Education: Sitting on Top of the World

In their spare time they code Oracle Corp. database applications and build websites. They've been surfing the web since there was a web. They're as comfortable with technology as Michael Jordan is with a basketball.

What they're not comfortable with is the idea that the IPO is the TKO of business. They don't believe that hype. What they believe is that a business should provide a product or service that actually benefits people (a radical notion in today's world of Showmethemoney.com).

Meet the class of 2001 at MIT's Sloan School of Management, one of the country's preeminent business schools. The 350 students in this class are your future consultants, internal staff, vendors and bosses. You might already be familiar with some of their predecessors: Hewlett-Packard CEO Carly Fiorina (1989), Boeing CEO Phil Condit (1975) and Citigroup CEO John Reed (1965) are all Sloan grads.

But the class of 2001, which is composed of students from 60 countries (a fact that testifies to the globalization of business and IT), is different. Even their professors admit it. "They don't complain. They don't moan. They don't whimper. They stand and deliver," says Kenneth P. Morse, one of Sloan's high-octane practitioner professors (he cofounded 3Com), who directs its Entrepreneurship Center.

MBA Program Director Margaret Andrews, herself a Sloan alum from the class of '92, says the class of 2001 is "an extremely energetic class. They have a very can-do, very positive attitude. Being so web savvy, they're pushing us to be more web savvy, and that's a good thing." Al Essa, Sloan's director of information systems, agrees. "Their forward-looking thrust and initiative made us aware that we have to be ahead of them," he says. "They're pushing for things to happen so fast, and that pressures us to move fast. The students have very little tolerance for bureaucracy. We see more and more of that pressure every year." To keep up with the students, Essa says that the school's role is to give them guidance, discipline and support. Or, as Morse says, "A rope, resources and a Rolodex."

Even before the students in the class of 2001 set foot on campus, they were using the web to get to know each other. Several entering students launched a club on Yahoo in spring 1999 for new master's candidates. This chat room and discussion board proved to be the ultimate sticky application; at one time it was the largest business school chat club on Yahoo, with 360 people participating. As soon as they hit campus, other students in the class, some of whom had participated in the Yahoo chat club, wanted to set up an online face book and an online calendar. Though the technology was available, and they knew how to use it, the students ran into snags when dealing with the administration. Even at Sloan, where faculty members view students as the muses of innovation, spitfire change is hard to achieve. And it won't be easy when the students get out into the so-called real world either.

Perhaps that's the biggest lesson they'll learn at one of America's most progressive business schools: Change isn't that easy.

QUICK AND DIRTY As the class of 2001 filed into a spacious lecture hall in the modern, green glass Tang building (named for Jack C. Tang, class of '49, chairman of Tristate Holdings, a Hong Kong-based apparel manufacturer) during their orientation last August, three students, Ahron Herring, Mark Freiheit and Kurt Leafstrand, were busily creating an online face book. They thought it would be a good way for the new crop of Sloanies to get to know each other and begin doing what business students do: network.

Herring wrote down his peers' names as Freiheit, armed with a digital camera, took informal photos of them--some smiling broadly with excitement about the new year, others still groggy from the previous night's debauchery. At the same time, Leafstrand frantically coded an Oracle database application that he adapted from an e-commerce app he had developed for his own software company, Forge Software Corp. (he owns one-third of it), whose product is used for project scheduling in manufacturing. The first semester at Sloan (known as "boot camp" by both students and faculty for its grueling courses in accounting, economics, finance and strategy) hadn't even started, and already these three students were under the gun; they wanted to get the face book online as soon as possible.

And they did. The password-protected face book went live Aug. 24, a week after orientation started. They hosted it on Forge Software's web server. Three days later, they received an e-mail from Sloan's office of educational services asking them if they had received permission from the students to post this information, who had the right to use it and whether recruiters would be able to see it--questions that in their haste the students hadn't considered. Though they were not told to take down their face book, they were informed that educational services, which was putting together its annual hard copy face book, was planning to post its own version on MIT's website in September. But September wasn't soon enough for Herring, Freiheit and Leafstrand. They knew the students needed it immediately, and that's all they were concerned with when they put it up. Good thing, because the administration's online version never appeared in September. (They had to work out some bugs, they said.) It was scheduled to go live in January. It didn't. And, as of the end of February, it hadn't.

