Entrepreneurship is thriving at Northwestern and Kellogg thanks to talented professors and students, innovative courses and alumni support

By Matt Golosinski

	Creative partnerships are serious business for Kellogg Dean Dipak C. Jain and Northwestern President Henry Bienen...
	...but there's also plenty to smile about when alumni, such as Larry Levy '67, lend their expertise and financial support to enhance curriculum innovation.

Innovation's nothing new at Northwestern and the Kellogg School.

In fact, Kellogg has reinvented itself several times over its 100-year history — even shedding a successful undergraduate program in the 1960s to instead blaze a trail in graduate business studies, anticipating market demand for more sophisticated managers. Today, new classes, programs and partnerships arise regularly to meet student needs, and an entrepreneurial approach to leadership has been a hallmark of the Kellogg administration for decades.

Of course, Kellogg experts like Steven Rogers are quick to note that innovation and entrepreneurship, while related, are not the same thing. It's a message the Gordon and Llura Gund Family Professor of Entrepreneurship tells students and others who think that entrepreneurs must launch brand-new ventures to qualify. That's not a requirement.

"A person never has to feel burdened by finding an idea," says Rogers, director of the Kellogg Larry and Carol Levy Institute for Entrepreneurial Practice and author of The Entrepreneur's Guide to Finance and Business: Wealth Creation Techniques for Growing a Business (McGraw-Hill, 2002). While some entrepreneurs do combine their passion, talent and creativity to start a venture from scratch, he says, others tap the same resources to acquire and manage existing companies or franchises. "We let students know that the entrepreneurial spectrum is much broader than what they may have heard."

There's no doubt that an innovative approach to shaping its curriculum and teaching has elevated the Kellogg Entrepreneurship and Innovation Program into the top three nationally, according to a 2006 study by The Princeton Review and Entrepreneur magazine.

No wonder. With more than 30 classes focused on entrepreneurship and some 50 programs and projects managed through the Levy Institute, this is a curriculum that continues to grow in exciting ways.

"Entrepreneurs are the future of our economy," says Kellogg School Dean Dipak C. Jain, the Sandy and Morton Goldman Professor of Entrepreneurial Studies. "As their numbers have grown, so has the Kellogg School's Entrepreneurship and Innovation Program. Our entrepreneurship offerings are constantly evolving."

The reasons for this success include an experiential curriculum that blends theory and practice; exceptional professors with real-world track records as entrepreneurs; creative partnerships between Kellogg and Northwestern University that push the boundaries of design innovation; and the contributions of notable alumni, such as the Levys and Gordon '60 and Carole Browe Segal (NU '60), co-founders of Crate and Barrel, who have provided generous support for teaching and research.

In 2003, a gift from Larry and Carol Levy bolstered the Kellogg entrepreneurship curriculum. Today, the founder and chairman of Levy Restaurants and his wife continue that support with a new gift. The Kellogg graduate's special passion is social entrepreneurship, efforts such as those of John Wood '89 and Andrew Youn '06. As founder and president of Room to Read, Wood has overseen the San Francisco-based nonprofit as it fights illiteracy by building schools and libraries in developing countries. Similarly, Youn launched the One Acre Fund while still enrolled at Kellogg. The plan came together in Barry Merkin's Entrepreneurship and New Venture Formulation course, earning high praise from the veteran clinical professor. One Acre combats hunger in Africa by teaching farmers more effective agricultural methods. Both Youn and Wood have garnered widespread distinction for their efforts.

"We're doing amazing things in the entrepreneurship program at Kellogg, and we need role models, we need mentors and we need more great success stories," says Levy.

The Segals, meanwhile, are funding a new design institute at Northwestern's McCormick School of Engineering and Applied Science, home of an innovative joint-degree program between Kellogg and Northwestern called the Master of Management and Manufacturing (MMM). The initiative, whose students work closely with faculty to turn technological breakthroughs into sound business proposals, features a capstone Integration Project, which requires second-year students to take an entrepreneurial approach to problem solving by serving as consultants to leading manufacturing companies or by developing a business venture based on a new product. The MMM program celebrates its 17th anniversary this year.

"The world as we know it would be unrecognizable without engineering," says McCormick Dean Julio M. Ottino. "Engineering creates goods, knowledge, services, and infrastructures that benefit humankind; it is no exaggeration to argue that engineering is one of the main drivers in our world today."

Another critical driver is the ability to bring this innovation to market using sound business practices. The Kellogg-McCormick collaboration prepares students to do both.

Dean Jain and McCormick School Dean Julio Ottino bring management and design together.

By bringing together technological tools and management acumen, MMM seems to exemplify what management thinker Peter F. Drucker had in mind when he outlined the elements of business creativity. In his 1985 text Innovation and Entrepreneurship, Drucker wrote, "Innovation is the specific instrument of entrepreneurship ... the act that endows resources with a new capacity to create wealth."

