IBC Forum

Innovations in Teaching: The New Venture Integrated Business Core

On April 24, 2003, Chris Andrews, Joshua Holt, and Kent Lundin met with Anne Hendricks and Candy Miller (moderators) to discuss the Department of Business’ New Venture Integrated Business Core (IBC) program. Mark Nygren’s comments were added later, as he was unable to participate in this discussion.

An Introduction to IBC

Anne: With this discussion we are hoping to 1) explain the New Venture Integrated Business Core (IBC) program to people across campus, and 2) acknowledge those programs that are rethinking education. To begin, will you describe the IBC program: how did the program begin, what=s involved, how do you coordinate?

Kent: IBC is basically four classes in one. Students register for four courses; however, these courses meet together in one room for a four-hour time period. (Currently, MWF from 9:00 – 1:00 p.m.) The first three hours are divided between three courses: marketing, organizational behavior (OB), and/or finance. Sometimes one course will take all three hours, but usually a day will be divided into two 1 ½ hour “classes.” So in one three-hour block, students will cover material for two courses. Perhaps Josh, teaching organizational behavior, would meet with the students for the first hour and a half, and then I would teach marketing for the next ninety minutes. The schedule is flexible, depending on what the students are studying. When students are starting their businesses, marketing and organizational behavior might be the focus, so the students might not see Chris for a few weeks. And then, toward the end of the semester when students are closing their businesses, Chris, who teaches finance, might spend more time with the students.

For the last hour of each class, the students spend time with Mark, who works with them on developing, running, and closing an actual business. In the first month of the semester, Mark spends this time with the students in more structured classes. Later in the semester, that last hour is used for individual companies to hold meetings.

Mark: When I was first hired at Ricks College, one of my responsibilities was to start an entrepreneurial program. I evaluated other programs and found that BYU-Hawaii had an integrated program combining courses in business law, business communications, and finance. By taking these courses concurrently, students had a fairly authentic business experience. I also contacted Larry Michaelson at the University of Oklahoma, who had developed a program called Integrated Business Core (IBC). We invited him to our campus as a visiting professor, and he provided significant input on developing our program. I also had the opportunity to attend a conference at Babson College in Boston, which is the top-ranked school for entrepreneurship. They also had a program where students started and ran businesses as part of their coursework. Pulling from these many resources, I developed the IBC Handbook and New Venture Creation Guidelines, which became the foundation for BYU-Idaho’s IBC program.

Initially, we faced some resistance to creating such a program, as well many challenges in its implementation. Our primary concern was whether the faculty and administration would accept the program’s fundamental premise that students would run businesses on campus. The program has been running for several semesters, and we have continued to modify the program based on faculty, student, and administration input. Initially IBC was optional for students; however, we feel the experience adds so much value that all Business Management students are required to take it unless schedules or other reasons will not permit them to enroll.

Chris: A great strength in the program is the flexibility in scheduling class time. Sometimes one entire day’s time will focus on one class. Kent may need the entire three-hour block to do a marketing project, which you cannot do in a traditional classroom environment. If we were all teaching standard classes, we’d have a MWF class for fifty minutes, and that’s it. But with this program, Kent can say, “I have a project that really takes some time,” and he can take the entire three-hour block for marketing. This gives him flexibility to do some things in class that you cannot do in a traditional course.

Josh: We are using student feedback to evaluate the program, and some say they would like a little more consistency in the class schedule. Every semester we have a small group of students who want the traditional fifty-minute class structure. But as soon as they say this, about thirty-five other students respond, “That’s why I like it!” Students spend most of the time working in groups of five, and they are in class for three hours. They bring in food. . . . In a way it is their home for three hours. They=re helping each other, they rotate bringing treats, and they have birthday parties within their teams.

Chris: Students have formed close friendships because they=re together throughout this stressful experience and work together for so many hours. You will see that same group of students working together throughout their college experience. Some group members have actually started businesses together.

