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Rice Business Plan Competition: Hail to the champions

Behind the scenes at the annual contest for budding entrepreneurs.

By David A. Kaplan and Anne VanderMey

Cashing out: Winner NuMat, representing Northwestern University

FORTUNE — It may not have the ubiquity of Facebook or the scale of Wal-Mart, but NuMat Technologies someday could change the world just a little bit. At least that’s what the audacious student entrepreneurs behind it believe. NuMat is a university spinout that aims to revolutionize clean tech by making natural-gas vehicles more practical. The Northwestern students behind the startup have come up with algorithms that design nanomaterials that could disrupt the gas-storage industry. Liquid gasoline is expensive. Natural gas is cleaner and cheaper, but it’s hard to squeeze much of it into a tank in a car. NuMat says it can do that at low pressures, increasing capacity by a factor of five. The secret: a proprietary kind of metal-organic framework (MOF), which is a type of remarkable crystalline material with a vast internal surface area; if all of the tiny walls on the inside of a single gram were unfolded, the structures would cover a football field. NuMat’s nanomaterial is ultraporous and, as the plan goes, will hold natural gas the way a bath sponge contains water. The vision is ambitious. Says chief technology officer Christopher Wilmer, a 29-year-old Ph.D. candidate in chemical engineering: It’s “the majesty of self-assembly on the molecular scale.”

Sounds cool — and really complicated to some of us in Houston listening to NuMat’s presentation at the recent 2012 Rice University Business Plan Competition. But for investors there, it was entrepreneurial gold. NuMat’s four founders won the grand prize — a record total of $ 874,000 in investments and cash grants, including $ 100,000 from Kleiner Perkins Caufield & Byers, the celebrated Silicon Valley venture capital firm. (Bonus honor: NuMat will get to ring the closing bell at Nasdaq in August.) NuMat says it will use its haul to build infrastructure, as well as to hire more engineers, chemists, and programmers on the way to producing a prototype.

Were it not for the Rice competition, which bills itself as the “world’s richest and largest,” NuMat might never have gotten the opportunity. Forty-two teams, culled from 1,600 entries, made it to the finals in Rice’s brick-bedecked McNair Hall this year. There may be lots and lots of money available to startups these days — from established VCs and angel investors in such places as Northern California, Manhattan, and Texas. Yet unless you’re a star graduate student at Stanford or MIT — or, say, a particularly precocious and well-connected curly-haired dropout from Harvard — you probably don’t have easy access to the investors. Similarly, while business incubators and accelerators can provide useful coaching and backup services, those programs are difficult to get into and sometimes demand too much equity.

That’s where business plan competitions like the 12-year-old Rice event come in. “We’ve created an ecosystem of investors, mentors, and other suppliers that allows entrepreneurs to be more successful faster than they would otherwise be,” says Brad Burke, the managing director of the Rice Alliance for Technology and Entrepreneurship, which sponsors the competition. The Alliance combines the talents of Rice’s schools of business, engineering, and natural sciences. At the three-day marathon of 15-minute presentations, 60-second elevator pitches, shark-tank grillings, barbecues, and an awards banquet, Burke is the barker.

The ringmaster, Rice’s Brad Burke

Some of the $ 1.5 million awarded this year comes with no strings attached — like $ 45,000 from NASA and $ 100,000 from the U.S. Department of Energy. Most of the money comes from organizations like the GOOSE Society of Texas (Grand Order of Successful Entrepreneurs), which in return get a percentage of companies that’s determined by later financing rounds. (Fortune is the media sponsor of the competition and writes about it each year but gives no prizes.) Because teams are university-based, they often unite cross-disciplinary skills — engineers and Ph.D.s with imaginations, MBAs with balance sheets. In the history of the Rice competition, 354 teams have raised nearly a half-billion dollars, and 128 of the startups are still in business, employing more than 1,000. The most dramatic success has been Auditude, a video advertising platform that won the grand prize in 2005 and was sold to Adobe (ADBE) in November for $ 120 million.

