The Oregon Trail: A Stanford Business Case
Or: “Executing Grand Strategy for Expanding the Frontier of Opportunity”
After three days of rest, Theodore Philpott, GSB ’24, put down his glasses, sat down at his desk, and took a long, wistful sigh at his team — wife, Josephine, eldest child, Agatha, son, Lil’ Cray, wizened uncle, Ol’ Poophead, and favorite ox, Theodore, Jr.
“We’re going to have to scale down rations,” Theodore told them. “It’s going to be hard, but we’ve always made up for it with operational excellence, shrewd negotiation abilities, and that extra wagon tongue.”
The team’s morale darkened, but all nodded in agreement. It was lonely being a leader. Theodore wanted so much to express his pride at their 600-mile-long journey from Illinois to Independence, MO. And to get so far as farmers! Any Boston banker could raise a Series A to spend on extra clothes and buckshot. What Theodore had was grit and literal bootstraps. He knew the new life out West — as well as triple points at the end of the game — would be worth the struggle.
Theodore spat out his hardtack as he thought about the journey to come: through Utah, Idaho, and finally to Oregon. The team had nearly exhausted their supplies. Health was “poor.” And Oregon was still over 1500 miles away. But armed with a Stanford MBA, a folksy demeanor, and an extra wagon tongue, Theodore felt ready for the challenge.
Over 10 years of operation, Theodore’s team had developed two distinct competitive advantages: Real-time Accounting Dossier (RAD) and Asynchronous Withdrawal, Expenditure, and Savings On Meals and Equipment (AWESOME).
Theodore had devised RAD in response to the Crisis of ’47 — in which Lil’ Cray and Ol’ Poophead (in an orgiastic explosion of gluttony) had eaten the entire store of family food a day after leaving Springfield. RAD was a real-time, technology-enabled system that collected information on the amount of food, bullets, clothing, and supplies remaining.
A spinoff of RAD, AWESOME was developed to incorporate asynchronous cash flows. The complexity of AWESOME is best demonstrated by example: Theodore could have spent all $400 at Matt’s General Store in Independence, MO. However, knowing that the team would need supplies later in the trip — and recognizing the high current cost of capital — Theodore decided to spend only $200, and wait to spend the remaining money later. AWESOME was simple, yet brilliant.
Crossing the Green River
At Green River, Theodore was faced with his first critical inflection point. He could either ford the river — a tested, but still risky, means of crossing—or deploy the cutting-edge RIVERCAULK TM technology, which employed the Archimedes Principle, as well as lightweight organic carbon compounds (“wood”), for an agile, modern, and powerful solution to river-crossing.
Theodore was distrustful of newfangled technology, but he also knew that evaluating river-crossing technology was not his team’s core competency. Theodore reached out his to his extensive MBA network for help, specifically the Mormon pioneer standing right next to him. “Never ford the river,” he said. “I repeat — never ford the river.”
Theodore looked into the distance, where he saw a wagon party disappear into the water as their attempt at fording abruptly failed. Theodore knew he had to opt for RIVERCAULK TM. Theodore held his breath as the wagon crossed the final few hundred meters to the far bank. Success!
Over time, as his team crossed more rivers, Theodore found that caulking worked almost universally. Theodore smiled smugly to himself. This is why they pay me the big bucks, he thought.
Managing Difficult Conversations
Near Soda Springs, the team finally ran out of provisions and, led by Lil’ Cray, began investing in hunting competency research and development.
By the end of Day 1, Lil’ Cray had made rapid progress, pocketing two beavers and a jackrabbit, supplying the team with 92 food.
Buoyed by the success of his beta test, Lil’ Cray requested permission to scale up hunting operations. Over the following week, Lil’ Cray went hunting daily, stockpiling more than 2000 pounds per excursion, and reducing the landscape to a hellish scene of rabbit, beaver, and deer carcasses.
While initially pleased with the team’s success, Theodore quickly became aware of a glaring operational impediment: Lil’ Cray’s puny human arms could carry only 100 pounds of food back to the wagon. Additionally, Philpott Inc.’s CSR advisors expressed serious concern about the ecological destruction wrought on a previously pristine prairie. Theodore knew he had to take action.
Theodore practiced some power poses in the Conestoga, took a deep breath, and sat down next to Lil’ Cray as he and the team wolfed down their nightly meal of bear meat and hardtack.
“When you commit ecological genocide, I feel like Caspar Milquetoast,” Theodore said.
“But this is the fun part!” replied Lil’ Cray in his nasally whine.
Theodore sighed. He could tell that Lil’ Cray had gone power hungry and was seeking to build an empire. They would need to have a Difficult Conversation.
Fortunately, Lil’ Cray contracted dysentery and died a few days later, putting the kibosh on his destructive spree.
As the days passed, Theodore could begin to sense the lushness of the Pacific Northwest. The only obstacle remaining was the wild Columbia River.
Theodore knew his team was well-trained, but the operating environment had evolved. Past the continental divide and high in the mountains, rivers were more treacherous, their placid surfaces hiding whirling eddies that could pull a full Conestoga — not to mention their sleek prairie schooner — down under.
But Theodore knew his team had no choice, and that the risk was worth the reward. Or something like that.
Three hundred yards from the shore, disaster struck. A rock tore into the side of the wagon, and — seemingly instantaneously — the dreaded block-text list of the drowned team members appeared in the cruel, blue sky.
Theodore was crushed. Don’t they know children are going through this for educational purposes? Are they trying to demean life here? Jesus.
But the tragedy also tore at Theodore’s core business identity. Theodore was supposed to be a master tactician — but the unregulated wilderness had reduced his prize-winning business plan to a waterlogged zip file. I should have just gone into commodities trading, Theodore muttered to himself.
It took weeks to recover from the shock, but Theodore finally realized that real leaders must overcome momentary setbacks. With only his trusty wagon tongue as company, Theodore set off once again towards the setting sun.
1) How might RAD and AWESOME be developed into something even more cool?
2) Prepare a role play and talking points for the conversation between Theodore and Lil’ Cray.
3) Should Theodore still consider selling a majority stake of his firm to private equity if they won’t let him retain his leadership role?
4) How should Theodore handle equity splits among his senior executive team?
5) How scarred were you by the Oregon Trail?