trials that historians and newspapers have written about. Where little is known, I’ll say so. The second come from novels and films; I’ll name the work so you don’t take a scene for an event. The third are my own memories of Don Vincenzo and our dealings. I’ve changed the names in them: the statute of limitations, you know, doesn’t run out on everything. The rest I’ve left as it was. Capisce?

Then let’s begin.