What services does the Career Management Center provide?
The CMC does not play a traditional placement role in the sense of matching companies and students. Today’s MBA job market is all about fit, and that’s something only the companies and the students can assess; matchmaking is really not part of what we do. Our job is more about helping to develop the job market. Our role with corporate employers is to educate them about the school and to help them attract the talent that they need to run their companies. Our mission with students, on the other hand, is to help them prepare for their job search. It’s not just about finding an MBA job when they get out, although that’s really important to everyone. It’s also about giving them the tools that will allow them to seek jobs for the rest of their lives. We teach them how to pick a direction, match their skills to job requirements, fill gaps if they’ve got them, and then market themselves to companies.
Does the CMC also provide career assistance for alumni?
Yes, there’s a person in my office named Debbie Clapper, who is the Associate Director of Executive and Alumni Career Services. She reviews resumes for alumni and consults with them in developing job-search strategies. For those who live in Nashville, she’s organized a job-seeking group that meets every other week. She’s also started taking her career services on the road to cities where there are larger concentrations of Owen grads. If any of our alumni are interested in career services, all they need to do is pick up the phone and call her. Or they can visit www.OwenConnect.com to find out more.
What advice do you give to students who are searching for jobs during these tough economic times?
Our students need to be a little more flexible about their searches. They also need to be persistent. There are jobs out there. They may not be the dream jobs that the students envisioned when coming to business school, but there are good MBA jobs. In certain sectors and regions of the country, the job market is quite robust. I think finding the right job is just a question of being realistic about what’s available and really matching your skills and interests to something that’s a good first step. Maybe you have to get two-thirds of the way to your dream versus the whole way when times are tough.
How can alumni play a part in the CMC’s success?
We look for alumni to open doors for us at their companies. When we focus on companies we don’t know or the strategic holes in our employer relationships, we turn to alumni to make that connection either through the HR people who do the MBA hiring or through the senior managers who care about MBA talent. We always appreciate it when alumni make us aware of opportunities at their companies. Being an advocate for Owen is something that is really helpful and important to us.
A 2,500-year-old text called The Art of War may strike some as an unlikely source of advice for today’s business leaders, but Thomas Huynh, EMBA’04, believes that there are valuable lessons to be learned from Sun Tzu’s masterpiece. Huynh has recently penned a new translation of the work, titled The Art of War: Spirituality for Conflict, with the hope that it will bring the Chinese general’s message to a wider audience.
Although the ancient document sounds as though it might glorify war, Huynh says it’s actually a treatise on peace, offering practical strategies for circumventing and diffusing conflict, whether on the battlefield, in the boardroom or at home. It is required reading for officers in the United States Marine Corps, as well as students at a number of B-schools, because of its innovative, still-relevant strategy for overcoming conflict. Marc Benioff, Chairman and CEO of Salesforce.com, who wrote the foreword to Huynh’s book, uses its classic principles to manage his company in an often hostile, highly competitive technology industry.
The text itself is a lesson in economy: 13 short chapters comprise The Art of War, but each is full of important lessons that teach the reader how to avoid conflict and resolve inevitable hostile situations using self-control, intelligence, courage and benevolence. Huynh’s annotations alongside the translation offer practical application of Sun Tzu’s philosophy.
Huynh enjoys a career in finance as Group Controller for Skyline Steel in Georgia, but has been dedicated to the study of Sun Tzu’s masterwork since he encountered the text as a teenager. In 1999 he launched Sonshi.com to provide Web space for authors, scholars and readers to gather and share information about Sun Tzu’s timeless approach to conflict resolution.
Says Huynh, “Conflict is part of life, but it is our response to the disagreement that has the greatest effect on our inner peace and personal happiness.”
Leverage. The power to get things done. That’s how Dave Marchese, BE’95, MBA’00, views his experience at Owen and his ability to switch careersfrom engineering to finance. Currently a Vice President at Haddington Ventures, a Houston-based private equity fund focused on the midstream energy sector, Marchese assists with deal sourcing, transactional work and portfolio company management. Prior to joining Haddington, he was Managing Partner at Eschelon Energy Partners, a company of similar ilk which he co-founded, as well as Reliant Energy, which was the launching pad for his industry changeover.
Marchese credits the late Elizabeth Powitzky, Owen’s beloved Associate Director of Admissions, for helping him shift his focus toward finance. Powitzky, who, sadly, lost her battle to breast cancer in 2001, steered him toward his summer internship at Reliant. “Elizabeth had a huge impact on my career change and helped me leverage my engineering experience and Vanderbilt MBA to get into energy finance,” he says.
His pre-MBA work with Jacobs Engineering translates into his current job, and he often draws on that knowledge in the development and construction of the energy infrastructure companies in Haddington’s portfolio. Additionally, he uses both his finance and engineering backgrounds to assist his wife, Liz, BA’95, in their development of a lakefront community, called The Point at Rock Island, on Tennessee’s Cumberland Plateau.
Marchese chose Owen because of people like Powitzky, as well as the opportunity to work with high-quality students, and says he greatly benefited from the diverse professional backgrounds his classmates brought to the table.
“My previous experiences combined with the people I encountered at Owen have allowed for my current success.”
If you are a SIRIUS Satellite Radio subscriber, then you are likely benefiting from savvy strategy developed by award-winning marketing veteran and Owen alumna, Vance LaVelle, EMBA’91. As a Senior Vice President, she is helping SIRIUS grow its subscriber base through service, sales and marketing. She also is helping the company prepare for its recently approved merger with XM Satellite Radio.
A quick glance at LaVelle’s bio shows a career path punctuated by a diverse range of experiences across a number of sectors, including technology, telecommunications, financial services, media and entertainment, and government, but the anchor throughout has been marketing.
Although she began her career at AT&T in operations, she has always been keenly interested in understanding consumers’ needs and building organizations around the experiences those consumers want to have. “I have always had good instincts about consumers and an ability to see the obvious path,” says LaVelle. Indeed, her marketing acumen has enabled her to successfully launch over 100 brands and turn the tide on flagging market shares and profits.
LaVelle’s instincts have been on point internally, too, in terms of recognizing when she has needed to change jobs, and she advises others to be aware of their own internal compasses. “We are the architects of our work life. We can be proactive or reactive, but regardless, change is inevitable.”
LaVelle has chosen the proactive path, joining SIRIUS after serving as Chief Marketing Officer with PNC Financial Services Group. She realized she was ready for a change, but after 10 months of exploring other options, including launching a consulting business, she also recognized her desire to get back into corporate life as an operator, not just an advisor.
She’ll no doubt continue to listen to her own internal cues, but for now, though, it’s SIRIUS business.
When asked what put her on the career path to her current position as CEO of Citizens First Bank in Bowling Green, Ky., Mary Cohron, EMBA’88, points to two pivotal factors: family and the Owen School.
Cohron’s predilection for banking comes naturally, by way of paternal DNA. Her father spent his life building a successful community bank in Glasgow, Ky., and she has fond memories of learning the business at his knee, from the ground up. But Cohron also credits Owen with shaping her career. “My MBA is the reason I was hired to run Citizens,” she says.
Interestingly, she did not receive a college degree prior to her graduate work at Vanderbilt. Cohron jokes about “the bad old days” when she was denied a scholarship at another university because her husband was already in dental school. Not one to let adversity hold her down, she worked her way up in a local bank and spent a number of years serving on the Bowling Green Board of Education and the Kentucky School Boards Association, as well as the bank board that would later spin off as the group of investors behind Citizens First.
Cohron made the decision to apply to Vanderbilt, having learned that some B-schools admit non-degree candidates. Her then-role as a Corporate Director made her an appealing candidate to the Executive MBA program, and after clearing a number of required high hurdles, she was admitted.
“Without doubt, Owen has enabled me to leverage my gifts and talents to their fullest potential.”
Sharran Srivatsaa, MBA’08, remembers arriving in Tupelo, Miss., well after dark and encountering what most people would expect to see on a small-town Thursday night: very little. “There wasn’t much going on.”
In the morning he saw the place, physically and figuratively, in an entirely different light, as through an arrival-in-Oz transformation when suddenly the picture turns from black and white into spectacular color. “When we woke up, suddenly it was a hub of activity—an amazing difference. We were told that, on weekdays, Tupelo swells from about 40,000 to more than 100,000. It really pulls workers in from the neighboring counties.”
Put another way, more people come into Tupelo each day to work than come in an entire year to see the city’s most famous attraction, the two-room house where Elvis Presley was born.
Well before Toyota chose Tupelo over many rival suitors as the site of a huge new manufacturing plant (set to open in 2010), the town would have been an economic wonder in any place, by any standard. But especially given this town’s location, visitors could be forgiven for saying, “I don’t think we’re in Northeast Mississippi anymore.”