It was then that the enterprising students started to suspect that their quick-and-dirty endeavor wasn't in sync with Sloan's broader and longer-term concerns about its legal responsibility for the content on its website.

(Nevertheless, their face book still lives online, somewhere in cyberspace, according to Herring and Leafstrand, who had to neglect the face book once their professors began piling on the work.) The students didn't anticipate having to deal with the 86-year-old institution's policies and procedures.

Unless they plan to start their own companies immediately upon receiving their degrees, they'll have to get used to following established ways of approaching projects. For when they reenter the professional world they'll find themselves up against corporate systems, structures, architectures and processes over which they'll have limited control. "They know that this is a way station to the real world, and they know that they'd better get real," says the tough-talking Morse.

Does this mean that the Sloan class of 2001 will wreak havoc on their companies' IS organizations by developing their own pet projects that don't mesh with the company IT infrastructure? Probably not. They're smart and they're learning that the most successful projects are those that are aligned with long-term goals. Meanwhile, administrators are finding that the fastest way to finish any IT project is to put it in the capable hands of the class of 2001.

DO IT YOURSELF Last May, while every other student at Sloan was cramming for final exams, three ambitious freshmen in the class of 2000 had other things on their mind. Rami Habal (who will be graduating with the class of 2001 because he's pursuing both an MBA from Sloan and a master's in public administration from Harvard), David Lam and Julian Ting were thinking about developing a portal for the entrepreneurial community. E-MIT (e-mit.mit.edu), as they named it, would connect the brainpower at MIT with entrepreneurs seeking staff, consulting firms wanting to extend their name to the MIT community and venture capitalists seeking the next billion-dollar business plan. The trio put together a 15-minute presentation, which they gave to Professor Morse to get his support and approval.

"I agreed with it on the spot," says Morse. "It was a no-brainer."

But the semester soon ended, and Habal, Lam and Ting left Cambridge for their summer jobs. Habal went to Andersen Consulting Strategic Services to work on a sales strategy project and then joined Cisco Systems in San Jose, Calif., where he worked with the cable broadband group. Lam was also working on broadband projects at Cisco, while Ting served as a product manager for Dell Online in Austin, Texas. The three developed their ideas for E-MIT via e-mail over the summer.

When they returned to campus that fall, they met with Morse, Program Director Andrews, IS Director Essa and Marilyn Cronin from the Career Development Office. Habal, Lam and Ting showed them how registered users would be able to log on and find a job board where entrepreneurs could post open positions at their startups. Users could join discussion forums and find a calendar of events related to entrepreneurship as well as articles on e-business written by venture capitalists and analysts with PricewaterhouseCoopers and McKinsey & Co.

Habal, Lam and Ting asked the faculty members for help raising money to cover their startup expenses, for things like servers, web tools, IT services and advertising. "We introduced the students to companies and organizations that we thought would be interested in it," says Morse.

Then the E-MIT team approached Essa for his IT resources. "I asked them when they wanted it up," recalls Essa. "They said, 'We want it done in a month.' I said, 'A month?' I talked about it with other folks, and they laughed," he says. "The students were determined to build the site, and they would do anything to make it happen. They did all the work and they had a prototype running in two weeks," he adds. Two-and-a-half months later the students had designed, built, funded and launched E-MIT.

"The joke in the administration," says Morse, "is that the only way to do something is to let the students do it themselves." A total of 10 students built the website (there are currently 40 working on it), which as of January 2000 had 1,750 registered users, among them CEOs of companies and partners with major consulting firms. (The list is kept confidential.) Lam, a new products and venture development major, says that although the E-MIT launch process went smoothly, his team spent 50 percent of its time checking in with the administration. "There were an enormous amount of administrative checkpoints that we had to meet along the way. One challenge was continually learning about how things work in a university," he says. He explains that one of the administration's main concerns was that E-MIT not be used to make a profit; it would have to remain a nonprofit educational program in keeping with MIT's nonprofit status.

