At Some Companies, MBA Students Are Consulting

SEPTEMBER 2, 2010. Some of the top U.S. business schools have been teaming up with companies, including Urban Outfitters Inc. and Green Mountain Coffee Roasters Inc., on programs in which students play the role of consultant—at little or no cost to the company.

Students may work on identifying acquisition targets, assessing a market segment’s viability or creating a business plan, among other topics, program directors said. At Dartmouth College’s Tuck School of Business and Indiana University’s Kelley School of Business, the programs are free; others charge the company anywhere from $50,000 to $80,000.

“We’re bringing together several faculty, and a larger number of M.B.A.s are put on a project than many private consulting firms,” said Jonathan Frenzen, who leads such a program at University of Chicago’s Booth School of Business. “The expense for doing that at the school is pretty significant.”

Green Mountain Coffee sent Tuck students to Nicaragua, where they developed business strategies to improve coffee quality and production at the source. “This will have impact on the quality, taste in cup and…the amount of coffees that [the farmers] harvest,” said Rick Peyser, a member of the company’s corporate responsibility department.

While some programs or labs, like Booth’s, have been around for decades, others are only a year old. Teams can range in size from 40 students at the Haas School of Business at the University of California, Berkeley, to five at Massachusetts Institute of Technology’s Sloan School of Management, and typically run three to six months.

Some students on the projects say they have worked up to 60 hours a week in crunch time, all for a grade or class credit.

David Slump, president of Harman International Inc.’s consumer-audio division, describes himself as a “repeat customer.” He has teamed up with Booth students to examine and research a forecast model, acquisition possibility and potential brand repositioning while at General Electric Co. and Harman.

Mr. Slump describes the program as an “accelerator” with a huge return on investment. “You probably don’t usually have the internal resources to take a fresh look at everything every day,” he said. “Hard decisions tend to need more analytics.”

While he has worked with consulting firms, Mr. Slump said those projects differ greatly from students’ work, which doesn’t typically have the “war room” mentality with management changes.

Wells Fargo & Co.’s Bill Griesser said he found value in the diversity of Haas students’ experiences—many didn’t have experience in financial services—that differ from what the banking-services company might get from a research or consulting firm.

Several top consulting firms said they were unaware of these business-school partnerships and didn’t comment further.

Ron Kruse, who manages supply chains at EnerNOC Inc., worked with MIT’s Sloan students to develop a supply-chain tool. He said the value was in having students working on projects that otherwise wouldn’t be given the same attention. “They come in with fresh eyes,” Mr. Kruse said. They see things that people who work on the project every day “aren’t noticing anymore or are too bashful to say.”

The spreadsheet tool the students developed had “powerful analytics,” Mr. Kruse said. EnerNOC will be using it to evaluate and set up third-party warehouses.

Sometimes projects don’t get implemented or are put on hold. Wharton students worked with Urban Outfitters to examine environmentally friendly initiatives, such as alternative-energy sources and packaging methods, said Amy Dorra, senior marketing manager. For now, that work rests in limbo. “It will take us a little while to process that information and have the right conversations to figure out how we can move forward,” she said.

Source: Wall Street Journal