Bootstrap Teaching

Typically, business schools teach management as a science and, through case-method paper exercises, train their students to fit into large corporations. Southern Methodist University in Dallas, however, wants to turn out not organization men but wheeler-dealers in the Texas style of Computer Centimillionaire H. Ross Perot and Financier John D. Murchison, both S.M.U. trustees. So the students are learning primarily by becoming small-scale entrepreneurs while they are still undergraduates.

S.M.U. trustees broke with tradition two years ago after determining that their 625-student business school was mediocre. To shake things up, they hired C. Jackson Grayson Jr., a mild-mannered man with radical education ideas who graduated from the Wharton and Harvard business schools, is fascinated by oil wildcatting and race horses, and once headed Tulane's business school. Three weeks ago. President Nixon tapped Grayson to head his Price Commission.

Intuitive Grading. Grayson believes that entrepreneurs succeed by freeing themselves from convention. So he immediately threw out all required courses except an orientation seminar that concentrates on sensitivity training and meditation. "We are interested not just in rational Western thought but in the intuitive, noncognitive approach," he says. Otherwise, students write their own course programs. Next, Grayson encouraged students to help found or run small businesses on campus. Students receive course credits for their businesses, and some agree to split any profits with faculty members who invest money or time in their ideas.

This novel approach has spawned novel problems. Professors face a nightmare in grading students on intangibles like imagination, integrity and initiative. Moreover, the basic idea has so far flunked the ultimate business test: profit. No student enterprise has yet run in the black--even though many are guided by John L. Welsh, an S.M.U. staff member and former businessman, who sometimes invests in the schemes himself with the unabashed intention of "making a lot of money."

Profiting from Failure. One budding entrepreneur, Ed McBirney, 19, rents $68.94 refrigerators to students for $25 per semester. All his receipts go toward paying off his 100 refrigerators but he profits in a nonfinancial way: 75 customers are datable women. Students also lease trailer-borne marquees to Dallas stores, or design football bumper stickers and sell them to alumni. Some enterprises die aborning. Jerry White, 26, devised a plastic sheathing to protect telephone poles from woodpeckers but found it too expensive to produce. Other students are still gamely trying to develop a drown-proof infant bathtub, a self-testing kit for lung cancer and a transistorized gadget that would automatically squirt out air freshener every few minutes. But, as Bob Lyle, the 30-year-old acting dean, points out, even failure teaches students something about business.

Like its student entrepreneurs, S.M.U.'s business school has yet to turn the corner. Grayson began a campaign to raise $37 million, including $12 million requested from Ross Perot. With that money, believes Lyle, the school could be self-sustaining by 1981. Besides, says one faculty member, there is always the hope that "one of these young people will come up with something like the Hula-Hoop"--and that money will roll in on its own.

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