A Fateful Phone Call
Before his graduation in May, Srivatsaa was one of the leaders of Project Pyramid—a two-year-old, student-driven initiative aimed at alleviating global poverty. The interdisciplinary project includes students from Owen, Vanderbilt Law School, Divinity School, Peabody College, School of Medicine, the Graduate Program in Economic Development (GPED), and College of Arts and Science. As part of their work, participants have traveled to such distant locales as India and Bangladesh, where they met with Nobel Peace Prize winner and GPED alumnus Muhammad Yunus, PhD’71. But it was only through a chance conversation that they managed to visit the economic miracle barely four hours away from Nashville.
Actually, says Srivatsaa, the group had wanted to put together a trip to a spot within manageable driving distance from Vanderbilt. “We had international trips, and we had a lot of international students who had seen poverty in other countries. We had a lot of domestic students who wanted to do something closer to home.”
So he approached Bart Victor, the Cal Turner Professor of Moral Leadership and faculty adviser to Project Pyramid. Knowing the town had a history of remarkable economic development, Victor recommended Tupelo.
There the process halted. “I didn’t know anyone in Tupelo who could help us put a trip together,” says Srivatsaa, who now works in private wealth management for the Atlanta office of Goldman Sachs. Then, by chance, as he was making thank-you calls on Owen’s behalf to a list of donors, he saw the name of Scott Reed, BA’80, and a Tupelo address beside it.
Reed is part of what is surely the family with the deepest Vanderbilt ties in Tupelo, maybe even in all Mississippi. His father, Jack Reed Sr., BA’47, and two uncles graduated from Vanderbilt after World War II. Scott’s brother, Jack Jr., BA’73, and sister, Camille, BA’75, were there in the ’70s. Jack Jr. met his wife, Lisa, BA’74, at Vanderbilt. Lisa’s parents had met there, too. Enough Reed nephews and cousins have matriculated to Nashville that Scott has to think before naming a number.
Scott never actually attended Owen. Just after he was accepted in 1985, he says, he jumped at a chance to start the first full-service brokerage firm in northern Mississippi. But he contributes financially. “One of the things I like about Vanderbilt,” he says, “is that, when they call about giving, they have students call. You can keep up with what’s going on at the school.”
During their conversation Srivatsaa made a point of bringing up Project Pyramid and its goal of eradicating global poverty (“You’d think they’d get a bigger goal,” Scott chuckles) and asking whether Scott could facilitate a contact for them. And, as it happened, Scott knew just the person: his brother Jack, who was chairman of Tupelo’s renowned Community Development Foundation. (Lesson: There is always a Vanderbilt connection.)
Scott Reed, left, and Jack Reed Sr. at the entrance to Tupelo’s historic Fairpark district.
In April Professor Victor and eight Project Pyramid students—three from Owen, three from GPED, and two from the Divinity School—rented a large van and drove to Mississippi to learn “the Tupelo Story” firsthand. During their visit the group first met with representatives of the Community Development Foundation. They toured the plant of a Tier 1 automotive supplier and visited two of the nine industrial parks that the city had farsightedly developed on land it had purchased. Over lunch with the local Vanderbilt Liaison Group—the Reed brothers; their father, Jack Sr.; local businessman Henry Dodge; and city attorney Guy Mitchell—they talked about what they had learned.
“This one-day trip,” wrote GPED student Sait Mboob “was arguably the best lesson I’ve had in six years of studying economic development.”
It was such a good lesson, in fact, that later in the spring, all 60 students in Vanderbilt’s GPED program went to Tupelo. Another Project Pyramid team will return next year. And the students are busily analyzing how to apply the lessons of Tupelo to other settings in the United States and around the world.
Rethinking Stereotypes
To learn the Tupelo Story, you must be prepared to unlearn what you thought you knew about Mississippi: all the stereotypes; all the “lasts” in education and health; the intractable poverty; the antebellum attitudes that led William Faulkner to write that, here, “the past isn’t over; it isn’t even past.”
In Tupelo everything has long been about building for the future. From practically nothing they built the capacity for bringing new businesses to the area, in ways that created both jobs and sustainable revenues for further public investments. The result is a diverse local economy that has remained remarkably stable.
Toyota’s manufacturing plant is scheduled to open in Tupelo in 2010.
Through planning and cooperation they established one of the best public school systems anywhere. Half the elementary schools have earned national blue-ribbon status. Twice, Tupelo High has received the U.S. Department of Education’s Excellence in Education Award. Public investment—highest, per pupil, in the state—has given Tupelo schools a student-teacher ratio of 13 to 1. Graduation rates not only are among the highest in Mississippi; they’re 18 percentage points better than the national average. There is virtually no “white flight”; 98 percent of the town’s school-aged children attend public schools.
North Mississippi Medical Center, which serves a 22-county area and ranks as the largest nonmetropolitan hospital in the nation, won the prestigious Baldrige Award for quality this year. (Many of its 430 doctors are Vanderbilt-trained, brags Jack Reed Jr.)
For years the town has drawn workers from across northern Mississippi and industries from around the country. And that was before Toyota announced that it had chosen Tupelo over a number of rival suitors for a huge new North American manufacturing plant.
The joke, told not so jokingly by locals, is that if Presley were growing up in Tupelo today, he wouldn’t leave. Indeed, one striking fact about Tupelo is the number of its sons and daughters who go away to college, like the Reeds and their children, and return to continue building the community.
A Resurgence Rooted in Tragedy
Things weren’t always so rosy. “In the 1930s,” says Scott Reed, “we were one of the poorest counties in the poorest state in the Union. I think Project Pyramid’s interest was in how we overcame that legacy. It’s like the way my dad was teasing an old friend of his: ‘Junior, are you ever going to amount to anything?’ And he replied, ‘Well, if you saw where I came from, you’d be more impressed.’”
What’s in a Name?
By Randy Horick
Project Pyramid draws its name from a book by C.K. Prahlad, The Fortune at the Bottom of the Pyramid, and its central idea that businesses can operate profitably in impoverished areas of the world while contributing to the development and well-being of those who live there.
In Owen’s characteristically make-it-happen fashion, students drove the development of the project: an interdisciplinary, collaborative effort that would draw participants from Vanderbilt’s professional schools and undergraduate community. It would involve both education and sustained action to help alleviate global poverty. Dean Jim Bradford not only approved the project but empowered the students to take a shaping role, even in designing a course on the subject. Victor remembers that Bradford sat in on the initial class and sent him a text message even before the session was over: “These kids are different.”
It’s true, Victor says. “They’re not just contemplative. They want to change the world. In my experience, I’ve never seen this degree of commitment from students on these issues.”
The Reed brothers will tell you that Tupelo’s resurgence was rooted in tragedy. In 1936 a monster tornado killed more than 200 people and left the place in ruins. But the tornado also marked a turning point of sorts. “We had to start over and work together to make things happen,” Scott says. “It was the beginning of what we came to call the Tupelo Spirit.”
Jack Reed Jr. also points to the fortuitous presence of “some enlightened business leadership”—particularly a newspaper editor named George McLean. Starting the Community Development Foundation was his idea, and he won the support of other leaders in the business community, including the Reeds’ father, Jack Sr.
“McLean was trained as a Presbyterian minister and had a really strong sense of social justice—that we’re all in this together and have to help each other,” Jack says. “Tupelo has an egalitarian ethic and a reputation for inclusiveness.” McLean, believes Jack, helped cultivate that civic sensibility.
Early on, civic leaders agreed that a key to development—one that ultimately proved crucial in Toyota’s decision—was a strong system of public education. The leaders pledged to send their children to public schools. And they formed one of the nation’s first private foundations to raise money for those schools—one of many public-private partnerships.
Community leaders were just as deliberate about laying the groundwork for success in other areas, too. Years ago, for example, they put together a “thoroughfare committee” to ensure that Tupelo would have the transportation corridors it needed. As a reflection of the town’s egalitarianism, Scott says, it wasn’t unusual to see millworkers and the chair of the CDF on committees together.
In the 1960s the Community Development Foundation bought up big tracts of land outside the town limits that would eventually serve as industrial parks. Now the city leases the properties to companies that relocate to Tupelo, then plows the proceeds back into the community.
Tupelo’s North Mississippi Medical Center is the largest non-metropolitan hospital in the country.
What seemed to impress the Vanderbilt visitors most was the all-for-one spirit for which the Reeds themselves served as exemplars. The family, notes Victor, owns a century-old clothing business, the largest in town. But they actively solicited big-box competitors like Wal-Mart to enter the local market—a strategy that runs counter to what students traditionally learn in business school.