Josh: We teach the students consensus decision-making. For example, the students will individually take a test in the testing center. Then they come to class the next day, and as a team, they take the same test. Although students won’t know their scores from the test they took in the testing center, they come back to class, joining their knowledge with the others in their team. Through this experience I can show them how much more they can accomplish with this team dynamic. Based on this consensus model, students start creating their own “teams” for other classes. Because of the IBC program, they know each other. They know who are the slackers and who will work hard. From IBC on, many students continue these relationships, and I believe they will continue even after they leave school. In stand-alone courses (non-IBC), I put students in groups and teams, but they don’t have that binding experience. When they have to complete their case study, they work with their group, but there isn’t camaraderie. There isn=t this banter between them. They aren’t dealing with each other=s problems or genuinely talking or communicating.

Students Creating Their Own Businesses—New Venture Creation

Kent: The unique thing about this program is not just that we meet together for four hours, but that the students actually start up and shut down a business during the semester. This is a real business that actually makes money. Students do this all in one semester. They come up with a business plan, they appear in front of a board to get a loan, and they do all the things that a real business requires. Our course materials, as much as possible, connect directly to their experience of creating this business. So, hopefully, our assignments aren’t just theoretical; they provide information that students will immediately use. This doesn’t always work because we can=t teach all of marketing, or finance, or OB, in the first three weeks of the semester. Some course material comes after the fact, but some comes right when they need it.

Josh: We try to cover as much material as we can in advance, but much of the time it=s perhaps more educationally beneficial to the students after the fact. For example, in Marketing, the students would make mistakes with their marketing plan for their business, and then, when they come back to class, they have real word experience to help them understand why the correct principles work.

Kent: In some ways, this is why MBA programs require students to have two years of work experience before starting a graduate program. Quite often, you are hungrier for information if you’ve actually tried something that failed. You are ready to accept the material. In the IBC program, if the students have set up an ineffective or poorly thought out promotional campaign, or done very little promotion, when we teach about promotion afterwards, they seem to be more willing to accept the information. As long as they don=t get mad and say, “Why didn’t you give us this sooner?”

Chris: I think the real benefit of this program is the fact that we create context, which does not typically occur in a business program. We modeled our program on the University of Oklahoma’s program, and we’ve identified approximately five other institutions in the United States that have some type of integrated program. Traditionally, a student takes classes independently of one another. Business education, for some reason, seems resist the idea of actually practicing what=s being preached—providing real life situations for the students to apply concepts. If you were to study cello at a university for four years, what do you do for four years? You play the cello, right? If you study art, you produce art for four years. A computer science major writes software. If you get a nursing degree, you’re stabbing people with needles for four years. Business is one of the few major academic programs that I=m aware of where the primary method of teaching is “let=s just talk about the principle.” This is really problematic because students are somewhat dysfunctional in a practical setting when they graduate.

Josh: BYU has what they call a combination management suite, but they haven’t integrated the new venture portion into their program. They haven=t forced the issue of creating a business. To me, that is the key. The key is that the students’ learning is based on their own business. We can reference content in our courses by referring to their companies: AWell, why are you having these problems in your company? What did you learn? How come this is working?@ Content application in the IBC program is so different than a traditional course. I teach a stand-alone course of the same content, and if I had my way, I=d never teach a stand-alone again. In fact, all freshmen who started Fall 2002 will have to take IBC in their junior year. After they have taken their pre-business core, they can take IBC.

Chris: This program creates hands-on experiences that provide context for learning. If Kent teaches marketing in a traditional, stand-alone, marketing class, when they talk about pricing, the students read the chapter and they talk about pricing. In an IBC class, Kent can say, AWe=re going to talk about pricing, and I know that you have to come up with a price for your company’s product. What are you going to charge for it?” This leads to great discussions and arguments. It=s very real because the students literally have to start selling their product the next week, and they don=t have a price set. With Josh=s organizational behavior class, running these companies creates many situations for conflict resolution. These teams have little squabbles constantly.

Josh: The only time they don=t have little squabbles is when they have big squabbles.

Chris: Or they have CEOs resigning. It=s just crazy. As a result, Josh can deal with organizational issues in a context that=s extremely real for the students because they’re feeling tension, they=re feeling team dynamics, they=re feeling a need for motivation.