Kellogg experts concur on that point.

"The reason I think that entrepreneurship should be supported is that entrepreneurs create most of the new jobs in the world," says Levy. "If we can teach people how to be good entrepreneurs, we can have more people earning a good living and having a better life."

Rogers has also noted the importance of entrepreneurship to the overall economy. In his 2002 book, he writes that the 1990s created an enormous number of new businesses: More than 600,000 were started at the beginning of the decade. By 1997, he reports, "entrepreneurs were starting a record 885,000 new businesses a year" — nearly 2,400 a day or four times the number of firms created in the 1960s. According to recent statistics by the U.S. Small Business Association, small businesses (defined as firms of 500 employees or less) represent 99.7 percent of all employees and provide 60 to 80 percent of net new jobs annually. These businesses, numbering nearly 26 million, accounted for about $6 trillion of U.S. GDP. Many of these enterprises are characterized as "entrepreneurial."

These figures are familiar to Adam Caplan '01, founder and president of Chicago-based Model Metrics, a customer relationship management company. He sponsored a survey of Kellogg alumni conducted by the school to determine the career paths of those who majored in entrepreneurship at the school. The results? Eighty-five percent of those people went on to become entrepreneurs at some time in their lives. What's more, says Caplan: "Companies founded by Kellogg graduates now employ more than 7,000 people. The revenue created is estimated at just north of $1 billion."

Behind these numbers stand Kellogg School faculty members who deliver the insights to help their students create this wealth. Besides Merkin and Rogers, Kellogg thought leaders in entrepreneurship include Professors John Ward, a preeminent family business scholar, and Lloyd Shefsky, clinical professor of managerial economics. Colleagues James Shein, clinical professor of management and strategy; Derrick Collins, clinical assistant professor of finance; and Robert Wolcott, adjunct assistant professor in the Levy Institute, lend their experience and insights to the program, as does Scott Whitaker '97, who is associate director of the Levy Institute.

The curriculum offers strong and comprehensive courses that address every aspect of entrepreneurship and innovation. For example, Entrepreneurship and New Venture Formulation focuses on business plan development; Corporate Innovation and New Ventures shows how to build entrepreneurial capabilities within an existing firm; Managing Innovation teaches how to manage R&D for organizations pursuing breakthrough industry innovations; Entrepreneurial Finance is designed to teach students how to become adept at managing all aspects of valuation, cash flow analysis and raising capital; Venture Capital and Private Equity Investing provides an understanding of key issues related to funding ventures. Strategic Management of Technology and Innovation; Small Business Management; Family Business: Issues and Solutions; Intellectual Capital Management; and Social Entrepreneurship are also part of the Kellogg School's innovation portfolio, which boasts dozens of formal courses and other structured learning opportunities.

Among the latter, the Entrepreneur in Residence program brings students face to face with successful entrepreneurs to glean practitioner insights. The Entrepreneurship Internship program allows students to hold a summer role in an entrepreneurial setting, such as Smith Whiley & Co., where Venita Fields '88 is senior managing director. "[Students] get firsthand, hands-on experience," says Fields. "They don't just stay in a closet and run numbers all day. We get them involved in client meetings. They actually go out in the field and visit the company and kicks the tires like we do."

With business competitions such as the Kellogg Cup, students have a chance to hone their ideas, testing and strengthening them against the critiques of real-world experts. Tour de KAE, meanwhile, offers an opportunity for Kellogg alumni entrepreneurs to showcase their achievements to members of their alma mater. At the same time, they get to offer strategic and operational insights to current Kellogg students who join faculty for an on-site visit to the alum's company.

At the annual Alumni Entrepreneur Conference — this year's event is scheduled for May 30 — students also have a chance to learn from Kellogg peers who have demonstrated proven skills in entrepreneurship. Similarly, the Distinguished Entrepreneur Speaker Series brings leading practitioners to Kellogg to share their experiences with students.

"We try to create environments where our students and alums can network with one another," says Professor Rogers. In addition, he says, "We want to teach students in the classroom in the traditional way about entrepreneurship. First and foremost they are coming to Kellogg to receive a premier education from a premier faculty. We've had more faculty recipients of Ernst & Young's Entrepreneur of the Year Award than any other school in the country." (Rogers himself has won the award.)

Rogers' mantra, which is backed by empirical evidence, is that those who come to Kellogg and major in entrepreneurship are destined to become entrepreneurs at some point in their professional lives. But he also says that entrepreneurship is a lifelong journey, one that Kellogg is always ready to support.

"The reality is, the entrepreneur who stops learning is the entrepreneur who dies," says Rogers. "Graduates from our program are and will always be members of the Kellogg entrepreneurship family. We expect you to come back and continue your education. We want to always be a part of your life."