“I was surprised by how intrigued the students seemed to be with that,” says Scott Reed. “It didn’t seem like rocket science. There was an understanding that, if the community thrives, we’re going to thrive with it.”
If the strategy hindered the Reeds’ business, it doesn’t show. Along with two locations in Tupelo, the family also operates stores in Starkville and Columbus, Miss. “We’re a ring, not a chain,” laughs Jack Jr.
Partnering for the Future
The business lessons from Tupelo have not been lost on the newer generation of Vanderbilt students intent on changing not just their corner of the world but the whole global village. “Tupelo can be a story of inspiration,” says Sharran. “They have an amazing interaction between public and private enterprise. The CDF straddles that line. Private organizations just cannot do it all.
“They have a lot to teach us: Take a long-term view, and lay a foundation for our children and their children so the community can develop and grow. They had projects lined up 30 or 40 years out. Yet a vision is not enough. Selflessness is what guided that community.”
Says Scott Reed: “I think the students’ biggest takeaway is that there’s nothing we’re doing that others can’t do. If you figure out how to replicate this model, you can make strides for eliminating poverty.”
One day was more than enough to energize the group into thinking about opportunities Tupelo might offer. One possibility, suggests Srivatsaa, is a cross-disciplinary academic case study of Tupelo’s development. “Project Pyramid is perfect for that because no other organization encompasses so many disciplines across the university. Peabody students could study the educational system. Medical students could study the health care system. There’s a strong tie between every area of Tupelo and every area within our group.
“We have something spectacular in our own backyard with a strong Vanderbilt connection that needs to be nurtured.”
“I’m really excited about creating a more formal partnership with Vanderbilt so we can have the input of these really bright young people coming in here every year,” says Jack Reed Jr. “It certainly is a win/win.”
Igleheart
Meanwhile, Tupelo is becoming more integral to the work of Project Pyramid. Vanderbilt Professor of Economics James Foster—who, says MBA student Ryan Igleheart, “knows more about Tupelo than anyone at Vanderbilt”—has discussed teaching a Project Pyramid-related course at Owen in the future. For the first time, there will be short courses about Project Pyramid at the Divinity and Law schools. Igleheart, who serves as President of Project Pyramid, will lead a second group from Vanderbilt to observe and learn in Tupelo. “Our next step,” he says, “is to adapt their model to other places.”
Those places may include Bangladesh, where, building on previous Project Pyramid efforts, Vanderbilt students will return in December and again next spring to work on a model village concept. They also could include Mozambique, where Project Pyramid participants may explore economic development strategies with Vanderbilt’s Institute for Global Health, which operates 10 AIDS clinics in the country.
The lessons of Tupelo also may reach to other business schools. Last fall Owen hosted a first-of-its-kind case competition on poverty alleviation. Teams from 35 schools, including Wharton, Chicago and Yale, participated. It’s part of an effort to plant seeds that could grow into Project Pyramid groups elsewhere. “The teams really started to embrace the excitement and energy of this project,” says Igleheart. Every week he receives e-mail messages from people around the world interested in getting involved. Which reminds him: Among growing numbers of tasks on Project Pyramid’s to-do list is a white paper on how to help others get started.
It’s the ripple effect, says Igleheart, that Project Pyramid has always intended to create. Ask students who have been part of it, and they’ll tell you those ripples have become strong currents in their own lives. Even after graduation Srivatsaa remains involved in building an advisory board of community leaders.
Igleheart, who is pursuing a Health Care MBA, says, “A big part of me wants to make this the focal point of my business career.” It’s a commonly heard sentiment—a reflection, perhaps, of a generational change and, perhaps also, of how Tupelo is a generation ahead of the curve. “There’s a point at which we’re all connected,” says Igleheart. “As a global community we have to succeed together. The world is waking up to that.”
If we’re to believe Sigmund Freud, then all that matters is love and work. Certainly everyone endeavors to succeed in both, but far too often one gets in the way of the other. That is, unless you’re like the couples profiled below. Although decades apart, they all have something in common: They have struck a happy balance between their married lives and their careers, and they owe much of that happiness to the place that put them on the path to both—the Owen School.
Minh-Triet Lethi Tucker, MMgt’72,
and Greg Tucker, BA’68, MMgt’71
Little did Greg Tucker know that an admissions brochure he designed would attract an honors student from Vietnam who would later become his wife. Greg was a member of the founding Vanderbilt GSM class, which met in the University Club basement. He remembers the day Minh-Triet’s application arrived at the admissions office, where he worked. “I opened the letter and thought, ‘I have to meet this young lady.’”
Greg was in Dean Igor Ansoff’s office, which overlooked West End Avenue, the day Minh-Triet arrived on campus. “I looked out the window, and coming down the sidewalk was this beautiful creature,” he says. Their initial introduction, however, didn’t go as well as he’d planned. Minh-Triet explains that she had a difficult time understanding Greg’s Southern accent.
After graduation Minh-Triet joined the MITRE Corp. in Washington, D.C., as a consultant. Greg continued at the school as its first Director of Admissions and Placement. In 1976 Greg enrolled in law school in Washington, and in 1977 they married in Constitution Gardens. During the Reagan administration, Minh-Triet was on the White House staff as Senior Policy Analyst for Science and Technology, while Greg practiced law with the Covington & Burling firm.
The couple dreamed of retiring to a farm, and it just so happened that one neighboring Greg’s aunt’s property outside Nashville became available at the same time his client HCA asked him to return to Middle Tennessee. It seemed “divinely planned,” says Minh-Triet. Today they are proud parents of a daughter and son, Brigitte and Burney, who are 2006 and 2008 Vanderbilt graduates, respectively.
Maria Renz, MBA’96,
and Tom Barr, MBA’98
As a Project Manager at Hallmark, Maria Renz was puzzled by a seemingly overconfident Owen summer intern. “I was a bit taken aback … the other two interns contact-ed me when they came to town. They’d say, ‘Oh yeah, Tom Barr is here,’ and I’d think, ‘Who the heck is Tom Barr?’”
Renz tracked Barr down, and they soon became friends. After graduation Tom joined GlaxoSmithKline in Pittsburgh. Renz was then with Kraft Foods in New York City, where GlaxoSmithKline’s ad agency is located. They began dating, even after Renz moved to Seattle to work for Amazon. Tom began taking Friday night flights from Pittsburgh to Seattle and then red-eyes home on Sunday.
“After a year we thought, ‘This is crazy. We have to figure out how to make this work,’” Renz says.
Before they even began exploring opportunities, a headhunter contacted Tom about coming to work for Starbucks Coffee Co. Tom is now the Vice President of North American Marketing for the coffee retailer, while Renz is a Vice President with Endless.com, Amazon’s shoe and handbag Web site.
“Whenever I need business advice or want to talk to my best friend, I turn to Tom. We have a great network of friends through Owen,” she says.
Tom serves on the Owen Alumni Board, and the couple participated in last winter’s Marketing Camp. They also have two children—prospective students for the Owen classes of 2031 and 2032, no doubt.
Donna Zavada Wilkinson, MBA’93,
and Jeff Wilkinson, MBA’92
Donna Wilkinson knew it was true love when Jeff agreed to help her cater an engagement party for Owen’s Director of Corporate Relations, Peter Veruki. The commitment meant that Jeff, a diehard Duke fan, would miss the NCAA regional finals basketball game between the Blue Devils and Kentucky—a game that many pundits consider the best ever played among the college ranks. Donna, at the time, worked with Veruki in the Owen placement office.
“I used to go into the placement office every day ostensibly to find a job,” laughs Jeff.
The two first met during an ethics breakout session Jeff helped facilitate during first-year orientation. He remarked about the prevalence of Duke graduates in the group, and Donna, a Duke alum herself, introduced herself afterwards. Jeff moved to Atlanta to work for Accenture after graduation, while Donna began her career with Sara Lee in Memphis, Tenn.
The couple timed their December 1995 wedding to coincide with the completion of her management training at Sara Lee and a transfer for both of them to Dallas.
The Wilkinsons both serve on the Owen Alumni Advisory Board and live in Indianapolis with their two young daughters. Donna is the Vice President of Human Resources with Pacers Sports & Entertainment, while Jeff is a Partner with Accenture. Says Donna, “We have a special place in our hearts for Owen. I loved my time there, and it was a bonus that I met my husband there.”
Vicki Simons Heyman, BA’79, MBA’80,
and Bruce Heyman, BA’79, MBA’80
When Vicki and Bruce Heyman paired up during a New Venture Creation course, they had no idea how it would change their lives. Taught by longtime Owen Professor Ed Bartee, the course not only introduced them to some of their closest friends but also sparked a romance that would last a lifetime.
