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Kathleen Eisenhardt: The pace of high tech is like jazz not a symphony

A pioneering female faculty member, she eschewed conventional number-crunching to show how in-depth case studies best reveal the improv culture of high-growth companies.
Kathleen Eisenhardt: “Choices don’t have to be forever. You can pick one path but then branch to another. You can always pivot.” | Photo by Rod Searcy

In a career spanning almost 40 years, Kathleen Eisenhardt has been a top-selling author, mom and consultant to tech executives from early ventures to the Fortune 500.

She is the Stanford W. Ascherman, MD Professor in the School of Engineering, a professor in the Department of Management Science and Engineering and a faculty member in the Stanford Technology Ventures Program. The co-author of two top-selling books, and the author or co-author of more than 100 academic articles, Eisenhardt studies strategy and organization in “high-velocity” industries, notably tech-based ones, where change and even upheaval are the only constants. Hailing from a family of engineers — including her grandfather, father, brother and sister — she earned a bachelor’s degree in mechanical engineering and a master’s in computer science. After a few years in industry, she took her PhD at Stanford Graduate School of Business. In 1981 she became among the first women faculty members in Stanford’s School of Engineering, where she juggled teaching and research with parenting two small children. Along the way, she blazed a trail that many women have since followed.

Unintentional pathbreaker

I never thought of myself as a pathbreaker, but I’ve regularly branched away from what seemed like the conventional choice. My first pivot came from realizing that I was less interested in mechanical engineering and computer science than in organizations and strategy. After getting my master’s, I’d managed a software team for few years, and noticed that the “people issues” were often more challenging than the technical ones. I became increasingly interested in psychology and its counterintuitive twists. So, I turned down an opportunity to do graduate studies in mechanical engineering, and instead pursued a PhD in organizational behavior at Stanford’s business school. I focused on “agency theory,” which is about the conflicts of interest that often occur when work is delegated such as between an employer and employee. Serendipitously, a faculty position in management sciences opened up in the School of Engineering just as I was finishing my thesis. I became one of the first women on the school’s faculty. My first child arrived just before I started my PhD, and my second two years later. So, from the outset of my academic career, I was juggling many balls.

Tenure-track mom

There were benefits and challenges to being among the first women on the engineering faculty. For instance, I was asked to serve on many committees because I possibly represented a different point of view. But while this was flattering and engaging, it was also time-consuming in an already busy faculty life. Like all junior faculty, I was under pressure to publish significant research, teach well and get tenure. Yet, I had two young children at a time when mothers handled most of the childcare and home responsibilities. My husband was a CEO without much time to help. That led to my next pivot from convention. After about two years on the faculty, I asked Dean Bill Kays to support my becoming part-time for several years, and so stretch out my tenure clock from six years to eight years. It was a novel request that no one had tried before. I made the case that if Stanford wanted faculty diversity, then it had to acknowledge the challenges that women (particularly then) and parents generally now face of having both young children and a tenure clock in their thirties. A short-term investment in part-time in a decades-long career just made sense for me and my family. The dean immediately “got it” as did my senior MS&E colleagues. This temporary segue to part-time helped me to embark on what has turned out to be a 40-year career.

A case in point

My next pivot came when I was carpooling to a conference with another faculty member. We recognized our mutual interest in studying how top management teams make strategic decisions, and decided to team up by exploring our research question in local computer firms. This was the mid-1980s, when Apple, Sun, Electronic Arts, Intel and many other tech companies in the Bay Area were on the rise. We probed how the senior executives at companies like these handled strategic choices. We’d planned a 90-company study, but soon scaled it back to an in-depth, multi-case study of 12. The insights were too fascinating to bury in statistical analysis. One set of ideas centered on how some executive teams make fast but also effective decisions, while others do not. For example, we found that executives who consider multiple alternatives simultaneously are more likely to make high-quality decisions quickly than those who study one idea at a time. People tend to make decisions more slowly when they lack confidence. Looking at several alternatives builds up confidence that the situation is well understood. Prior to this work, I’d done traditional quantitative research. I knew that many researchers dismissed case studies as “storytelling.” But tech companies operate in high-velocity markets — and studying “how” they operate quantitatively is difficult in part because they are so new and moving so quickly that data don’t exist at scale. I figured that I was onto something important: using rich and carefully selected case studies to build rigorous theories that could later be tested. I wrote a paper on the multi-case theory building approach in 1989. It has become a research classic with something like over 60,000 Google Scholar cites. More importantly, it legitimated a new method for unpacking phenomena across a range of disciplines.

