Game Changer Profile

Michael McCarthy, Executive Coach at Harvard Advanced Leadership Initiative Read insights

Michael McCarthy is a serial entrepreneur, an executive coach at Harvard and MIT, and a strategy consultant to scores of start-ups around the world.

He was previously America’s No. 1-ranked stock market timer in the U.S. for 10 consecutive years, at a self-founded money management company where, as a 26-year-old, he was already managing $100 million for private investors.

Having founded six start-ups, including the award-winning Budi Bar “brain foods” – all without external start-up investment – McCarthy now guides some of the world’s most talented business minds at Harvard’s Advanced Leadership Initiative.

He teaches Blockchain innovation to business students and entrepreneurs at Harvard, and founded the Leadership Sailing Program at MIT.

For start-ups, he advocates that founders first explore the possibility of service-based business models, rather than product-based, and that, in either case, customer “needs” are prioritized over “wants.”

He seeks to reset start-up expectations away from Unicorn dreams and major venture capital investment, and toward the satisfaction and control of creating one’s own, viable bootstrapped business.

For CEOs and executives, McCarthy advocates a disciplined approach to innovation strategy – especially in the protection of scheduled innovation time – and even suggests that executives personally spend time, ideally “undercover,” as lower-level staff, or on the production line to experience the business through the employee and customer-facing lens. 

His approach to innovation overall is the identification of need, and the elimination of negativity – up to and including physically ejecting nay-sayers from his rule-based brainstorm sessions.

“Simply having a person in a bad mood can undermine the front-end innovation process, and it certainly suppresses the creativity and valuable input of the introverts in the team,” he says. “Negativity is a cancer to creativity.”

Instead, McCarthy coaches executives and intrapreneurs on a “mastermind” process for innovative thinking, based on half a dozen principles and rules, including the “Yes, and” technique most famously used by improv comedy teams. Uniquely, the method requires that the person with the original idea, or dilemma, physically leave the room while others discuss possible solutions, so that they are not subject to the originator’s self-limiting beliefs.

He also serves as a pitch coach for companies of all sizes, although he says a common principle for all is the need to focus far more on client needs than one’s own resume.

McCarthy invented the “DICE” decision tree to match innovative solutions to client needs, in which companies ask “what do I need to Decrease; Increase, Create and Eliminate?”

He says DICE has become an active catalyst for the classic “SWOT” snapshot of a business’s status (strength, weaknesses, opportunities, and threats).

“This summer, we helped architects win the bid for a $200 million skyscraper in the Boston’s Seaport district, in which we discovered that the specific, underlying need of the client company – an Internet of Things company – was to attract Millennial talent. Their winning design is a stunningly modern building, from vegan cafes to meeting rooms that read smartphone preferences to circadian lighting.”

While negativity is the enemy for McCarthy’s creativity, he says his early success as a money manager was based on building client trust through a pre-contract focus on the negatives of his investment program: by candidly outlining the potential downsides of an investment for clients before they signed the contract.

“I got to the number 1 ranking as a market timer partly through a technique of “telling, not selling” – I actually focused more on the negatives of the money management program,” he says. “What I found is that people will accept negatives much easier before they sign the contract, and invest in a trust relationship, but become very angry if they discover the negatives after the contract is signed.”

Now, McCarthy spends more time listening, identifying needs, and helping company leaders – from enterprise executives to developing world start-up founders – to realize their competitive potential.

“Every other month I go abroad to teach for a few days,” he says. “I was in Barbados last month, teaching things like how to talk to the press. Attendees included the head of the stock exchange; the head of tourism, and business owners. Next month, I’m off to Vietnam to coach start-ups on how to pitch to U.S. venture capitalists. It’s a very exciting and rewarding role.”