CHAIR Dr. William Frist, Partner, Cressey & CompanyDr. Bill Bates, President and CEO, digiChartJack Bovender Jr., Chairman, HCA Ron Calhoun, President, The Remi Group Rep. Jim Cooper, 5th District, U.S. House of Representatives Richard Cowart, Partner, Baker, Donelson, Bearman, Caldwell & Berkowitz Deke Ellwanger, Former President, HealthSpring Catherine Gemmato-Smith, Managing Director, Jefferies & Co. Roberta Goodman, Health Care Analyst, Health Care Analytics Joel Gordon, Chairman, The Gordon Group Jay Grinney, President and CEO, HealthSouth Dr. Lawrence Hanrahan, Global Lead, Health Facility Development, Accenture Kathy Harris, MBA’85, Partner, Noro-Moseley Partners Douglas Hudson, MBA’94, Chairman and CEO, Simplex Healthcare Joey Jacobs, Chairman, President and CEO, Psychiatric Solutions Dr. Harry Jacobson, Vice Chancellor for Health Affairs, Emeritus, Vanderbilt University Medical Center A.J. Kazimi, MBA’84, Founder and CEO, Cumberland Pharmaceuticals Paul Keckley, Executive Director, Deloitte Center for Health Solutions Ben Leedle, President and CEO, Healthways Holly Meidl, Managing Director, Marsh USA Ken Melkus, Consultant, Welsh, Carson, Anderson & Stowe Rock Morphis, Managing Director, Heritage Group Dr. Wright Pinson, MD’80, Deputy Vice Chancellor for Health Affairs, Vanderbilt University Medical Center Linda Rebrovick, CEO, Consensus Point Thomas Sherrard, Partner, Sherrard & Roe Brian Shipp, CEO, Southeastern Region, Amerigroup Michael Shmerling, Managing Partner, XMi High Growth Development Fund Tom Singleton, BA’70, President and CEO, FTI Cambio Wayne Smith, Chairman and CEO, Community Health Systems Dr. Mitch Steiner, BA’82, Vice Chairman and CEO, GTx Chris Sullivan, National Director, U.S. Healthcare Provider Solutions, Microsoft Corp. Jack Tyrrell, Managing Partner, Richland Ventures David Vandewater, President and CEO, Ardent Health Services Caroline Young, President, Nashville Health Care Council |
Author: Nancy Wise
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Owen’s Health Care Advisory Board
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Bright Future
When asked about his role as Global Brand Strategist at Intel Corporation, the world’s leading manufacturer of microprocessors, Bryan Deaner, MBA’93, cannot help but talk about the future. His job, after all, is to look ahead from 18 months to 2018 and decide, in conjunction with Intel’s other strategists and planners, how best to manage its $35 billion brand portfolio.
This farsightedness, however, is not unique to Deaner and those he works with. If anything, the company as a whole has its sights set squarely on the horizon, as evidenced by its latest marketing and branding campaign, which Deaner had a hand in crafting. Known as “Sponsors of Tomorrow,” it illustrates in a humorous, “geek-chic” way how Intel’s technological breakthroughs will impact everyone’s future.
“One of the things I enjoy most about working here is that we’re creating technology that moves society forward. We’re changing the course of human discovery and endeavor,” he says. “I know that sounds really high-minded, but when you consider the fields that depend on our technology to advance—health care, applied sciences, communications—we’re enabling fascinating leaps ahead.”
Even though Intel currently enjoys an 80 percent market share in the microchip business, Deaner’s job is not without its challenges. He notes that brand management is sometimes more about the shifting mood of the consumer landscape than the competition.
“A major challenge right now is apathy. In many cases the conversation has moved beyond the chip—how fast it is or how small we can make it. It’s now about the user experience,” he explains. “Figuring out how to remain part of that conversation is difficult, especially when you’re not a product for the end-user, like a laptop or phone, but rather something inside one of those products.”
Deaner, who majored in electrical engineering as an undergrad, credits the Owen School with giving him the marketing tools to make sure Intel’s voice is heard in spite of these challenges. “I often hearken back to my experience at Owen,” he says. “My engineering degree helps me understand the products we sell, but my marketing background is what translates that information for the wider audience.”
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‘Cracking the Code’ Conference Examines Consumer Psychology
This past summer marketing professionals and academics gathered at Owen for the 2010 Advertising and Consumer Psychology Conference, titled “Cracking the Code: How Managers Can Drive Profits by Leveraging Principles of Consumer Psychology.” The conference attendees heard presentations on state-of-the-art managerial consumer advice and reviews of up-to-the-minute research on consumer behavior with the goal of ultimately improving managerial decision-making and organizational performance.
Presenters from Owen included conference organizer Steve Posavac, the E. Bronson Ingram Professor of Marketing, and Steve Hoeffler and Jennifer Escalas, both Associate Professors of Marketing.
In his presentation called “Managing the Marketing Mix to Drive Brand Consideration and Choice,” Posavac half-jokingly referred to his selection of the conference t-shirt as an illustration of the way most consumers go about buying products. He simply called colleagues from Owen and got a recommendation for a t-shirt company without thoroughly researching his options according to quality, cost or any other factors. Consumers, he explained, always appreciate an easy decision, and that is one reason endcap displays in supermarkets are so effective.
“Brands are judged more favorably than warranted when judged in isolation,” he said.
Meanwhile Hoeffler focused on the area of radically new products, his marketing research specialty. He said questions need to be asked about whether these products transform the market or create a new one before a strategy can be devised.
“Does it allow customers to do something they’ve never done before?” he asked.
If a product meets that test, then there is more flexibility in advertising and more opportunity to break new ground, while communicating the basic needs met by the product. When bringing out a new product, a company can start with an abstract idea or concept, but Hoeffler said it is important to create a more concrete message at the point of adoption.
Escalas’ presentation highlighted narrative processing and storytelling in ads. She mentioned a dog food campaign that told stories about pets in need of adoption. The dog food was then associated with a good cause and a good story. Escalas went on to talk about what makes for a good story in advertising and emphasized that research has shown stories can build meaning for brands. A surprising finding was consumer data showing fictional stories persuade consumers just as much as factual narratives.
“You need creative ad execution to get through the clutter,” she said.
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Beyond Numbers
Recession or not, there is a constant need for public accountants. Likewise there is a need for graduate-level accounting programs to fill this demand. Yet, while many of these programs only seek applicants with undergraduate accounting degrees, Vanderbilt’s yearlong Master of Accountancy (MAcc) program takes a decidedly different approach. The high-performing individuals who enroll in the MAcc program come from a variety of academic backgrounds. Many, in fact, have liberal arts degrees. What’s more, the program goes a step further than most by providing not only the technical knowledge to practice accounting—around 90 percent of MAcc graduates pass the certified public accountant (CPA) exam within eight months of graduation—but also the crucial business skills, like teamwork and communication, to succeed professionally.
The Idea
There were high hopes for the MAcc program when it launched in 2007, but no one quite expected it to come as far as it has in such a short period of time. The program is already attracting the kind of talented applicants it hoped it would. If anyone deserves credit for this rapid success, it is Associate Professor of Management Karl Hackenbrack, who has guided the program from its very beginning.
With an impressive background that includes numerous professional achievements and a long tenure at the University of Florida’s Fisher School of Accounting, Hackenbrack saw a constant demand for entry-level professionals in the audit service line of public accounting firms. But he also noticed that many new hires lacked the so-called “soft skills”—communication, teamwork and leadership—that are needed in today’s clientoriented professional services firms.
Hackenbrack, therefore, designed the MAcc program, along with Dean Jim Bradford and others, as a way to fill both of these needs. The students, who come primarily from liberal arts backgrounds, are selected for their breadth of experience, diversity of interests and people skills.
“We weren’t encumbered by the traditional idea of what an accounting program should look like,” Hackenbrack says. “We were given the freedom to build something that makes sense for the world that we’re facing today. So we leaned heavily on experience and relationships with those in the public accounting profession to spec out what is sensible today.”
The partnerships that Hackenbrack has forged give MAcc graduates a direct path to employment at firms like Deloitte, Ernst & Young, KPMG, PricewaterhouseCoopers and Grant Thornton.
