Here’s the scene: It’s the first class of my first day at Harvard Business School in 1969. Five years after graduating from Princeton as an English major, I’ve been discharged from the US Navy, where I had been teaching naval history at Iowa State University, preceded by three years at sea on destroyers. I knew a lot about the Victory at Sea television series on World War II, and nearly as much about hunting submarines from a tossing destroyer in the North Atlantic, but what I knew about business was nearly zero, and I was pretty sure that I had just made the biggest mistake of my life by thinking that I could fit in at HBS.

I learned that my 75 sectionmates had been working on Wall Street or in banks or as salesmen for Xerox and IBM. At least six of them were certified public accountants. One had been a major social force in Cleveland, Ohio, where he had secured multimillion-dollar budgets from the federal government. There were several military veterans as well, but they were mostly ex-Army or ex-Marines who had fought in Vietnam, and they all seemed tough and seasoned. There was a brilliant scion from a well-known French banking family who knew more about money management than most money managers on Wall Street. Everyone looked confident and sophisticated.

I felt like a complete dope—an ex-Naval officer with a degree in English. This was going to be a short academic adventure for me, I thought. I smiled at everyone and tried to look comfortable but the feeling of impending doom would not go away.

A former college classmate, Murray Scureman (MBA 1970), had finished his first year at HBS and offered me advice: “The first case will be an easy one with no serious numbers in it. Give it the English-major treatment. Forget about the fact that you’re at HBS. Raise your hand when you hear ‘Who’d like to start?’ and give a common-sense analysis of the case. You’ll freak everyone out.”

Professor Dick Vancil published more than 20 books during his tenure at HBS and became an expert on how large corporations choose chief executives. (HBS Archives Photograph Collection)

Professor Dick Vancil published more than 20 books during his tenure at HBS and became an expert on how large corporations choose chief executives. (HBS Archives Photograph Collection)

Our first class was called something like Management Control and Reporting, but we were convinced that this was just a fancy name for accounting. The case was about a man who ran a corner sandwich shop. He was helped behind the counter by his wife, her sister, and their daughter. The man owned the building, paid no rent, and bought cold cuts from a relative at a big discount.

The owner went to the bank to borrow money for a new meat slicer or something expensive. The bank manager rejected his loan application, telling him that his business was a money-loser. “What do you mean? I make money every day. We charge more for the sandwiches than they cost to make. I count up my profits every day, and there’s always cash in the cigar box.”

The owner’s loan application was attached to the case as Exhibit 1. Some other financial data showed what rents cost for comparable shop fronts and typical hourly wages in the city. Evidently, the owner did not regularly pay his wife or his sister-in-law or his daughter. If they needed money, he gave them cash from the cigar box that he used as a cash register. Every night, he emptied the cigar box and put the leftover cash under his mattress or in a safe in his apartment.

Professor Vancil strode into the class at 9:40. We were quietly sitting in a semicircular classroom, behind our name cards, looking down on him. He looked professional and confident. Only later did we learn that he was only 37 years old, nine years older than me, and had been promoted to full professor the previous year.

He walked to the blackboard and wrote his name: Richard Vancil. No phone number, no office number, not even the title of the course. No one made a sound. He turned and walked to the center of the pit and glanced at each of us in turn. He took his time, looking at faces, saying nothing. Occasionally, he looked down at a class list in his hand—it must have had our names and backgrounds. He fixed each person with a brief knowing gaze, nodding his head occasionally as if to say to himself, Oh, yes. I see. Farmer. Former Naval officer. Knows absolutely nothing.

The silence and the suspense were awful. It was like being in an elevator that stopped between floors, with no one saying anything in the hope that silence would ensure safety. The situation would fix itself.

Much later, when I knew Professor Vancil better and had seen him “work the classroom” many times, I realized that he loved the drama of the silence. He held all the cards. He knew what he wanted to accomplish and how he was going to do it. We could not read him but he could read us. He had an amused twinkle in his eye. He was playing a game, and he was good at it. It was not a game of Vancil vs. 75 students. It was instead a game of 75 students being played by their terrors, competitiveness, and uncertain knowledge. Our terrors were like musical instruments, and we were the imperfect musicians, each playing a tune. He gradually learned our tunes, and he let each one of us solo from time to time, before fading into the chorus. He knew how to make music from this out-of-tune orchestra. Every day was a performance.

He never told us how we sounded. At the end of class, he’d say, “See you tomorrow. Crumbley Corporation (A) and (B).”

He was giving us our musical score.

None of this was known on day one, though. He finally broke the silence. “OK. Who’d like to start?”

We gulped. What did this mean? I raised my hand, following Murray Scureman’s advice.

“Mr. Farmer,” he said.

I started to talk, not quite knowing where I was going. It was dramatic, like being on stage at Carnegie Hall. The others stared. “Mr. So-and-So has a problem because he defines profits by what he has left in his cigar box every night, and the bank manager has a different way of defining this, adding in rent and salaries, even though they aren’t actually paid. There’s no right answer about the shop—it’s neither profitable nor unprofitable. It all depends on the definition you use. Since the owner’s looking for a loan from the bank, he’s obliged to accept the bank’s definition even though it’s different from his definition.”

Professor Vancil watched me while I spoke, and when I finished, he let things go quiet. A long pause. Then he walked to the blackboard. He took the chalk and wrote Profit in big letters. He paused. He then drew a thick X through the word and spun around dramatically. He raised his voice, nearly shouting.

“Mr. Farmer says that there is no single definition of profit! It’s just a word! Isn’t that what you said, Mr. Farmer?”

Not exactly. Maybe I had not been clear. I started to talk, but after I got out a few words he held up his hand. “You can stop there, Mr. Farmer. You stated this clearly. No need to go over it again.”

He stopped and raised his voice again: “No such thing as a profit? Does anyone agree with Mr. Farmer? Or not agree?”

Two hands shot up. There was courage in the air. Professor Vancil called on the CPA. “Mr. Flynn?”

Michael Flynn (MBA 1971) launched into a treatise on income statements and balance sheets and generally accepted accounting principles, and that’s why there are auditors, and the sandwich shop is clearly losing money, losing even more than the bank manager said because there is depreciation and unpaid taxes, and the owner is going to find himself in big trouble and risks going to jail. And, yes, there is a standard definition of profit, and everyone knows what it is.

I listened to this. What was depreciation, anyway? I slinked down in my seat and hoped that I was done and did not have to get into a debate with Flynn. He was an accountant and knew what he was talking about. Others raised their hands, taking on Michael Flynn about his jail comment but ignoring what I had said. The discussion rambled off in new directions, with no shape or sense.

The class went on for an hour, and then another 20 minutes, and none of us knew where we were. The sandwich shop was a confusing mess. The consensus seemed to be that the bank manager was right. Michael Flynn was right, and the notion that profit was hard to define was firmly dropped. I felt stupid. I had embarrassed myself. The class was nearly over.

We waited for Professor Vancil to sum up the class and give us the answer. This did not happen. “OK,” he said, “that’s it for today. We will come back to this again, testing Mr. Farmer’s theory that there is no such thing as a profit.”

I raised my hand to say no, that’s not what I said, but he was already shuffling his papers and paying no attention, and the class was clearly over. There was nothing I could say.

Over the next several weeks, each of us became identified by some exaggeration of something we once said in class. I became “Profits aren’t real,” and the phrase got dragged out from time to time. Professor Vancil would say, “Isn’t this situation what Mr. Farmer likes to talk about when he says profits aren’t real?” I wanted to protest, but there was never an opportunity, because the comment, absurd as it was, always drew laughter.

Someone else became known as “Don’t forget depreciation!” and another was “Cash is king.” The nicknames were exaggerations but they each served a purpose in Vancil’s classroom—just as the tuba, the bassoon, and the cello each serve a musical purpose in an orchestra.

The nicknames showed that he paid attention to us as individuals. He made us laugh with his exaggerations, and the more he acknowledged us in this way, the better we felt about ourselves and the more relaxed we were in class. We ceased competing with one another, and we poured more energy into “cracking the case” than cracking one another’s heads.

Professor Vancil never changed his persona in class. He was always the consummate case method orchestrator, playing with us and guiding us to understand how the world actually operated. The teaching was built on random student utterances, some of them smart and some of them ridiculous. Every comment served a purpose.

None of us ever understood how Dick Vancil did what he did, and how hard he had to work to create such coherent learning. He was always wise and calm, amused at the fun he was having and the occasional havoc he was creating.

Even now, decades later, I’m still in awe of the exquisite performances that Dick Vancil brought to the classroom three times per week. We were richer for having worked so hard for him, and we were humanized by the laughter he elicited from the absurdities of our daily combat.

Michael Farmer (MBA 1971) is chairman and CEO of Farmer & Company, a strategy consulting firm for the advertising industry. He is the author of two books, Madison Avenue Manslaughter and Madison Avenue Makeover.

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