Inter-university business plan competitions go back to the early 1980s. The first — Moot Corp, at the University of Texas at Austin’s business school — was intended to mimic the venerable moot court competitions at law schools. But Moot Corp did more than a moot court and more than the traditional case studies in MBA education: The competition was among actual, rather than hypothetical, ventures, and the judges were VCs with real cash. Over the course of the past decade, the number of competitions has proliferated — from about 350 in 2006 to triple that today. At Wake Forest University, competitors get two minutes and 28 floors in a moving elevator to pitch their ideas. Columbia University hosts the Outrageous Business Competition to showcase, well, schemes like Turn Off, a drug that blocks sexual arousal by stopping the production of pheromones.

Rice Business Plan Competition: The winners

The closest that teams got to whimsy at Rice might have been Action Figure Laboratories, a retail-store notion from Rice students that gives boys the chance to customize toys in the way girls do at Build-a-Bear. The twist: a 3-D scanned miniature version of your face on your action figure. (Voodoo note to editor: We now have your mug on a doll!) Then there’s PhoneSoap, from students at Brigham Young, which won top honors for marketing. Targeting “the germ-conscious public,” PhoneSoap says it has the “world’s first UV-sanitizing cellphone charger.” Wide-eyed investors (all with cellphones) learned that mobile phones carry 18 times more bacteria than the flush handle in a public restroom. “Gross!” proclaim PhoneSoap’s co-founders during their presentation. Maybe they’re talking profits. So, if $ 39 PhoneSoap makes it to market, when you wake up every morning to the tune of, say, “Hells Bells” on your iPhone, it will be not only charged but clean. (Never mind that you then immediately put your bug-infested fingers on it.)

Several Rice contestants had purely online plays. SasaAfrica, from MIT, didn’t receive a boatload of money but was the darling of many judges. The for-profit social enterprise is an e-commerce site, connecting craftswomen from the developing world directly to consumers worldwide, via a mobile phone. SasaAfrica won $ 26,250, including $ 10,000 for social impact. Still, the typical startup focused on a new medical device or industrial process — the kind of idea that costs more to develop. Lemm Technologies, from Purdue, won $ 111,500 to help develop a non-invasive way to monitor glucose levels in diabetes patients — a $ 7 billion industry in the U.S. In the way a finger-mounted pulse oximeter measures a patient’s oxygen level, Lemm says it will be able to measure blood glucose by shining a laser horizontally through the curvature of a nail; because nails are translucent, the system theoretically allows for a more accurate reading than going through skin. If it works, Lemm will have a diabetes test that doesn’t involve drawing blood. But the company needs to build a prototype and show that it can work on a real finger rather than nail clippings of the wife of COO Marcus Kramer, 26, who recently got his doctorate in biomedical engineering.

Sixty seconds: That’s what teams had to make their case in the elevator-pitch competition. The winner, Gaylene Anderson of Solanux, from the University of Idaho, got a check for $ 1,000.

Another Purdue startup, Medtric Biotech, is trying to bring to market Osmotec, “an entirely new concept for bactericidal action” that the startup claims also facilitates wound healing. The company says there are no newfangled ingredients in the gel that would worry the FDA — only “nanobubbles” that are able to pierce and dehydrate bacteria, even superbugs. Rice investors and judges were impressed: Medtric was the runner-up to NuMat Technologies, winning $ 146,000 in investments and grants, including the $ 25,000 NASA Game Changer Award. More important, says Sean Connell, Medtric’s 27-year-old president and a biomedical engineering Ph.D. candidate, the company gained visibility. “I just knocked on the door of 250 investors,” he says. Those investors can be pretty good at wooing back. Just ask Henrik Skovsgaard of Senseye, a University of Copenhagen software company that markets its product as “eye control for mobile devices.” Skovsgaard, who holds a Ph.D. in “gaze interaction,” hung around the night the competition festivities ended. Some of the sponsors, he wrote in an e-mail to Fortune, “introduced us to American whiskey (in large quantities) in the hotel bar.”