“Our first date was Lamar Alexander’s governor’s ball,” says Bruce, a Managing Director for Goldman Sachs, who is the firm’s recruiting captain for Vanderbilt. The Heymans have remained very involved with the university, serving as co-chairs of their 25-year reunion in 2005. Vicki also has served on the Vanderbilt Alumni Board and on the Hillel Board for the Schulman Center for Jewish Life.
“Our participation has been exciting for us because we’ve been part of the upward trajectory of Owen. It’s also come at a very exciting time because our kids have been going through the college process,” she says.
Their youngest daughter, Caroline, is a high school senior, and middle daughter, Liza, is a Vanderbilt junior. Their oldest child, David, is 23 and an analyst in the foreign currency sales and derivatives department at JPMorgan, which, coincidentally, is the position Vicki held for four years after working in recruiting at Bankers Trust.
Elaine Wu, MBA’04,
and Jon Weindruch, BA’98, MBA’04
Elaine Wu and Jon Weindruch’s first date, an informal meet-up at a coffee shop, never happened. “Elaine stood me up,” jokes Jon. In reality, Elaine was a newly trans-planted international student stuck outside of downtown Nashville during a thunderstorm without a car or Jon’s cell phone number.
The two first met during a retreat about ethics sponsored by Cal Turner, which brought together students from Owen, as well as the Divinity School, Vanderbilt Law School, and the School of Medicine. They started dating during their second year, and Jon, who founded the Web-site strategy consulting company Websults while at Owen, followed Elaine to North Carolina, where she worked for Hanes after graduation.
In May 2005, during a return visit to Nashville, Jon proposed to Elaine at Percy Warner Park. They were married six months later in Taipei, Taiwan, by a pastor who had pursued his Ph.D. at Vanderbilt Divinity School. Some of their Owen friends also traveled to the wedding.
Elaine is currently Director of Internet Marketing for Victoria’s Secret, which operates the biggest retail apparel-accessory Web site in the United States. The couple lives in Columbus, Ohio, and Jon travels regularly to Nashville to consult with several clients, including the Owen School, which he has been assisting with Internet marketing.
Professors Jacob Sagi, Hans Stoll and Craig Lewis offer insight into the reasons for the recent financial crisis.
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Alumni Weekend 2008 Thank You (video)
Alumni share their thoughts about the Owen School.
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OwenUpdate – Winter 2008 (video)
Dean Jim Bradford talks about the recruiting and employment status of the Owen programs, the Vanderbilt Board of Trust visit, and the rumors about a new building.
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Distinguished Speakers Series
George Barrett, CEO of Cardinal Health (audio recording)
Barrett discusses the current state of the pharmaceutical industry and the role of generic drugs.
Vince Manze, President of NBC Creative Services (video)
Manze talks about his experiences in the entertainment industry and the future of global media.
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Rob Matteucci, MBA’77, CEO of Evenflo (audio recording)
Matteucci talks about life within a private-equity firm.
Featured Research
Campaign Contributions Boost ROI (audio recording)
New research by Alexei Ovtchinnikov, Assistant Professor of Management, provides hard evidence of a “positive and significant” relationship between campaign contributions and stock returns.
Managing the Brand: You (audio recording)
Kimberly Pace, Clinical Assistant Professor of Management, discusses the importance of reputation, attitude and identity for individual managers and executives in today’s corporate culture.
Navigating Global Antitrust Regulations (audio recording)
Luke Froeb, the William C. and Margaret W. Oehmig Associate Professor in Entrepreneurship and Free Enterprise, offers his perspective on the state of international antitrust laws.
The Poverty Paradox (audio recording)
Bart Victor, the Cal Turner Professor of Moral Leadership, talks about his research on the benefits of microlending.
Student Life
OwenBloggers – Why Owen? (video)
Student bloggers talk about why they decided to come to Vanderbilt.
Yesterday’s stock market tumble is the direct result of the deregulation of the financial system during the ’70s, experts say. “It was another example of an asset bubble that appears periodically. An economy will disregard risk, and when people see another investor making money by investing in an asset, others will throw caution to the wind,” explains Nicolas Bollen, a finance professor at Vanderbilt University’s Owen School.
McClatchy News Service, Sept. 16
Trade Off
International trade remains an evergreen fissure running through U.S. politics. While John McCain has been firm in his defense of the North American Free Trade Agreement (NAFTA), the Democrats have promised, albeit without specifics, to renegotiate treaties to protect U.S. workers. Luke Froeb, a free enterprise expert at Vanderbilt University, identifies this as a key ideological gap. He argues: “Renegotiating NAFTA would make our economy a lot less flexible. It would reduce income and make us all worse off.”
The Guardian (U.K.), Aug. 31
Clinical Trial and Error
Many institutional review boards do an exemplary job, keeping scientists on the ethical up-and-up, but “hyperprotectionism,” according to the Journal of the American Medical Association, “can have a stifling effect on research productivity.” One measure of that might be the number of new compounds approved by the Food and Drug Administration. It averaged an abysmal 19 last year—the fewest since the early 1980s. Or you can measure it by how long it takes a clinical trial for cancer to get off the ground: 171 days of red tape, finds David Dilts of the Owen School.
Newsweek, Aug. 11
Striking Gold
Olympic advertisers will spend more than $1 billion for U.S. airtime alone, although some say they will not get their money’s worth. In a time when it’s harder to win by simply offering a better product, the goal of a lot of advertising is to arouse positive feelings that forge lasting bonds with consumers, says Jennifer Escalas, a Vanderbilt professor. This year’s Olympic ads fit squarely with that goal. McDonald’s, for example, isn’t trying to sell a specific burger but to “build a relationship,” Escalas says. “If you feel good about the Olympics, that good feeling should spill over to the brand.”
MSN.com, Aug. 7
Full Disclosure?
Researchers have found that the Security Exchange Commission’s Regulation Fair Disclosure rule (Reg FD) has curtailed the amount of information that companies disclose to the public. Baljit Sidhu from the Australian School of Business, Tom Smith from Australian National University, and Robert Whaley and Richard Willis from the Owen School studied the effect of Reg FD by comparing cost components of the bid-ask spreads of Nasdaq-listed stocks in the months before and after Reg FD went into effect. “While Reg FD gave everyone the same info at the same time, what it’s done is it has made firms release less information, and it’s driven up the cost of trading,” says Whaley.
CFO.com, Aug. 1
On the Margins
The collapse of SemGroup LP, which filed for bankruptcy after losing $2.4 billion on energy contracts, has focused attention on margin requirements. Financial-market experts point out that while trading firms may struggle with margin requirements, increased margin doesn’t become an issue unless the trade is a loser to start with. “It’s a standard argument” when traders “get into trouble,” says Hans Stoll, a finance professor at Vanderbilt.
Michael Lapré, an Owen faculty member who studies operations and performance in the airline industry, sees many challenges ahead for the major airlines. Maintaining customer satisfaction will continue to be a problem, he predicts, as fuel costs continue to soar and the industry works to keep costs down.
“Right now the biggest issue is cost,” says Lapré, the E. Bronson Ingram Associate Professor in Operations Management. “They need to figure out an appropriate cost structure that makes it at least appealing to compete with an airline like Southwest. That’s not easy. You want to pay your employees appropriately. But that’s tough because other airlines, the discount airlines, have much cheaper labor. Then there are fuel costs, and figuring out how many different types of planes you can profitably have in the fleet. So there are cost-structure issues, fleet issues, labor issues. It’s not easy.”
Indeed, the airline industry today is facing a triple threat from rising costs, customer dissatisfaction, and an aging air-traffic control system, spurring some industry analysts to compare the current environment to the post-9/11 era of bankruptcy filings and extreme belt-tightening.
While US Airways CEO Doug Parker and others see mergers and acquisitions as an inevitable mechanism for airlines to consolidate costs, it is well known that mergers create problems, at least for the short term, and can create customer dissatisfaction.
“There are going to be more mergers,” Lapré says. “I do know that mergers and acquisitions can be troublesome. For example, the two airlines’ information systems can have trouble communicating. It takes a long time to integrate the information systems. It’s actually much easier to start from scratch than patch different types of systems together.”
Within the next few years, the number of major carriers in the United States will be reduced from the current six—US Airways, Delta, American, Northwest, United and Continental—to four and perhaps fewer, he predicts.
Within the next few years, the number of major carriers in the United States will be reduced from the current six—US Airways, Delta, American, Northwest, United and Continental—to four and perhaps fewer, he predicts.
