"The problem in teaching IT [information technology] management is threefold: first, IT changes almost daily; second, students don't pay attention to long lectures anymore; and third, HBS cases are just too long and pedantic for them to get through."

The speaker, Dick Nolan, is a four-time University of Washington Huskie: B.A., M.B.A., Ph.D., and current professor there. He's also a professor emeritus at the Harvard Business School, where he taught Operations Research and IT management for 20 years. So he qualifies as an old dog, as well as being a long-time neighbor and friend of Annie and me.

Over lunch with our wives last weekend, Dick continued, "Because students today are pretty proficient with their PC's, iPods, and cell phones, they consider themselves IT knowledgeable, to a point at which they often do know more about these devices than their professors do. When that occurs, they then make the giant leap to think that because they know how to use IT, they also know how to manage it.

"So, what's a teacher to do?"

What Dick did was to enlist two HBS colleagues with playwright and theatre experience, Rob Austin and Shannon O'Donnell, to help engage the students. "We developed a long case series for a fictitious company through which the students 'walked in the shoes' of a new CIO [I.T. manager] during a year in which the manager oversaw a diverse set of characters in order to apply and manage IT in a business."

"We used various theatre techniques, the best of which was 'the loaded gun on the mantle.' We also had the fired CIO tell the new CIO 'you won't last a year;' and we ran a 24-hour clock to simulate the time-dependent events of a real crisis. Having to deal with all of the other stakeholders in the process, including a CEO who didn't know much about IT and cared even less, our students had to figure out how they would handle the management issues and defend their positions among their peers.

"In the process of teaching the series," said Dick, "we discovered that this generation of 'digital natives' works differently than the previous generations — some even say that their brains are wired differently. They 'google' continuously to access the latest real-time information; they carry out tasks in a collaborative manner with wide-ranging networks; and — believe me — their hearts beat faster. We're all challenged to learn new ways to keep a step ahead of them."

I knew what he was saying. It's the same way I felt three days earlier, after 90 minutes with Susan Pravda.

I thought that I knew a lot about the merger and acquisition game. Four of my clients have been involved in buy-outs in the past year (two complete, two to go), and the Alligator in me has addressed the subject several times here recently. But Susan, the legal architect of one of those successfully completed buy-outs, is the Authority. Managing Partner of Foley & Lardner's Boston office and Chair of their Emerging Technologies Team, Susan focuses on mergers and acquisitions and lectures frequently to businessmen and businesswomen as well as to professionals on buying and selling companies.

With another client of mine, a candidate for a fifth buy-out from my portfolio, I had a real-time learning experience in one of Susan's seminars last week. I didn't have to sift a lot of sand to come up with these nuggets from her presentation:

• Audits have high value in a buy-out. With your own history of audited statements (as opposed to review-level reports), you're not at the mercy of the acquirer's interpretation of your financial statements, which will not be done to your advantage.
• Pro-forma your bottom line every quarter. Maintain a running history of what your profit would have been without one-time exceptions, e.g. Y2K costs, a two-day system crash, an employee bonus, a product recall. Every dollar that you can justifiably add back to your profit potentially adds five to ten dollars in valuation, depending on the multiple.
• In this respect, don't take excess compensation yourself. Instead of $300,000 a year, take $150,000 as the senior operating manager and bonus yourself the difference, thus improving the bottom line while saving some payroll taxes.
• Put "change of control" agreements in place with your management team to guarantee them a severance package as an "ordinary course" contract. This provides a security blanket to the buyer together with delivering your top managers. "Otherwise," says Susan, "50% of your key employees will have their resumes on the street when they hear that the company is for sale."
• A portion of any long-term bonus agreement with top managers should be tied to a sale of the company, with 50% withheld until a year after the closing. Make sure that it is a contractual obligation of the buyer to pay each bonus; if an employee leaves early, the pay-out goes to the seller.
• Give your buyer flexibility — don't own your real estate in your business. Set up a real estate holding company to help maximize the deal value: the buyer assumes your company's lease and pays an above-market rent as a kicker to the purchase price of the business.
• The owners of the property (in the holding company) should not be exactly the same as the owners of the business. You get negotiating leverage by saying, "I'm not sure that rent rate is enough, let me check with my partner," even if the partner is a remainder trust for your kids.
• Plan now to avoid taxes later. If the value of the business has grown beyond what you'll need for a comfortable retirement, gift the surplus to your heirs. It doesn't have to be irrevocable; you don't even have to tell them about it. But your stock valued today, factored by illiquidity and a minority discount, is certainly worth less than it will be upon sale. No sense paying taxes on that appreciation if you help it.

I felt much better about going to school with Susan Pravda after discovering that Dick Nolan is still "going to school." He acknowledges that he's always learning and adapting to the requirements of his marketplace. I'm continually learning and adapting to mine. The difference is that his expertise resulted in a student-voted award from the Business School for "Best Professor"; mine resulted in two less (but two very happy) clients.