“The Vanderbilt MAcc program has proven to be a great source of new hires for us,” says Sam DeVane, Managing Partner at Ernst & Young’s Nashville office and an advisory board member for the program. “Karl has done an outstanding job in creating the program and preparing students who are truly ready to be successful in our business.”
The Faculty
The faculty members of the MAcc program have expertise in a variety of areas and provide their students with a well-rounded business education. Students have the opportunity to learn the technical side of accounting, auditing and taxation from seasoned instructors, several of whom have years of experience at public accounting firms. Yet students also receive a managerial perspective by taking coursework with MBA students—from managerial economics and business law to information systems and ethics.
Associate Professor of Management Nicole Thorne Jenkins, a CPA and former Big Four auditor who teaches financial reporting, says her MAcc students, most of whom have liberal arts degrees, are as well or better prepared than many undergraduates with accounting or business degrees.
“People think accountants are in an office working by themselves—kind of loners—but when you’re in public accounting you’re consulting as a business professional and interacting with clients,” she says. “The liberal arts exposure that our students have makes them well-suited for the profession.”
William Henderson, Professor of the Practice of Tax Accounting, who spent 37 years with KPMG, is impressed with the MAcc students’ classroom performance. He notes that they are outpacing his MBA students on grades despite generally having no business experience.
“We don’t have a lot of time, and there’s so much to cover,” he says. “The students put a lot into one year’s time. It’s a tremendously intense program.”
Gary Scudder, the Justin Potter Professor of Operations Management, teaches a broad-based class on business fundamentals, such as supply chain management, which is demonstrated through simulations. Such exercises give the students a context for the accounting and auditing work they will be doing for a variety of business clients.
“We get really motivated, smart students,” Scudder says. “They’re taking hard courses and lots of them. If they can handle that pace, they can succeed in a public accounting firm.”
The Advisers
The MAcc program benefits from an advisory board that includes executives from all of the major public accounting firms. Their guidance in shaping the program has resulted in exceptionally high placement rates for the program’s graduates.
The advisers say it is not the technical skills, but rather the interpersonal ones, that make a successful accountant. They have specifically requested that program administrators attract and develop students with the potential for leadership in the profession.
“The technical side is important—you’ve got to have the basics—but we’ll build on that with new employees,” says board member Randy Laszewski, Managing Partner at KPMG in Nashville. He describes his input as “a buyer’s perspective.”
“What we really need are good, mature people who are analytical, business-minded thinkers and who have good communication skills. That’s more important than just being able to cite accounting rules,” he says.
Board member Sam DeVane, who is Managing Partner with Ernst & Young in Nashville, adds, “People have the impression of accountants as backroom types, but you can’t operate behind the scenes and enjoy success in our profession. You’ve got to be on the front line every day interacting with clients. Focused client interaction is the only way we’re successful.”
In just three years the program has far exceeded the advisers’ expectations, says Greg Anglum, BA’92, MBA’93, Partner at Grant Thornton in Raleigh, N.C. The only board member who is an Owen alumnus, Anglum has a unique stake in seeing the MAcc program succeed.
“We’re all big fans of the program,” he says, “and we all say the same thing: Don’t change what you’re doing in terms of developing these students because they’re really top-notch.”
The Internship
As part of the MAcc program, each student spends 10 weeks interning for a major public accounting firm. Last year Ashley Kushner, BA’09, MAcc’10, and Madison Hampden, MAcc’10, took part in an internship at Deloitte’s office in Hyderabad, India, where they got not only a taste of the auditing work they will be doing as accounting professionals but also a firsthand look at the globalization of business.
“I’ve always wanted to travel abroad and do business,” Hampden says. “India and China are where the big growth is going to happen in the next 20 to 30 years, and it was great to see that myself.”
Deloitte’s 1,000person India office supports American operations by taking up unfinished work after the U.S. workday is done. This 24hour work cycle increases efficiency and provides a competitive advantage, says MAcc advisory board member Jim Brady, CEO of Deloitte’s Assurance & Enterprise Risk Services operation in India.
“It was really telling how important this part of the company is and how important it’s going to become,” Kushner says.
The students worked long hours but fit in sightseeing at the Taj Mahal and in the Golden Triangle region of Agra, Delhi and Jaipur.
“They worked really hard and did good work, and I think both were changed by the experience of living abroad in an emerging market—one of the fastest growing economies in the world,” Brady says of Hampden and Kushner. “It’s life-changing. You realize it’s a global world, not a U.S.-centered world.”
Both Hampden and Kushner accepted full-time jobs with Deloitte. And both plan to work abroad as part of their long-term career plans.
“I’m so glad I went to India because now I know I want to go back,” Kushner says. “Wherever the need is around the globe, if I have the skills, I’ll seek out that opportunity.”
The Testimonial
When Katie Appel, BA’08, MAcc’09, chose to enter the MAcc program, no one was more surprised than her father, Steve Appel, Partner in Charge of KPMG’s Southern Coastal Business Unit and a member of the MAcc advisory board.
“I was very happy, but pretty shocked, honestly,” says Steve, who thought she would choose law school. “She’s always been far more verbal, so I thought the law thing made sense.”
After comparing the two career paths, Katie, who majored in communications and Spanish at Vanderbilt, decided the MAcc program was a better fit. She now works at PricewaterhouseCoopers in Nashville.
“I’m just starting to see the takeaways from this career,” Katie says. “With my CPA and work experience at a Big Four, I can set myself up for the same type of job in business I would have wanted with a law degree—and in less time.”
Plus, she says, she will have opportunities to fulfill another dream: working in South America, where she can use her language skills.
“The markets are really ramping up in Brazil. It’s nice to know I could work abroad through my own company,” she says.
Steve says he is thrilled with Katie’s choice—and with Vanderbilt’s MAcc program. His own company hired half a dozen graduates from the Class of 2010.
“You’ve got all these kids with different backgrounds, and in a year they become CPA-eligible, well-rounded professionals who have already done internships with a Big Four accounting firm,” he says. “It puts them in position for all these opportunities. It doesn’t get better than that.”
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The Right Ingredients
“Baking is all about chemistry,” says Lindsay Beckner, who co-owns FiddleCakes, a Nashville-based bakery, cafe and catering business that can accommodate box lunches for 30 or cupcakes for 500. “You have to be very exact. There’s little room for error.”
Beckner may be referring to what determines a successful recipe for, say, a muffin or a scone, but she could just as well be talking about what determines a successful business, like the one she and fellow co-owner Tasha Ross have built during the past year.
The idea of opening a bakery started with Ross, but the pieces did not fall into place until Professor of Accounting Germain Böer introduced her to Beckner, a fellow Vanderbilt alumna who was working in finance and catering on the side. Ross and Beckner clicked, and their business plan came together quickly: They opened FiddleCakes just five months after their initial meeting.
“Coming from an HOP [human and organizational performance] background at Owen, I knew one of the toughest things would be building a team,” says Ross, who previously worked for a startup software company. “Fortunately we found that we share the same vision.”
An important part of that vision is providing customers with tasty vegan and gluten-free meals. Demand for the latter has grown in recent years as more doctors prescribe restricted diets for those suffering from conditions like autism and celiac disease, the autoimmune disorder caused by gluten proteins in certain grains.
Forgoing eggs and traditional flour makes Ross and Beckner’s task of operating their bakery all the more challenging. “The recipes are much more temperamental than they would be otherwise,” Beckner explains. “Sometimes the mixes don’t rise, and you have to start over again.” The challenge, though, as they see it, is well worth the effort.
“It makes all the difference when, for example, a parent whose child suffers from celiac disease thanks you personally,” Ross says. “Running a successful business is rewarding, but having a social impact on top of that is even better.”
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Her Cup of Tea
A few years ago Karla Diehl started a nightly ritual of serving tea to her family. At the time it never would have crossed her mind that the drink would someday play an important role in her future. Yet today tea is more than just a beverage she enjoys; it is her livelihood. In January she became Chief Operating Officer and Financial Manager at Partners Tea Co., a Nashville-based company specializing in fair trade and organic artisanal teas. For Diehl, whose background was in an altogether different field, it was an opportunity steeped in possibilities.
