Flying High at Babson: Len Schlesinger Wants to Create the Equivalent of the Airline Industry’s Star Alliance for Teaching Entrepreneurship
Len Schlesinger wryly refers to himself as president of the finest business school between Route 128 and I-495. And indeed, Wellesley, MA-based Babson College is, for many folks around Boston (and elsewhere), often over-shadowed by Hub institutions I don’t need to name.
Yet Babson is also one of the country’s top business schools. I’m not going to cite all the high rankings it gets from places that track B-school programs, because I don’t believe in such metrics. More to the point, Babson has a first-rate faculty, and we here at Xconomy seem to be writing increasingly about its graduates. Off the top of my head, I can reel off Jason Jacobs, who founded FitnessKeeper, maker of a highly popular run-tracking application for the Apple iPhone 3G called RunKeeper; Rush Hambleton, who founded Canditto, a Cambridge-based service that rents out photo-sharing kiosks; and Matt Lauzon and Jason Reuben, who launched Paragon Lake (the subject of a previous X Factor column), which is out to revolutionize jewelry design and sales, when they were mere undergrads at Babson.
This kind of evidence, not rankings, is what caught my attention. So I was pleased to be able to visit recently with the dynamic Schlesinger, who took Babson’s reins in July 2008 and wasted no time trying to lift the college’s profile.
The Babson president has a unique academic and business background that includes some 20 years at Harvard Business School and eight years as a top executive at Limited Brands, his most recent position before coming to Babson (full bio here). And he says the combination of business and academic experience gave him three sets of skills that serve him well in his new job. First, thanks to his development work at Harvard and, later, Brown University, he knows how to raise money. Second, he has been able to bring the perspective of a business executive to the management of Babson, which has helped shape his plan to strike partnerships with universities around the world (more on this below). And third, he is intimately familiar with the ways of academia, which has helped him understand the process of getting buy-in from Babson faculty.
Now, Schlesinger is an energetic and thought-provoking speaker—and he can be hard to keep up with when taking notes. (If you want to see what I’m talking about, check out this YouTube spot.)
What follows is a much-condensed overview of Schlesinger’s rapid-fire comments on innovation and entrepreneurship, and his ambitions for Babson, which was founded in 1919 as the Babson Institute (it became Babson College in 1959) and is now home to some 1,900 undergraduate and 1,600 graduate students.
1) Entrepreneurship rules—and it can be taught.
On this point, Schlesinger quotes or paraphrases the Bangladeshi economist and microlending pioneer Muhammad Yunus: “We’re all entrepreneurs, only too few of us get to practice it.”
Based on academic work at Babson and other institutions, Schlesinger believes that the principles and practice of entrepreneurship are “documentable, codifiable, and consequently teachable to anybody.” That is a tremendous opportunity for Babson, he says. “This is our time…and the world can benefit enormously from a much more expansive diffusion of what it is that we do.”
2) The underlying assumptions of most business plans, such as a skilled, abundant labor market, cheap energy, and easy access to credit, are things of the past. Outcome measures for businesses must be extended beyond the traditional profit and loss to embrace three categories of measures related to “people, planet and profit.
“The last year has just been spectacular in terms of demonstrating the limitation of the operating model that most businesses and most communities operate under,” Schlesinger says. “We need to extend our capability to deal with social enterprises and their development.” Many business schools now have courses, even academic institutes, built around subjects like sustainability and social responsibility, he says. But the problem is that schools typically “deal with them in ways that keep them on the periphery of core business properties.”
Says Schlesinger, “Are there sustainability issues? Yes. Is the solution to intellectually separate them and deal with them serially? The answer is no.” His view is that rather than considering these as special topics, they are “better dealt with as issues of ‘just business’” and must be incorporated into basic business practices. To help with that, business school curricula needs to be revised, and core practices need to be changed to focus on what he calls a “simultaneity of positive outcomes”—meaning building profitable business that also give back to the community and take care of the environment.
3. These new fundamentals of entrepreneurship and business should be taught globally.
Schlesinger’s idea is to partner with universities and other institutions in the academic equivalent of the airline industry’s Star alliance. Universities don’t share route structures, of course. But, explains Schlesinger, they often “do share services, etc, and believe in a world of entrepreneurs and people, planet, profit. What we’re looking for are just a few friends who think very much like the way we do, who have enormous amounts of energy to extend these ideas in a variety of ways.”
Such partnerships could involve sharing students, faculty, and curricula—and soon after arriving at Babson, Schlesinger got to work on the idea. Faculty volunteers divided into eight groups that worked “feverishly” this past summer, and are busy developing and fine-tuning these and other ideas this fall, he says. “And in the middle of all of that, my provost Shahid Ansari and I have been flying all around the world, pigeon-holing, cajoling, and nudging, looking for like-minded partners.” He calls this an “intervention,” because “it’s not the natural act” of academic institutions to collaborate. Still, he says, the reception from both foreign governments and educational institutions “exceeds my wildest expectations.” And he believes it will likely lead to some announcements later this year.
Not Playing Defense
Schlesinger says he was fortunate that Babson gets most of its operating budget from tuition and not its endowment like many institutions. Still, during last year’s meltdown, Babson’s endowment dropped from about $216 million to $165 million—a $51 million, or 25 percent, hit that, because of the way the endowment is tied to the budget, meant losing about $2.5 million from operating funds beginning three years down the road. But Schlesinger was able to convince the faculty and staff that if they could begin filling the hole right away, the school could more readily absorb that blow and focus on growth. Within two weeks, the staff had rallied around proposals for providing several million dollars of operating expense reductions, he says.
As a result, Schlesinger says, “While everyone else was dealing with uncertainty, I was able to go to the community before Christmas, and say that unless the whole world falls apart, no layoffs.” After the holidays, officials were able to free up enough room in the operating budget that people could get raises of up to 2 percent or $2,000, whichever was lower. “Not a normal raise, but certainly a recognition of the fact that people are working hard,” says Schlesinger.
All this has enabled school officials to focus on longer-term issues of revenue generation—such as growing enrollment and attracting new foundation support. Schlesinger calls those problems “much more fun” than cutting budgets for the next several years.
So is Babson out to become the best business school in the Boston area, period? Schlesinger says he isn’t trying to compete with Harvard, MIT, et al, as a free standing business school, but rather wants to focus on strengthening Babson’s unique role in teaching business under the umbrella concept of entrepreneurial thought and action. But that doesn’t mean he isn’t competing on some level. And he says he’s fortunate that he can take the offensive and work on creating growth rather than a lot of cutting. As he puts it, “Virtually none of my attention goes to playing defense right now.”