Master Class

Strategies for Growth

Lessons from a road trip

It's no secret that top business schools look to case studies about multibillion-dollar corporations to understand industry-changing insights. But what about the thousands of small and midsize companies that are thriving? To glean what helpful lessons these oft-overlooked companies could teach MBA students, Mike Mazzeo, professor of strategy and senior associate dean of curriculum and teaching, decided to hit the open road.

"We realized there was a gap in the market for strategy oriented toward companies like this," he says.

Working with Stanford's Paul Oyer and the University of Utah's Scott Schaefer, Mazzeo has taken a series of weeklong road trips to various parts of the country and across the globe to interview the leaders of small- and mid-market businesses.

The three professors turned the resulting case studies into a book, Roadside MBA, and the interviews with the business owners form the basis for Mazzeo's popular course, "Strategies for Growth," which is part of the Kellogg MBA growth and scaling track.

"The correct answer to any strategic question is, 'It depends.'"

Master class by the numbers

A look inside the course

A major challenge many small and mid-size businesses face, particularly when they're trying to grow, is bringing additional employees into the organization. During one of the "Strategies for Growth" course sessions, Mazzeo focused on the idea that hiring is inextricably intertwined with two other important challenges for growing businesses: incentives and delegation.

Hiring: The class begins with its first case: The students view an excerpt of an interview with the owner of a growing digital marketing agency in Denmark and discuss its unique HR approach. "Hiring requires delegation, and delegation requires incentives, so you have to think through them all at once," Mazzeo says. "It's a holistic problem, and it requires a holistic solution." The class then moves into an in-depth look at incentives and delegation.

Delegation: To grow, business leaders must hire others to do what they have been doing. This requires determining which tasks to delegate to new employees and which functions they should continue to perform themselves. Challenges associated with delegation are illustrated with a second case about a small engineering firm from Colorado that manufactures customized communication solutions.

Incentives: A big component of effective delegation relates to incentives for the new employees. "It may not be worth delegating something unless you provide the appropriate incentives for employees to make the right decision — the one you would make if you were doing it yourself," he says. The class examines this issue using a third case about an Eastern Washington-based IT services company. It has an approach to pricing that makes it difficult to design incentives for employees to perform sales functions instead of the CEO.

No one-size-fits-all strategy: Mazzeo's mantra — and a constant theme throughout the course — is that there's no single formula for success. By discussing diverse case studies, students get to flex their analytical muscles and think critically about the unique challenges each business faces. "The correct answer to any strategic question is, 'It depends,'" he says. "We try to determine what it depends on using frameworks from economics and strategy."

Mazzeo shares with the class that during his travels, he met many intuitive leaders who came up with creative solutions to the hiring problem based on a deep understanding of their own business. "Many, if not most, of the business leaders that we met were not formally trained in business," he says. "And yet, through the experiences of their own companies, they had been able to work out elegant economic solutions to the specific problems they faced."