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Teaching
Boxed
In
Student
box makers learn the naked truth about entrepreneurship.
Marianne, a French box-making company, confronts a problem that, for entrepreneurs in the era of globalization, is as common as it is painful.
A Chinese competitor is flooding the market with cheap substitutes for Marianne's boxes. In response, Marianne has decided to go up-market, catering to a fussy buyer who's willing to pay more for top-quality containers to ship Ming vases.
But as the first run of its new boxes rolls off the assembly line, none of them meets the customer's standards. The corners of some aren't creased sharply enough. Others show ragged edges. What's worse, production is crawling along as Marianne's competitor continues to crank out boxes by the dozen.
Marianne's managers gather to reassess. "We stink," grumbles one. "We're not going to be able to sell a single one of these boxes." They decide to abandon their high-end strategy and jump back into the commodity market. They may not make as many boxes as the competition, but at least they'll sell something, allowing their firm to survive.
Welcome to an industry that's as imaginary as Tolkein's Middle-Earth or Dilbert's cubicle.
Marianne's managers are newly enrolled students of the Lauder Program, which prepares future business leaders by integrating Wharton's MBA with an MA in international studies from the School of Arts and Sciences of the University of Pennsylvania. Though the students all speak French, none of them is actually from France. Their competitors are students, too — speakers of Japanese, Spanish, Portuguese, German, Russian and Arabic; every Lauder student must show proficiency in a foreign language to enroll.
The students are participating in a six-hour simulation that tracks the first six months in the life of a startup; in effect, they're getting an espresso shot of life as an entrepreneur. Run by Bethesda, Md.-based Team Business LLC, the simulation was developed in South Africa. Team Business brought it to America thanks to a chance meeting in London's Heathrow Airport.
In 2000, Lara Azzam, a 1996 Lauder graduate, was sitting in an airport lounge, catching up on work as she waited for a flight. Andre Van Der Bergh, a South African retail consultant who moonlighted as a facilitator for the simulation's creators, walked up, introduced himself, handed her his business card and a book — The Celestine Prophecy — he'd just finished reading. "I'm about to miss my flight," he said. "But read this, and if you like it, send me an email." Azzam did, and two years later, they became business partners.
During the six hours of the simulation, Azzam and Van Der Bergh will lead the students through everything from investing in hard assets and manufacturing to financial management and advertising — in other words, the sorts of things a fledgling entrepreneur might face. And they'll do it all with the simplest of tools — sheets of white paper, glue sticks, rulers, scissors, pencils, a white board and a black marker.
By the end of the day, the students' companies will have produced hundreds of boxes. "They'll dream about little white boxes tonight," Van Der Bergh quips.
The students
also will have to overcome a host of challenges — shifts in
demand, a market-changing technology, competitors who grow
by merger and, most vexing of all, a naked Russian. (More on
him later.) They learn, in other words,
about the many challenges of being an entrepreneur.
Their first task is figuring out how to make a box out of
a piece of notepaper. In a practice period, the student-members
of Team
Marianne measure and
cut the paper, apply glue and fold it into a box. It's
well-made — tidy and
symmetrical — but its production has exhausted their
practice time. They'll
have to work faster. Once the simulation begins, they'll
be paid by the box.
Van Der Bergh starts by giving each team a loan and instructs them to buy the materials. Paper, for example, sells for 1 madiba — the name of the currency is taken from the nickname of former South African president Nelson Mandela — for 10 sheets; scissors, 4 madibas each. They'll pay wages, taxes and interest, too.
The members of Team Marianne decide they can get by with paper and a glue stick. To save money, they'll tear the paper, instead of cutting it. Van Der Bergh has said he'll clear the market; as long as a box holds together, he'll buy it for 5 madibas.
As box making
begins, chatter rises in the room. Some students bark instructions
Others coo
encouragement.
Still others
call out for
more paper. A few
curse as their neatly folded boxes spring apart due
to insufficient glue.
Team Marianne works quietly, with each member focused
on a task in the makeshift assembly line. No one takes
charge.
Instead,
they work
collaboratively;
throughout
the day, they'll make decisions by consensus. "As
a French company, we're focused on employee morale
and equality among laborers," one
of them quips.
By the end
of the second "month," the
Marianners are congratulating themselves. They've
made 33 boxes.
But it's early to get complacent. The Chinese team sitting nearby
has made more than 50. Its output looks like origami — done by kindergarteners.
The boxes are misshapen, with rough edges and rounded corners instead
of creases.
That doesn't matter. Van Der Bergh's
unlimited demand means that quantity is all that
counts.
The Marianners ponder their position. "I think we should reconfigure," says team member David Rubin. He's the quietest member of the group, but also the most linear thinker and is always looking for ways to improve their process. "You're good at folding," he says to one of his teammates. "And you're good at gluing" to another. He suggests switching roles.
"I think we should get a second glue stick," offers Jonathan Taqqu.
"And one unpaid intern," cracks Bryce Goodwin.
"Maybe we should we think about outsourcing to the Chinese team," adds Anthea Kelsick.
Van Der Bergh bails them out. Or at least seems to. He announces that the price of low-quality boxes has fallen to 2 madibas, and he'll pay 8 madibas for high-quality boxes. It seems sweet salvation for Team Marianne. They start laying plans for their ill-fated experiment with high-quality boxes. They buy a metal template for the box pattern, which supposedly will accelerate production.
It doesn't, of course. And once again, they make fewer boxes than the Chinese team.
Now, the experimental entrepreneurs have reached the last month of the simulation. "You'll be making a TV advertisement this month," Van Der Bergh says. In fact, they'll have to do a short skit that's like a mock-up of an ad. He sends the groups off to create their ads. Team Marianne heads for the sunny quad outside the building.
"We're French — our ad has to have sex appeal," says Goodwin. That sparks ideas. Within 10 minutes, the ad comes together.
Back upstairs, Team Marianne goes first. Kelsick, the only woman on the team, ambles, hunched-shouldered and sheepish, into the middle of the room. She carries an armful of crumpled, sloppy boxes. Her teammates are lined up like construction workers on lunch hour. They hurl insults. "Those boxes are so cheap," snarls one. "No style," growls another. "They must be mass produced."
Seconds
later, she returns, head held high.
This time, she wields a perfectly
made
yellow box.
The workers
perk up. "Ooooh, so chic," says
one. "What
style." "Look at that box."
She spins, raising her box aloft. "Le Box," she declaims
in a heavy French accent. "By Marianne Louis Vuitton." The
crowd applauds enthusiastically.
Each of the other teams takes its turn — the Chinese, the Spanish, the Germans, the Japanese. Then come the Russians.
As they saunter into the room, one of their group — a tall, big-boned, brown-haired guy — is hidden behind a big piece of poster board. One team member starts the spiel. A minute later, another pulls away the poster board. There stands the big guy in nothing but a small white box. It covers him strategically, like a bathing suit. His thick hairy legs poke out the bottom, and his pasty upper body pokes out the top. The crowd goes wild. He smiles broadly. Thankfully, he doesn't take a bow.
The Marianne group, once they stop laughing, are mainly relieved. A surprisingly tense day has ended without any friction on their team. Not all of the other groups can boast that, and it's important, given that, in a few weeks, the members of Team Marianne will head to France together to study for the summer. There, they will be each other's main source of support. They're also feeling a little smug — though they didn't make the most boxes, their comparatively small team did achieve the highest per-person rate of production.
La Belle France may not triumph in bicycling anymore, but in box-making, it's doing just fine.
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Goeorgen Entrepreneurial Management Program