Prior to Partners, Diehl was President of Edison Automation, an industrial automation firm that she and her husband, Matthew, MBA’87, had co-founded in 1991. When Edison merged with another company in 2007, she decided to start a new chapter in her career and apply her business skills elsewhere. She had spent the better part of two decades at Edison, making a move to someplace other than an industrial, technology-driven company unlikely. Diehl, however, was open-minded about her search.
“I spent a lot of time talking to startup companies and small entrepreneurs who were trying to write business plans, something that I seem to do more of than the average bear,” she says. “You get a good insight into companies when you work with the founder. I met a lot of folks, and I liked a lot of them, but nothing seemed to be a good spot for me.”
Then last fall Diehl took a call from a friend, Lisa Froeb, whose husband, Luke, is the William C. and Margaret W. Oehmig Associate Professor in Entrepreneurship and Free Enterprise. Lisa suggested that she look into a local tea company called Partners Tea.
“I told Lisa that tea sounds lovely and it was all organic and fair trade—things I believe in—but that it was a real stretch to go from selling industrial components to tea,” Diehl says. “But she was persistent and told me more about the company and that a group of women were meeting to learn more. I begrudgingly went to that meeting and almost everyone there ended up investing in the company, including me.”
Partners Tea was founded in 2006 by Nashville native Sarah Scarborough, who incidentally, is engaged to Owen alumnus Jeff Gowdy, MBA’06. During her extensive travels after college, Scarborough became aware of fair trade principles and started developing her own tea business adhering to those guidelines. She relocated to New Zealand to study for a master’s degree and became Co-developer of Scarborough Fair, Australia’s and New Zealand’s largest fair trade tea, coffee and chocolate company. She launched Partners Tea when she returned.
“After that initial meeting I agreed to write a business plan for Sarah,” Diehl says. “People were ready to invest, but they needed to see the plan on paper. We put it together in eight or nine days. All I really did was take Sarah’s extensive knowledge and put it in a format that was acceptable to the business community.”
When Diehl and Scarborough went back to the women investors with the plan, another issue was raised: Who was actually going to run the back office of the company? The investors noted that while Scarborough knew all about the growing, blending and marketing of tea, she was missing some essential business expertise.
Social entrepreneurism, fair trade, organic—all of these are growing trends and that means our company has great macroeconomics.
It’s like having a great bone structure for your business.—Karla Diehl
It was only natural then that Diehl would step in and fill that void. At Sarah’s invitation, she became COO and Financial Manager, assuming responsibility for accounting, shipping, receiving and inventory management.
“Sarah’s not at all enamored with operations, and I love it,” Diehl says. “I live for spreadsheets. I can’t plan a vacation without one. I can’t think without one. Excel is how I get through life, which frightens most of my friends.”
Partners Tea offers six blends and two pure teas—a Ceylon grown in Sri Lanka and an Assam, which is a malty black tea grown in northeastern India. The teas are shipped to a tea blender in California, who sends them to a co-packer in Pennsylvania, who then sends the finished product to Nashville where the custom-designed canisters are packed for delivery.
“The packing of teas for shipping is done by our group of investors at tea-packing parties at my house,” Diehl says. “It makes your investment ‘more real’ when you’re physically working with the product. We’ll pack hundreds and hundreds of canisters into cases and master cases several times during the year.”
Teas are available online at www.partnerstea.com, at select Whole Foods stores in the Southeast, at the Williams-Sonoma–owned chain West Elm during the holidays, and in cafes across the country. They recently added a sales representative in California and also picked up several new accounts thanks to their participation in industry trade shows earlier this year.
“We’re kind of a gift- and gourmet-type product because our price point is around $10–$12. It’s a great, lovely little package that’s perfect for a wide range of people—almost everyone drinks tea,” Diehl says.
Diehl is also very excited about the company’s membership in 1% for the Planet, a global movement of nearly 1,400 companies that donate 1 percent of their total sales to worthy causes. Partners Tea gives in support of increasing opportunities for women.
“Ours goes back to the tea estate in Sri Lanka where our Ceylon tea is grown,” she says. “Picking tea is primarily a woman’s job, and they’re pretty much on the lowest end of the totem pole in their society. We’re helping to improve their standard of living with our donation.”
Women helping women is an ongoing theme surrounding Partners Tea and its investors.
“There’s been research into what’s called ‘the girl effect,’” Diehl says. “This study shows that when women are educated and given opportunities, it raises the whole economic and social level of their community. When women earn income, they reinvest 90 percent of it back into their families.”
If women helping women is a primary theme, the Owen connection is certainly a close second. Of the 11 women involved in Partners Tea, six either are alumni or have close family members who are. Aside from Diehl, Luke Froeb and Jeff Gowdy, Owen connections to Partners Tea include Fleming Wilt, BS’91, EMBA’00; Cathy Brown, BA’86, MBA’90; and Michael Lindley, MBA’88.
Diehl credits her own business savvy to her Owen education. “Owen taught me to look at a business’ macroeconomics, and tea is a hot growth market right now,” she says. “Social entrepreneurism, fair trade, organic—all of these are growing trends and that means our company has great macroeconomics. It’s like having a great bone structure for your business.”
Making the transition from engineering and electronics to organic tea has been an interesting switch for Diehl. “What I’m most satisfied with at the end of the day is building something,” she says. “It’s satisfying to watch the market acceptance and the growth. The sales are showing me that it’s a good, fundamental business.”
Diehl also jokes that tea is certainly easier for people to relate to than her previous business. “I used to say that my husband and I had the No. 1 cocktail party buzz killer,” she says. “People would ask what I did, and I’d tell them I ran an industrial automation firm that works with communications in the utilities market. You could see their eyes glaze over.
“Tea is a lot easier to talk about.”
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Someway, Somehow
“Do you think it’s possible that he put diesel in the tank instead of petrol?”
I asked Girish this question while we sat in our broken-down car facing three cows and a street vendor selling coconuts. Girish, whom I had met at the Hong Kong University of Science and Technology during my Owen semester abroad, was taking me on a tour of his hometown of Delhi, India, by way of a two-hour gas station visit. Minutes later the guilty station attendant put one end of a hose in our gas tank and the other end in his mouth. Before I could say, “Please, whatever you do, do not do that,” he inhaled to create a suction that pumped the gasoline into a waste bucket. Meanwhile Girish looked at me, shrugged his shoulders and said, “Jugaar.”
Jugaar is a Hindi term that loosely translates as “things will work out, somehow.” Is a man attempting to fix your car by sucking gas out of a hose? Jugaar. Or perhaps a shopkeeper does not have 7 rupees in change, so he offers you 5 rupees and a piece of chocolate instead? Jugaar. Or maybe it is too hot to sleep at night so you pull the mattress onto your balcony and wrap a mosquito net around the railing? Jugaar. I had to remind myself to be resourceful and remain optimistic during my visit to India—even when the clear path to success was either blocked or unavailable.
Those of us who are business professionals in the U.S. could certainly benefit from this line of thinking, especially during these lean economic times. Perhaps your company has slashed its budget and work force, and you are now saddled with extra burdens? Jugaar. Or maybe you are among those who were laid off and are now trying your hand at entrepreneurism? Jugaar. We are all making do with fewer resources and relying now more than ever on creativity and innovation to keep moving forward.
While in India, I dedicated my time to working with Goonj, an NGO (nongovernmental organization) with offices in seven cities, a network that spans 21 states, and partnerships with 150 groups, including other NGOs and the Indian army. The idea behind the organization, which was founded by Anshu Gupta in 1999, is “clothes for development”—utilizing donated clothing and other items as compensation for development work, like digging wells, building schools and constructing bridges in village communities. In this way Goonj enhances the efforts of other social entrepreneurs by providing a way to compensate village laborers without using cash.
The key to Goonj’s success is a lean business model fueled by innovation and resourcefulness. The clothing and other donated goods are gathered from affluent families at collection points in urban areas and then filtered through a complex supply chain that eventually reaches rural villages. Any donated item that arrives at the Goonj warehouse in poor condition is broken down into raw material, which is then used in making items such as quilts, bags and children’s toys. Even small threads that fall on the production-line floor are collected and sent to the seamstress team for product development.
