As the US and UK continue to focus on job creation, the foundation arm of Goldman Sachs, the investment bank, is tapping into the expertise of business schools in a bid to stimulate economic growth.
Announced almost two years ago, the 10,000 Small Businesses initiative focuses on spurring small business development in the US. Goldman Sachs helps pair business school knowhow with the connections and experience of community colleges to help small businesses develop. As part of the programme participants also receive outside mentoring and the opportunity to secure business development loans.
More than 300 students have so far completed the programme, but Goldman intends to expand the initiative until it engages 10,000 small businesses in the next five years, says Dina Habib Powell, the bank’s global head of corporate engagement.
A separate pilot programme has been launched in the UK, with participants in Manchester and Leeds and input from Saïd Business School, Leeds University Business School and Manchester Metropolitan University.
“The most important driver of economic growth are small businesses,” says Ms Powell.
Developing a hands-on curriculum has required collaboration between several business schools and the five community colleges that are already participating. Babson College, Olin Graduate School of Business, which has a heavy emphasis on entrepreneurship, is the national academic partner for the programme.
Babson professors have developed a national curriculum for all community colleges to follow and community college instructors have to participate in two executive education-style programmes at Babson in order to teach. Professors cover topics such as operations, leadership and how to build a sustainable business.
For the business schools the main challenge has been to make the teaching accessible to a group of students that are not steeped in business theory or used to learning via the case method. Consequently the curriculum has to be tailored to their needs.
“We created all the materials – we don’t use external cases, everything was used specifically for this audience,” says Patricia Greene, a Babson professor who works on the Goldman initiative on a full-time basis and is US national academic director for the programme. Students use only one small business case in the coursework and the rest of the examples come from their own businesses, she says.
The curriculum is not broken down into subjects such as finance or accounting. Instead, students learn in a modular format and take lessons away from the classroom. Each time they complete a module, they should be able to take the elements straight to the office. For example, “when you’re teaching the finance piece [to MBA students], you use publicly traded companies because the data is available,” says Prof Greene. “But [these students] would look at the last three zeros and think it doesn’t have anything to do with them.”
Most programmes take place over four months and participants attend classes on alternate Saturdays. The initiative is open to those small businesses that have been operating for at least two years, have at least four employees and have an income between $150,000 and $4m.
The effort is an important one for Goldman. The company has pledged to invest $500m in the initiative, more than any other effort led by its foundation. An advisory council, co-chaired by chief executive Lloyd Blankfein, Harvard Business School’s Michael Porter and Warren Buffett meets several times a year to make sure the programmes are sufficiently applicable to participants. “They’ve been very involved in making sure that the curriculum is very pragmatic and has the elements that are really critical to success,” Ms Powell says.
For the business schools, opportunities like this can help them become more engaged in the local community, says Zachary Shulman, a senior lecturer of entrepreneurship at Cornell University’s Johnson School who helped add a video component to the course work. Without the partnership or investment, it would be difficult both financially and from a resource perspective to pull off an effort of similar magnitude, he says. “Business schools don’t have the flexibility to be altruistic like that,” he adds.
Getting business schools involved has also provided reinforcement for community colleges that may not have all the resources. At LaGuardia Community College in New York, University of Pennsylvania’s Wharton School works with the college to fill in specific gaps in its curriculum. Modules on human resources processes and negotiations are taught by Wharton professors, for example. And before participants begin the courses they are placed in a learning community, a Wharton concept that helps them think about how they will learn best in the next few months.
Other schools are also playing a part in the effort. This year, Tuck executive education at Dartmouth College has offered participants the opportunity to join existing executive education offerings. Participants can attend the same week-long modules offered to minority business owners for $4,500 per course; attendance is free of charge to programme graduates.
Meanwhile UCLA’s Anderson School of Business has shared best practices on course delivery with Goldman. “People have some real hunger for this [knowledge],” says Elaine Hagan, executive director at Anderson’s Center for Entrepreneurial Studies.
This is not the first time that Goldman has worked with business schools. The bank launched its 10,000 Women initiative in 2008, committing $100m to a project that helps under-served female entrepreneurs in 23 countries. Top business schools worldwide such as Saïd and Wharton worked with Goldman to provide entrepreneurship education.
This time the bank has tapped those same relationships to help small businesses.
“We had a proven model to follow,” says Ms Powell.