One of the most striking things you may notice about Steve Morrissette is his modesty. While insisting that there are many other terrific courses students should take at Booth, Morrissette brings his vast industry experience and meticulous preparation each year to deliver his Mergers and Acquisitions strategy class to Booth.
After receiving his MBA from Booth in 1990, Morrissette has held numerous CFO and CEO roles, primarily in commercial banking. From this, he has developed a toolkit that runs the gamut from mergers and acquisition strategy, corporate development, post-merger integration, and entrepreneurship—skills he continues to use in the “real world” through his consulting company and his work with start-ups and search funds. Morrissette’s decision six years ago to add teaching to his busy schedule was highly influenced by his experience at Booth: “I was tremendously appreciative of the education I have got at Booth. I learned a lot from my professors here, it built upon my strengths, and it stretched and grew me significantly.”
Reflecting on how Booth has changed, Morrissette recalls what it was like teaching at Booth for the first time: “When I got my course evaluation forms back, students were saying that they spent 4 ½ or 5 hours a week on my course. I went to my mentor and I said ‘I’m embarrassed that students are only spending 4 ½ or 5 hours on my class.’ Because when I went to school, the more time consuming classes were more like 10 to 12 hours a week. And my mentor said ‘One of the things that has changed is that now there are so many other activities that we want students to participate in such that 5 hours now is a very appropriate level of coursework.’”
Why should all Booth students care about mergers and acquisitions? “Thinking about acquisitions forces a clarity of understanding of a firm’s core strategy. To use an analogy, you get the x-rays and bloodwork, and you’re tying together a series of diagnostics that allow you to look at a strategy or an acquisition from multiple dimensions, understand it, then come to a critical thought on whether or not a strategy or an acquisition is going to be effective.” To go beyond a class of “practitioner war stories”, Morrissette spent approximately 250 hours conducting research for his course. To keep his subject matter up to date, he invests time each year interviewing industry practitioners and hours each work reading industry-related material.
How does he have time for all of this? Using an investing analogy, he describes his time management strategy as one of keeping a balanced portfolio—making sure his time is being spent in a way that gives him the greatest return (both non-financial and financial): “I spend about a third of my time teaching, a third consulting, and a third doing board and investing work. I track all of my hours. Because I came from a billable consulting world, I literally track them in a software package so that I know where my time is going…I don’t track personal time—I’m not that extreme.” Still not clear on how Morrissette has time for all that he does? Well, he admits that he doesn’t get enough sleep.
Banking vs. consulting? Morrissette chooses none of the above for fresh MBA graduates: “I am of the side that line experience, ‘real jobs’—running something in an operating business as opposed to providing services to an operating business—are extremely valuable. I believe that there is no substitute for real line experience.” Although Morrissette acknowledges the value that professional services can provide to those who are new to business, Morrissette has other ideas for fresh MBA graduates: “There are thousands of companies in the U.S. that need new ownership. There are thousands of new ideas to come up with, but sometimes finding that great new idea is more difficult and much higher risk than buying one of those thousands of companies out there.” A search fund provides a vehicle for MBA graduates (the “searchers” in search fund speak) by committing a $10 to $15 million investments in a company like what Morrissette describes, while providing the MBA graduate with two years of post-MBA salary ($300 - $400k) plus a 20% stake in the company. Morrissette speaks of a Booth graduate and guest speaker in his class who headed a six employee company through a search fund, growing the company to 600-800 employees through a series of eight acquisitions over eight years. For searchers who are not able to achieve this type of success, Morrissette still views the experience as a win: “Even if the company fails, in three or four years, you can say that you had 15 wealthy investors willing to back you, it didn’t work out, but it was a great experience searching for an acquisition where you looked at hundreds of companies, streamed them down, did due diligence, and ran one.’ That’s a hell of a lesson. That is not a failure on the resume. For the searcher, instead of being an MD at Goldman or a manager at McKinsey, they would have to start over after five years. But the skill set they build is tremendous.”
One last piece of career advice Morrissette has for Booth students is to not overlook the skillset one develops from middle-market companies, going so far as to argue that admitting more students from middle market companies and family businesses will positively impact the learning experience for all at Booth.
Araba is a first year at Booth who recently discovered that there’s life above the 2nd floor of Harper Center.