To raise funds Goonj sometimes sells the items it receives. For example, if a donated book will not be used in a village, the team will sell it to a bookstore in the city to generate income. The NGO also sells the products it makes to clientele in the cities. These items include folders, purses, wallets, cell phone holders and greeting cards. I even witnessed a donated Michael Jackson cassette tape repurposed into other items, including stripping the tape out of the cassette and using it to weave handbags and mats. The Goonj team consistently finds a way to promote and advance its efforts by working with what it has and within its means.
In many ways Goonj provides a model not just for other organizations in India but for those elsewhere, including the U.S. The NGO is small enough to respond to fluctuations in donations and has kept its fixed costs low enough to ensure that profit centers keep the organization afloat. Its technology may be outdated, the office space cluttered and the sorting center dilapidated, but Goonj has effectively optimized its production and supply chains. Its warehousing model can compete with any corporate Six Sigma project.
Success comes down to whether we are willing to look at and work with what is in front of us. Rigid perceptions of how things should or used to be eventually give way to the certainty of how things are. Organizations that stay lean and remain creative with resources are the ones that will be standing when the smoke of the recession clears. It may not be easy, but things will work out, somehow. Jugaar.
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Military Discipline
Ray Sumner, MBA’10, woke up in a bed with white sheets. He recognized his mother, who was holding his right hand. She had traveled from their family farm on Staten Island to keep vigil at his bedside in Bethesda Naval Hospital.
Sumner did not know she would be there. Until someone told him, he did not even know where “there” was. The last thing he remembered was being with his unit, the 25th Marine Division, on the debris-strewn streets of Haditha, Iraq. It was the 11th week of his second tour in the country, and his battalion was engaged in house-to-house operations in the heart of the Sunni Triangle—one reason the 25th sustained the highest casualty rate of any outfit during the war.
Sumner remembers clearly how an insurgent ran out of a house and fired off a few quick rounds as the Marines were clearing a block. One bullet struck Sumner in the right hip, severing an artery. He was in a coma for 10 days. And then, suddenly, he found himself in Bethesda, Md.
The Marines never leave one of their own behind. For Sumner, who spent 18 years as an officer, the reverse is also true. Despite the injuries and rehabilitation, he would sign up again tomorrow if the Marines called him. Sumner still misses it. In some sense that is a big part of what attracted him to the Owen School.
How is Owen like a military enterprise? The question may seem odd to someone who has never worn the uniform. But to veterans who earned MBAs at Vanderbilt after earning their stripes, the connections seem obvious. For four of them—among the surprisingly large number who gravitate to this relatively small business school—seeing those connections made all the difference in their choice to enroll and in the directions their careers have taken.
For Ray Sumner it was the camaraderie—“the biggest thing I missed about the military,” he says. “I looked at other big-name schools. Vanderbilt is extremely competitive but friendly. The others were hostile-competitive.”
Sumner particularly remembers his first campus visit in 2008. “I immediately felt like I was part of the Owen family,” he says. “That’s how the Marine Corps is. It’s the smallest branch of the service. Very close-knit. You get to know a lot of the other officers.”
Life Mission
Kyle Clay, MBA’09, by contrast, was not looking for something small. Ever since he was a football star and three-sport athlete in Lima, Ohio, Clay sought opportunities to be involved with something larger than himself. That is one reason why he accepted a scholarship to play football at West Point, and why he was drawn to the health care field after his military commitment ended.In between his graduation from the U.S. Military Academy and Owen, parts of his service experience were a reminder why the old Chinese saying “may you live in interesting times” was originally intended as a curse.
In June 2003 Clay arrived at an abandoned water purification plant near Baghdad. The soldiers called it Dogwood, but it might have been more accurately named Hell. There was no running water. No air conditioning. Temperatures routinely surpassed 110 degrees.
“You’d get to midday and just want to take a nap because you couldn’t get anything done,” remembers Clay, who was a lieutenant in the 54th Engineer Battalion. “Nothing could have prepared me for Iraq.”
Clay and his men lived off prepackaged rations, or MREs. Sometimes, when they had to pick up arriving soldiers and supplies, they would navigate the deadliest stretch of highway in Iraq—dubbed “RPG Alley” for the prevalence of rocket-propelled grenades—and grab some hot food at the airport, where, almost surreally, there was a Burger King.
Among Clay’s responsibilities was leading convoys—an innocuous-sounding job that was a very dangerous assignment in Iraq. The supply convoys traveled under constant threat of attack from improvised explosive devices (IEDs). His convoy was hit only once during his first six months, but tension soared every time they ventured onto the roads.
Clay’s second deployment to Iraq made the first tour look civilized. Stationed in Ramadi and Fallujah, scenes of the war’s most intense fighting, Clay was assigned to “route clearance”—an Army euphemism for bomb removal.
You can create your own path at Owen. After nine years of a very strict environment, it was a great place for me to try a smattering of academic and extracurricular activities.
—Kyle Clay
Clay soon realized how increasingly sophisticated the insurgents’ techniques had become during the year he was back on base in Germany. “Some IEDs were buried deep enough that our equipment couldn’t detect them,” he says. One, he remembers, was planted in a manhole. It detonated as a vehicle in his battalion passed over it. The manhole cover rocketed through the underside of the vehicle, killing and wounding several soldiers. In all, he lost seven men in 12 months. All told, his engineer battalion removed 1,000 IEDs.
Even before he came home from Iraq, Clay knew he wanted to go to business school. He had become interested in health care—something that, to him, was more than just business. That led him to Owen, where he found the change he sought and the continuity he needed.
Like the Army, he says, Owen is extremely collegial, and there is a sense of purpose even among students with different career aims and areas of focus. For example, with colleagues involved in Project Pyramid, the student-led initiative to alleviate global poverty, Clay had the opportunity to travel to Bangladesh. “Even in Iraq, I’d never been face-to-face with such poverty,” he says. “It was life-changing.”
In contrast to the Army, Owen’s Health Care MBA program is extremely entrepreneurial, Clay says: “You can create your own path. After nine years of a very strict environment, Owen was a great place for me to try a smattering of academic and extracurricular activities.”
It is a far cry from Dogwood, but Clay is today, once again, in the desert—Phoenix, to be exact—where summer temperatures can reach a Baghdad-like 114 degrees. As a Regional Operations Director for DaVita, North America’s largest operator of kidney dialysis centers, Clay oversees 11 in-center dialysis clinics and two home programs.
“The position demands a very different type of management from the Army,” he says. And yet, he adds, “I entered into an environment not unlike the military. We are all focused on one mission.”
That mission is life. Without dialysis or a kidney transplant, every patient with end-stage renal disease will die. With dialysis, they can live, work and stay with their families. “That’s what gets me excited about this company,” Clay says. “We are a community first and a company second.”
The name DaVita comes from an Italian phrase that roughly translates as “he or she gives life.” Clay likes the sound of it. For someone who has traveled so closely with death, it feels good to be surrounded by givers of life.
Anchors Aweigh
As a boy, Henry Guy, MBA’98, had the power to determine whether kids in his community would have to attend school. Guy grew up on Smith Island, off Maryland’s Eastern Shore. He was the son of a son of a son of a fisherman who caught blue crabs and oysters in the Chesapeake Bay.Getting to school involved an hour’s trip by boat. The boat’s captain had a policy for rough weather: If even one kid wanted to make the trip, the school boat would run.
“My parents were very focused on education,” Guy explains. “It didn’t matter if there was a hurricane out there, it was, ‘Get up and get on the boat.’ So on days when it was extremely windy, the neighborhood kids would congregate in our yard to see if I was going to go, and when I walked out, they’d all moan, ‘Aww, man.’ A couple of times they even booed.”
But Guy did not let this singular power go to his head. Even in the relatively small pond of Crisfield High, he looked up to others as role models—especially one older boy whom he remembers as “all the things I tried to be.” When that student pursued a spot in one of the service academies, Guy’s interest was piqued.