Entrée to investors is what attracted Solanux, an entry from the University of Idaho that promises a healthier potato. “Idaho’s not crawling with angels and VCs,” says CEO Gaylene Anderson, 41, who’s an executive MBA student and also works in the university’s Office of Technology Transfer. Her company means to transform potato products from a diabetic nightmare into a fiber-rich resistant starch that produces only a low glycemic response. Anderson has the ebullience of an evangelist who was thrilled to be out of town for a few days, but she nonetheless carried in her handbag a piece of home wherever she went at Rice: a big potato, which she used as a prop. Solanux won $ 25,000 in the competition.

For their part, the grand-prize winners from NuMat Technologies could not have had a more perfect time. At the closing gala, where NuMat was announced as the victor, the team came to the stage to pick up their grand prize check — in giant form, just like at state lotteries. But with a flourish, the sponsors added another $ 300,000.

Even with that investment windfall, it was still neckties rather than nanotechnology that people wanted to ask the NuMat team about. Everybody at a business plan competition seems to be in a dress shirt and a somber suit. But the four NuMat guys sported matching ties that shouted “geek”: illustrations of the MOF structure that the team aims to get rich on. Designed by Wilmer’s wife, Emily Winerock — a Ph.D. candidate in history at the University of Toronto — the ties were printed by the do-it-yourself retailer Zazzle. Just two days after the competition, the “silky, 100% polyester” ties were up for sale at numat-tech.com for $ 32 apiece — along with NuMat-branded coffee mugs. It’s “our backup business,” says COO Tabrez Ebrahim, 31. Once an entrepreneur, forever an entrepreneur.

This story is from the May 21, 2012 issue of Fortune.

Filed under: Contributors, Rice Business Plan
From:Management and Career

After Yahoo: Why do powerful people lie?

Why do leaders risk so much over what, in the grand scheme of things, is a small dishonesty?

Former Yahoo CEO Scott Thompson

FORTUNE — In the wake of Yahoo CEO Scott Thompson’s departure amid controversy over his padded resume, the question remains: why did he do it?

Whether Thompson embellished his bio with a college major he didn’t earn, or simply signed his name to a document that someone else falsified, the lie cost him a flourishing career. It also added him to an ignominious list of powerful leaders who stepped down in disgrace over resume deceptions, including former RadioShack (RSH) CEO Dave Edmondson and Notre Dame head football coach George O’Leary.

Why do they do it? Why do they risk so much over what, in the grand scheme of things, is a small dishonesty?

Thompson didn’t devise a multi-billion dollar Ponzi scheme or embezzle millions in company funds. At some point in the last few years, his actual accounting degree from Stonehill College on his bio changed into a degree in both accounting and computer science — a false credential that appeared periodically in his online bio when he was PayPal president. After he joined Yahoo (YHOO) in January, his official bio containing the double major became part of the company’s annual report filed to the SEC, a document that CEOs must personally attest is truthful.

“Whether he was the fabricator or complicit in the perpetuation of the falsehood, he didn’t have the courage to correct it,” says Adam Hanft, a consumer culture expert and branding strategist based in New York.

MORE: How Yahoo can get its mojo back

Insecurity.

People lie when the truth is too painful, embarrassing, or simply perceived as inadequate. “Clearly he didn’t go to a first-tier school, so I would suggest that he was operating under some feeling of insecurity or inadequacy,” Hanft says. “Here’s somebody who achieved despite that, but — as people do — harbors some anxiety and the fear of being found out.”

While Thompson might appear to the outside world to embody success — a rising star in corporate America whom Yahoo wooed from PayPal to turn around the struggling Internet giant — his own self-perception could be wildly different.

“Lying results from a deep-seated belief: I am horrible on the inside. I need to make up a bright, shiny self to show the world. If anyone ever finds out who I truly am, everything will come crashing down,” says New York-based psychoanalyst Elizabeth Singer. “Look how fudging his academic record has brought about the shame he sought to avoid.”

Desperation.

