Entrepreneurship Remakes the Business Degree: The Acton MBA Makes Students Think About Their Calling in Life
JEFF SANDEFER HAS THE REFLECTIVE AIR of a college professor, but his calm demeanor masks an entrepreneur’s impatience. When Sandefer sees an opportunity, he takes it; when something is broken, his instinct is to fix it. That entrepreneurial impulse led Sandefer to start his first business at the age of 16, and has since propelled him to found a number of highly successful oil and gas enterprises. When Sandefer started teaching in the MBA program at the University of Texas, his old entrepreneurial impatience kicked in.
“Most people came to business school because they were not happy with their lives,” Sandefer recalls. “I found that they would go through an MBA program, take a high-paying job, and then a couple years later discover they were even unhappier than before.” There has to be a better way, he thought. That realization led him to help fund and, with the aid of three colleagues from the University of Texas, develop a new MBA program, the Acton School of Business. And a better way it’s proving to be. The Princeton Review recently ranked Acton the #6 “classroom experience” in the country, and Acton’s faculty was ranked #5 in the nation.
In contrast to the standard MBA model— a two-year program in a university setting, taught by academics and geared toward graduating students into a few, select fields—Acton emphasizes entrepreneurship, hard work, accountability, and a search for the student’s true calling in life.
Acton’s students hail from all walks of life, from recent college graduates to executives at publicly traded corporations. “All of our students share common traits. They want to change the world, and they are incredibly hard workers. You don’t survive the Acton MBA unless you’re willing to work hard,” says Sandefer.
Acton is not for the faint of heart. Its MBA program condenses the usual two-year course of study into a single year, and students are expected to put in 90+ hours of work per week. Classes are taught by business owners and entrepreneurs who bring their real-life experience to the classroom. Instructors do not lecture; instead, they lead their students through case studies with a series of rigorous questions. “To be on the faculty at Acton, you must run a company while you teach,” says Sandefer. “And when you do teach, you are required to follow the purest of pure Socratic Method.”
An “A” for Accountability
The school holds instructors responsible for their classroom performance, a practice nearly unheard of in a higher education system dominated by tenured faculty. Acton professors are paid a relatively low base salary—but, with good student evaluations, they can earn bonuses of up to $30,000. (To guard against faculty bribing students with high marks, Acton requires that professors grade on a bell curve, with equal numbers of As and Fs, and that student evaluations be conducted before the final grades are given.) The evaluation results are made public, and the lowest-rated professor is not invited back to teach again.
“It’s a very free market approach,” says Sandefer. “It’s a powerful model because it holds everyone accountable.” Moreover, the Acton MBA program is pioneering a novel financial aid system: Successful graduates pay no direct tuition. Students front the funds for their first semester. If they make it through, they are reimbursed for the first semester costs and are awarded a fellowship funded by a business leader for their second semester.
At the end of the program, each student writes a letter to the donor who funded his or her fellowship. In the letter, the students evaluate the entire Acton MBA program. If they believe the program has lived up to its promises, they are asked to donate 10 percent of their salary until they have paid back the cost of the fellowship. If, however, the student is willing to tell the donor that the program failed to meet expectations, the student can walk away, owing the school nothing. Financial support from outside donors is thus directly linked to aid for students—and to accountability for the school as a whole.
“Acton is the only school where students graduate and do not pay any tuition. And the system we use makes it easy to see if we are delivering,” notes Sandefer. He hastens to add that “100 percent of those who have graduated under the fellowship program have agreed that the school fully delivered on its promises.”
A Real Vocational School
Perhaps the most innovative aspect of the program involves its efforts to help students discover their deeper purpose in life. Lord Acton, for whom the school is named, famously remarked: “To be able to look back on one’s past life with satisfaction is to have lived twice.” That insight goes to the heart of the Acton MBA.
“Our students are not worried about their first job out of business school. We want them to consider where they will be in 20, 30, 40 years. It should be a hero’s journey, where they find their calling,” says Sandefer.
For that reason, the school does not participate in traditional business school recruiting programs. Instead, students are expected to decide where precisely they want to work. Then the school does its best to land those exact positions for its students. “We don’t have a system where 1,000 recruiters come to campus and students just take whatever job is offered,” says Sandefer. “The students have to be very thoughtful about what they want to do. And then we call the CEO of that company for them.” While the program emphasizes entrepreneurship, many students will work for an established company to gain experience in a specific area before they start their own business. “The first job after Acton is just the first ‘stepping stone’ towards a calling,” adds Sandefer. “Unlike most MBA programs, where students will go into consulting, investment banking, or middle management, our students’ ‘stepping-stone jobs’ are as varied as the callings.”
Reinventing the MBA
The entire Acton approach has excited higher education donors who lament the lack of accountability, widespread inefficiencies, and lack of purpose common in today’s Ivory Tower. “The Acton MBA is a great alternative to the traditional university model. It shows you can have a high-quality, accountable education for less cost than what higher education usually offers,” says David Weekley, chairman of David Weekley Homes and an Acton MBA donor. “It also causes students to think about why and not just what. The students are thinking broadly and deeply about the society around them. They are learning about how to be great in business, and how to be great in life, too.”
Weekley appreciates that the program holds students and faculty equally responsible for their performance. “The fact that they vary compensation based on student evaluations is highly unusual in higher education. In the business world, we are graded by our customers every day. With tenure, your compensation is unrelated to work you do with students. The Acton MBA is a very democratic system and ensures accountability for students and teachers.”
Other donors echo that sentiment. “There’s some accountability in higher education, but for what?” asks Alex Cranberg, chairman of Aspect Energy and another Acton supporter. “Professors are held accountable for how often they’re cited, or for the amount of research grant money they bring in. But there’s very little accountability for actual student achievement. I’m impressed that at Acton both students and faculty are graded on a curve. Few schools—if any—are doing the same thing.”
Cranberg is likewise pleased that Acton employs teachers with real-world achievements, not just book smarts. “Higher education’s infatuation with credentials has made it blind to opportunities to use professional people that are equally, or even more, impressive. We should be focusing on teachers with achievements, not just credentials.” He agrees with Weekley that the program instills a sense of purpose in its students. “The students are urged and taught how to set out a path in life as opposed to just allowing a path to be set out for them. The Acton MBA makes the student figure out who they really are.”
Weekley says that letters received from the fellowship students he has sponsored reveal how profoundly the program affects its students. “People usually have two or three seminal points in life. For our students, Acton is clearly one of them. These letters are heartfelt, and students always talk about how this experience has changed their lives.”
The Acton program has a relatively small class, currently set at 22, with a planned expansion to 35 next year. But Sandefer has larger aspirations. “We are trying to find a way to spread this across the country in different types of graduate schools, including business schools, engineering programs, and even law schools,” says Sandefer. “I truly hope that donors who are thinking about writing checks to higher education look at what we have done and examine ways to make that gift effective.”
Both Weekley and Cranberg believe that higher education and its donors would be wise to adopt Sandefer’s approach. “A lot of entrepreneurs have an interest in supporting higher education. They want to inspire people,” says Cranberg. “But anybody looking to support entrepreneurship would do well to look at traditional programs, understand why the Acton MBA is different, and learn from that comparison.” “My hope is that this can become a whole new model for higher education,” Weekley concludes. “It’s proven to be a successful formula. A forward-looking university would be wise to make this a reality on campus.”
Mr. O’Keefe is Associate Director of the Center for College Affordability and Productivity. This article is reprinted from Philanthropy magazine, March/April 2008.