MBA Journal: Saying Goodbye to B-School (BusinessWeek)

Well, t-minus 25 days until I graduate from UCLA's Anderson School of Management (Anderson Full-Time MBA Profile). I've been measured for a cap and gown (more I had to decide whether I consider myself 5 ft. 8 in. or 5 ft. 9 in., since 5 ft. 8.5 in. apparently does not translate to a gown size) and it's waiting at the student center to be picked up. I probably just had my last meal at my group of friends' favorite all-you-can-eat Chinese restaurant. (It offers the buffet to go, and I find that very confusing.) And the first of two thesis presentations will take place this Friday. So with business school clearly -- and sadly -- ending and the real world careening toward me like my beloved No. 6 train in New York, I suppose it's time to reflect on the last two years.

Ultimately it all comes down to whether I evaluate this experience as having been worthwhile. My initial gut reaction is an unequivocal "yes." But such an analysis surelydeserves more-thorough examination and if we simply stopped here, this post would be far too short. So let's examine things a little further. There's certainly a cost to business school, both in time and money. And of course, there's the opportunity cost of the whole endeavor. Presumably, we MBA candidates could be in the work force, earning salaries instead of learning about NPV and M&A. However, MTV doesn't pay its minions the millions you'd imagine, so that was not a pressing concern for me. Nevertheless, I can now make calculations regarding opportunity costs, net present value, and mergers and acquisitions, so let's chalk up a point for the benefits of business school.

The fact of the matter is -- no matter what happens after school -- I'm a better-rounded individual because of the education I've received. For example, my brother came to visit me over spring break. During his stay, we met up with one of my friends so wecould catch up. Over the course of that conversation, I peppered my friend with questions about her online business and proceeded to analyze how her insights would affect a venture I was thinking about undertaking. Later, my brother pulled me aside and commented that he'd never heard me speak like that before, with such nuance and command of issue. Business school had apparently changed me. Even though I was surprised to hear him say those words, I must admit: He was right. I just hadn't noticed because the evolution has been so gradual over the last two years. I am now capable of speaking to both silos of the entertainment world (my preferred field), creative and business. Consequently, I'm a more-desirable and -marketable job candidate. There's another point on the board for getting my MBA.

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In addition to an eye-opening education though, I'm also walking away with an invaluable network of friends. Those closest tome here at UCLA will undoubtedly be friends for the rest of my life. I remember when I was choosing schools and I went to the Anderson admitted-students mixer in New York: An alumnus told me about the incredible people he is now proud to call friends. He added that if he were to fly to Barcelona right then, he'd have someone to call to pick him up at the airport. I found that to be an odd statement at the time. (Not odd enough to prevent me from accepting my admission, though; now it makes much more sense.) My inner circle undoubtedly consists of people who"in a pinch"I'm sure would pick me up at the airport. Coming to Los Angeles from New York, I didn't realize how big of a deal that was, but a person who gives you a ride to or from the airport is the truest of friends. Even though most people don't have cars in New York, I'm not sure I had anyone who would take up the mantle of the sacred airport trip. That has to be worth the price of businessschool tuition, right?

These individuals are also supremely intelligent and talented. I've never been surrounded by so many exceptional people for such an extended period of time. They are always there to evaluate an idea and they invariably find some key insight. In fact, many of them have been extraordinarily helpful critiquing and improving a business I may launch (others are even part of my team), an endeavor that would have been very difficult for me before business school. (Yet another point for pursuing the MBA.) Basically, I have no doubt that many of my colleagues and friends will become successful titans in their respective industries and that we will be there for each other in the future because of the relationships that were forged here at UCLA Anderson.

At the end of the day, there are times to trust your gut and there are times to let reason win out. In this case, my gut was right. Attending UCLA's Anderson School of Management has molded me intoa more capable and savvy person with the skills and network to succeed in the future. And if things ever go wrong, I've got a lot of shoulders to lean on.

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Maximizing Returns on Executive Education (BusinessWeek)

As an educator, I believe that knowledge for the sake of knowledge has enduring social value. As the head of executive education for Northwestern University's Kellogg School of Management (Kellogg Executive Education Profile), this philosophy has no place in my mission. Having experienced managers show up at my door just to learn about a topic -- in the absence of knowing what specific issues they are there to address -- may not seriously harm their businesses, but it certainly will damage mine over time.