In this competitive job market and economy, credential embellishing is far from rare. In fact, employers are seeing an increase in the number of outright lies on resumes, such as changing employment dates to hide an employment gap or listing enhanced responsibilities, according to Michael Crum, vice president at Dale Carnegie Training.

MORE: Yahoo: Chill, it’s time to get down to business

“With the higher levels of unemployment and the increased competition to get a few jobs, people begin to exaggerate and outright lie on their resumes,” says Crum. Half of all resumes contain at least one inaccuracy, whether deliberate or inadvertent, according to several studies.

A degree from a small Catholic college outside Boston doesn’t quite have the same shimmer as the Harvard and Stanford diplomas littering Silicon Valley offices, so Thompson might have felt he needed the edge of a technology degree. “Today’s business world is so competitive. If you don’t have the right MBA, didn’t go to the right school, don’t have the right educational background, people look down on you,” says Richard S. Bernstein, an adviser to Donald Trump and the Trump Organization.

Self-Deception.

Once you tell a lie, and leave it uncorrected long enough, you can start to believe it’s true. “People start saying something enough that they start believing it themselves,” says David Reiss, a psychiatrist based in San Diego.

“Looking back on the history of these people, the pattern started before they were powerful. They got into the habit of inflating things out of lack of confidence,” Reiss says. “Once they got to a higher level, if they’ve gotten away with it, they think they’ll never get caught.”

Once executives reach the top levels of management, they can become surrounded by sycophants, start believing their own accolades, and lose sight of the truth. “You have to be able to hold people accountable. What happens with leaders is there’s nobody who is speaking truth to power,” says David Gebler, president of Skout Group in Boston, which helps organizations manage people and culture based risks. “They’ve got themselves locked into a world where they really believe they’re not doing anything wrong.”

Human Nature.

We all have the tendency to rationalize behavior that falls in an ethical or moral grey area, and many of us stretch that line to cover outright lies. We’re wired to adjust the narrative of our actions to align with our identity. If we believe we’re fundamentally honest people, we will rationalize our behavior to ourselves as ethical — regardless of how it looks to an impartial observer.

“The brain is doing this constant dance of, ‘How do I get more of what I want while holding onto the identity that I think I actually have,’ ” says Kevin Fleming, owner of Grey Matters Intl., a neuroscience-based executive development and coaching firm based in Jackson Hole, Wyo. and Tulsa, Okla. “The brain is always wired to reduce dissonance.”

MORE: 20 weird reasons to quit your job

Indeed, one of the dangers of a prominent individual being publicly shamed, as Thompson has been, is that the general public grows more likely to rationalize their own shady behavior. “They make us feel good because it puts our own behavior in perspective,” Hanft says. “It’s why we love celebrity meltdowns or professional meltdowns. They allow us to continue in our delusion of acceptable behavior.”

However, the little lies can lead to big missteps. They pave the way for us to rationalize larger dishonesty. So whatever we take away from the Thompson episode, we should resist schadenfreude — it could actually lead us to greater deception in our own lives.

A spokesperson from Yahoo did not immediately respond to a request for comment.

Filed under: Careers, Contributors
From:Management and Career

20 weird reasons to quit your job

Leaving to take a better offer elsewhere is nice, but pretty dull compared to climbing Mount Everest, or joining the circus.

FORTUNE — The number of people quitting their jobs has been climbing steadily since June 2009, the Bureau of Labor Statistics says, to 2.1 million in March (the latest month available). And where are all those people going, exactly? As you might expect, most quit for greener pastures at other companies. But then there are a few whose reasons for jumping ship are more, shall we say, unconventional. Staffing firm OfficeTeam recently surveyed 1,300 senior managers nationwide in a variety of industries. Here are some of the things they said about why workers were flying the coop:

• “Someone left because her boss lost the dog she had given him.”
• “Our employee said he was joining the circus.”
• “A staff member left to climb Mount Everest.”
• “There was an individual who left to play the trombone.”
• “An employee wanted to enter a beauty contest.”
• “One worker left to become an apple farmer.”