Lapré, the author of an award-winning paper on performance improvement paths in the U.S. airline industry, focuses his current research on longitudinal data from the industry—data he says is easier to procure than in some other areas of business because the airline industry is so tightly regulated.
“I am focusing on the lessons learned about what worked well,” he explains. “I have found that you really must start with quality first. If you start cutting costs and don’t pay attention to quality, it’s going to be detrimental in the long run.”
Lapré says it’s hard to predict when flying may become more pleasurable and profitable again.
“Security issues are going to make flying a bit of a hassle. And now airlines are playing with charging for baggage. The so-called legacy airlines—those formed before the current era of discount carriers—began their operations in an era when oil was much cheaper and costs were less of an issue. Discount carriers, on the other hand, started from a cost-control position, so they can afford not to trim such services.
“Discount carriers are at an advantage because they turn the plane around so quickly on the ground,” he says.
But even discount carriers experience delays due to the antiquated air-traffic control system. “I think the industry is waiting for some technological advances that will make it easier for more planes to be in the air. Right now it’s almost full in the air. It’s too congested.”
Lapré repeatedly returns to the linchpin that will make or break an airline: quality.
“No airline can forget about quality. And that just means doing the basic things right and making sure customers are happy. Satisfied customers can become loyal customers, who will keep coming back.”
Grounded. In airplane parlance, it’s an ironic way to describe someone who oversees the fifth largest airline in the country, but that’s exactly how friends and colleagues of US Airways Chairman and CEO Doug Parker, MBA’86, view him. While he’s adept at managing the 30,000-foot view, they say he remains one of the most down-to-earth people they know—even as his embattled industry confronts soaring costs and plummeting customer satisfaction.
Parker, who steered America West Airlines from bankruptcy to profitability in the ’90s and then engineered a successful merger with US Airways in 2005, launched his career in the airline industry with American Airlines. The Dallas-based company offered him his first post-MBA job during a recruiting visit to the Owen School.
“The fact of the matter is, I don’t think I would have been in this business if it weren’t for Vanderbilt,” he says from his company headquarters in Phoenix. “American Airlines recruited only MBAs, and they did so only at a very select group of schools. Because of the Vanderbilt connection, I was able to get hired.”
In recent years Parker’s strong views about the value of mergers and consolidations in restoring the industry to profitability have earned headlines. A bid for Delta Air Lines, initiated in late 2006, was rebuffed (a Delta-Northwest merger was announced earlier this year), and talks with United Airlines stalled. But Parker remains characteristically optimistic, despite cost-cutting imperatives driven by rising oil prices.
Team Building
Parker saw the merger of America West and US Airways as a mechanism for building on the best of both worlds. The two airlines had similar cost structures and together created a larger customer base and more business markets. “We didn’t raise prices; it was about making us both more efficient,” Parker explains.
The merger, though profitable, wasn’t without snags, including the headaches of integrating two information systems. There have also been new challenges, such as skyrocketing oil prices and growing problems with customer satisfaction, which US Airways has tackled with spectacular success, going from last place to first in on-time arrivals during the first six months of 2008.
Even after 20 years in the business, Parker maintains a relish for grappling with complex problems that his classmates remember from his days at Owen. “We’ll figure out a way to make this industry profitable again, even if the oil prices remain high, but it will be a different industry,” he says.
No doubt he will lead the company toward making necessary innovations a reality with a focus on team building, his signature management style.
Parker’s team-centered leadership style harkens back to his days playing high school and college football, says Elise Eberwein, Senior Vice President for People and Communications at US Airways, who has worked with Parker for five years.
US Airways operates approximately 3,200 flights per day and serves more than 200 communities around the globe.
“He is completely ‘relatable’ to employees of all levels and backgrounds. By relatable, I mean he laughs at the same jokes, is so incredibly down-to-earth, and cares about things that matter to our people as opposed to just the 30,000-foot view. Don’t get me wrong—he cares about that, too—but he is very connected to the emotional things that matter to people day in and day out at their jobs,” says Eberwein, who estimates Parker spends 50 percent of his time getting to know employees at all levels.
She says he truly wants divergent views at the table and has created a culture where differences in opinion are handled respectfully. “I’ve worked for several CEOs and been around a lot of high-level executives. Doug is by far the best team builder and ‘head coach’ I’ve seen,” she says.
Parker made news after the US Airways-America West merger when he refused a bonus based on America West’s performance the previous year because he felt it was unfair to US Airways employees whose salaries had been cut. More recently, he made a large personal investment in company stock.
A Reflection of His Character
It did not surprise any of Parker’s Owen friends to see him step up and make a large investment during a dark time for the industry, according to David Hornsby, MBA’86, Owner of Executive Travel and Parking in Nashville.
“Doug has always had this ‘never say die’ optimistic bent. … That’s just the way he’s always been,” says Hornsby, who has remained close to Parker since their days at Owen. Hornsby and others describe Parker as a fun-loving guy and a generous friend who is always punctual, neat and full of ideas.
“Doug has always been extremely analytical. He was always coming up with a ‘system’ for everything. We put a lot of faith in Doug’s systems, and I’m sure he is a master of systems at US Airways,” Hornsby says.
Owen School Dean Jim Bradford says Parker’s focus on finding systems that work rather than copying existing operations was a huge factor in the success of the US Airways-America West merger. “It’s a reflection of his character, organization and strategic initiative that when he rebuilt America West, he didn’t just copy a successful airline like Southwest; he made strategic changes that saved costs but with an ultimate focus on customer service,” Bradford says.
Parker and Hornsby are part of a tight-knit group from the MBA Class of 1986, and Parker says the strong friendships he made at Owen were the most important part of his graduate school experience.
Bradford recalls how well Parker’s friends from Owen have helped keep him grounded, particularly right before the airline executive was slated to speak at a class reunion gathering: “Here’s a successful guy speaking at a ‘no-risk’ conference. One of the things his classmates did the night before he was speaking to the entire group was pepper him with really nasty questions they were pretending to prepare for the next day. Of course, they love him to death. It was funny to watch him get a little nervous.”
Parker met his wife, Gwen, a former flight attendant, through mutual friends while living in Dallas. It was a courtship witnessed by Owen classmate Jim Loftin Jr., MBA’86, who also worked for American Airlines after graduation.
“I knew when Doug had found his bride,” says Loftin, now President of JDL Management and Consulting in Dothan, Ala. “I was visiting him in Dallas and, for the first time I had ever seen, he was particularly interested in attending a specific party. Doug was always a go-with-the-flow kind of guy. When we arrived, I noted Doug had a bit of uneasiness I had never witnessed before. On more than one occasion that evening, Doug would say, ‘Hey Jimbo, come on, let’s go over here.’ It was always within 10 feet of Gwen. She paid him no attention that evening, but it was only a matter of time before those two would tie the knot.”
The Parkers are the parents of three children—Jackson, 13; Luke, 10; and Eliza, 8—and live in Paradise Valley, Ariz.
“Doug’s a great dad and husband,” says Andy McCain, MBA’86. “He’s managed to balance that pretty well with being CEO in an industry that’s had more difficulty than any other that size.” McCain, who is Vice President and Chief Financial Officer of Hensley & Co., is another member of that tight-knit group from the Class of 1986. He lives in Phoenix and is one of Parker’s closest friends.
One Crisis After Another
Parker spent five years at American in Dallas, holding a variety of financial management positions, before joining Northwest Airlines in 1991. His titles at Northwest included Vice President and Assistant Treasurer, as well as Vice President of Financial Planning and Analysis.
“Northwest was going through an LBO (leveraged buyout) and looking to hire new management to improve their team,” Parker recalls. “I loved my time at American, but I was ready to do something where I could make even more of a difference by building some things really from scratch.”
After four years with Northwest, he was recruited in 1995 at age 33 to become Senior Vice President and Chief Financial Officer at America West, based in Tempe, Ariz. “It was a smaller airline going through similar things Northwest had gone through a few years before. The new management was trying to build a new team. It was a great opportunity for me that I couldn’t pass up. I’ve been here ever since,” Parker says.
He was named CEO of America West on Sept. 1, 2001. “It was a good 10 days,” he says wryly.
The industry, already troubled before the Sept. 11 disaster, lurched into crisis mode after those events. Parker led his company through a loan guarantee process that helped turn it around by 2005, the same year America West initiated a merger with US Airways, then in bankruptcy and in danger of shuttering its operations. By 2007 the combined airline, with Parker in the leadership role, earned $427 million in profits.
Unfortunately those profits are now being eaten away by huge increases in oil prices. The company is predicting that spending on fuel alone could increase by $1.8 billion dollars in 2008 over the previous year. Fuel prices now represent a staggering 40 percent of the operating budget, Parker says.