Sandeep Swadia, another new products and venture development major in the class of 2001, has committed himself to making sure E-MIT lives on when the class of 2000 graduates next month. "E-MIT had so much motivation because there's so much value. When we talk about it to VCs, their eyes sparkle," he says. What's important in proposing these projects, adds Swadia, is knowing who your interested parties are and how you can bring them together.

And that's another thing the class of 2001 really knows how to do. Lam says that students like Swadia (who also helped launch the popular Yahoo club) are best suited to find solutions to one of E-MIT's biggest challenges--building a community for its users. Lam explains that E-MIT is a way for them to take what they learned from the Yahoo site and channel it toward a more public effort, while helping them build skills that employers value highly. "Being a leader in our group, you see all the technical challenges related to building a website and running a web business," says Lam. For instance, he and his teammates are constantly thinking about the reliability of the site: It has to be up 24/7 and users have to be able to log in easily. Scalability is another issue. Within just six weeks of the Dec. 4, 1999, launch, E-MIT had nearly 1,800 users, and Lam anticipates strong growth.

As long as these student-run initiatives serve a multitude of interests, including those of the faculty and the business community, these plans will roll smoothly. But what happens when they don't?

STEERING THE QUEEN MARY Another project that the class of 2000 initiated that 2001 saw come to fruition is an online calendar listing all the events taking place on the Sloan campus. "It's been talked around school a lot, a year before I got here," says Andrews, who became program director in August 1999. "When I came on, there was much more talk about the calendar. The students were saying, 'We need this. It would help us manage our lives better.' We said, 'Yeah, you're right.'" She adds that after a year of talk it was only in January 2000 that students and administrators finally drew up a proposal for it. (The calendar went live the following February.) Granted, the implementation took a quick four weeks, so why did it take a year to draw up a proposal?

"If the calendar was a standalone project," says Essa, "it would be a no-brainer. We could have had it up in a few days. But with IT, things have to be integrated. If it's going to be institutional, it needs to sync to other databases on the network." Essa explains that students tend to focus their efforts on getting a project up and running while overlooking both the impact on the school and how they're going to sustain it. "People think technology is the solution, and they underestimate the process," he says.

Liz Rounsavall, a 29-year-old strategic management and consulting major from Louisville, Ky., who sees firsthand working on the student government how difficult it can be to coordinate efforts between students and the administration, offers her perspective. "Anytime you try to change a big institution, it's like trying to steer the Queen Mary. In the end, the administration is a poli-tical body. They'll be here in two years and we won't.

As long as it looks good for prospective students, they'll be supportive," she says.

Like the face book, the calendar project highlights the inevitably diverging agendas of students and administrators. Students come to Sloan for two years, demanding certain applications without being overly concerned with IT standards and policy issues. The administration, by contrast, has to keep an eye on standards to make sure they are integrated with the long-term infrastructure.

This sort of dynamic is reflected in the real world, where end users want their company desktop PCs to have the same applications and features as their home computers, without realizing what that means for the company's computing architecture and the impact it has on the total cost of ownership.

But what's different in the case of Sloan is that many of today's students will be tomorrow's CEOs and CFOs. The students in the class of 2001 will no doubt have a less general and more value-based understanding of technology and its business applications than the current breed of AARP-card-waving CEOs. Because of their constructive attitude toward information technology, this generation of technology-friendly MBAs finally has the proper skills and education to resolve the business and IT alignment conundrum that has puzzled executives for far too long. Under their purview, business and IT will be inherently aligned.

In web-enabling student life, the class of 2001 is learning the importance of understanding the environment in which they are working to effect change.

Herring summarizes what he learned from working with the Sloan administration on the face book: "The school is an ongoing process. When you innovate, it has to be in the context of the ongoing evolution of the school. MIT does a reasonably good job of balancing policy concerns with the need to innovate. It can be really dynamic, yet it's not a four-person startup that can sit down over coffee and switch markets. The school needs to ask where it really wants to go as an institution over the long term."