A few employees’ stated reasons were reminiscent of Oscar Wilde’s alleged last words, “Either this wallpaper goes, or I do.”

• “One person quit because he hated the carpet.”
• “A worker did not like the color of the walls.”
• “She left because she hated the lighting in the building.”
• “He quit because he didn’t like the way the office smelled.”
• “An individual did not like the sound of cabinets being slammed.”

Strangely, once in a while, someone quits when just taking a vacation day probably would have sufficed:

• “One person quit to watch a soccer tournament.”
• “An employee left because he wanted to watch a movie with his girlfriend during work hours.”
• “We had someone quit so he could stay home and feed his dog.”

And then there are the folks who just aren’t all that crazy about work, period:

• “One person left because she didn’t want to work so hard.”
• “The worker told us he just couldn’t get up in the morning.”
• “An employee said work was getting in the way of having fun.”
• “A staffer quit because informal dress was not allowed.”
• “A guy told us he was making too much money and didn’t feel he was worth it.”
• “Someone left because she was going to live off her trust fund.” Nice work if you can get it.

Filed under: Careers
From:Management and Career

A Harvard MBA’s radical quest to erase his debt

B-school grad Joe Mihalic went on an extreme financial diet to pay down over $ 90,000 in debt in just seven months and charted his story through an anonymous blogging project.

(Poets&Quants) — When he graduated from the Harvard Business School three years ago this month, the economy was a wreck. Nearly one in four of his classmates didn’t have a job at graduation in May 2009. Yet, Joe Mihalic, then 26, was able to land a job with Dell (DELL) in Austin, Texas, at twice as much as the $ 52,000 a year he made before earning his MBA.

But there was some overhang from his experience in Boston: roughly $ 101,000 in loans that he had to borrow to get the degree, even after Harvard gave him $ 54,000 in fellowship support.

Mihalic, of course, is hardly alone. The average debt of a Harvard MBA last year was $ 77,880, up from $ 73,110 a year earlier. Wharton MBAs, however, racked up average debt loads estimated to be an unprecedented $ 114,000, and the median financial burden for an MBA from a top-10 business school from the Class of 2011 is about $ 88,500.

Despite Mihalic’s six-figure burden in the midst of the economic downturn, he gleefully jumped into a free-spending lifestyle that had defined his MBA experience. He bought a 2004 BMW M3 in the same month he graduated from Harvard. From Thursday to Saturday nights, he did the town with pricey dinners and drinks. For his 28th birthday, he barhopped with friends in a black stretch Hummer. Though Mihalic had budgeted $ 850 a month for entertainment, he was commonly spending $ 1,300 monthly.

But there was one place where he didn’t slough off. For 21 months straight, he dutifully made the monthly $ 1,057 payments on his student debt. It wasn’t until last summer, when he checked his balance, was he thrown into shock. After paying out more than $ 22,000, he still owed $ 90,717, a sum that exceeded his after-tax salary for a year.

Going the extreme financial diet route

A back-of-the-envelope calculation showed that Mihalic would pay $ 42,000 in additional interest if the loans went to their natural 10- and 15-year terms. That is when he vowed to go on an extreme financial diet to get rid of the burden. “Student loans are a strange animal,” he reasoned. “Unlike a payment towards a car loan or a mortgage, a student loan payment doesn’t go towards something that is benefitting me in a direct way.”

He vowed to do “everything in my power — short of lying, cheating, and stealing — to pay down this debt in the next 10 months.” Except that in his case, he also decided to chronicle the journey on a blog called No More Harvard Debt. The idea to anonymously write about the sacrifices he was about to make occurred to Mihalic last August after knocking out a cover letter to apply for a weekend delivery job.

Even to him, taking a part-time position to pay down more of his debt seemed like a peculiar thing to do as a Harvard MBA with a six-figure management job at a Fortune 50 company. “I took a step back and it wasn’t until I stopped laughing at myself that I realized others might enjoy laughing at me, too,” he recalls. “The blog started as a joke. I had every intention of following through on my challenge when I started it, but I wanted to let people be amused by it and get a laugh at it, too.”

Over the next seven-and-a-half months, through 88 separate posts, he vividly describes his experience. His blog is, at times, introspective, witty, and sincere, often inspirational. His finances are laid bare, open for all to see as if he were dissecting a frog in a high school lab. From his $ 20 haircuts to his monthly car insurance of $ 171, he meticulously details every expense and just about every source of revenue in his life. He writes with humor and flair on what it is like to be a cheap date over a cup of coffee or a hike in the woods.

But what allows Mihalic to maintain this entertaining and often addictive narrative of what he calls “the walk to debt freedom” was his extreme goal. The challenge resulted in sacrifices that few of his classmates could ever endure. He gave up all dinner dates and didn’t go to a single movie. He stopped contributing to his 401k plan, decided against going home for Christmas, and missed his friends’ parties and weddings. When he went to bars with friends, he carried a flask with booze to mix with his purchased Coke (KO). He shared a NetFlix (NFLX) account and refused to buy a single article of clothing.

To earn extra money, he sold his second car and a motorcycle, rented his spare bedrooms to strangers through Craiglist, and started a side business doing landscaping work. Quickly, he chipped away at his debt. To start, he liquidated his IRA account for $ 8,000, sold stock worth $ 14,000, and used about $ 3,000 of available cash to wipe out one loan. Within seven months, he managed to make his final payment and rid himself of all his debt in March of this year — three months ahead of his goal.

Leaning on thrifty origins

His fanaticism to quickly toss off the debt albatross has its roots in a relatively modest upbringing, despite the fact that his father is a successful auto executive. “I come from a family that respects the value of money — almost to a fault,” he explained in one post. “While money never appeared to be tight, it never got thrown around, either. My mom bought my clothes at Kohl’s. If I wanted name brand, I had to pay for it myself. My mom spent her Saturday mornings clipping coupons. Every single Saturday evening — without fail, no exaggerations — we went to mass followed by dinner at Olive Garden, Red Lobster, or some similarly priced restaurant.”

One anecdote is especially telling. “My dad is extremely careful with money, and he has gone to lengths to try to instill that value within me,” the Harvard MBA wrote. “It took him two weeks and a couple of trips to K-Mart before he finally bought me a bicycle when I was five. When I outgrew that, he paid for a second bike a few years later. On the car ride home after the second shopping trip, he told me that that would be the last bike he ever paid for.”

After he graduated from the University of Michigan with a degree in business in 2005, he went to work as a supervisor in a factory in Austin. “I decided the bonuses and raises of my blue-collar staff, so I knew how little they made and I saw how many of them were living paycheck to paycheck,” he wrote. “In addition, the factory was constantly under the threat of being outsourced and off-shored. Between these two influences, I never felt fat and happy, and was always watching my back for that tap on the shoulder that signals the beginning of a lay-off.”

Weaning off of the MBA spending culture

He concedes now that a shift in his lifestyle occurred during his two years in the MBA program at Harvard. “At HBS, $ 100 dinners for one person in downtown Boston are a standard affair,” he says. “Nobody thinks twice about taking an international vacation — they just go. I remember a friend told me she was going with a group of students to Oktoberfest for the weekend. I asked her what bar she was heading to. She laughed at me and told me the bars in Germany — she was going to the actual Oktoberfest — for the weekend!”

His conclusion is obvious, yet filled with truth. “A lot of people in this country — regardless of socioeconomic status — have an unhealthy obsession with things and experiences and statuses. We shop brands; we drop names. We try to keep up with the Joneses. We comfortably tolerate an unhealthy level of debt.”

Each day during his challenge, Mihalic would pore over a spreadsheet that tracked his progress. The negatives, when he went over his budget, were marked in red, and the positives were in green. On March 29, after seven months of discipline and patience, he made his final payment on the debt. Mihalic says he then had to ask his roommates for their rent a few days early so he could meet his mortgage payment three days later.