At its best, executive education is the most direct way to make an immediate impact on the practice of management. When the Great Recession hit, the verdict of the business community was that executive education was a expense that could be cut. At the very moment when executive education could have been most valuable, enrollments plunged.

The challenge that confronts those of us in the executive education business is to work with our clients to help themunderstand that there should be a direct and measurable connection between executive education and business results.

I began to focus on this problem after speaking with executives who arrived on campus knowing what they wanted to explore but unable to articulate clearly the why. If learning about a topic were the metric used to gauge the success of management education programs, executive education providers would all be fabulously successful. As we have seen, that is not enough.

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Each person attending an executive program needs a quantifiable measure of success that the executive and the sponsoring organization agree upon in advance. It should be shared with the school, with follow-up research conducted to determine the extent of the return. This is a tall order, but it can be done.

Anyone who invests in executive education should be seeking a specific solution to a clearly-defined problem. Part of my job is todemonstrate that this happens, which means developing useful performance metrics that are available for all to see.

At the Kellogg School our goal is to ensure that the 5,000 managers who annually attend our executive offerings return to their jobs energized, with specific action plans to apply what they learned. We do this in a number of ways. We start by asking participants to arrive with a clear sense of the business issues that they want the faculty and class to help them address. We assist them in planning a formal debrief describing what they learned to their boss and colleagues on their return. In our advanced executive program, participants keep daily course-applications journals and meet in small groups to share these "ideas for action" with their classmates so that they can benefit from the extensive experience of their peers. Further Kellogg programs incorporate coaching sessions, during which participants distill what they have learned and comprehend howthis new knowledge may be applied. Months after the program's conclusion, the coaches and participants reconnect to discuss progress on their action plans and how to overcome barriers. We also selectively conduct follow-up interviews with participants after a few months to gain an understanding of how they applied key program learning.

In some cases, knowledge application is easy to spot: A participant returns from a program with a new idea and puts it into practice. I spoke recently with an executive whose financial services product had become commodified. He attended a program on building value in the business-to-business sector, learned a strategy for adding value to his product, and greatly improved his business. Return on investment can be a powerful metric.

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We routinely find that while participants can describe enthusiastically how they put their new ideas into practice, significantly benefiting theirorganizations, the financial returns are less clear. For example, a recent follow-up interview of a practice leader for a global professional services firm showed that the participant had structured a four-hour meeting with her team using program frameworks, insights, and tools to help develop actions for strengthening client relationships.

Another form of metric can be to determine what specific course ideas were implemented and how desirable the impact turned out to be, even through putting hard numbers on the outcome may not be practical. Organizations routinely make investments that cannot be measured in dollars and cents. In the case of our practice leader, developing strong client relationships is a strategic imperative of any professional services firm. Strengthening relationships may or may not yield incremental (and measurable) sales in the short term. The ultimate impact may be to retain clients that otherwise might be lost. The impact of helping a manager become moreskillful at conducting performance evaluations is hard to quantify, despite universal acceptance that this result is valuable. We are exploring ways to show this type of result to participants as a way of helping them understand what to seek through executive education.

The ROI from attending an executive program can be frustratingly difficult to demonstrate. I believe that for the good of our industry -- and service to our clients -- we must try at the very least to identify the actions taken and to assess the desirability of the results. It is the only sure way in which the field of executive education will demonstrate its value. And value -- not just knowledge -- is what we are in business to provide.

Q&A: SloanGear's Lorenzo Farronato (BusinessWeek)

Lorenzo Farronato recently graduated from MIT's Sloan School of Management (Sloan Full-Time MBA Profile), where he served as a co-owner and chief marketing officer of SloanGear, a student-run business that sells school merchandise to the community. The concept of SloanGear, which has about a 20-year history on campus, is unique because it is student owned and operated, with no involvement by the school.

Each year groups of six to 10 second-year MBA students bid on the rights to the company and write a business plan in the hope of persuading the soon-to-be graduates to sell it to them. In the end, the graduates pick one team to run SloanGear for the next fiscal year, after which the new team chooses another and the cycle repeats.

