Stanford GSB: Stanford Business February 2001

Stanford Business

February 2001, Volume 69, Number 2

Community

Supporting the Public Sector

Stanford MBAs joining the Alumni Consulting Team add their business muscle and know-how to help solve problems for nonprofit organizations.

By Kathleen O'Toole

Movies are supposed to be the enemy of books. Not so at the Marina Branch of the San Mateo Public Library, where books are enjoying resurging popularity thanks to the drawing power of movies and java. The library, now equipped with an outdoor deck, where patrons can sip, read, and watch birds lingering in a lagoon of San Francisco Bay, is open 33 percent more hours without city taxpayers having to spend a cent more. All this is the result of consulting assistance from Stanford Business School alumni/ae.

"People want to get something done, so there's not a lot of chest-thumping."

ACT teams, she says, don't just raise funds or fix one-time problems—they teach public and nonprofit managers new skills by rolling up their sleeves and demonstrating approaches normally seen in the for-profit sector.

Founded in 1987, ACT is a chapter of the Stanford Business School Alumni Association. Since its inception, volunteers have completed more than 200 consulting projects that would have been worth more than $10 million had the public agencies and private nonprofit groups been required to pay. As a first step, an experienced volunteer defines and clarifies the client's business issues so the team can hit the ground running. Some projects involve analysis or research that requires involvement over six months; others are "fast-track" projects, where alumni teams simply provide advice.

One ACT team, for example, spent only four hours solving a vexing problem for San Francisco's Exploratorium. The science museum was about to be remodeled when staff realized the construction work might provide an opportunity to reduce theft and breakage in their retail store. Ashley Boren, MBA '89, who had once worked for Smith & Hawken, quickly looked through the alumni database and found several others with retail background. "In just two 2-hour meetings, we critiqued the store's layout and gave the staff some ideas," Boren says. The result: Store sales are up 7 percent, merchandise shrinkage is down 50 percent, and the store's staffing requirements decreased by two-thirds.

At the other extreme of involvement, another ACT team figured out how to fully equip and staff a badly needed vocational training program for computer network administrators. DeAnza College in Cupertino "already had people with theoretical knowledge in network administration, but they didn't have a way to teach it practically," says Bryan Brown, MBA '69. The school couldn't afford the going rates for network engineers or the equipment that students needed to gain experience repairing networks, so Brown's team decided partnering with industry was a must. Team members were instrumental in getting Hewlett-Packard to provide key equipment and Cisco Systems to dedicate an engineer for a year to both train trainers and link the school into Cisco's network for its own training program. DeAnza's program, which opened in January 1999, quickly developed a waiting list and prompted another training program—for people to staff computer technical support call centers, says DeAnza president Martha Kantor.

"One of the spin-offs of this project was our learning the concepts of growing our own and layering opportunities," Kantor says. "ACT members understood the smaller cost was the equipment and helped us address the true cost of operation, which is support and teaching staff. We developed internships both to help us run our own networks and to provide paid part-time jobs where students from low-income families can learn competitive skills."

In a similar vein, the ACT teams who worked with San Mateo's library taught staff new approaches, Ouye says. Asked first by the city manager to help reduce city operating costs, an ACT team recommended moving the Peninsula Library System's little-used video center, hidden away in an office building, to the underutilized Marina Branch library. Adding coffee service would help attract customers, the team said.

Impressed with the results, Ouye asked if another team might help her staff learn how to evaluate other entrepreneurial ideas and existing services. "The team interviewed key members of our staff for a couple of months before deciding what instruments to use," she explains. "Then they trained us in how to use the decision-matrix model they designed for us. There are things we would like to do, things we are good at, things we can make money or lose money at, and political reasons for doing some things. The decision-matrix is an idea filter that really helps us figure out how to compare apples and oranges."

Cynthia Dai, MBA '93, was one of five volunteers who met with library staff over six months. "When our team organized a brainstorming session, we were afraid that we would get blank stares, but they generated over 100 ideas in 45 minutes," Dai recalls. "We provided an educational process about business concepts, like opportunity cost, that you ordinarily don't find in nonprofits."

For Dai, the experience was "a refreshing change from run-of-the-mill business projects. You can't just take your standard profit measure and go with it," she says.

Brown says he also appreciates the change in working climate from normal consulting. "People volunteer for a relatively short duration; they want to get something done, and so there's not a lot of chest-thumping or the strong sense of competition we saw in school and our early careers. One of the benefits is getting an opportunity to interact with other Stanford graduates. We brainstorm about the project, but we also compare life experiences in the context of doing something worthwhile for the community."

Dai recently finished her sixth ACT project—a long-term strategic plan for the Japan Society of San Francisco—and Brown finished one on facility utilization for Mountain View Community School of Music and Arts. Meanwhile, Ouye has been working on plans for a new main San Mateo library that taxpayers voted to finance in November 1999. "I really believe that applying the skills we learned from ACT helped us achieve that goal," she says.