“I felt good,” he recalls. “I knew that the reward would be worth it. I got misty-eyed looking at the progress I made and all the work that went into it. My heart was beating so hard and I was still in shock that I had done it. On that day I made that payment, I had nothing. But every day I go to work now I’m actually increasing my wealth instead of reducing my debt.”

More from Poets&Quants:

• Graduating With An MBA & Loads of Debt
• Top Feeder Companies to Stanford’s Graduate School of Business
• Our Ranking of the Top 100 MBA Programs in the U.S.

Filed under: Business School, Contributors
From:Management and Career

MBAs gone wild: Have B-schoolers gone too far?

Excessive drinking and other Mad Men-like behavior has become part of the culture of getting an MBA degree at schools like Harvard and Wharton, including, in some cases, sexual harassment.

Harvard Business School

By John A. Byrne

(Poets&Quants) — The Wharton MBA student finished off 14 Jager bombs, six Red Bull vodkas, and an appletini for good measure — and then he prepped for a case study on Gillette.

The red-faced student was captured on a YouTube video, slurring his words and shouting numerous obscenities. To describe the case study for his upcoming class, he proudly tells the camera and everyone else: “It’s marketing. We got to learn it so that’s what I’m fucking doing.”

The video is merely a joke, a humorous skit in this year’s Wharton Follies. But the idea of portraying a drunken MBA student for a few laughs hits home. The truth is that excessive drinking and other Mad Men-like behavior has become part of the culture of getting an MBA degree at a top school, including, in some cases, sexual harassment.

Last month, at Harvard Business School, the co-president of the school’s student follies show was disciplined because empty containers of alcoholic beverages were found on campus after the show — in violation of school policy. The crackdown by HBS administrators closely followed a report of a sexual assault that “involved unwanted groping” of a female student by one of her section mates at an off-campus venue.

During the course of their investigation, administrators say they became aware of behavior that has been disturbing to many on campus. Another female first-year student, for example, had been told that the men in her section had voted her to have “the second best rack” among her classmates. Many students, the school discovered, were playing a game popularized by the TV show “30 Rock” called “Kill, Fuck, or Marry,” in which students name classmates that they would like to murder, have intercourse with, or wed.

“The vast majority of our faculty were shocked and horrified by it,” says Robin Ely, Harvard’s senior associate dean for culture and community. “As we have learned more about what our students are experiencing, a lot of us are coming home and asking our daughters and find that it is rampant in high school. It’s a larger cultural issue.”

Confronting the B-school culture

Those attitudes are hardly exclusive to Harvard Business School. Professors at several other schools say that the revelations are neither new nor unique.

“The problem of the ‘male adolescent culture’ at business schools is widespread,” says one prominent business school professor who preferred not to be quoted directly on the issue. “And how that ‘excludes’ groups — females, married students, and even some foreign students who don’t fit in — is also an issue. This is simply the Wall Street culture, which really hasn’t changed much since the bad old days, imported to business school.”

In 2008, for example, some MBA students at Northwestern University’s Kellogg School of Management reportedly were so drunk at an event at the Field Museum in Chicago that the bar was shut down early. According to an email written by a student officer, some students attempted to smuggle into the museum “a substantial amount of alcohol” in large trash bins filled with bottles, cans, and flasks.

Some MBA candidates arrived at Kellogg’s open bar event already over-served and began to vomit on themselves. Some students spat at people and threw things at the museum’s $ 8.3 million Tyrannosaurus Rex. “It is
pretty embarrassing that the Field Museum will refuse to host future
Kellogg events unless they can treat it like a high school prom, with
breathalyzers, high security, and chaperones,” wrote Andrea Hanson, then a vice president of the Kellogg Student Association.

In many cases, faculty and deans aren’t all that aware of the behavior because it occurs outside of the classroom. But there is an expectation that some bad behavior is inevitable. “These are MBAs,” says Amir Ziv, vice dean at Columbia Business School. “They are in their late 20s. There is a lot of youth and there is alcohol at parties.”

