Could ‘Growth’ Become A New Business School Discipline?

Kellogg's series of courses on scaling a business

Kellogg’s series of courses on scaling a business

“We really were motivated to do this based on our interaction with people outside the school,” adds Jones. “We felt we could deliver quality in this area which we think is very important. This was not about market differentiation. That said, when we looked out at the world, we didn’t see a lot of other schools that are doing this.”

In fact, the initiative has an added differentiating benefit for Kellogg: it makes the school a more likely target for prospective students with private equity backgrounds, students who as graduates will head back to PE jobs, the highest paying industry recruiting MBAs today. At Stanford University’s Graduate School of Business, graduating MBAs who went into private equity last year reported median base starting salaries of $170,000.

GROWTH IS A HOLISTIC PROBLEM FOR MANY MID-MARKET COMPANIES

Indeed, one case developed by Daniel Weinfurter, a lecturer at Kellogg who is also the founding CEO of a consulting firm called GrowthPlay, centers on a hospital supply firm bought by a private equity firm. “It’s about an entrepreneur who built this business over 20 years and sold it after hitting $20 million in revenue,” says Weinfurter, who teaches Human Capital and Enterprise Scaling. “Now the PE firm wants to take it to $100 million-plus in three years. What do you have to do to drive that kind of revenue growth? It was never set up to scale so everything has to change.”

“Ten to 15 years ago, private equity could buy, reorganize and sell a business in just a few years,” says Mazzeo. “Those deals are now few and far between. Now it’s getting a company and trying to grow it over a five- or seven-year period. These growth problems are multi-faceted. For mid-sized companies, it’s hard to break down their growth challenge to a specific finance issue. It’s really a holistic problem. So we’ve designed a curriculum around that.”

‘TO SCALE MID-MARKET COMPANIES REQUIRES A DIFFERENT SKILL SET’

Weinfurter, once an executive for General Electric, views the coursework as unique. “I don’t believe it’s frequently taught in business schools,” he says. “The folks at Kellogg are smart at seeing this gap between the entrepreneur and the larger business. These are companies that generally have revenue above $1 million but less than $100 million. To scale those companies requires a different skill set and it’s an area where a lot of people play. So there is a big opportunity.”

Professor Mike Mazzeo's course was the first of the seven on growth and scaling

Professor Mike Mazzeo’s course was the first of the seven on growth and scaling

The initiative also plays well with students who have come from family businesses, such as Ochagavia, or would prefer to work in a mid-market company where growth is a core challenge. “It’s the most critical thing to get right,” adds Weinfurter. “You go from an early stage business to a much bigger business and the business changes fairly dramatically. In a big company, you have a sophisticated human resources group to help you think about it. But in an entrepreneurial concern you may not have the expertise or knowledge.”

Professor Jones sees the initiative as only the start. “This is a work in progress,” he says. “We are now in the process of innovation, testing these courses and scaling ourselves.I expect several more. We’ve tried to pull out a few courses in every functional area and some are experiential. We’re doing an experiential course on scaling operations with companies, pairing them with students who can gain valuable experience.”

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