Although the current obstacles are daunting, Parker recalls that in 2001, many pundits similarly believed America West “was done.”
“Survival’s a great motivator,” he says. After Sept. 11 the airline was forced to better understand customers’ needs, making changes accordingly, and to redefine the airline with a low-cost structure.
But America West executives knew the operational turn-around might be tenuous. “So as we looked at America West, we were very concerned about our viability because we had an airline that never had the same revenue generating capacity” as other airlines, he says. “We made up for it with lower cost structure, but we had cause for concern.”
The merger with US Airways was an opportunity to expand into more business markets and afforded a larger customer base.
“I recall vividly when we were putting this merger together that there was concern about oil prices, which were then $50 a barrel,” he says. Company managers were confident that they could succeed despite the high costs of fuel. “But when oil prices jump from $90 to $145 in a matter of months, that has a profound impact on our business. There’s a lot of financial turmoil in the business that we’re not immune to.”
Tackling Problems Head-On
Parker, always one to see the silver lining, says soaring oil prices have similarly forced the industry to address airport capacity issues. “Six months ago we were spending a lot of time working on how to fix the congestion issue,” he says. “It was much of what everyone was talking about. The fact of the matter is, oil fixed that. We were forced to take 10 percent of capacity out right away. It will come back one day, but the impact of oil overwhelms everything else.”
Six months ago we were spending a lot of time working on how to fix the congestion issue. The fact of the matter is, oil fixed that. We were forced to take 10 percent of capacity out right away. It will come back one day, but the impact of oil overwhelms everything else.
~ Doug Parker
The new US Airways is aggressively addressing the issues it can, as evidenced by the dramatic turnaround in on-time arrivals in 2008. Parker credits this accomplishment in part to several key hires, including Robert Isom, recruited from GMAC Financial Services less than a year ago as the airline’s Chief Operating Officer. Parker and Isom worked together both at Northwest and America West before Isom left the industry for GMAC. Suzanne Boda, another key hire, joined US Airways in January as Senior Vice President for the East Coast, where airline congestion has been a particular challenge. Boda is also a Northwest Airlines veteran.
A mark of Parker’s style is that he stayed in the background as the turnaround was announced and let his executives take the lead. In July, an article in The Wall Street Journal trumpeting the airline’s new data never mentioned the CEO’s name, quoting Isom and Boda instead.
“If someone suggested we’d go from 10th to first in a year, I would have thought it was too much, but we’ve done it and it is a credit to all our people,” Parker says.
The company accomplished the performance turnaround in part by focusing on getting planes out of the gate on time, rewarding employees for better service, and investing millions in capital improvements.
A major challenge was integrating the communications systems more effectively, something that took time and led to frustrations for travelers after the merger.
“In our case, through that operational integration, we’d gotten ourselves into running a much worse operation than we wanted to run,” Parker says. “We knew the problem would get fixed when integration took hold, but we also knew we needed to take additional action because of what those problems meant from a customer perception standpoint. We had to win customers back. We put a tremendous amount of focus on it, including bringing in new people who knew what to do.”
Meanwhile, the airline is finding other ways to adapt to rising costs. Among those in the news are such changes as per-item charges for baggage and other efforts to “de-bundle the product,” such as charging for drinks. US Airways also announced it would stop giving bonus miles to frequent fliers and begin charging between $25 and $50 for booking award tickets, calling the cost-saving measures “necessary realities.” Other airlines announced similar cost-saving measures.
“We want to concentrate on providing great service on our core product, which is getting our customers from point A to point B on time,” Isom explains.
Isom says while people in the industry have been talking for months about how to confront the cost issue, he enjoys the culture at US Airways, which is focused on tackling problems head-on. “None of us are people who are going to wait around without charging ahead,” he says. “The worst thing you can do is sit back. It’s time for bold measures.”
Isom worked indirectly for Parker during his first post-graduate job. “I can credit Doug with getting me into the business and pulling me back in after I got out,” Isom says. “Not only is he a really good friend, but he’s a charismatic guy whom you want to work with.”
In His Element
“Every organization has its own cul-ture and feel,” agrees Bradford. “When you’re around Doug, you recognize the quality of this human being. He genuinely wants what’s best for the company, and he treats the school the same way.
“What really comes across with Doug is that here’s a very accomplished business guy who values integrity above all things and is a real family man,” Bradford says. “His success hasn’t gone to his head. He’s firmly grounded in his value system, and his leadership comes from that value system.”
While Parker strongly believes that the industry won’t be able to avoid looking at the efficiencies of combining airlines in the coming years, he predicts the current environment of skyrocketing oil prices will freeze any movement in that direction during the coming year, and maybe longer, except for the recently approved Delta-Northwest merger.
“The airline industry is very fragmented,” he says, citing the fact that American Airlines, for example, has less than 20 percent market share. “It’s hard to find businesses like that outside the airline industry. The fact that we’re highly fragmented is a lot of the reason we go through this turmoil. It’s just so hyper-competitive.”
Parker predicts that the Delta-Northwest merger will be fraught with hazards similar to those faced by US Airways and America West. “There will be hiccups. There is so much to integrate from an operational standpoint. You can’t turn it on overnight and not have consequences to deal with.”
Although he knows the industry is in for a bumpy ride, he wouldn’t change the course of his career. “I love it. It’s a great business. It’s extremely dynamic. If you’re looking for a business that runs itself in a steady state, that’s not what this is. But I like that part,” he says.
“It’s not for the faint of heart,” he says, as he shuffles through papers on his desk for his next meeting and prepares to deal with tomorrow’s chal-lenges. “There are times when you wish for some level of normalcy. But if I had some level of normalcy, I’d probably be bored. I enjoy the challenges.”
Robert Barrett, left, and Rob Shults founded Honours Golf in 1998.
When the Scottish first pioneered the game of golf all those centuries ago, it’s safe to say that they had no idea what a worldwide phenomenon it would become. Of course the sport has changed considerably since then; some of the modern rules and conventions would be unrecognizable to those ancient Scots. Yet for all the changes, golf today remains rooted in sportsmanship and camaraderie, and it’s these ideals that help to explain its enduring popularity.
Certainly Rob Shults, MBA’96, can attest to this. As the President of Honours Golf, the leading golf course management company in the Southeastern United States, he’s built a business around the idea that the game is as much about instilling core values and forging friendships as it is about competition. This is reflected not just in the company’s name, which hearkens back to the origins of the sport with its British spelling. It’s an inherent part of everything that Honours Golf does to create memorable experiences for its members and guests. From course conditioning to customer service, Shults and his team go the extra mile to uphold the long and noble tradition of the game.
Practice Swings
Though Shults didn’t realize it at the time, the philosophy behind Honours Golf took shape when he was just a school kid growing up in Little Rock, Ark. His father taught him how to play golf at an early age, but it wasn’t only the rules that he learned. The game brought Shults happiness on so many different levels that he came to view it as a life pursuit rather than a simple diversion.
“Golf was a game that I had talent in, and I just fell in love with being outdoors, spending time with good friends and working on a skill over and over,” he says.
Shults’ talent for golf led him to play competitively in high school and at the U.S. Military Academy at West Point, where he earned a B.S. in Management and Systems Engineering. After serving as an Officer in the U.S. Army for four years, he began looking for a way to transition from the military to the business world. The Owen School offered him just such an opportunity. While earning his MBA, he picked up basic business tools that continue to serve him well to this day.
“Owen gets you ready to handle a lot of different tasks simultaneously. It’s good preparation for getting out there in the real world and trying to figure out what direction you’re headed in life and how successful you’re going to be,” he says.
The Drive
Shults’ direction in life didn’t become entirely clear to him until a couple of years after Owen. While working for Wachovia Bank in Atlanta, he started to get the itch to do something that he’d always wanted to do—start his own company before he turned 30. The problem was, he didn’t know what that company would be. At the time, golf wasn’t on his radar screen, except as a hobby. “Frankly, I had never thought about making money or going to work in the golf business,” he admits. But a chance meeting with one of the sport’s premier developers changed all that.
That developer was Robert Barrett, a native of Augusta, Ga. who had been working in the golf industry since the ’70s. Barrett had made a name for himself planning and managing golf operations for a number of well-regarded clubs across the country, including La Quinta Country Club in California, the site of several Skins games during the ’90s.
Despite their different backgrounds, Shults and Barrett hit it off immediately. They found they shared not only similar personalities but also a similar appreciation for the game.
“He was a golf operations guy through and through, and I brought a financial perspective to the table. But we had the same vision for what we wanted to do,” says Shults.
