Harry Potter And . . .

. . . the trials of growing a business . . . the rewards of independence and ownership. Behind the magic and the mystery hides an entrepreneurial tale. Join the initiated and learn what Harry has to say about doing business.
Magazine Contributor
11 min read

This story appears in the February 2001 issue of Entrepreneur. Subscribe »

If you're like us at Entrepreneur, and like millions of children and adults around the world, you're not only a fan of the Harry Potter books-you're a fan in withdrawal. It looks like the next book in the series, Harry Potter and the Order of the Phoenix, might not hit bookstores until 2002, and the first movie won't be released until November. You have two options: Go insane, or read this article.

Like many entrepreneurs, Harry Potter author J.K. Rowling started in humble digs and with big dreams. "She had to retype the entire manuscript for the [first] book because she couldn't afford to have it photocopied," notes Jeff Blackman, a business growth specialist in Glenview, Illinois, and author of Result$ (Successories). "Now, more than 30 million [Harry Potter] books have been sold. It's a remarkable testament to [her] persistence and passion."

Rowling studied French and literature, not business, in college. But she worked for several years at the Chamber of Commerce in Manchester, England. Perhaps something rubbed off, because young Potter can teach us a lot about running our own businesses.

We're not making this up. Even The Wall Street Journal ran a story about how business Muggles are embracing the books, referring to e-mails as owls and ATMs as Gringotts. (Confused by that sentence? Consult "Potter Mouth.") Of course, because the Harry Potter books are ostensibly for children, some of the hidden and not-so-hidden business lessons may seem basic. But, like all eternal truths, it's a good idea to revisit them occasionally. So get your milk and cookies, pull up a chair, and let's read a story . . .

Book One: Harry Potter and the Sorcerer's Stone
Book Two: Harry Potter and the Chamber of Secrets
Book Three: Harry Potter and the Prisoner of Azkaban
Book Four: Harry Potter and the Goblet of Fire


Book One: Harry Potter and the Sorcerer's Stone

The plot: Ten-year-old orphan Harry Potter lives in a cupboard under the stairs in the house of his uncaring relatives, Mr. and Mrs. Dursleys and their dimwitted son, Dudley. Harry learns that he has wizard blood and must go to the train station at Kings Cross' 93�4 platform to travel to Hogwarts, a school for wizards. There, for the first time, Harry makes friends. He also confronts his enemy, Lord Voldemort.

Business lesson No. 1:Understand the various cultures in your company. On Harry's first day at Hogwarts, he and the other first-year students meet the Sorting Hat, who tells its audience, "Try me on and I will tell you/Where you ought to be." Once donned, the Hat sends each student to one of four dormitories: Gryffindor, Hufflepuff, Ravenclaw or Slytherin. The most talented wizards (including Harry) are sent to Gryffindor, and the sinister ones bunk in Slytherin, where you'll find Draco Malfoy, the most evil high school student in the fictional universe.

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Do you know what's really going on in your company? If you're not sure, check out The Shadow Knows for tips on determining which of your employees yield the real power.

The bigger your business gets, the more cultures it will have-and you need to be aware of them, says Don Andersson, a business coach in Cranford, New Jersey, and author of Hire For Fit (Oak-hill Press).When he read the first Harry Potter book, he immediately noticed how Hogwarts' academic culture reflects that of the corporate world. "If you want a new hire to thrive, the person making hiring decisions must understand your company's culture well enough to know where that [candidate] will be best," Andersson says. "An employee can have wonderful skills, but in the wrong culture, they won't really [work]."

Business lesson No. 2:When you own a company, you'd better be in good company. Your partners and employees are everything; you do realize that, right? Such wisdom is exemplified by Harry's best friends, Hermione Granger and Ron Weasley. Hermione lies to a professor to keep Harry and Ron out of trouble for confronting a troll, and Ron risks death in a live-action chess game so Harry can prevent the Sorcerer's Stone from falling into the wrong hands.

But loyalty isn't enough. You also need employees and partners who will tell you what they think, not what you want to hear. And if they're smart, all the better.

Potter Mouth

If you haven't read the books, here's a quick guide to key terms:
9: The platform where the train leaves to take Harry to Hogwarts. You'll never find it if you're a Muggle.
Gringotts: The bank where wizards keep their money; fierce goblins guard it.
Hogwarts: The seven-year academy of magic Harry attends.
Mudblood: A derogatory slang term for the offspring of a Muggle and a magical parent.
Muggle: A person with no magical powers. It can be spoken as an insult or with a tinge of pity in one's voice.
Owls: Owls carry messages back and forth-not as fast as e-mail, but more fun.
Quidditch: Think of soccer on brooms, and you've got the idea.

Book Two: Harry Potter and the Chamber of Secrets

The plot: Harry returns to Hogwarts one year later to discover that an evil being is turning students into living statues.

Business lesson No. 1: Initiative is rewarded. Sometimes rules do need to be bent or even broken. Caryn Beck-Dudley, a professor of business law and ethics at Utah State University, Logan, observes, "If you kicked the Hogwarts students out every time they made a mistake, you wouldn't be left with a very virtuous organization. And you wouldn't even have Harry Potter."

When you're trying to create a work environment that makes people enjoy coming to work, treating people like people should be tops on your list. Read Manage Your Employee Better to find out just how to do that.

