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Eric Benhamou’s course at INSEAD: From start-up to Fortune 500

January 9th, 2009 · 4 Comments · Entrepreneurs

Eric Benhamou started to teach at INSEAD, one of the world’s leading business schools, in 2003. He recently completed his fifth year. “I am just beginning to get a feel of what it is to be a professor there, and every year, I enjoy it more,” he says.

You have an impressive arsenal of degrees, and one of them is a Master of Science from Stanford University’s School of Engineering. How did you end up teaching MBA courses at INSEAD?

It was a coincidence because I did not go to the INSEAD. I had met Gabriel Hawawini, then Dean at the school, and he talked me into teaching there after a casual comment I made in a cocktail party about considering something like that. What I found interesting is that when you have to really teach something, this is when you have to figure out whether you know something or not.

What is the focus of your course?

The title of my course is “From start-up to Fortune 500,” and its subtitle is “Lessons in management and governance.” Over the years, I figured that what would be the most valuable to teach is a practical perspective on creating, building and growing high-tech companies. INSEAD has a very good reputation as a strong academic institution, and, as most top business schools, was short of practitioners. I can’t teach people in advanced finance or theoretical strategies, but I can teach them about practical cases which I have lived through, and I can make them feel what business is really like. As I was building the plan of my course, I came to the conclusion that I should focus on the times when a business is in crisis, because you always learn much more under such conditions than when everything is going well. Also, having been on the receiving end of many lectures, I don’t like when people tell me about their great accomplishments. I prefer to hear about their failures and what they learned from them. So I decided to approach my subject by focusing on the failure mode and on failure modes that I personally experienced and where I was not necessarily at my best.

Can you give two typical examples of such “failures,” one in a start-up, one in a Fortune 500 company? Let’s start with start-ups…

A funded start-up can have a bunch of VCs on its board and the Board is often dysfunctional. VCs don’t know how to function as Board members, nor do they know how to coach the CEO. There are hidden agendas between the venture firms and oftentimes, the CEO is caught in the crossfire. One VC supports the CEO and another VC wants to fire him/her. This happens much more frequently than people suspect. I was caught in a situation like this when I was relatively new as a venture capitalist and I found that it was too late for me to make a difference, because I had failed to raise the bar on governance and the level at which I expected directors to operate. By the time a crisis hit, it was too late. I could not appeal to best practices and best behaviors, because they had never been upheld in the company. From this example, I teach about the importance of setting the right type of governance at the various stages of the life of a company. Even when you have a small fast-moving start-up, it is still important to have a real Board, a Board that is disciplined, and someone has to take the leadership of that Board. It can be the CEO, but it can also be an experienced Board member.

And in a Fortune 500 company?

Most examples are true regardless of the size of the company, but yes, I also teach about the biggest mistake I made as the CEO of a Fortune 500 company. In 2000, when I was still the CEO of 3Com, my Board became very impatient about growing the shareholders’ value at the same pace as the young high-flying startups. They were criticizing the company for not executing as well as Cisco in the enterprise market, and basically wanted to deconstruct the business: “we like this, we like that, but we don’t like this piece of it, so we think you should get rid of it.” My gut was telling me this was the wrong thing to do because we could not just separate out the large enterprise piece without contaminating the whole business. However, I wasn’t sure exactly how to build my case. I handed the matter over to very smart McKinsey consultants who threw in a whole bunch of interesting analyses that validated the Board’s perspective. My gut was still telling me that there was something missing, that this approach was too simple, too simplistic, and failed to take into account the synergies between the businesses, but I could not explain my position forcibly. So I basically gave up under the pressure of smart but under-informed board members.  I should have said instead: “I am the CEO. I set the strategy. I disagree. I can’t prove my case with numbers but my judgement tells me we should stay in this business…” That mistake proved to be costly, because we proceeded with the sale of that large enterprise business. It created such a fracture in the company that it caused it to go into a tailspin. It turns out that this happened at a time when I had already planned to retire from my job. So I said to myself: “well, I may not feel great about this decision but if everybody else, included my appointed successor, does, so who I am to just say “no”? I have to live with it. I’ll go and set this in motion.” This proved to be a very costly mistake and from this I derive a key lesson I teach my students. If as a CEO, you don’t feel completely 100% comfortable with a strategy, you cannot execute well. All your instincts have to be in line; if they are not, it’s better to press the Pause button than the Go button. You must think about it until it feels right. You can hire a group of McKinsey business consultants to support any point of view. They will come up with interesting arguments, they will develop them cogently with great slides, but ultimately, you’ve got to lead from the guts, as Jack Welsh used to say, and if the guts don’t respond, you are not in a position to lead.

How do you see teaching versus mentoring?

The way I approach my course, it’s very close. The reason why students take my course is because they expect that. Many students come to my course for mentorship. They value the experience of a practical perspective. Basically, at the end of the course, students have a flavor of what it’s like to grow a company through different stages and understand the typical failure modes that are looming at each stage. I try to integrate this human dimension in every situation. For example, when I teach a case study, I explain who the actors are, what their backgrounds, and what their basic personality traits are, so the students can anticipate how they will behave in a similar situation and make intelligent analyses. It typically comes home when the students see that the people who teach the case, actually lived the case and are not just professors who pick a case from the Harvard Business Review. I teach very practical things, such as how to create a dashboard. I give them five companies and tell them to imagine that they are the CEO of one of them and need to present at the next Board meeting a dashboard that the Board members will understand. They have to prepare it in 5 slides, no more. So at the next session, I ask for 10 volunteers to present the dashboard and we critique them. They see how I would react and they see it in real time. This is what they expect. The people who take my course have a very high propensity to start a business. When I ask them: “Do you expect to start your own business in the next 5 years?” More than half of them do. Also, 10% of them are already true entrepreneurs who go to INSEAD to prepare for their next start-up, and about 20% of my students plan to take over a family business at some point.

Who are your students?

There are about 50 of them. I always spend a few minutes in the first session to know more about them and I keep some stats. The demographics have not changed all that much over the last five years. The average age is 29 when they start. By the time they graduate, it’s 30. It’s more senior than the MBA course at Stanford or Harvard. It is a diverse group. This year I had students from 13 countries  – which is fairly representative of the overall population at INSEAD, because they have a recruiting policy such that no single country will represent more than 10% of the enrollment. This ensures a level of diversity that I could not get in other top business schools. And I get countries that are hard to get, such as Uzbekistan, for example. I even had a student from Papua New Guinea. This is not like at Stanford where you have primarily Americans, Indians, and Chinese.

Given that a major advantage of business schools is to be able to build a business network, how valuable will it be to build a geographically diverse network?

It’s a good question. It turns out that it will. First of all, persons from a small or less developed country may very be the ministers of commerce or industry one day. And also, if they do not go back to their home country, they are likely to become very successful in mainstream economies somewhere. These people are bound to be very successful. The school is not super-old, but it’s old enough to have a solid track record, so you know where these people are and how far they have been able to go.

What do you learn from teaching?

I have learned that even when you know something, for example a case that you teach every year, there are always angles that you have overlooked or that only come out through discussions with people who bring a fresh perspective. When you walk into the classroom, you have to be humble enough to realize that you have not answered all the questions yet.

Why would you recommend INSEAD?

First, of the top business schools, it is probably the best return on investment. It is a very intense 12-month program rather than a more typical 18-month program. The salaries after graduation are very comparable worldwide to the salaries of graduates from other to the top business schools. And yet, you invest far less in time, in money and opportunity cost. Secondly, it is a great human experience. Harvard, Stanford, or Columbia are US business schools with foreigners attending. INSEAD is truly a global business school – where speaking three languages is a requirement, even though all courses are taught in English. 

Marylene Delbourg-Delphis

To get an overview of Eric Benhamou’s highly successful business story, I suggest that you read the bio on his web site: Srmana Mitra’s extensive series of interviews:  

For more information about Gabriel Hawawini, Professor of Finance and former dean of INSEAD (2000-2006), visit:

For more information about INSEAD:

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4 responses so far ↓

  • 1 Build a Business // Jan 9, 2009 at 2:29 pm

    Great Story! Good luck to Eric.

  • 2 Franklin // Jan 13, 2009 at 12:22 pm

    Great interview ! It’s wonderful that he is humble enough to teach from his mistakes. Learning to say no when everyone says yes is huge. If he had not been on the verge of retirement maybe he would have resisted better. It’s hard to bear the full responsibility of a decision if you don’t fully own the future. Great lesson !

  • 3 Greg James // Jan 13, 2009 at 1:25 pm

    Great Blog. It was good to hear Eric’s experience and I agree, learning from someone who’s willing to discuss their mistakes is far more informative.

  • 4 Talk to INSEAD Students: Starting a Company: Thrills and Agonies // Aug 20, 2009 at 6:10 pm

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