That vision—creating courses that provide something more than just an ordinary round of golf—took root when they decided to form Honours Golf together in 1998. From the very beginning Shults and Barrett found that their partnership was all the more effective because of their different, yet complementary, skill sets. Their roles within the company point to this. As CEO, Barrett handles golf course development and operations out of the Birmingham, Ala. office. Shults, meanwhile, heads up strategic direction and business development in Atlanta.
The Approach
Shults and Barrett’s first business deal was with Highland Park Golf Course in Alabama—the oldest course in that state. Since then, the two have steadily added to their portfolio, which now includes a total of 12 courses located throughout Alabama, Florida, Georgia and Mississippi. Some of these properties were signed through golf course management contracts, as in the case of Highland Park, while others came about through development deals, in which Honours Golf assisted with the design and construction. Shults and Barrett have purchased several golf courses as well.
Whether through management, development or whole ownership, Honours Golf always takes the same disciplined approach. “Every one of our projects, by its nature, has its own unique brand,” says Shults. “That takes a whole host of disciplines. It takes leadership, of course, and it takes putting a good team in place, whether it’s the right team to build the golf course or the right team to run the golf course. And then it takes putting a culture of success in place with good systems and good training.”
Minding the Hazards
Good teams and good systems are especially needed in today’s business climate. The recent downturn in the economy poses a challenge to golf course owners since the sport is a discretionary expense for consumers. There’s also the added pressure of rising fuel costs, which affect everything from the transportation of fertilizer products to the price of food served in their clubs. And to make matters even worse, the industry is already dealing with growing pains brought about by overexpansion during the late ’90s and early ’00s. Today fewer golf courses are being built, and many are being closed.
And yet Honours Golf has reason to be optimistic. As Shults points out, there are an estimated 25 million people in the United States who play the game. Of those, 8.5 million are considered to be core golfers. They spend about 80 percent of the money in the sport and are not likely to give it up, even during times of recession or inflation.
Shults also sees an opportunity for his company in golf’s consolidating market. “Owners and financiers are realizing that golf course management companies are part of the necessary solution to get the golf industry back to health from a supply and demand standpoint, as well as from an operating standpoint. Existing golf courses that are undermanaged are our biggest opportunity,” he explains.
The Bottom of the Cup
Perhaps most importantly, though, Shults knows that the golf industry as a whole is in good hands. There’s a reason, he says, why you never hear of people being forced into his line of work by their fathers: It just doesn’t happen. “People are in the business because they want to be in it,” he says. “So everybody is passionate. It’s an industry that is competitive, but for the most part everyone takes the attitude of ‘Let’s grow this game together.’”
Serving as President of Honours Golf may be a job, but to hear Shults talk, you might just think otherwise. Every day at the office brings challenges, for sure, but there are plenty of rewards, too. Shults has found great satisfaction in sharing his goals and principles with like-minded people, such as Rob Barrett and others on his team, and in the process, he’s made friendships and memories that will last a lifetime.
As Shults puts it, “At the end of the day, pursue something you love. Because if you’re doing something you love, you’ll never feel like you had to work a day in your life.”
This piece is adapted from a speech that Neil Ramsey delivered during Owen’s Alumni Weekend in April.
Looking back at my graduation 25 years ago from Owen, I’m amazed at how much my perspective has changed. Perhaps I could have learned most of what I’m going to describe here by reading, but there’s no way that knowledge would mean anything to me today without the experiences to back it up.
So what have I learned since graduating from Owen?
I’ve learned that most of the lessons my parents taught me were the keys to a happy life. When my dad used to tell me that I would grow up to be exactly the kind of person that I was as a boy, he was right. Ralph Waldo Emerson said, “The only person you are destined to be is the person you decide to be.”
I’ve learned that how I handle my problems is a lot more important than avoiding the inevitable problems that pop up. Unfortunately I haven’t fully learned what Teddy Roosevelt said best: “Nine-tenths of wisdom is being wise in time.”
I’ve learned that it is okay to say what you think, but it is better to do it tactfully. I did not understand this when I was younger. I felt that if what I was saying was true and I meant no harm, it was okay to say it. It took many hurt feelings to learn this one, and I’m still working to be more considerate in my delivery.
I’ve also learned, as a friend of mine said 20 years ago, that “there are no throw-away comments.” The irony of this quote is that when I recently reminded him of the comment a couple of weeks ago, he was surprised I had remembered it. Everything you say and do can touch people in a positive or negative way, and you may never even know it.
I’ve learned to go as far as I can to show people I love what they mean to me. If you find yourself wanting to record your feelings in words, do it.
I’ve learned that substance may be all that matters, but you may not be listen-ed to if you do not pay attention to form. Substance without form serves little purpose.
I’ve learned that having ambitions is much more important than being ambitious. I’m one-tenth as ambitious today as I was 10 years ago, but my ambitions are 10 times greater.
I’ve learned that perseverance is the key to success. Accumulated knowledge and experiences are our most valuable assets.
I’ve learned that you can change the way the world treats you simply by opening your heart, looking for good, and showing more kindness and patience. I haven’t mastered this, but I am better than I used to be, and the world treats me better because of it.
I’ve learned that I would rather be respected than liked. I would prefer both, but given the choice, I’d pick respect.
I’ve learned that the need for my parents’ approval never goes away.
I’ve learned that I could not be successful in my own business until I decided I was just another employee with specific responsibilities.
I’ve learned that my favorite people are very smart, have a good sense of humor, and don’t take themselves too seriously.
I’ve learned to demand much less of most people but demand much more from the people who can handle it.
I’ve learned that my greatest comfort comes from watching my kids find their own way. Nothing makes me prouder than when someone I really respect says something nice about one of my kids.
I’ve learned that nothing makes me happier than having a special moment with one of my children when it is completely obvious they love and appreciate me.
I’ve learned that I should have no faith in objects, little faith in institutions, faith in people I care about, a lot of faith in myself, and complete faith in God.
I’ve learned that one of my biggest sources of frustration and angst is the guilt associated with unreturned phone calls.
I’ve learned that having money is much more important for mental freedom than I ever imagined. I live scared. That is my motivation.
I’ve learned that intelligence can’t be measured accurately. I think maybe intelligence is like what Supreme Court Justice Potter Stewart said about pornography: “I don’t know how to define it, but I sure know it when I see it.”
I’ve learned that intellect and talent sometimes don’t translate from one field or endeavor to another. As an undergraduate, I had very good grades, but the two courses I did poorly in were economics and an engineering science “calculator” module. At Owen I had a difficult time in Professor Blanton’s computer course and Professor Blackburn’s stats course. Now here I am running a statistics-based, research-oriented quantitative hedge fund utilizing econometric models. In my business we always have to say “past performance may not be indicative of future performance.” I guess there’s a reason for that.
I’ve learned not to compete head-to-head with people smarter than me. I try to compete where my strengths are unique.
My wife has been trying to teach me for 25 years that when people seem odd or mean, they are probably just going through something tough. I am beginning to get this one.
I’ve learned that the world would be a much safer place if we all lived below our means.
Along these lines, I’ve learned not to laugh at old men with no hair on their ankles. I am now one of those old men. This is a pretty minor issue but shows that we should be more understanding and compassionate.
I’ve learned that the world would be a much safer place if we all lived below our means.
I’ve learned that inexperienced geniuses are dangerous.
I’ve learned that “value” is very difficult to surmise.
I’ve learned that the stock market is a tricky place to make money.
I’ve learned that most people and almost all politicians take the benefits of economic activity for granted. They forget that this is the core of morality and self-worth and opportunity for society.
I’ve learned that most arguments between people could have been avoided with some initial definitions and that all of the Ten Commandments make sense.
I’ve learned that making things as simple as they should be is very difficult. As Einstein said, “Make everything as simple as possible, but not simpler.”
I’ve learned that perseverance is the key to success. Accumulated knowledge and experiences are our most valuable assets. One of my favorite quotes is from Winston Churchill. He said, “When you are going through hell, keep going.” Conversely I’ve learned that if what I’m doing is not working, I better do something else. Separating hindsight from new insight gained from a setback is the key to perseverance.
I’ve learned that answers and new opportunities wondrously appear when I seem to need them.
I’ve learned that I should be striving more for goodness than greatness.
I’ve learned that when something hurts me or angers me, it’s not a good idea to get philosophical and accept it too quickly. And more importantly, it’s even worse to lose control of my emotions and do damage.
I’ve learned that we have no idea what tomorrow will bring.
While I have no idea what I will learn in the next 25 years, I’m guessing that I will not learn some of the simplest and most basic lessons well enough:
Take care of my family.