Guy eventually enrolled at the U.S. Naval Academy, where he was struck immediately by how accomplished so many of his fellow students already were. His first-year roommate, an Iowan, was fluent in Russian and spent his summer as an interpreter overseas. “There were guys who went on to Rhodes Scholarships or completed their graduate education while at the academy,” says Guy, who was a teammate of future NBA star David Robinson on Navy’s basketball team. “A number of experiences like that made me think, ‘Wow, if you work hard and take advantage of the opportunities put in front of you, that opens the door to a host of new opportunities.’”
He brought that mindset to his first posting as a division officer aboard the USS Comte de Grasse, a destroyer named for the French admiral whose blockade of Yorktown helped win the Revolutionary War. The Comte de Grasse focused on maritime interdiction: looking for Caribbean drug smugglers, patrolling the Red Sea to intercept materials headed for Iraq, or boarding ships in the Adriatic to stop weapons from reaching combatants during the Balkan wars.
Meanwhile, remembering his lesson from the academy, Guy soaked up all the knowledge he could from rotations involving various systems and areas of the ship’s operations. Every duty was an opportunity. It helped him move up to become an aide to an admiral, a coveted position for a junior officer.
That mentality also helped him choose Vanderbilt when his five-year commitment ended. “I very much considered myself to be raw material,” he says. “I knew nothing about the business world I’d soon be entering. The mod system allows you to take many more classes than a traditional semester system. That was very appealing to me because I felt like I had so much to learn. Every mod, I got permission to take extra classes. I wanted to sample everything out there.”
In other ways, too, the Owen experience built on what Guy liked most about the Navy. He liked the way that much of the work at Owen was team-oriented, just as it was aboard a ship. He also liked the way that Owen’s “approach is focused on how we get people to go out and be contributors right away. It’s not a stamp. Everything is structured so that it wraps itself around the individual rather than being a one-size-fits-all factory.” It was the right way to do things, Guy believes, and that, too, created continuity. “At the Naval Academy,” he explains, “there’s a huge focus on doing things the right way, honoring the legacy of the past.”
The mindset from the academy and from Owen carried over into Modern Holdings, the New York investment firm he founded. As President and CEO, Guy believes the right way to run a business is to work as a team and to think long term. “We’re not a traditional private equity firm,” he explains. “We invest our own money, and that makes for a different decision-making process. We don’t look to flip companies. To me, the value is how we can help grow the business over time.”
More than anything, Guy’s approach has its roots on Smith Island. Modern Holdings typically buys closely held family enterprises. Because he grew up around such a business, he holds a special appreciation for them. Fishermen, he reflects, are not merely people who ply a trade. “They’re entrepreneurs,” he says. “They’re huge risk takers who are up against a formidable competitor—Mother Nature.”
Leaping at an Opportunity
For Lindsey White, MBA’10, jumping out of airplanes turned out to be especially relevant preparation for Owen. A self-described “Army brat” who split her childhood between Germany, Oklahoma, North Carolina and Tennessee, she grew up literally wanting to follow in the footsteps of her father, a paratrooper in the 101st Airborne. As a young girl, she would practice by sliding her feet into his big boots and hurtling off the living room sofa.So, after White enrolled at the U.S. Air Force Academy, it was not surprising that she volunteered for jump school. “The first time I jumped,” she recalls, “was a frightening experience. You don’t know up or down. You’re just falling and counting and remembering when you are supposed to pull this cord. By the third time, it’s a little more automatic. On my fourth jump, the chute got twisted, but by then I knew what to do.”
White earned her jump wings but never had to leap from a plane again. After graduating from the academy, she oversaw airfield operations—a duty that also required certification as an air traffic controller—at bases from Florida to California.
When her five-year commitment ended, “I decided to try something new,” she says. “I felt like I’d been in the military my whole life.” Eventually she put her operations expertise to work as a project manager for a California company that designs and builds large-scale water features, including the landmark fountains at the Bellagio casino in Las Vegas.
There, she realized she needed to learn more. “Much of what I knew centered on the military and people management,” White says. To reach higher levels in the business world, she needed to broaden her skills. That realization led her to Vanderbilt.
“Everyone on staff seemed concerned about the fit of the students,” she says. “It made me feel that if I was selected to join Owen, it had something to do with who I was and how I could contribute and learn from the other students.”
That first mod, White recalls, was like her first jump. Learning to be a student again after eight years was challenging. “It’s not like a work assignment,” she says. “You can’t just shut it out when you get home like you can after a day at the office.”
But after the first month, as with the first few parachute drops, something clicked. “I found I had made great friends and was sharing a unique experience,” she says. “I fell into the day-to-day (and evening) routine and never looked back.”
After a summer internship in the corporate world, White realized she missed some of the structure military life provided. She won a two-year Presidential Fellowship with Voice of America (VOA), the U.S. government’s official radio and television broadcasting service, in Washington, D.C. The new job offers her the best of both worlds. Within the security of her position, she has opportunities to complete rotations in other areas besides her specialty, operations, as training that may prepare her ultimately to take over a division of VOA. It is like being able to jump from a plane, with none of the uncertainty.
Of course, White’s new position is not without stress, but her Air Force experience taught her a valuable lesson in dealing with it. “In air traffic control your life is about stress,” she says. “Nowadays when somebody comes into your office and says this is a life-or-death situation, I can say, ‘No, it’s not. Let’s talk about it.’”
Brothers in Arms
Jumping remains part of Ray Sumner’s life. He loves the adrenaline rush that comes from hurling himself off a cliff, his survival depending on a strand of bungee cord. He has jumped from three of the world’s highest bungee-accessible sites: Bloukrans, South Africa; Victoria Falls, Zimbabwe; and Interlaken, Switzerland.Somehow jumping fills a longtime need. The love of flying, with or without a vehicle, is what led Sumner to the Marines in the first place. While he was still in ROTC at St. John’s University, the Corps guaranteed him a seat in flight school if he passed a test. He passed and went on to train on T-34 jets and pilot helicopters.
Sumner left the Marines after 13 years but rejoined in 2003, after a General Officer phoned one morning and told him, “Your country needs you.” In between he operated a fledgling import business in handmade goods from some of the exotic locales he had visited with the Corps, like Yemen. The business barely broke even. But, as an entrepreneur, Sumner had found a civilian avocation that could satisfy his need for flowing adrenaline.
When I got out of the Marine Corps, I thought I’d never have this again. The camaraderie at Vanderbilt is unique. That’s why I’ll always appreciate it.
—Ray Sumner
Now he is returning for another jolt—this time as a beer maker with an MBA. He learned the brewer’s art from his younger brother. After taking a new product development class, he realized he might have a new product of his own. He began testing its viability at Owen get-togethers. “At one party,” he recalls, “I brought 26 different types of beer. People were saying, ‘Where can I buy this stuff?’”
With help from Owen’s entrepreneurship program, Sumner test-marketed his quaffs in the wider community. This summer he was busily researching properties around Nashville and as far afield as Austin, Texas, and Portland, Ore. To Sumner, it feels like an exhilarating jump, and his MBA colleagues are his bungee. They are continually providing support and advice, offering to serve on the board of his company for free, helping him assess logo designs, and serving as sounding boards for ideas.
That is the thing, Sumner says, about Owen. “When I got out of the Marine Corps, I thought I’d never have this again. The camaraderie at Vanderbilt is unique. That’s why I’ll always appreciate it. There were a lot of students who perhaps were smarter than me and whom Owen could have accepted into the program, but they chose me to be part of the family. When somebody gives you a chance like that, you don’t forget it. And that’s the Marine Corps way.”
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In a New Light
In 2009 a team of Vanderbilt graduate and undergraduate students visiting rural Bangladesh made a startling observation. The villagers they met lacked access not only to reliable electricity but also to cheap, alternative fuel for lighting their homes. Though widely available, kerosene in Bangladesh typically costs $5 per month, or the equivalent of an average week’s salary—far too expensive to use for anything besides cooking.