Student-Centered Learning Through Running a Business

Candy: When students present their business plan, do they come up with just one idea? Do they have an option in case their business plan is turned down?

Kent: A company is made up of twenty-five students, with five teams within a company, and each team develops an idea for a company. When developing an idea for their company, they go through the entire process of developing a business, which is supported by their coursework. Students work in the New Venture Creation course to learn how to come up with new, valid ideas. In OB, they learn how to organize their company. Marketing is involved because students must do some marketing research to identify what needs in the community are unmet so that they know if they have a good product idea. Each of the five teams goes through this process for their specific idea. Then they get together as an entire company and decide which of the five teams’ options will be the basis for their company. Recently, because the President=s Council does not approve every idea, we’ve encouraged students to have a contingency plan, so they might choose the top two ideas. One semester a business was turned down halfway through the semester, and the students had to start over.

Chris: Which was good for them.

Candy: Is it true, the rumor we heard, that you had a coup in one of the businesses?

Chris: Oh, yes. Someone was replaced as CEO. We=ve had other semesters where a CEO has offered to resign, and the whole company had to talk him into staying.

Josh: One company did have a coup, and it happened right before they were presenting their company to the loan board. They already had their business plan, and now they needed to get their loan. About ten minutes before their presentation for the loan, a group of vice presidents got together and said, “This isn=t working out. We want to put this other person in, and we=re going to make this change.” Ironically, by the end of the semester, those same vice presidents were kicking themselves because they wish they hadn=t put the new person in as CEO. By the end of the semester they were butting heads all the time—these vice presidents and the “new” president—and it was their own fault. They were the ones who instigated the coup and then they weren=t satisfied with the man that they put in the position. It was a good challenge for them to learn from.

The Benefits of Struggle

Chris: Can I say something about the messiness of the whole process? When students are surrounded by textbooks, they have a tendency to think that the world is black and white. In reality, it=s gray and it=s mushy and it=s squishy and it’s dynamic and it’s filled with characters and personalities and tension. For probably eighty to ninety percent of the students, IBC is their first real exposure to working within an organization that=s structured somewhat similarly to what a real business would be.

It’s a marvelous thing to watch the students struggle. They struggle to put a business plan together. Then they present the business plan to a loan committee, and we shoot that plan full of holes. We flog them publicly, and it=s one of the most entertaining days of the whole semester. The students get very stressed about it, but they try to get away with glossing over things in their plan and in their presentation. We expose these problems, and the students feel a lot of what you would feel in a normal business context if you were trying to get an idea approved. Students learn some important lessons from that process. They go into the loan committee presentation thinking, AAll we have to do is just make this presentation, and then this plan will be approved. And the business idea will work because there is a signature approving it.” Through this process they learn lessons about why an idea will or won’t be approved.

Students learn lessons in dealing with personalities. They have struggles with suppliers. This past semester was awful. Many suppliers didn’t send the students their product, or changed prices, or shipped the wrong amount, or misrepresented the quality of what they sent. The students had to deal with all these issues. In these situations, unlike a traditional case study, they’ve already put money into buying these products, so the question of “how are we going to fix this” is real. The companies that benefit the most in the semester are the ones that have the biggest problems—those that struggle. Those students leave saying, AAh-ha. This won’t be a mystery to me the next time I run into an executive who behaves like an idiot.@ Or, Ajust because a supplier tells me a great story doesn=t mean I shouldn=t still shop around.@

Josh: The basis for this program is that students will be better prepared for the future because we, as teachers, don=t solve their problems for them. When students come to me, if they have a problem with their organization or the people they=re working with, I say, “What are you going to do to work it out? I’m not going to change anything. We’re not going to put you in a different team. You’ve got to learn how to work it out.@ Students will sometimes respond, ABut my grade=s on the line. If my team won’t pull their weight, then I=m going to get a bad grade.@

Chris: Welcome to life. There is so much benefit to them that comes from the struggle. When things don=t work and when things melt down inside their company, the students panic and come to us for help. We basically just throw them back onto the playing field. I think of the teachers as goalies. The students try to escape the company, and we throw them back in and say, ANope. You get back in there and solve your problems.@ At the end, I think they almost universally agree. They say, AThis experience has been great. I learned all these things. I had no idea business was this messy or this complex or this unpredictable.@

Candy: You couldn’t create a simulation that would throw all these elements at a student.