The students use their own funds -- garnered from personal savings, extended student loans, or money from family and friends -- to purchase the company and get started, explains Farronato. They have to pay Sloan royalties to use theschool's logo on merchandise, such as T-shirts and diploma frames. The team sells the items at tables in the lobby of the school once a month, on the SloanGear website, and through direct sales chiefly of customized products for specific events and clubs. And a nearby store selling university gear is SloanGear's competition.

Having enjoyed the experience so much, Farronato admitted he didn't want it to end. Alas, he and his classmates have sold the business to another group of second-year students, who Farronato says were not the highest bidders but had the most interesting plans for SloanGear in the future.

"We picked the group that provided the most interesting, thoughtful, and easy-to-understand business plan, which could enable them to do well in the future and make sure the company could be successful," Farronato says. "It's a great tradition, and by no means did we want to be the ones screwing it up."

Recently,Farronato, who will be working in management consulting at Booz & Co. in Cleveland, Ohio, talked with Bloomberg Businessweek reporter Francesca Di Meglio about what attracted him to SloanGear and the many lessons learned. Here are edited excerpts of their conversation:

Di Meglio: What originally drew you to SloanGear?

Farronato: I wanted to have a hands-on management and entrepreneurial opportunity as I was doing my MBA. It represented a chance to apply all the lessons I was picking up in class. You take SloanGear way more seriously, and it is way more fun. It's more serious when you have your own money on the line. I could test my knowledge, how well I was learning, and what I could further improve. Second, I wanted to have a practical leadership position. Everyone on the team was responsible and accountable for a specific set of deliverables. You were also accountable for the money everyone had invested. Third, I wanted to broaden my skill set,including improving my communication skills, while further bonding with my classmates.

What was the greatest learning experience?

I got to experience how it feels to be both a manager and investor. When I looked back and considered the work I was doing at Procter & Gamble before coming to Sloan, my point of view was very much focused on the deliverables that my organization and department had to achieve. I was disconnected from the greater company and the expectations of its investors. When I was working at Procter & Gamble, I was making mistakes and achieving success with the company's money. When I was working at SloanGear, I was making mistakes and achieving success with my money. It was a good learning opportunity to recognize another layer of perspective that I was ignoring before.

What changes did your team make to SloanGear?

The changes we made were around building a stronger equity and repositioning the products and services in a waythat were aligned with the needs of the people in the school. Until last year, SloanGear was seen as nice, but the designs were plain vanilla, not so special. People could get a Sloan T-shirt for $10 to $15. We wanted to offer unique, limited edition T-shirts that related to some specific event or happening at the school. We wanted it to be closer to what students were doing and for the designs to always be fresh, so we'd be on the top of student's minds.

Every month we launched one new T-shirt, which meant a higher price point because we could not buy or sell the T-shirts in bulk. The shirts cost up to $20. We also used 100 percent sustainable materials to make the T-shirts, including ink that did not contain harmful chemicals. We sold only diploma frames with recycled wood or with wood coming from forests that were replanted every time they were cut down. These products were more expensive. It was good, though, because it suggested we were environmentally friendly,which is a topic we talk about at school all the time. People wanted that.

What were some of your failures?

I don't want you to think that everything was always successful and smooth. We didn't expect to have such a hard time expanding the business to the alumni network. We have 50,000 alumni, but 95 percent of the revenue comes from on-campus folks. It was really tough to reach alumni. That was the problem. We expected to see more sales in that segment, and we did not meet those expectations. It is very difficult to pitch products like these beyond the campus. We failed to learn how to use Facebook in a proper way. In class, there's all this hype around social media and how you can use it as marketers and how it is the wave of the future. But when my friends and I tried to apply it, we faced a barrier. It's a challenge I know I need to overcome someday. I'm happy to see that the incoming owners started up a new Twitter account and are creating anew Facebook page.

What message do you have for the new owners?

The message I have for them is to give it their all. They should have fun. They should try every single idea, even the craziest ones they have. And make use of this unique opportunity at Sloan to do everything you want in a still somewhat protected environment. You have the market -- 1,000 students who are looking for the products and services you are offering -- so it's not as risky as opening a store in downtown Manhattan. Leverage the history. Then make sure you are handing over the business to the right team next year.

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