Inside the Winter Garden: Professor James Schrager

Jonathan Park ‘15 E/W

 I was lucky enough to catch Professor James Schrager and interview him for Chicago Business

JAMES E. SCHRAGER, Clinical Professor of Entrepreneurship and Strategic Management

JAMES E. SCHRAGER, Clinical Professor of Entrepreneurship and Strategic Management

ChiBus [CB]: New Venture Strategy is one of the most highly rated and sought after classes. How did you create it?

James Scharger [JS]: The idea for the class came straight out of my original dissertation proposal, which was to answer the question, "Why do some businesses fail while others succeed?" After quite a bit of work, it became clear that idea was too broad to work as a dissertation project, but perhaps a good topic for a course. Since Michael Porter had recently developed his break-through ideas on corporate strategy, I decided to work in the start-up world and see if we could build some useful models there.

[CB]:  What did you have to do to get the class on the course roster?

[JS]: I inherited the class from an adjunct professor  when I was ABD (all but dissertation) studying for my PhD. My idea-which I adapted from law school-was not to do each case as a stand-alone, but to develop what Steve Kaplan would later call "frameworks" so that the lessons from each case could be built in a structure that made sense. I felt this also made it easier to remember. It was somewhat unusual to give a class to someone so junior, but entrepreneurship was not a big deal in business schools back then.

[CB]: What would you say is the single most interesting thing about your background that you don't share with the class?

[JS]: I don't talk enough about racing our sailboat on Lake Michigan with my two boys. This is a decision-intensive experience and the similarities to running a business are significant. I wrote a series of articles for an East Coast sailing magazine titled "The Mind's Eye in Racing" that applied the decision-making model we use in NVS to sailing. This might serve as a interesting application example for business school students. Perhaps I will post those to my faculty web page.

[CB]: Critics often say you can't teach entrepreneurship, especially in an MBA program. How do you respond?

[JS]: I think they are talking about the drive to be an entrepreneur. You can't teach the intense desire to do what it takes to succeed in your own business. You have to come equipped with that. But I think we can, and do, teach a great deal about how to channel that drive, and how to make good decisions to get where you want to go.

[CB]: In class you mention wins and losses. We know your wins. Can you share your biggest loss and what you learned?

[JS]: I dropped out of graduate school at the Univ of California (Davis) to race motorcycles. I supported myself by buying a tiny company that made parts for VW Beetles. From start to finish, it was an utter disaster. I blew my life savings, which was a modest amount then, but as I would later discover, quite tough to replace. I slowly got back on my feet financially, but that wasn't the hard part.

The hard part was looking in the mirror and understanding whose fault it was. It took me a few years. Once I did, a magic door opened that allowed me to understand what happened. I think I would never have been able to do the turn-arounds I later attempted without the failures I had as a struggling entrepreneur. There is a great quote from an early VC talking about portfolio company presidents: "We never lie to others, only to ourselves."

[JS]: Any updates on your corporate strategy research?

Our research has involved 392 Booth students, testing how to provoke "strategic insight" when looking at a very simple case.  Most graduate students--and executives--get it wrong.  I did an executive group at Gleacher yesterday and all 47 missed it.  Yet when viewed in the right light the answer becomes transparent, and everyone sees it.  This is the classic issue of creation of an “ah-ha” moment.  

When we ran the first group, we set up the test with what we thought was absolutely the best way to ignite the insight required.  We had taught the case orally for years and knew it inside out.  So this would be easy.  Only one problem, we had complete failure with our first protocol.  Nobody got it.  

We went back to the drawing board and took a much deeper look at how we were creating insight in our oral teaching of the case.  With help from several Booth psychologists, we redid the experiment, which in laboratory form, does not allow us to go back-and-forth with students as we do in class.  With the new protocol, we got tremendous results.  As Nick Epley told me, "Experiments often show us what we as teachers don't know."

[CB]: Any interesting talents?

[JS]: Steve Martin, my hero, played the banjo. I did too, but was awful at it. I couldn't play it right-side up, much less upside down.

[CB]: Any final advice?

[JS]: Everyone I've met and worked with who is at the top of their field is doing what they love, living their dream. Some people know this at a young age, others need to derive it after being knocked around in the real world for awhile. If you don't know what it is now that's ok. But you have to be open to the feeling, when you get there, of "this is what I was meant to do."