Cal State Fullerton students get to tell businesses a thing or two

Typically in this world, the old teach the young.

The veterans train the novices.

Jedi masters instruct padawans.

But the CSUF Consulting program turns that on its head.

Semester-long projects allow Cal State Fullerton students to apply their classroom lessons to real-life situations while providing free or low-cost consulting to businesses in the community.

While students attend lectures and complete homework, they also meet with their clients to lay out goals, brainstorm with teammates to craft solutions and rehearse an end-of-semester presentation that will count toward their grade and, when things go right, satisfy their clients’ needs.

In the process, the students might interview customers or potential customers, research competitor strategies and visit the work site to get a feel for the company’s culture.

Students are kept on track by their professor and volunteer mentors who are professionals in their fields. They might point out a hole in the team’s research or nudge the team’s thinking in a new direction. But by and large the work is the students’ own.

“Why would someone who has been a business owner for 30 years rely on the things that a bunch of undergrads are telling her?” posed associate professor Atul Teckchandani to one such class, Management 464: Entrepreneurial Leadership, during fall semester. “If the recommendations are credible, then she will.” Credibility comes from thorough research, he said.

Teckchandani taught his students concepts including design thinking, which uses such tools as empathy to solve problems, and root cause analysis, which champions moving beyond the surface of a problem. He introduced case studies from such companies as NUMMI, Zappos and Nordstrom in discussing the components of a company’s culture.

“When Nordstrom says ‘Use your judgment,’ that’s their culture,” he said.

The class divided into teams at the first class meeting, choosing among clients that had contacted the program for help or, in some cases, been recruited by the students.

Student teams did consulting for coffee chains, a pizza restaurant, a music collective and a home health care business.

Two teams worked on similar client challenges: how to attract more millennials into the business. One was a hair salon, the other an insurance office.

Pulling in millennial hair stylists

For more than 30 years, Barbara Nolasco, owner of Artistic Hair, a salon in Orange, has hired graduates fresh out of cosmetology school and put them through training in styling and client management. But in recent years, more trainees have dropped out, resistant to work 40 hours a week, put in the work to build a client base and learn new skills.

Problem

“As I worked with younger and younger hairdressers, my systems didn’t seem to be as effective,” Nolasco said.

“The one thing I admired about millennials is they have figured out a way to make work not their main priority. I think that’s admirable,” she said. But the flip side is they aren’t as “hungry” as previous generations, since they are staying single longer and often still living with parents. In her salon, that translates into new stylists not building a clientele as quickly as previous stylists, which means they don’t pay full rent as soon – taking up to two years as opposed to six months previously.

Nolasco also was frustrated they didn’t like being told what to do.

“How do I go about teaching them something without sounding like I’m telling them what to do?”

Nolasco didn’t have to go far to find help. Amanda Martinez, a student in Management 464, has been a stylist at the salon for more than eight years. She went back to college to obtain the skills and education needed to open her own salon one day.

“In completing various consulting projects, I have made many contacts, and learned more than I expected I would,” Martinez said. “I’m so grateful to attend a university where I can learn firsthand about the industry I want to grow professionally in.  Also, my network is growing, which, I’m realizing more and more, is so important.”

Martinez recruited her boss as a client for her class and – with team members Helen Gip, Madison Davidson, Saipele Sala, Carrie Clark and Alex Noble – set about to analyze the source of the problem and suggest solutions.

To understand the dynamics of attracting millennials and better retaining clients, the team distributed surveys on Facebook, receiving 102 anonymous replies. Surveys asked people what they want when they visit a hair salon and asked stylists how they retain clients.

The team also interviewed hairstylists and salon owners and walked into beauty schools to observe the learning environment and meet students to learn what they expect after graduation.

To help assess the salon’s strengths and weaknesses in recruiting stylists, the team used an approach to problem solving called a congruence model, which they had learned in class. The model is used by managers and consulting firms to improve the fit (or congruence) among four organizational building blocks: critical tasks, people, formal organization and informal culture.

For example, the team kept in mind Nolasco’s preference to hire newly graduated stylists, rather than established stylists with their own clientele, to preserve the salon’s longtime culture.

Findings

“We concluded that Artistic Hair Salon undergoes problems with their current training program because it does not fit the needs and desires that millennial stylists are comfortable with,” the team said in its report.

Artistic Hair’s training program, which hadn’t changed in 30 years, required new hires to work the front desk while assisting stylists by shampooing, mixing color and cleaning up. But the team’s findings showed that millennials want more hands-on experience sooner. They also respond well to training programs with clearly defined levels.

“These days, your assistants don’t want to be your assistant for very long.  They want to get on the floor right away,” one stylist who has managed three salons told the team.

Millennials also need to work on people skills, one salon owner told the team.

The students also sought suggestions to help Artistic Hair retain clients more effectively. Typically, the salon’s stylists send out thank-you notes to clients, but that tactic was called outdated by survey respondents, who text instead. Other salons also use discounts for client referral and take advantage of social media to introduce new products or incentive offers.

Clients surveyed also mentioned the importance of such extras as a glass of wine or a shoulder massage on top of a great haircut and personal attention.

The students also discovered the salon was using an outdated software program to manage client relationships. Instead, the team researched two cloud-based programs, including Vagaro, which allows clients to book appointments online and lets the salon send out reminder texts and emails, which cut down on no-shows.