Some MBA students say the partying and the jokes are light-hearted fun and that there is a generational gap that leads to misunderstandings by older faculty, particularly over the playing of the “Kill, Fuck and Marry” game. “My sense is that the game is played with some frequency, and that many students were surprised that it was cited as part of the ‘problem’ that might exist within the culture here,” explained one Harvard MBA student who asked to remain anonymous. “The game is played very casually by some, and to many it seems unreasonable to draw a line between that game being played and an incident of sexual assault.”

When it’s no longer fun and games

On April 26, Harvard Business School called “mandatory lunches” with all 10 of its 90-person sections of first-year MBA sections to discuss the accusations of sexual harassment on campus. The meetings, led by both faculty and students, were scheduled at the request of student leaders after the administration began a dialogue with them.

Faculty members at several other prominent schools say the behavior is fairly prevalent. “It happens everywhere, in business schools and in the organizations MBA students come from,” says Mandy O’Neill, a professor who studies gender issues at George Mason University’s business school. “Some of the joking isn’t all that different than what goes on in the workplace. It’s the same kind of behavior. They just import it.

“Sometimes, it’s not the games they play,” adds O’Neill, who has also taught at Stanford University and the Wharton School. “It’s what they say.” It can be common, for example, for male MBA students to say they would never marry anyone in their class because aspiring career women are aggressive, assertive, and dominant. “The reason it is a problem is because it conflicts with the expectation of women as warm and submissive,” says O’Neill. “A lot of successful women will say the same thing: ‘I don’t want anyone who is that driven. I want someone who will cook and stay home and take care of the children.’ But it’s the way people talk about their classmates that I find most disturbing. Their language is, ‘She’s a bossy bitch.’”

O’Neill, however, sees graduate business education as an opportunity to more positively influence such attitudes and the behaviors they cultivate. “A business school education should be an intervention on how you can be a better and more inclusive manager and change agent. So when students go back into their industries, they have the opportunity to engage differently with their colleagues.”

At Harvard, that may well be one of the reasons Dean Nitin Nohria created the new associate dean position for culture and community soon after taking office a year-and-a-half ago and named Ely, a professor who specializes in gender issues, to the post.

“We know that there are cultural issues outside the institution, but we think that there are things we can do to address and mitigate them,” says Harvard’s Ely. “It doesn’t mean we don’t bear responsibility for addressing it. They are going to encounter these same issues when they leave. Part of our responsibility is to help them deal with these issues constructively.”

Addressing gender issues inside the classroom

As part of that initiative, Ely has authored a 40-page report on Harvard’s culture, examining 10 years of data on students and academic performance. In late March and early April, groups of faculty have come together to discuss the findings of what is still a confidential report.

“One of the main reasons for doing this is that our faculty had an uneven understanding of what our students experience,” says Ely. “So people found different things interesting and surprising. One result has to do with the gender grade gap, and that is something that has been on our minds for a while.”

A couple of years ago, a Harvard study found that proportionally more men than women receive academic honors at HBS and that had been the case for many years. Though women accounted for 36% of Harvard’s Class of 2009, only 11% of the school’s Baker Scholars were female. That honor is given to students who are in the top 5% of HBS’ graduating class. Meantime, only 21% of the first-year honors (for being in the top 20%) for the class were awarded to women, and only 22% of the second-year honors were given to women.

“We analyzed the data and found that the grade gap has actually gone,” notes Ely. “The first year of the current class of 2012, there was no significant difference in grades between men and women. And then we looked at the first term for the class of 2013, and there were no significant differences.”

Ely says that the recent revelations at Harvard won’t change the nature of her job. “In some ways, it helps to illustrate the current nature of the problem,” she says. “It gives people a sense of urgency — if they didn’t have it before. We have made progress in some ways as evidenced by the disappearance of the grade gap. But this is a complex issue, and it’s not going to go away overnight.”

More from Poets&Quants:

• Graduating With An MBA & Loads of Debt
• Top Feeder Companies to Stanford’s Graduate School of Business
• Wharton May Add Team-Based Discussion For MBA Applicants

Filed under: Business School, Contributors
From:Management and Career