December 6, 2010 12:06 am

From Enron to language learning

 
Tom Adams’ multicultural background and language skills have helped him in his role as chief executive of Rosetta Stone

Polyglot: Tom Adams’ multicultural background and language skills have helped him in his role as chief executive of Rosetta Stone

It is hard to imagine a worse start to a post-MBA career than what befell Tom Adams within two months of graduating from Insead, the French business school.

“I don’t know whether to call it a misfortune, as things turned out well in the end, but my first job out of Insead was with Enron, which I joined on September 3 2001,” says Adams, now chief executive of Rosetta Stone, the Virginia-based language-learning provider.

“By November 29, the party was over.”

It had seemed like a good idea at the time. Before doing his MBA, Adams had spent six years trading commodities – “I was buying and selling copper concentrate, and I got really good at it,” he says – but by the age of 28 he wanted new challenges, rather than just continuing up the ladder within a narrow field. Enron was also a commodities-based trading business, but it did have an associate programme, developed specifically for MBAs, which he joined.

“I didn’t get to profit from it, but the sales pitch was that you would rotate around and get lots of exposure [to different roles within the company]. Believe it or not, even though they were a commodity business, it was a way for me to get out of commodities, because I was going to get much broader work experience there, based on the MBA,” he says.

But Adams’ exit from commodities came rather sooner – and more abruptly – than expected. “I arrived at Enron just after Jeff Skilling had resigned [as chief executive], and the smartest people in the department were leaving,” he says. “I was told, with a pat on the back, that this was temporary, that everything was going to be fine, and there was stupid stuff like ‘You’re the future.’”

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The ending, when it came, was “some spectacle”, he says. “I was in the London office, which was an incredible building, and I was terminated along with another 1,000 people by a guy standing on a desk, telling us to go home because there was no more money in the company.”

Undaunted, Adams then looked for a very small business to buy, to start building an entrepreneurial career. “My motivation for going to Insead to begin with was really driven by a long-term idea that I wanted to be an entrepreneur,” he says. “I looked at buying all sorts of very small but pretty cool companies.”

Then he was contacted by a high-school friend who was working at Rosetta Stone and wanted him to travel to the US and meet the company. The founder, Allen Stoltzfus, had died in September 2002, and Adams arrived at the company’s headquarters in Arlington, near Washington, later that year. The talks went well, and Adams warmed to the idea of making a career-changing move.

“I suppose some people aged 29 or 30 wouldn’t ask to be chief executive, because it would just be too ballsy,” he says. But he remembered something that Patrick Turner, professor of entrepreneurship at Insead, had told him: “El ‘no’ ya lo tienes” – or, to paraphrase: “If you don’t ask, you won’t get.”

“So I just asked,” he says, “and the founder’s brother [Eugene] said right away, ‘Done, we’ll do that.’”

Adams, now 38, has been chief executive at Rosetta Stone since February 2003 and is in many ways the ideal person to run a language-learning company. A native of Sweden, he grew up in France and moved to the UK when he was 10. He is fluent in French, Swedish, English and Spanish, has a working knowledge of German and Chinese and is learning Russian.

“My own experience of learning languages was consistent with the philosophy of teaching that the company had developed, so there was a real fit there,” he says. “The whole philosophy was to democratise language learning and make it easy and acceptable for everyone.

“When I first moved to the UK, my parents just threw me into a school without me getting any language instruction. I just had to figure the language out, and it was a very lonely, difficult experience. So I’ve had that kind of pain, and then the exhilaration of success that you also get once you’ve gone through that. That’s really what I identified with at the company.”

With his background, the Insead campus “really felt like home because everyone else there was international”, he says. “I’m someone without a strong national identity, and I feel more multicultural that way, and that’s what the school feels like.”

Adams was a man in a hurry – as people who become chief executives at the age of 30 tend to be. “Time was of the essence, so the Insead MBA, being one year, was going to allow me to make a career change very quickly,” he says.

In one important respect, however, Adams differed from most of his peers at the campus at Fontainebleau, France, coming from a niche activity rather than a large industrial or consumer products company, a big consultancy or an investment bank. As a result, he says, he came out of the school “knowing stuff that I had no clue about when I went in”.

His background lacked accounting or financial analysis, so “it was incredibly helpful afterwards that I could essentially read financial statements … I could figure out how healthy things were. Here at Rosetta Stone, for example, when I came on, I could put together a forecast and be comfortable I was doing something that was going to build value.”

The entrepreneurship courses were another attraction. “It’s one of the most entrepreneurial schools, with real practitioners, or ex-entrepreneurs, teaching a lot of these courses,” he says. “It wasn’t so much that they taught you how to be an entrepreneur … but you connected with a certain mind-set, so it was more a case of being exposed to lots of different entrepreneurs.”

However, it was some of the marketing courses that were probably the best part of his time at Insead, he says.

In particular, the competitive team games using marketing simulation software captured his imagination.

“They were fantastic,” he says. “We were essentially managing a budget, making allocations between product development or the sales force or the marketing and branding, trying to position products to gain greatest market share and cash flow.

“Although it was obviously a simulation, it created an environment that I had never been in, making those kinds of decisions, because previously I had always been looking at a specific trade or transaction and I didn’t understand this more strategic, more spatial way to think about things.”

Adams says his time at Insead was the best year of his life, and a “critical step in making it possible for me to do what I’m doing now”. But, after nearly eight years at Rosetta Stone, he is aware of the limitations of the business school experience. “Although you study things such as leadership, management and entrepreneurship, it can only prepare you to learn,” he says.

“You need to be immersed in the job and challenged with doing something that people buy into. That gets good outcomes and makes money for you to really figure out how to lead, manage and generate value.”

The emphasis on group work at Insead has helped Adams make a success out of getting, say, five colleagues round a table to agree on a course of action, but leadership and giving people a purpose is “something you develop in your early childhood and that you’ve continued to nurture your whole life, and that I’m still developing”, he says.

Also, having a sense of how people should behave towards each other is another part of being successful, he adds – “and I don’t think business schools really focus on that”.

One of the biggest challenges for business education, he says, is teaching delegation: “I don’t know of any business school that does this well, and that may be because it really needs to be experienced in the real world for you to know how to do it.”

In his first year as chief executive at Rosetta Stone, Adams had a coach who helped him grasp that he did not need to solve every problem himself, but should find ways to challenge colleagues to take things over, and then be canny in inspecting to ensure things were getting done.

The coach’s method was just to ask questions, says Adams. “He would say, ‘How are you doing on your idea to expand overseas?’ and I would say, ‘Well, we haven’t done anything.’ ‘Uh-huh, and why not?’ And I would say, ‘Well …’ and then I’d start thinking about why.

“Eventually you start to connect the dots on why things aren’t getting done, and out of that very practical experience you develop your business and management philosophies.”

There is still much to be learnt after an MBA, he says, but it does teach students how to learn and what to pay attention to in the real world – and when things go wrong, their new problem-solving skills can be deployed.

“It may be that you just develop an attitude at business school that is conducive to learning [subsequently] some of the most important things such as leadership and management,” says Adams. “And those things ultimately decide whether you are successful.”

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