Jeff Sandefer doesn't equivocate when he describes what's wrong with business schools. The 46-year-old, who started the Acton School of Business in 2003 in Austin, Tex., says they fail at preparing students to run their own companies. Sandefer, who runs an energy investment firm in Austin, says he has seen too many B-school grads unhappy with their careers five years after graduation. "We want the best and brightest to find their calling," he explains. "Far more think that is consulting, investment banking, or private equity than it really is."
Sandefer's Acton program is certainly a departure. For starters, all professors must run a business. The requirement reflects Sandefer's view that, unless you are living an entrepreneurial life, you can't effectively teach how to be an entrepreneur. Compensation for professors is based in large part on student ratings. Each year the professor with the lowest ranking, out of the 11 now on the faculty, is not invited back to teach the following year (though they can return after that). Half the length of traditional MBA programs, Acton's one-year stint radically intensifies the learning experience. And while Sandefer, himself a Harvard MBA, has built the program around his alma mater's case studies, students are never told what the best solution is, and professors aren't allowed to tell them.
Acton puts a premium on learning by doing. All students need to sell a real product as part of one class. And all must help run an assembly line set up on campus that manufactures circuit boards. "Few people know how to make the rubber meet the road," says Chris Shonk, 32, who graduated with Acton's first class in 2004 and went on to start his own boutique investment bank. "You learn how to execute."
Sandefer is so confident students will find the program rewarding that, starting this fall, he has created what amounts to a money-back guarantee. Tuition is $17,500 per semester, but the first semester's check is returned at graduation, and the second semester is free. After graduation, students are still on the hook for the $35,000 and are asked to contribute 10% of their salary until the tab is paid off. Then again, if a student is disappointed with the program, the debt is erased. Without crippling loan payments, Sandefer contends, "you can follow your calling."
Of course, Acton has plenty of critics. Academics at other B-schools argue that a faculty made up solely of practicing entrepreneurs isn't well-balanced. And the relatively unknown school may not be a big asset for someone looking to land a job at a large company. "I know people applying to business schools who won't consider it because of the name," says Chris S. Munson, a 2005 Acton graduate who recently bought a restaurant chain with a partner. "But I'm convinced I learned more [there] than I would have learned anywhere else."
By Amy Barrett