Chris: It=s not possible to simulate everything that occurs while running a business, and that=s been the problem with traditional business education. Business education typically uses the Harvard case method, and it=s very helpful. But there is just no replacement for feeling real pain, real discomfort, and real panic.

My first semester I thought, AOh we should smooth this out for them. Let’s make it easier.@ But the more I thought about it, I decided that, in some ways, the students could learn more by having a horrible experience. And I don=t think anyone=s had a horrible experience. We’ve had ten IBC companies, and none of them have lost money. They have had some pretty wild times on the way.

Just so you understand the scope of these businesses, in the first year, the four IBC companies generated a total of $55,000 in revenue. This translated to profits of $16,000, which was donated to charities. This year the businesses have generated less than half that. However, we’ve also deemphasized the students’ focus on increase: trying to do everything they can to increase their revenues. Instead, we’ve emphasized the behavioral aspects of their business. We’ve tried to discourage students from trying to break sales records, so this year they=ve earned less than the year before. Between fall and winter semesters I’d guess that students have generated less than $20,000 in revenues and probably, at the most, under $8,000 in donations to charities, but it=s still a significant amount of money.

Focusing on Service as well as Business

Anne: Who determines which charities will receive these profits?

Chris: This program falls under the guidelines of service learning. The students donate the money to a charity of their choosing, and sometimes they split the revenue between multiple charities. Each company makes a decision about what to do with its profits. Some have donated to the Student Legacy fund or various scholarship funds on campus. Some money has gone to a battered women=s shelter. Quite a bit of money has been donated to the Perpetual Education Fund. This semester there will be some money going to the Student Legacy Fund, the Perpetual Education Fund, Special Olympics, and I believe there is a fund that is being put together to send books to universities in Africa.

Kent: An important part of the IBC program is service learning. We require students to participate in service-learning activities where they serve part of the community. Typically each company contributes hundreds of service hours. They might be teaching business principles to some group of students or at an Indian reservation. They have helped with the battered woman=s shelter and various other projects. We=ve had groups put in 250 service hours in a semester.

Anne: And how do you connect the concepts of service learning to the business principles taught in the courses?

Kent: Students participate to help them learn that they have ethics and social responsibility. They come to understand that they can take what they learn in their majors and teach someone else.

Chris: It=s based on the concept that businesses are members of society as well as individuals. You must have some aspect of social consciousness even as an organization. This is what the service learning component teaches: to show we can do more than make a profit, we can also give back to the community.

Candy: And in the real world, every business in every town is expected, by the patrons, to participate in this type of community outreach.

Kent: Students learn that there are other things involved in running a business. If they=re involved in the community, they need to be contributors and not just people who take profits away.

What Makes an IBC Successful Business?

Chris: We get involved in helping students with their business plans and helping them with their final reports. I handle their finances, which is just chaotic at times because I=ll have fifteen people a week coming in for help with reimbursements or deposits, so there are some additional time demands compared to teaching the normal stand-alone classes.

Anne: You teach stand-alone classes at the same time you teach the IBC courses. Can you prepare for both classes with one preparation, or do you prepare your IBC class and then have to re-prepare for your stand-alone?

Chris: I consider IBC as a separate prep. My syllabi are identical, but that=s misleading. What goes on in the IBC course, from a preparation standpoint, is very different.

Kent: I use the same textbook, so that helps, and there are some other similarities between the two types of courses, but in many ways the courses require different methods of teaching.