Just as entrepreneurs rarely stick to a 9-to-5 regimen, Harry breaks curfew to sneak around school and combat evil. When he flies on his broom against orders, he isn't punished-in fact, he's rewarded with a coveted spot on the Quidditch team. Why? Because he was flying to help a classmate, and he's the best broom-flier the school has seen in ages-to the delight of students, professors and even headmaster Albus Dumbledore. "But if Dumbledore were like many bosses," says Beck-Dudley, "he'd focus on the bad things Harry did. Then, either Harry would leave and take his skills elsewhere, or his creativity would be squashed."

Business lesson No. 4: Create a nurturing work environment. If Harry Potter worked at most companies, he'd have been fired by now, asserts Beck-Dudley. "Sometimes harsh punishment isn't the best remedy," she notes. "Business owners often fire someone because it's the easiest [route], without realizing it creates an environment where people are afraid and unproductive. "Hogwarts includes everybody. You aren't harshly punished if you don't succeed. Poor Neville [one of the students] tries hard but never quite makes it and is still part of the group. The focus is on how he contributes rather than how he doesn't."

Book Three: Harry Potter and the Prisoner of Azkaban

The plot: Our hero returns to Hogwarts, hoping to stay out of the way of the infamous murderer Sirius Black.

Business lesson No. 5: Networking works. This theme runs throughout the series but seems best illustrated in this installment. Harry and Hermione are good at making contacts that pay off. Before the book begins, Hermione has arranged with one of the teachers to take three classes at once (via time travel) and get further ahead academically. But Harry is the networking king. In Chamber of Secrets, he meets Dobby, a house-elf who later saves his life with advice in Goblet of Fire. In Azkaban, Fred and George Weasley (Ron's brothers and Harry's classmates) provide Harry with a map of Hogwarts that shows where individuals are at any given time. In Goblet, Harry assists his opponent, Cedric Diggory, during the Triwizard Tournament; later, Cedric returns the favor. If not for his contacts, Harry would likely have been done for long ago.

Need to brush up on your networking skills? Make The Connectioncan tell you just what you need to know to meet and greet with the best of them.

Business lesson No. 6: When necessary, abandon your business plan. Little goes as Harry expects, but he learns to be flexible in this book. (If you haven't read this one and want to, consider skipping this section.) After hearing he can't visit the magical village of Hogsmeade with his fellow students, Harry plans to spend the day reading. But when he gets a secret map of the school, he discovers a tunnel to Hogsmeade-which later helps him reveal the villains. And though many heroes (entrepreneurs) could be forgiven for not wanting to team up with somebody who was once the competition, Harry befriends Sirius, who becomes one of his closest allies.

Harry's willingness to quickly change directions impresses Blackman. "The choices you make influence your future," he explains. "Do you choose to innovate, imitate or vegetate? If the last, you might as well abdicate. So much of Harry Potter deals with innovation-thinking creatively from a unique perspective." Dumbledore muses, "The consequences of our actions are always so complicated, so diverse, that predicting the future is a very difficult business indeed." You can make predictions for your company, but you can't count on them.

Book Four: Harry Potter and the Goblet of Fire

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The plot: Harry goes back to Hogwarts and competes in the Triwizard Tournament.

Business lesson No. 7:Entrepreneurs triumph over big corporations. Anne Warfield, a business coach, professional speaker and owner of Impression Management Professionals in Minneapolis, thinks that business lesson is the most important in the books. "No matter how inconsequential we think we are, we can have a powerful effect," she says. "What's important is getting the tools to develop that potential in ourselves." Harry does just that at Hogwarts and winds up besting Lord Voldemort.

Business lesson No. 8:Adequate funding is essential. Invest wisely. The money Harry inherits from his parents and saves along the way allows him to provide money when George and Fred Weasley need financing for their magical joke shop.

Who'd have thought? Harry Potter may not grow up to be an entrepreneur, but he's already a venture capitalist.

Rating The Characters

We asked business experts how Harry and his cohorts would fare as entrepreneurs.

Harry Potter
Characteristics: kind, ethical, courageous, headstrong, independent
As an entrepreneur: He'd be great. "He'd be willing to work through problems to find the answer," says business coach Anne Warfield of Impression Management Professionals.
His Achilles' heel: "He might not rely enough on others, handling every adventure on his own. Like with the spiders, he didn't think through the danger he was putting Ron in, because his quest to get the answer was driving him," says Warfield, referring to the time Harry convinces Ron to accompany him into the Forbidden Forest in Chamber of Secrets.

Ron Weasley
Characteristics: loyal, brave, ethical but sometimes envious of those more successful
As an entrepreneur: He should partner with a friend or mentor. "He'd be a better vice president than [CEO]," says Warfield. "He does have strength of character, but . . ."
His Achilles' heel: "Leading is difficult for Ron," Warfield adds. He expects Harry and Hermione to pre-sent the ideas.

Hermione Granger
Characteristics: intelligent, ambitious, loyal, extremely ethical, serious, kind, friendly
As an entrepreneur: She'd probably do better than Harry. "She's logical, detail-oriented and has connections," says Warfield. "She'd be the most visionary and insightful."
Her Achilles' heel: "She might overwork her people," says Warfield. "She doesn't know how to lighten up."

Draco Malfoy
Characteristics: mean, unethical, evil, the sort of guy who'd send orphans Father's Day cards
As an entrepreneur: "His type often goes far," says business professor Caryn Beck-Dudley of Utah State University.
"He'd be surrounded by yes men and would manipulate to make things happen," adds Warfield. "He'd be successful as long as he got the organization going and then sold it."
His Achilles' heel: He's evil, and you know what usually happens to the bad guy in the end.

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