This problem is not just limited to a handful of villagers the team met. There are, in fact, more than 100 million people in rural Bangladesh who are literally in the dark. Once the sun sets, countless children can no longer study or do homework, families and friends cannot interact, and all work ceases. And during the day the situation is not much better. Bangladesh is both blessed and cursed with a monsoon season, and for almost two-thirds of the year, the sun is blotted out by thick, dark storm clouds, denying these people sufficient light to live by.
The 2009 trip, which was organized by Project Pyramid, an interdisciplinary student organization that aims to alleviate world poverty, demonstrated the need for a sustainable lighting and power solution in rural Bangladesh. To tackle this issue, the organization proposed three different projects: building a biogas digester to convert animal waste into usable methane gas, creating an apparatus to turn that gas into power, and devising a product to generate more affordable lighting.
Project Pyramid presented these ideas to the School of Engineering, which, in turn, gave its fourth-year students the option of working on them as senior design projects. Each project would require a small team of engineering students led by a first-year MBA candidate. As a member of Project Pyramid, I volunteered to lead the team tasked with the affordable lighting solution. Although I hadn’t traveled to Bangladesh with the others in 2009, I was familiar with poverty in my native South Africa and knew what a positive impact a basic convenience like lighting could have on those affected. Joining me on the project were engineering students Greg Larson, Jared Robertson, Mason Hensley, Macy Skulman and Carly Jackson, all in the Class of 2010.
At the launch of the project, Clinical Professor of Management David Owens gave an insightful talk about innovation management, entreating us to consider the constraints when looking to innovate. This approach proved especially valuable for us as we highlighted two constraints that guided us throughout: (1) the product had to be affordable and meet a certain low price point, which we decided should be the $5 that was already being paid monthly for kerosene, and (2) the power source had to be sustainable and readily available to villagers and again, had to fall within our price point.
Initially we considered a number of different ways to power our product, from using the nuclear decay of radioactive materials to more traditional sources like wind and solar energy. Our list eventually narrowed to two choices: either solar or kinetic (human) power. Since Bangladesh has heavy cloud cover for most of the year, we decided a kinetic solution was best. (Although there are solar panels that can work on cloudy days, they are not affordable in this instance.) The engineers also proposed using a light-emitting diode (LED), which is energy efficient and reliable, and a modular design, which would give the user the option of changing power sources.
The potential for real innovation was not in a light that could be powered by different sources; it was in a kinetic device that could power any number of rechargeable items, including lights.
Our team had some clever ideas for using kinetic energy to power the lamp but settled on a foot-pedal design similar to that of manual sewing machines. The initial prototype was promising: It created a flickering light that varied as the pedal went through its arc. The catch, though, was that it needed to produce a steadier current and higher voltage to be a viable light source.
In discussing this challenge with others, including Stephen Songy, MBA’10, and Joseph Boulier, MBA’10—the two second-year MBA students heading up all the Project Pyramid teams—I soon realized our group should take a different approach. Rather than focusing on increasing the output of the foot pedal, I thought we should instead figure out a way to harness the energy it creates. In some sense we had the modular design backwards. The potential for real innovation was not in a light that could be powered by different sources; it was in a kinetic device that could power any number of rechargeable items, including lights.
Excited by this suggestion, the engineers on our team produced an updated prototype featuring a USB, instead of a proprietary, connector. At our next meeting we tested a compatible LED light, which worked fantastically. Next we plugged in an iPod and then a BlackBerry to the USB connector and charged them both using the foot pedal. After more meetings and tests, our product was finally ready for the end-of-the-year Project Pyramid showcase, where it performed as well as we had hoped and received a lot of attention from the other participants.
So, what is next for our product? Even though my teammates and I are no longer collaborating on it, the idea awaits a future group of students eager to change the world for the better. The next step will be to modify the design so that it can be easily mass-produced. It will also need to be tested in real-world conditions. And, if all goes as planned, I hope someday it will shed light, so to speak, on a problem that has plagued rural Bangladeshis for far too long.
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Headlines from Around the World
Executive MBA Program in Top 25
The Vanderbilt Owen Graduate School of Management ranks No. 25 among executive MBA programs in The Wall Street Journal’s new survey of national business schools. On management skills and alumni satisfaction—key components of the overall rankings—Owen is No. 17 and No. 18, respectively.
The Wall Street Journal, Sept. 30
Putting Investors in a Fix
In coming weeks the Securities and Exchange Commission and Commodity Futures Trading Commission are expected to release their report on the “flash crash” of May 6, 2010, when the stock market briefly plummeted. “The market always tries to find its way around the rules,” says Bill Christie, the Frances Hampton Currey Professor of Finance, whose work first exposed the game-playing among Nasdaq dealers in the 1990s. “It’s kind of like a balloon—you squish one side and it pops out the other.”
The Wall Street Journal, Aug. 24
Beware of ‘Independent’ Research
In recent years financial-services firms have found a new tool to help them drum up customers: the academic study. Universities conducting the research say they do not allow sponsors to interfere, but critics say that schools should do more to disclose corporate support. Hans Stoll, the Anne Marie and Thomas B. Walker Jr. Professor of Finance, says business schools have been accused of not being close enough to the real world. “The connection to business is desirable. I don’t think we want to sever that on the altar of conflict of interest,” he says.
The Wall Street Journal, Aug. 16
Southern-fried Health Care
Health care now is by far the largest industry in Nashville, commanding a fifth of its economy, with the picture looking ever brighter as the industry stands to gain from constant, unrestrained growth. But as the capital of Tennessee, the second-most obese state in the nation, Nashville’s health care cluster suffers from a public relations blemish. Jim Bradford, Dean of the Owen Graduate School of Management, is quoted.
MarketWatch, July 27
Trimming Payroll without Layoffs
While layoffs may be necessary at some small businesses, employers should avoid sharpening the ax. Here’s why: Not only do employees contribute to the company’s productivity and bottom line, they’re often well-schooled (at a great cost) on specific business methods. If there isn’t enough work to go around, consider switching up people’s duties, suggests Ray Friedman, the Brownlee O. Currey Professor of Management. “I have seen big companies make it through downturns by having factory workers do maintenance work [such as] painting, fixing tools” and the like, he says.
Entrepreneur, July 20
Buying Household Staples Online
SmartMoney’s “Deal of the Day” blog looks at online deals for everyday household items. The regularity with which consumers buy household goods appeals to Web retailers, says Dawn Iacobucci, the E. Bronson Ingram Professor in Marketing. Even Amazon offers groceries and home products. “They’re all hoping to hook you on the convenience of home delivery for a regular order,” she says.
SmartMoney, July 20
To Specialize or Not
Once accepted to business school, students must decide whether they need or want to specialize or pursue a more general business education. “Don’t stick to one goal or career choice if it’s just not going to bear fruit,” says Nick Bollen, the E. Bronson Ingram Professor of Finance. Several of his students have looked to other industries for employment and found roles in entirely different areas, such as health care.
Financial Times, June 22
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Q & A with an Owen Staff Member
Your master’s degree from Vanderbilt is in Latin American studies. How did you become interested in that?
I was born and raised in a small town in rural Connecticut. I hadn’t seen much of the world by the time I got to college but found that I had a facility for languages and actually became a modern languages major at Colgate. Like so many liberal arts graduates, I had absolutely no idea what I wanted to do in life. I knew I wanted to work internationally because I had that wanderlust that so many 22-year-olds have, but I had no idea if I would channel that interest into the business world or into the public sector. The perfect way for me to find that out, albeit an expensive way, was to get myself into a nonterminal degree at the graduate level, and Vanderbilt had a wonderful—and still does—master’s program in Latin American studies.
International opportunities have played a big role in your career. Where have you lived and worked, and what have you learned from those experiences?
My family and I lived in Guatemala, Ecuador, Panama and Venezuela, and later in Hong Kong for three years. In Hong Kong I grew to have a tremendous appreciation for what you and I would call consensus management. The Asian way of attacking a problem is so much different from the way we do it in the West. In Latin America what I took away was an appreciation for a more emotional approach to business. In some ways it is the antithesis of what I found in Asia. I remember that my boss at Pillsbury told me, “You’ve spent enough time in Latin America. I’m going to send you someplace where you’re going to have to do things totally differently.” He was right. The two things I grew to appreciate are different approaches to solving the same problem. Also another key difference I noticed was the pace at which business and social life are done. In Latin America the pace is deliberate and methodical—often with detours. However, in Hong Kong, the pace my wife, five children and I experienced was breakneck. People had to prod me along because everything happened so fast. I’m glad, though, that I spent time in both parts of the world, as different as they are.
