What They Do (and Don't) Teach You in Business School

Tweet

"They don't do a good job of dealing with that," agrees Art Dodge III, CEO and president of Dodge-Regupol Inc., in Lancaster, Pa., a company that makes recycled-rubber products and has projected 1997 revenues of $30 million. "All your human-resources classes are about motivating employees, goal setting, things like that. But how do you recognize a bad decision, kill it, bite your tongue, and move on? You've got to be able to make mistakes quickly, find out, and get out of them quickly. They teach you a lot about how to be a success but not what to do when something goes wrong--when you fail, which you are going to do."

Despite the lack of enthusiasm for an M.B.A.'s usefulness during the start-up phase, 9 out of 10 survey respondents said they would recommend an M.B.A. program for would-be entrepreneurs. At later stages of company building, they agreed, the analytical skills learned at business school are extremely valuable when it comes to understanding broader issues, such as planning, strategic marketing, and resource allocation. The most helpful courses cited by these CEOs--finance, accounting, and marketing--focused heavily on analytical tools.

Typical is Irving Levin, CEO of Renaissance Holdings Inc., in Portland, Oreg., who graduated from the University of Chicago Graduate School of Business in 1977. Levin, whose company projects 1997 revenues of $45 million, passed the "survival stage" many years ago. "Now," he says, "I have and need more formal structures, reporting requirements, and planning cycles." And that's when what he learned in business school started "filtering back."

Michael Stopka figures that an M.B.A. helps most when your company reaches about $12 million to $15 million in sales--"when you deal with higher-end issues." Stopka says he is able to make more reasoned judgments about his mailing list using techniques he picked up in his quantified-methods and analytical-modeling classes. "I'm mailing 7 million catalogs," he explains. "Every one I don't send saves me 56¢."

Tim Chen, who graduated from North Texas State University School of Business in 1980 and is now president and CEO of Keys Fitness Products, in Dallas, draws on his schooling in finance to help him make key decisions about operations. For example, Chen tries to hit his company's break-even point by the middle of each month. "We never spend more than we make," he says of Key Fitness, whose 1996 revenues were $51 million.

"No matter what your role in a business, you have to understand the numbers," says Fay Wu. The ability to assess the market and estimate product life cycles in a persuasive and replicable way, she says, underpins much of the success of her company. The sales pitch at Castek relies heavily on showing the numbers to prospective customers. "The stuff I learned in business school has a direct application here," she says.

In addition to understanding financial-management and -analysis tools, some successful entrepreneurs point to other benefits of their years in business school.

For Art Dodge III, who graduated from the International Institute for Management Development in Lausanne, Switzerland, in 1984, attending a European university was crucial. Dodge, long interested in international business, specifically wanted to attend a non-U.S. school. "In Europe, unlike in the United States, the entire curriculum is globalization. The European school gave me a tremendous leg up on anyone going to an American school," he contends.

"At the end of the day," concludes Martin Smoler, the key question is always, "Are you going to be able to make money?" Knowing which tools you can use to answer that question is a key benefit of a formal business education, says Smoler, a 1971 graduate of the J.L. Kellogg Graduate School of Management at Northwestern University. As president of $3-million American Echo Inc., in Kansas City, Mo., which makes echocardiography positioning systems, Smoler is often asked if he can make custom products for individual accounts.

 PREV  1 | 2 | 3  NEXT 

Read more:

Sign-up for our Leadership and Managing Newsletter

Email Address: