In my last two columns I wrote that a business should be built and managed on a foundation of solid principles. I argued that a good reputation counts for more than a smart strategy or clever tactics. That message hit a nerve among readers, who filled my E-mail to overflowing with hundreds of letters, many of them touching accounts of fathers, grandmother or their first boss, who taught them early on how important reputation was to success.

One of the letters I most enjoyed was about my proposal that business schools offer an M.B.O. (Master of Business Ownership) as well as an M.B.A. degree. The reader made a sensible suggestion: Instead of paying tuition in the final year, a student would be required to raise his own money for equity to start and run a small business--say, a hot dog stand, car wash or dry cleaner. The student would have to write a business plan and submit it for approval by the school's investment committee. If the plan were approved, the student would get additional capital in the form of a loan from the college's endowment fund--a full recourse loan with an interest rate and equity kicker commensurate with the risk involved in any startup. The student would love to write a business plan and submit for approval by the school's investment committee. If the plan were approved, the student would get additional capital in the form of a loan from the college's endowment fund--a full recourse loan with an interest rate and equity kicker commensurate with the risk involved in any startup. The student would run the business for the year, with real employees, real rent and real taxes.

A passing grade and a diploma would depend on three factors: The business must have been conducted in a principled way; it must report a cash operating profit at the end of the year (there go the technology ventures); and the student must have added value to the initial capital. The third would be the toughest requirement. The student would have to find a buyer who would confirm the soundness of the investment by paying more for the business than was invested in it. That would be the final examination: Had the student added value to the money he used?

Oh, I almost. Faculty members would not be allowed to teach at the school until they had fulfilled the same requirement. We may never get such a school for lack of qualifying teachers.

Would this be good training? Would the M.B.O. diploma be valuable? Absolutely. Is it likely to happen? Alas, probably not. Another reader, a black partner of a law firm in a big, tough American city, wrote to tell me that he devotes a significant amount of his time to helping minority business owners start and grow their companies. He said that while it was easy to teach accounting, finance, manufacturing and marketing, these were not the most important skills needed. What his students lack, he wrote, are an ability to trust other people and the unshakable faith in the future they need to overcome temporary failures and setbacks.

This second letter got me thinking: Is there a way to expose grade-school children to experiences designed to teach them the three bedrock essentials of business success? In my view these are: 1) an understanding that a good reputation is a major form of capital; 2) an ability to distinguish between people who are trustworthy and those who are not; and 3) the realization that it is okay to fail, so long as you get back up, dust yourself off and try again. There is such an emphasis today on being cool, and on being a winner--in sports, on television and in advertisements--that we are forgetting what a valuable teacher losing can be. Most of the people I know who have built great companies didn't hit a home run their first time at bat. More than any business school professor ever could, not being able to make payroll will sear the importance of cash flow into your brain.

How do I know? I have been there. Know what it taught me? To shy away from hiring people with perfect résumés. It is the heart and the gut, not the head or the résumé, that matter most in business.