Harvard Business School

The two HBS researchers who attempted, in the summer of 1911, to establish definitively the costs of operating a retail shoe business were soon frustrated.

They discovered that no two retailers kept exactly comparable records. Some included their own salaries in operating expenses, while others accounted for salaries separately. Some charged themselves rent for stores they owned; others did not. The Bureau of Business Research decided to organize a committee of manufacturers and retailers, public accountants, and Harvard faculty members to establish a standard classification of accounts for retailers in the shoe industry.

That classification became available in the summer of 1912, and HBS researchers used it to obtain operating expenses from 130 stores in the East and Midwest. Some retailers refused to cooperate. “Why, damn it, man, you’re asking for the guts of this business,” complained one president of a New York department store.

“That’s exactly what I’m asking for,” replied the Harvard researcher.

The fruits of these efforts appeared in May 1913, when the Bureau issued its first bulletin: Object and History of the Bureau with Some Preliminary Figures on the Retailing of Shoes.