Josh: If I had my way, I would teach two IBC classes any day because it is such an enjoyable experience. I don=t have to create a context for the material. In IBC, all I have to do is say, “Where can you apply this principle in your business?” Then the students will respond, “In our meeting just the other day, this is what happened, and here is how the principle relates.” I don=t have to be the one who says “What would be a real life situation that uses this principle?”

Fostering the Transition from Student to Business Professional

Anne: Have you ever had an IBC student say, “I think this is unrealistic—the amount of time that this program expects”?

Chris: There are people who complain at the end of the semester, but they’re the same students who would complain in a stand-alone class.

Josh: There are those students who are taking twenty credits with IBC, and this is a large burden for them. However, for some students, the workload frustration ties into working with other students. Some students come into this whole event with a mediocre mind set, and it is just hard for the other students who are really anxious. Often companies will choose their product because only one team put together an idea, and the other teams didn’t work very hard. That=s always a challenge, but I think it’s a beneficial experience: letting them figure out their own mistakes, how they got themselves into their own problems, and then identifying how they are going to get themselves out of it.

Chris: I agree. President Bednar visits the class once in the semester, and he always tells the students, “We=re trying to get you to stop acting like students and start acting like business people.” The attitude of many students is “What is the bare minimum effort I can give and still get a 93 %.” But a businessperson has a completely different mind set. A business person asks, “How can I add value through my work.” These are two very different attitudes. Through IBC, students start to realize that to be successful you have to think like a businessperson instead of a student.

This is an interesting shift and prepares the students for the larger context of what we are doing in the College of Business and Communications. Going back to the cello example, you don=t just play for one semester. Hopefully, you would practice for many years. Similarly, following the IBC program, students complete an internship, which is required for graduation. Students also participate in several versions of a capstone course. For example, they can run an on-going business. Kent is working with the sacred music series business, which is national in distribution. Other students are doing client-consulting projects for small businesses in the local community. As a result of these three programs, the students leave BYU-Idaho with a range of practical business experiences.

Kent: If we could do a research study of IBC, which we don=t have time to do, I think we would find an interesting by-product of this program. We have more students becoming entrepreneurs than typical. Many students are starting businesses while they are in college. Maybe it=s because there are no jobs in Rexburg, but maybe it=s IBC, maybe it=s the whole business program . . . It could be that student have to be non-risk-adverse people just to come to BYU-Idaho. I don=t know the specific reason, but we have perhaps twenty percent of our students starting their own businesses.

Chris: And these are not Mickey Mouse businesses. I could name over a dozen students who are making significant amounts of money from their own businesses.

Mark: There are other factors that encourage students in starting their own businesses, as well. Our department offers one of the stronger entrepreneurial programs compared to many universities. We not only have the IBC program, but we also offer seven courses in entrepreneurship. Additionally, we have created an annual, day-long entrepreneur conference, added a campus-wide, entrepreneur lecture series, and offer several courses that encourage or require students to write business plans for their own business ideas. All of these opportunities have contributed to a strong entrepreneurial spirit on campus.

Josh: One of the biggest concerns that I had with the announcement of moving from Ricks College to BYU-Idaho was that, previously, we were just preparing the students to go to another school to finish their education. And now we are solely responsible for giving students the education they need to be successful in industry. In many ways, IBC is a successful component of this education. I had an exit interview with a young man who had served as CEO for his IBC company. He had recently been hired as a pharmaceutical salesman, starting at $53,000. He mentioned that he repeatedly referred to his experience in IBC, throughout the job interview, as an example of how he would benefit their company. Also, the people interviewing him were intrigued with IBC. They asked many questions: “You were the president? You had to manage all these people, and you had to deal with these problems?” The student was able to explain some of the problems he’d encountered in the company and how he had resolved these issues. Students who did not complete the IBC program might get some of this experience working while going to school, but they are not getting this experience coupled with the educational value of the courses. That is the epitome of the goals and objectives of this program.

President Bednar once said, “Why, in our rethinking of education, will we be a great value? Because we give the students an IBC opportunity, we give them an internship, and we give them a senior capstone experience. These three things are opportunities that 95% of other business majors don=t have. That is going to be our advantage. That is why the world will want to hire our students.”