Recommendations

To hire and train millennial stylists:

1.            Clearly define a minimum of three levels of training that a trainee must complete before receiving his or her own chair – moving from receptionist to color formulation to shadow assistant – all involving hands-in-hair training.

2.            Give trainees hands-on training instead of cleaning duties whenever possible.

3.            Utilize Artistic Hair’s master stylists in the teaching of trainees in exchange for one week of discounted rent.

To better retain clients:

1.      Implement a follow-up procedure with clients.

2.      Implement a referral program to reward clients who refer a friend.

3.      Pamper clients: serve free wine, offer head massages.

4.      Upgrade salon management software to Vagaro, the less expensive of the two programs.

Aftermath

“I was so pleased with the suggestions they came up with, and I plan on implementing them in the timeline they suggested,” Nolasco said.  “The most important thing I came away with is that my training program must reflect the importance of giving a millennial stylist more hands-on training.” Also, a thorough training in giving a great consultation will help with retaining clients, she said.

After the team’s presentation, Nolasco contacted Vagaro, which will save the salon more than $70 per month, according to Martinez.

“I am so grateful to have been chosen for this project, and I would highly recommend it to any business,” Nolasco said. “Having the team help me to look at the areas that needed improvement will put my salon ahead of the game.”

The salon also gained a new assistant as a result of the consulting project, she said. Team mentor Bob Pierson had provided a contact at a local beauty school, where Martinez was in turn connected with a former student, who went to work at Artistic Hair.

“This is definitely a bonus of the consulting project,” Martinez said. “I love connecting people, and I never could have imagined Cal State Fullerton would help me do that, but I’m so thankful it did.”

Recruiting future insurance agents

Millennials were also an appealing target for an Orange County insurance office that solicited the advice of the Management 464 class. The office was looking to hire recent college graduates to enter a training program that would allow them to one day to own their own insurance agency.

This team encountered some challenges, however, and in the end learned that consultants, like doctors, sometimes have to deliver less-than-wonderful news.

“Having an independent third party confirm a fact that may be unpopular is still of value,” said Derreck Ford, president of JETEC Corp. in Costa Mesa and one of the class mentors, during a critique of the team’s presentation. “This is such a great experience for you guys. It’s very hard to be a consultant and not rah-rah them. Tell the truth.”

Problem

The team – Branden Wells, Alan Cerna, Richard Lazo and Jeremy Wan – conducted interviews, surveys and online research to understand the office’s challenge. Its online research turned up six characteristics especially valued by millennials (those born between 1981 and 1998): social welfare, leadership, team orientation, instant recognition in the workplace, self-sustainability and work-life balance.

The insurance office was successfully delivering on two of those, team orientation and life-work balance, the students determined.

“Millennials like to work where they are not only there to make money but to give back to the community,” the team said during its presentation.

Findings

In 25 interviews with younger millennials, only one expressed interest in being an insurance agent, and he was the son of a couple who own an agency and expect him to take it over when they retire. A few others were planning to pursue underwriting or actuarial work, but most had no knowledge of the industry and/or had a perception it is boring. Surveys turned up one interested person out of 29, who wanted to be more highly compensated and have a shorter training program.

Another discouragement to younger millennials is the $250,000 cash and working spouse required to launch an agency. “That’s one reason the young millennials bounce out. They just don’t have the capital,” the team said.

The team ran across a 2015 study by The Hartford insurance company that found older millennials, those 26 and up, were more likely to want to lead in business within five years than younger millennials. The team posited they might also be more successful insurance agents, since they would have more industry experience and more built-up capital.

Recommendations

That’s what the team pitched to the insurance office’s owner and manager, who declined to be identified for this article. The team recommended that the office’s recruiting ads stress the service agents provide to the community by supporting local homeowners and businesses – playing to the social aspect millennials desire.

The team also recommended a much shorter training program – 17 weeks vs. the three to five years previously required.

But the team members were frustrated that the millennials the office hoped to target were so uninterested, even when it’s pointed out that one upside of owning an insurance agency is a high earning potential.

“She is looking for someone who wants to make millions. And we’re afraid that doesn’t really exist,” Wells said of the agency’s owner, who wanted recruits who are “hungry.” Millennials tend to want to make enough to sustain themselves and live comfortably, he said.

Ford said many businesses are trying to grab millennials. “In this particular case, they don’t fit.”

Another class mentor, Bob Pierson, managing consultant with Profit Recovery Partners in Costa Mesa, assured the team members they were performing a consulting function by advising a client not to spend money where it planned and presenting an alternative.

Echoed associate professor Teckchandani: “They can disagree with it. … My hope is that the requirements are going to be consistent with what they want, but sometimes that doesn’t happen. … What’s important is that you can stand on that foundation you’ve created.”

Aftermath

So that’s what the team did when it presented its recommendations to recruit older millennials and to shorten the training program. By providing more thorough background research after the initial presentation, the team was able to explain the grounds for its findings and overcome some hesitation on the part of the office owner and manager.

But not every problem is easily solvable.

“The friction occurred when we stated where to approach or find these older millennial aspirants,” Wells said. “Our research found no definitive answers on how to recruit these people.”

The team did suggest changing the job posting to better reach them, and discussed methods the mentors recommended, as well as making changes to the office’s formal work culture.

“With the research we conducted, we easily justified the adaptations to postings and work culture,” Wells said.

To become a CSUF Consulting client

Own a business looking for innovative ways to improve? Contact Charlesetta Medina, client project specialist, at cymedina@fullerton.edu or 657-278-8243.