Jazz, not symphony

Using the multi-case approach opened up all kinds of creative opportunities, particularly as I became co-director of the new Stanford Technology Ventures Program. The center attracted amazing PhD students to study strategy and organizing in tech-based companies. They often brought their own research questions that frequently evolved into rich multi-case research. How are some companies able to develop great new products in quick succession while others aren’t? How and why do some R&D collaborations work while others fail? What do tech CEOs get wrong in dealing with their boards of directors? For example, one of these collaborations became a book with Shona Brown, a PhD student who later became a senior vice president at Google. We wanted to write a book that academics would think was “smart” but which executives would also want to read. When it came out in 1998, Competing on the Edge: Strategy as Structured Chaos garnered research awards and made Amazon’s Top Ten business and investing books. We looked at six global technology companies and explained how the best tech firms are more like jazz bands than symphonies. Symphony musicians know what notes are coming next, like executives in established industries. Jazz musicians are improvising in real time while paying close attention to one other, like execs in high-velocity companies. Executives at these firms are always probing the future, without trying to predict it. They’re partially structured and partially not, like a jazz ensemble. To compete amid chaotic change, they’re always trying novel ideas to see what works while leaving a foot anchored in what worked in the past.

The temporary guru

Competing on the Edge led to a run of speaking and consulting engagements plus invitations to the World Economic Forum in Davos, Switzerland. But after six or seven years, I became restless with the “guru” gig, and felt that I was running out of fresh ideas. So, I pivoted back to research, delving deeper into how tech company executives manage complexity, novelty and speed. I began to focus on the idea of “simple rules” — i.e., rough heuristics to guide actions. Back in 2001, I had co-authored a Harvard Business Review article with Don Sull, a professor who’s now at MIT, about how companies like Cisco and Autodesk use simple rules to navigate through an almost endless stream of opportunities. By 2011, we had refined those ideas sufficiently to embolden us to try something that was, at least for us, new: write a “popular” book aimed at the broad reading audience — something my family and friends, not just academics and business execs, would read. In 2015, Don and I came out with Simple Rules. We wrote about the rules that combat medics use to do triage on the battlefield; the rules of migrating insects, Stanford football and comedian Tina Fey; even rules for playing better poker and dating online. While the book has business and investing “simple rules” exemplars, it was entirely different from anything I’d done before. It was fun to write about sports, gardening, health and so on, and to discuss the ideas in all sorts of media, from “shock jock” sports shows to new age and Wall Street ones. It was so satisfying to see how a small set of ideas could be helpfully applied in a million unexpected ways.

Simple rules for students

Probably my single most rewarding activity at Stanford has been teaching — undergrads, master’s students and PhDs. My two long-time courses, MS&E 180, Organizations: Theory and Management, for undergrads and MS&E 270, Strategy in Technology-Based Companies, for master’s students, never seem old to teach. Teaching itself, of course, is very gratifying in the sense of helping others to learn, but seeing where former students go and what they’ve accomplished is perhaps even better. For my PhD students, I always advise, “Your dissertation is unlikely to be the greatest research you ever do. So, don’t agonize and just finish.” I had written my own thesis on agency theory and employee compensation. It was credible. But it wasn’t me. I finished and moved on. Drawing the bigger lesson, I’ve come to realize that it’s easy to slide into things you don’t really want to do, or to just keep the momentum going. Yet it’s often better to choose — to be a professor, a writer, a business person, an activist or whatever. Yet the complementary view is to realize that choices don’t have to be forever. You can pick one path but then branch to another. You can always pivot.