Student Teachers

Looking for new ideas? Hire some college kids.

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Don Medoff had just wrapped up a brainstorming session with his managers and was dismayed at the results. His Tucson-based company--a conglomeration of four different window and door suppliers--was reeling from the loss of a $50 million account with Home Depot (NYSE:HD). But when he asked for ideas that would help insulate the company from the further whims of big-box retailers, he felt as if he were talking to himself. "It was like, 'Well, let's wait and see what Don says,'" he recalls.

Most of Medoff's top managers had been with him for nearly 20 years; many were now in their late forties or early fifties. Medoff felt loyal to his staff, but he also feared that the culture at his companies--Solar Industries, SI, Acme Door, and Window Depot--was becoming "inbred." He needed some young blood. Medoff's solution: Hire a class of irreverent undergrads, let them take a pass at a half-dozen of his company's headaches, and, in so doing, help his long-in-the-tooth executives find their lost sparks.

For decades, top-tier business schools like Wharton and Babson have offered courses in which students tackle the problems of local firms. Now, thanks to increased demand for entrepreneurship education, many colleges and business schools are creating new programs or expanding existing ones. Today some 1,600 universities offer at least a course in entrepreneurship, and some 400 offer some form of student consulting.

The programs typically work like this: Teams of between three and six business students are assigned a task at a small company--say, doing market research for a new product or writing a business plan. Unlike interns, the "consultants" are supervised by professors and graded on their work. The cost is minimal: Some colleges ask for a donation of several thousand dollars; many offer their students' services for free.

Medoff got the idea to hire students from one of his employees, Penn Weickhardt, a 28-year-old inventory manager who had graduated from the University of Arizona's Eller College of Management. Working with a communications professor, Weickhardt developed a project for the fall 2005 semester in which a team of five students would design packaging for a skylight to be sold in Lowe's (NYSE:LOW) hardware stores. In exchange, the company paid the college $2,500 and agreed to meet with the students every two weeks.

Weickhardt took the group on a tour of the company's operations and told each student to visit a different hardware store and study the packaging. The students then were given two weeks to work individually on new packaging concepts. They came back with a handful of suggestions, and John Bankemper, a 30-year veteran of the company and president of the skylight division, was particularly impressed by two: a large text box touting the company's lifetime warranty and a circular cutout that let shoppers look at the skylight without opening the box. Bankemper, who had spent most of his career focusing on selling to contractors rather than do-it-yourself consumers, hadn't considered either. Medoff was equally impressed and decided to expand the program, asking managers to come up with five projects for the spring semester.

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