You mentioned your wife and children. What did they think about moving around to all of those places?
My long-suffering wife of 38 years has been through 15 moves. She is the real champion. The five children—four boys and a girl—are appreciating what they experienced more and more as they age. I just recently had a conversation about this with my eldest, who is 34. It was a very different conversation from the ones I had with my kids when they were teenagers being uprooted from one country to another. In fact, one of my kids is now involved in international work.
Speaking of change, you’re in the middle of making a big transition from the corporate world to academia. Where did you work before Owen?
Before this, I started a general management consulting practice in 2003 with four friends. I had always looked upon owning my own business as something to do in the “presunset” years. It was a wonderful experience. And before that I was in the consumer packaged goods industry at companies like Gillette, Revlon, Pillsbury and more recently Bausch & Lomb in Rochester, N.Y., where we just moved from.
How did you become interested in career management?
I’m very fortunate to have been involved in a pro-bono capacity with career services at Colgate. When I was on the alumni board there, I headed the career services committee and found that I really enjoyed it. In fact, I spent three or four years after my term was up volunteering one day every month in the career services office. That’s how I got a taste for it.
It’s a tremendous differentiator when we can point to alumni who are very active in helping our students showcase their talents in person.
—Read McNamara
Did you envision yourself doing this for a living at the time?
Yes, my wife and I decided in 2004 over the dinner table that my last career move would be getting involved in a top-tier MBA program in a career management position. And here I am. This didn’t happen by chance. I’m just fortunate enough that Vanderbilt came to me.
What was so appealing about this particular opportunity at Owen?
Being part of a team that is absolutely committed to achieving top-tier status. In my conversations with Jim Bradford, I found that we are kindred spirits in that Jim is determined to make Owen a top 20 program. I love that challenge. I think we have all the tools in place. I did a great deal of research into where the school’s been and where it wants to go, and I wanted to be part of that.
What are some of the challenges facing the Career Management Center this academic year?
A very difficult economic environment has to be at the top of the list. It’s a challenging market for MBAs right now. Also things are changing very rapidly after a long period of relatively stable best practices. When I graduated from Wharton with an MBA degree in 1973, they were using essentially the same practices in career management that had been used 20 or 30 years before. Today, though, employers have the luxury of doing what we call “just-in-time” hiring, which means our students sometimes sit on the edge of their seats until May or June. Supply and demand factors allow employers to do that. It’s no longer so common for companies to come to campus—for the man to go to the mountain, so to speak. Of course, we have very loyal employers who come here, but that number goes down every year. And that’s not just at Owen; that’s at all of our peer schools. We have to use technology and be creative in getting the mountain to the man and putting our great students in front of these companies in different settings.
Would you say that’s the most important part—getting one’s foot in the door and being face-to-face with employers?
Absolutely. And the key to that is our alumni. I can’t stress that enough. One of the things that attracted me to Owen is the loyalty of the alumni and the great success of those individuals. We’re not that old as a school, relatively speaking, and we don’t have as many alumni as some of the schools we’re competing with. It’s a tremendous differentiator when we can point to alumni who are very active in helping our students showcase their talents in person.
If there’s one message you could convey to Owen alumni, what would it be?
Connectivity is the word of the day. To me, it’s a reality at Owen. I’ll give you a concrete example. In last year’s class, all the members of the student government association sent me a welcoming email and offered to do anything they could to help. Whether they had started their jobs or not, they said, “I’m here for you. Please let me be part of this connectivity.” That’s very gratifying. Words like collegiality and collaboration take on special meaning here. This place is different, and that’s coming from someone who has been around a bit.
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Flour Power
Some of the grandmothers—only in their 50s, but aged by the hardships of living in one of the world’s poorest places—liked the porridge so much that they started dancing, hopping on one foot and then the other, grinning toothless smiles and kicking dust onto their colorful skirts. It was mid-morning in rural Alto Molocue in the Zambezia province of Mozambique, and villagers were sampling several new flour mixes, each made of different combinations of ground corn, cashew, soy, moringa and cassava.
The gathering was the joint effort of New Path Nutrition, the nonprofit that Joe Boulier, MBA’10, and I had co-founded; World Vision Mozambique, a humanitarian organization dedicated to helping children; and CETA Industries, a Mozambican company that exports cashews and builds local infrastructure projects. Our successful taste test represented an important step in developing a nutrient-dense flour—farinha forca in Portuguese, the country’s official language—to provide rural Mozambicans with an alternative to traditional maize flour. We all shared the goal of improving the health and nutritional profile of people in the region.
Joe had recently graduated from Owen, sold his possessions, liquidated his 401(k) and moved to Mozambique to develop New Path’s concept for a more sustainable model for food intervention. I was there on a visit accompanied by Clinical Professor of Management Jim Schorr. Together Jim and I snapped pictures and entertained the kids who crowded around while the villagers answered questions about the flours they were testing: Did they like the taste? The color? Which of the five blends, including a control of pure maize flour, did they like the most and why? As the day wore on, we compiled our surveys and notes while the villagers sang and danced and the children scraped the remaining porridge out of the bowls.
Joe and I both had been interested in sub-Saharan Africa prior to graduate school. He had spent several years working with Catholic Relief Services as an auditor on Title II food distribution and AIDS relief projects funded by the U.S. President’s Emergency Plan for AIDS Relief program. I had lived and worked in Tanzania as a researcher for Africa Bridge, a microfinance organization. At Vanderbilt Joe and I became friends and found common ideological ground through Project Pyramid, the Owen-based interdisciplinary initiative focused on applying business models to address sustainable development and poverty alleviation.
We had many conversations and even a few heated arguments about the right ways and wrong ways to approach international development. While we did not always agree, we shared a fundamental desire to see foreign aid interventions accomplished sustainably, driven by local market demands, resources and preferences. The concept of “social enterprise,” using business models and market-based approaches to address social and environmental issues, became especially compelling for us both.
In October 2009 Joe and I received the William N. Pearson Scholarship Award from the Vanderbilt Institute for Global Health (VIGH). The funding allowed us to develop our plans to pursue international development in an innovative way. Fortunately for us, World Vision, which had been working on development issues in Mozambique since the end of the country’s civil war in 1992, contacted the VIGH seeking support on a public-private venture. CETA Industries was offering factory space, local managerial expertise and equipment—enough to run a small-scale flour production facility—to support their workers’ wider rural community.
White maize flour, notoriously nutrient-poor, is an inexpensive and filling food source. In much of sub-Saharan Africa, including Zambezia, it is a staple food, often consumed with every meal. Knowing this, we initially explored the idea of producing nutritionally fortified maize flour for distribution to hospitals and people living with HIV and AIDS. Eventually our idea expanded to include not only these niche areas but also the broader population of Mozambique, specifically there in Zambezia.
Rather than immediately making and distributing food-as-medicine for the poorest of the poor, we convinced the parties involved to try producing instead a maize-cashew flour mix with a taste, color and consistency comparable to traditional maize flour. Our plan would be to employ local labor, use local inputs and sell to a local market at a price equal to that of existing maize flour alternatives, while maintaining a financially viable factory operation. The new mix, we hoped, would be a substitute product that aligned with existing cooking habits and unlocked latent regional demand for healthy flour alternatives. In all, we considered it a promising opportunity to improve nutrition more sustainably in the region.
During the spring Joe and I refined our idea in Jim Schorr’s Social Enterprise and Entrepreneurship course. After it ended, we invited Jim to stay on as an advisor to New Path Nutrition and to accompany us on a trip to Mozambique. A visit to the area was essential if we were to determine how receptive consumers would be to a new product, test the validity of our many assumptions and projections, and begin establishing our venture.