Then, Sloan has to find the students, like those in the class of 2001, who can take it there.

Staff Writer Meridith Levinson was impressed by the Sloan students she met.

Were you? E-mail her at mlevinson@cio.com.

PETTER J. KARAL Age 27 Hometown Bergen, Norway Major New product and venture development Former job Consultant with McKinsey & Co. Imported pens and cassette tapes with a friend when he was an enterprising 11 year old. Personal philosophy "I want to take risks, make my mark and make sure I don't step on anyone in the process." Greatest achievement "At age 17, I was put in charge of organizing graduation celebrations for 11,000 high school students in Norway."

Favorite quote "A plan is nothing. Planning is everything." Favorite article of clothing "The red-brown shirt I got from my fiance." Verbatim "There hasn't been so much change in business since the Industrial Revolution. This means that brainpower is more important than anything. Young people get hired for their brains, not their experience."

LIZ ROUNSAVALL Age 29 Hometown Louisville, Ky. Major Strategic management and consulting Former job Helped build Simon & Schuster's intranet. Worked on an internet caf startup in 1994. Personal philosophy "Keep learning new things and expanding my scope; balance hard work with serious relaxation." Greatest achievements "Managing an intranet network for the world's largest book publisher. Finishing a New York Times Sunday diagramless crossword puzzle.

Learning to drive a stick shift. Learning to water ski." Favorite quote "I will sell this house today. I will sell this house today. I will sell this house today...."-Annette Bening in American Beauty Favorite article of clothing "My new black leather boots." Verbatim "Everyone at Sloan wants to be a leader.

Nobody is here because they're an underperformer."

SMARANDA MOISESCU Age 31 Hometown Cluj, Romania Major Strategic management and consulting Former job Worked for consulting firm Archimedes Systems in Waltham, Mass. Personal philosophy "I always try to see the bright side of things and be happy with the choices I make. I want to keep reaching for the impossible."

Greatest achievement "Balancing a very challenging and successful career with my personal life. [She has two children ages 6 and 9.] Making different aspects of my life complement and support each other." Favorite quote "In Romania, we say that each man makes his own luck. I don't believe in winning the lottery.

Everything I've done so far was based on hard work and planned thinking."

Verbatim "I want to return to Romania and help bring the economy out of the dumpster."

SANDEEP SWADIA Age 30 Hometown Bombay, India Major New products and venture development Former job Led the internet division of System Resources Corp.

(SRC) in Burlington, Mass. Most recently worked for Boston-based Computer Sciences Corp. Personal philosophy "To align myself with principles such as integrity, trustworthiness, sharing and fairness. These deeper values are always more lasting than quick charisma." Greatest achievement "Professionally, I am proud to have risen in SRC from a summer intern to a program manager. In the musical arena, I have been fortunate to perform at Radio City Music Hall and Madison Square Garden. [Swadia plays percussion.] As a community servant, I found gratification from working with second-generation Indian youths to preserve and promote South Asian culture. Personally, I feel thankful every day that I had the courage to move to the U.S. from India." Favorite quote "Skate where the puck is going to be, not where the puck is." -Wayne Gretzky Verbatim "I don't want to be the next Amazon.com. I have nothing against Amazon, but I don't know where they're creating value. My personal problem [with that] is that you start a company and are thinking about an exit strategy. If I have to start something, it had better be long term. It's like falling in love."

AHRON HERRING Age 25 Hometown Hollywood, Fla. Major New products and venture development Former job A bond market salesman with Merrill Lynch Personal philosophy "Appreciate what I have, aspire to the most I might achieve and share in success with society." Greatest achievement "Being a steadfast friend to my brothers through thick and thin." Favorite quote "A good name is better than the finest oil." -Talmud, Ethics of the Fathers Favorite article of clothing "A tuxedo because you can't help but look good when you're all purty'd up." Verbatim "Innovation doesn't happen every six months. It happens every two months, if not more often. Organizations need to ask themselves, How open are you to constant innovation?"

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