Looking for new ideas? Hire some college kids.
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.
One such project asked students to develop a TV commercial that targeted women for Window Depot, Medoff's window supplies retailer. "We came up with some silly ideas," says Amy Hwang, a 20-year-old accounting major. But after touring several stores and talking to the company's president, Ron Hess, Hwang says, the team decided to "tone it down." They worked with a local television station and produced a straightforward ad in which a female customer gets help from a sales rep. Other student projects included a redesign for the company's mirror door packaging, an analysis of competitors' websites, and a study of possible locations for a new store in Phoenix. All were successful: New door and skylight boxes will roll out within the next six months, the website has been revamped, and Window Depot plans to lease space in one of the recommended locations next year.
For student consulting to work, business owners need the patience to become de facto teachers. Company executives are expected to meet with the students regularly over the course of the semester to offer critiques and suggestions, says Jerome Katz, a professor of entrepreneurship at Saint Louis University. To avoid problems, Katz suggests working with professors to choose a task in which you have some experience and defining it narrowly enough so that students can complete it within the given time frame. In general, marketing and research assignments are among the easiest projects to execute because they don't require a great deal of technical knowledge.
Finally, you must be willing to put up with the headaches of hiring a gaggle of 20-year-old part-timers. In Medoff's case, the students' energy and brashness sometimes rubbed managers the wrong way. Hess, for example, recalls feeling defensive when a group of students ripped into Window Depot's website and logo. "It was like somebody was making fun of my children," he says.
Medoff says that was exactly the point. He hopes that by exposing his top managers to a bit of brashness, he'll push them to question his leadership more often. (Hess, for his part, now calls the students' advice "invaluable.") This fall, Medoff is taking the program one step further: A team of University of Arizona graduate students will write a plan for a new business to complement Medoff's existing ventures. If he likes their idea, he'll fund it and, he hopes, entice the students to run the company after they graduate. The cost of this flier: $7,500. Says Medoff: "I want a portfolio varied enough that, if a big customer walks away again, the bank won't even notice. If they come up with one creative idea, that's worth $100,000 by itself."