We flew to Maputo, Mozambique’s capital city, and spent several days conducting meetings with VIGH staff, NGO (nongovernmental organization) partners and local business leaders. Further into the trip, in Quelimane and Alto Molocue, we visited the CETA cashew processing plant and the proposed factory space, met with members of the local farmer’s federation, and conducted taste tests with local villagers. Jim and I then returned to the United States, while Joe stayed on to continue working in the area.
Our taste tests demonstrated a strong preference for a particular blend of the fortified flour, outperforming even the traditional, widely consumed maize variety. Joe and I, however, knew from our days at Owen that we would have to address many other business issues if we were to make this new venture a success. An enthusiastic local response to the initial product was just the beginning.
Pending New Path’s ability to secure additional funds, Joe plans to remain in Mozambique for a year, refining the product, building relationships and proving the overall concept. By the end of his stay, we hope to have a working model for building an economically viable social enterprise that is replicable in other rural sub-Saharan areas.
New Path Nutrition is a registered nonprofit working towards 501(c)(3) tax-exempt status. Any donations will be used to allow Joe to remain in Mozambique until the completion of the project. You can reach us at newpathnutrition@gmail.com or via our mailing address: 3000 Hillsboro Pike #104, Nashville, TN 37215. We appreciate your interest and support.
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Hell or High Water
“It’s heartbreaking. You walk through these buildings and feel like the soul has been taken out of them. There are no customers. … There’s no joy. There’s no music playing in the Grand Ole Opry.”
These were among the only words I could summon standing in front of TV cameras and newspaper reporters the morning of Monday, May 3. I had just landed at the Nashville airport, rushed to the Gaylord Opryland Hotel and toured the property with the media. The day before I had been stranded in the Miami airport as a record-setting rain fell in Nashville—a rain so great it swept away cars, homes, buildings and lives. It also left up to 9 feet of water in 800,000 square feet of our hotel and 4 feet of water on the stage of the Grand Ole Opry.
The enormity of it all was difficult to grasp and certainly difficult to put into words. All day Sunday, May 2, those of us on the leadership team were in constant contact with one another, monitoring and reporting on water levels in the Cumberland River, which snakes its way through Nashville and surrounds our properties in an oxbow known as Pennington Bend. The reports we were receiving from government agencies continued to indicate our levee would be high enough to hold back the rising river. However, visual inspections by our team told us the information we were receiving simply wasn’t accurate. The river was rising higher and faster than agencies had earlier projected.
Eventually we decided to evacuate the hotel—1,500 guests and our employees, or STARS as we call them—to a nearby high school. There was no debate among the team on the phone that evening. Life safety was our first priority. Even if the river didn’t top the levee, we thought it would be better to inconvenience our guests and STARS rather than risk harm to anyone. A few hours later, with everyone safe at the high school, water began seeping into the lobby of the hotel.
Back to Monday morning. The interviews and media tour were complete. Guests who had an uncomfortable night in the shelter were off to the airport, which was open again. The leadership team at the property had customer transition well in hand. It was time to begin answering the questions we’d posed during our hourly conference calls Sunday night: How long will our businesses be closed? How extensive is the damage? How quickly can we pump the water out? What do we tell our customers? What do we tell our STARS who cannot come to work? Where will the displaced leaders find office space? How did our country music archives and memorabilia fare? We needed to plan updates for the board of directors and our shareholders, but what would we tell them?
Although a difficult road lay ahead of us, we were extremely fortunate in one respect: During the crisis we were able to fall back on our emergency preparedness, business continuity and crisis communication plans. These three interconnected plans provided a template as we reacted to the increasing threat of the flood and evacuated a large number of guests to safety in a reasonably orderly fashion. The plans also served us well as we set about answering the questions facing us, making some tremendously difficult decisions in the process. At times the task of finding solutions to all these problems seemed never-ending, but we continued making progress day by day.
Now that it has been several months since the flood, I can attest to just how far we have come. The rebuilding process is almost complete: The Opry House has recently reopened, and our hotel will soon follow in mid-November. I also now have some perspective and can look on the bright side of those dark days. As tragic as they were, the events of early May gave us an opportunity for a fresh start. The flood spurred us to make the hotel and Grand Ole Opry even better than they were before, and we now can take great pride in reintroducing these cherished businesses to our customers, our city and the world.
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McNamara Named Executive Director of CMC
Read McNamara, MA’76, a seasoned executive who has held senior positions with such Fortune 500 companies as Gillette, Pillsbury, ConAgra, Revlon and Bausch & Lomb, has been appointed Executive Director of the Career Management Center for the Owen School.
McNamara has lived and worked extensively in Latin America and Asia, speaks fluent Spanish and is conversant in Portuguese. He earned his MBA at Wharton, a master’s degree in Latin American studies from Vanderbilt and a bachelor’s degree from Colgate, where he has worked closely with their career management center as an alumnus.
“We are pleased to hire Read in this critical role for Owen,” says Jim Bradford, Dean of the Owen School. “With a wealth of connections, global experience and unparalleled sales skills, he can undoubtedly help us open doors and build our recruiter base in the U.S. and abroad.
“We also look forward to his role as a mentor and adviser to our students as he helps them match their goals and talents with the needs of business.”
McNamara succeeds Joyce Rothenberg, who led the Career Management Center for the past three years. Rothenberg left the Owen School to relocate to New York with her family. “Joyce has helped strengthen this department in many ways and is leaving a stable team and firm foundation on which her successor can build,” Bradford says.
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Trade Secrets
Amid growing uncertainty about the stability of the European Union, an increasing number of North American companies are looking to capitalize on opportunities in emerging markets. One such market that is particularly attractive is China, but setting up shop there is not as straightforward as these companies might perceive. Recent legal developments surrounding information management in China have the potential to dampen the enthusiasm of global investors.
A key to establishing business presence anywhere is building a local infrastructure, which includes data centers for hosting information. In April the Chinese government made this practice more difficult when it announced an amendment to its Protection of State Secrets Law, forcing Internet service providers and telecommunications companies to share their information. The state-owned Xinhua News Agency reports that the amendment requires these companies to “halt and report leaks of what the government deems to be state secrets.”
So what is the definition of a state secret? According to Xinhua, it is “information that concerns state security and interests and, if leaked, would damage state security and interests in the areas of politics, economy and national defense, among others.” The official Chinese government website posted a broad definition of what constitutes a commercial secret, defining it as covering information related to “strategic plans, management, mergers, equity trades, stock market listings, reserves, production, procurement and sales strategy, financing and finances, negotiations, joint venture investments and technology transfers.”
Outside of China, media reaction to the legislation has been critical. For example, The New York Times called it an obvious attempt to impose control over cell phone and Internet communications. The Wall Street Journal has opined that this amendment is simply a reaction to the criticism of the Chinese government’s handling of the recent Rio Tinto scandal, which led to the arrests of several of the mining corporation’s employees for espionage and bribery.
This discussion brings to mind the early 2010 decision by Google to move its servers out of mainland China and into Hong Kong because of heavy interference by the authorities. Although technically still part of China, Hong Kong has retained considerable autonomy under its designation as a special administrative region. The principle of “one country, two systems” has enabled Hong Kong to follow economic and political policies different from those of mainland China.
The Hong Kong Basic Law, which serves as the constitutional document of the region, went into effect in 1997 and will stay in place until 2047. Under this law Hong Kong’s diplomatic relations and defense are the responsibility of the Chinese government. At the same time, articles 27–38 of the Basic Law stipulate that “Hong Kong residents shall have, among other things, freedom of speech, freedom of the press and of publication; freedom of association, freedom of assembly, freedom of procession, of demonstration, of communication, of movement, of conscience, of religious belief, and of marriage; and the right and freedom to form and join trade unions, and to strike.”
Whether other companies will follow Google’s lead is not clear. Hosting companies like Rackspace that have data centers in Hong Kong have not experienced a noticeable surge in business due to this amendment so far. It is likely that companies are not making their intentions public for fear of antagonizing the Chinese government.
The April amendment does little to change the fact that there is a lack of transparency in the rules that organizations are expected to follow while doing business in China. But one thing is certain: For all those North American companies looking to take advantage of sales in the Chinese market without compromising on sharing their information, Hong Kong is a good option.