Connect to other people.
Treat people kindly.
Be thankful for what I have.
Recognize that my current situation is just a snapshot.
China is undergoing an infrastructure building campaign unrivaled in recent history. When the country first opened its doors to the outside world in fits and starts in the ’80s and ’90s, large transportation providers, like DHL, UPS, FedEx and Exel, began vying for a toehold on the mainland through joint ventures with the various government transportation groups, like Sinotrans, and newly-privatized enterprises. It was as if China had re-awakened when Deng Xiaoping, the late leader of the Communist Party of China, proclaimed, “To get rich is glorious!” during his famed Southern Tour in 1992.
A view of the famous Bund district in Shanghai.
Today the east coast highway and port system has reached or surpassed international standards around the centers of commerce in Beijing, Shanghai and the Pearl River Delta in Guangdong Province, and the government has slowly allowed international firms to operate independently of their joint venture partners. With China’s entry into the World Trade Organization in 2004, restrictions on foreign direct investment were officially loosened, but multi-nationals were still functionally required to navigate the bureaucracy of multiple layers of government.
According to Datamonitor, the Chinese logistics market is projected to grow in the low teens through 2010 after posting a remarkable 22.6 percent compounded annual growth rate from 2001 to 2005. Today China has 16 major ports and a shipping capacity of 50 million tons per year. It also has a network of over 30,000 kilometers of highways, second only to the United States in total kilometers. Despite this phenomenal growth, logistics costs remain high—representing 20 percent of GDP in China versus 11 percent in Japan—when compared to overall production.
Market Remains Fractured
One would expect rapid consolidation among logistics providers seeking to capitalize on China’s growth. Yet in the trucking world, a single provider has yet to emerge with a comprehensive network. There are over 5 million trucking companies, with each owning an average of 1.8 trucks. The top 100 logistics providers only comprise 5 percent of the total logistics market.
These smaller trucking firms are often the lowest cost provider with low overhead and expertise within a single area. Their expertise includes relationships with toll collectors and inspectors that give them an advantage over a trucking firm from another region. With such low barriers to entry and local protectionism, it is hard for larger players to compete. In the case of bulk commodities like cotton, factories will often manage the supply chain between the mill and the port because they can get the lowest prices with their existing carriers.
Level of Automation Remains Low
Although many logistics providers that move high-value merchandise have invested in the latest tracking systems, many of the bulk commodity shippers are not using available technology to provide shipment visibility. Much of the tracking is still done the old-fashioned way with a clipboard and a marker. If cost is the primary buying motivation and labor costs are low, there is not a short-term payoff for investing in automation. Why would you buy a forklift if you can hire a team to stuff a container by hand for a fraction of the cost?
Overloading Persists
In China it is common practice for truckers to overload their trucks by two to three times the legal limit to maximize their asset usage and eke out a profit in a fiercely competitive market. The central government has issued tougher laws to ensure the safety of drivers and reduce damage to roads, but they are lax in the enforcement of these regulations because they know many small truckers would go under if they adhered to the weight limits. Meanwhile the local government has an incentive to allow overloading to continue as tolls are collected on the total weight of the load and they are not responsible for road repairs. This practice reminds one of the Chinese saying, “The hills are high and Beijing is far away.”
What to Do?
There is no “one size fits all” solution. Instead of a China logistics strategy, have a unique strategy or partner for each region. Find logistics providers who have worked with firms that you trust.
Also keep in mind this is not the West. Proceed with caution and realize that corruption is widespread, contracts are hard to enforce, and management talent is scarce.
As in any business, logistics is a game of relationships. This is even more appropriate in China where a long-term relationship may mean the difference in your product being held up in port rather than getting delivered to a factory on time. Invest in a long-term relationship with a company that is willing to establish a mutually beneficial partnership.
Oscar Atkinson traveled with 19 classmates to China as part of Professor Ray Friedman’s Doing Business in China course. The highlight of the week-long trip was a visit to international logistics firm Mallory Alexander with Michael O’Brien, MBA’08, Jen Smith, MBA’08, and Scott Hall, MBA’08. Atkinson now works for SEACAP Financial, an investment bank in Memphis, Tenn. specializing in the sale and acquisition of family-owned companies. Atkinson can be reached at oscar.atkinson@seacapfinancial.com.
In his book Topgrading: How Leading Companies Win by Hiring, Coaching and Keeping the Best People, author Bradford D. Smart concludes, “With an average base salary of $114,000, the average total cost associated with a ‘typical’ mis-hire is $2,709,000—greater than 24 times the person’s base compensation.”
To rationalize these amounts, think about the opportunity costs that can result from substandard service, inadequate research, missed deadlines, failed marketing campaigns, missed sales targets, flawed accounting or investment strategies and more. Additionally you may directly absorb considerable recruiting expense, invest in orientation and training, or put up with mediocre performance and results for some period of time. And, adding insult to injury, you may have to pay a severance to get the employee to leave. Finally you may also incur hard executive recruiting costs for the replacement employee and absorb various additional costs to train that person.
CEOs agree that hiring and retaining high-quality executive leadership is crucial to achieving strategic business goals. However, very few CEOs have accurate data to openly discuss the true cost of a bad hiring decision. Yet when it does happen, it’s too personal and too painful to study under a financial microscope. But it’s not a question of guilt or blame. The real question is: How could it have been avoided and how can you reduce making mis-hires in the future?
You’re Thinking These Costs Are Overstated?
With more than 12 years in the executive search industry, I believe these numbers are close to the mark. But go ahead and cut these costs in half. Change 24 times salary to 12 times salary. Or if you’re really a skeptic, go ahead and cut them in half again. Even at a mere 25 percent of the researched amount, you’re still looking at a $684,000 cost for a bad hiring decision involving a $114,000-per-year employee. For a $200,000 executive, you’re looking at a $1,200,000 cost for a bad hiring decision. The numbers are too large to ignore.
Over the years I’ve had the opportunity to work with VC- and PE-backed health care companies to Fortune 25 organizations. I’ve found that many corporations avoid the calculation by simply not agreeing on an appropriate formula, despite the fact imperfect information exists in all decision-making processes. It’s too easily dismissed as just another “cost of doing business.” Across industries it’s reported that internal corporate executives consistently recruit and retain the “right” manager or executive for 12 months or longer less than 55 percent of the time. This seems low.
I’m convinced long-term candidate retention can be improved and that mis-hire costs can be materially reduced.
Three Ways to Improve Your Executive Recruiting Outcomes:
1. Recruiting firms are not always the right solution to hiring key leaders. Retained search firms are excellent resources at the right time. However, internal candidates, board members and industry colleagues can be valuable resources. These individuals may be candidates individually; they may be able to open their rolodex; they may provide comments about desired candidate characteristics; and they may recommend retained executive recruiting firms for you to talk with. If you use a retained executive recruiting firm, do appropriate diligence on more than one search firm.
2. Plan a thoughtful and well-prepared interview process. Each interviewer in your company’s process must have a clear understanding of his or her role in the assessment process. The absence of interview structure will be recognized by the candidate and may lead you directly down the path to a costly mis-hire.
3. Ensuring that the new executive is successful requires communication between the hiring executive, the successful candidate and specific, internal colleagues. Managing the individual’s integration into your company for the first 90 days will provide a foundation for long-term retention. Following the first 90 days, ongoing communication develops relationships, provides clear strategic direction and reinforces cross-functional interaction and discussion.
At an average cost of $2,709,000 per mis-hire, I encourage all business leaders to take a closer look at their executive recruiting processes, determine where and how these processes lead to false economies and then take steps to better manage these processes. A bad hiring decision can be a significant drain on the bottom line.
Paul Frankenberg is CEO, President and Co-Founder of Kraft Search Associates. In both 2006 and 2007, Modern Healthcare magazine ranked Kraft Search Associates one of the nation’s Top 25 Healthcare Retained Executive Search Firms. Frankenberg can be reached directly through www.kraftsearch.com.
What services does the Career Management Center provide?
The CMC does not play a traditional placement role in the sense of matching companies and students. Today’s MBA job market is all about fit, and that’s something only the companies and the students can assess; matchmaking is really not part of what we do. Our job is more about helping to develop the job market. Our role with corporate employers is to educate them about the school and to help them attract the talent that they need to run their companies. Our mission with students, on the other hand, is to help them prepare for their job search. It’s not just about finding an MBA job when they get out, although that’s really important to everyone. It’s also about giving them the tools that will allow them to seek jobs for the rest of their lives. We teach them how to pick a direction, match their skills to job requirements, fill gaps if they’ve got them, and then market themselves to companies.
