Sunday, April 5, 2009

MBAs Go Micro

MBAs Go Micro

Marley Hodgson couldn't believe his luck when the rsum of a top-notch local business school student landed on his desk last year. Hodgson, co-founder and CEO of Denver salad company Mad Greens, was looking for a vice-president for finance, and John Montgomery, an MBA student at the University of Colorado at Boulder's Leeds School of Business, fit the bill.

Prior to business school, Montgomery worked as a controller at restaurant chain Noodles & Co., helping it grow from 40 to 120 locations during his four years there. Hodgson hoped Montgomery would work similar magic with his fast-casual salad chain, which has eight locations in Colorado, around 100 employees and $6 million in revenue. "I really liked him, so then the question was how do I make sure he jumps on board with us," says Hodgson.

Hodgson knew he couldn't pay Montgomery the $130,000 to $150,000 salary he'd command at a larger company. To entice him, Hodgson threw in extra vacation, an attractive bonus, and equity in the company. "We wanted to give him some skin in the game," says Hodgson. His strategy paid off a few weeks later when Montgomery accepted the offer. The company is now considering hiring another MBA for a job opening later this year.

Dent in Recruiting

For years, small companies have had trouble competing with the larger firms that typically hire business school students, but that is starting to change. With the recession making a dent in campus recruiting, career service officers are advising students to broaden their job searches to include small businesses. Students are heeding their advice, and companies now have "access to a lot more talent than they ever had before," says Tracee Petrillo, career services director at Babson College's F.W. Olin Graduate School of Business.

MBA grads may not be happy about it, but small and midsize businesses have advantages that their larger brethren don't—and it's not just that they're hiring. Small companies can offer perks that will be tempting to students, such as allowing students to sit in on board meetings or mentorship from a top executive. In smaller organizations, many MBAs will be able to rise quickly up the ranks. And the ability to have an impact is far greater at small companies than it is at huge conglomerates.

Such benefits can easily outweigh some of the disadvantages of working for small companies. Montgomery, for example, said he was willing to take a substantial pay cut to work at Mad Greens, a company where he felt he could have "my hands in all the cookie jars," says Montgomery. Since he started, he has had the chance to work in almost every department, from marketing to operations, an experience that would be hard to replicate at a larger company. Says Montgomery: "It was worth the pay cut."

In many cases, going the small-company route is an opportunity for MBA grads to follow their passion or just to try something new. Stanford MBA student Kieran Furlong interned last summer with Solazyme, a 60-person South San Francisco biotech company, and accepted an offer with it in early November. Furlong, a former chemical engineer who worked for large multinational companies for nearly a decade before coming to business school, was eager to work for a smaller company, specifically one that focused on renewable energy. He knew he wouldn't get a signing bonus when he took the job at Solazyme, but he was able to negotiate a competitive salary, as well as stock options, and future equity in the company. "At the end of the day, I decided I've done the large corporate world before, let's try something different," he says.

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