Tim Perry has never been one to follow convention. When most of his high school classmates in Kansas City decided to attend nearby state universities in Kansas, Perry instead went south to the University of Arkansas at Fayetteville, where he majored in finance. Upon graduating, he again bucked the trend, choosing to enroll directly in what was then a relatively young business school, rather than seek an entry-level job at a bank or investment firm.
“I didn’t want to go to work and then come back to business school, because I was afraid if I started a job that I’d get caught up in it and never leave. Owen ended up being the best possible choice. It was an up-and-coming school at the time, and I got an excellent education,” Perry says, adding that he still relies on the critical thinking skills he developed while earning his MBA.
Perry’s instincts have served him exceedingly well, even when conventional wisdom might have suggested a different path. Today he is Credit Suisse’s global co-head of oil and gas investment banking—the latest accomplishment in a distinguished 36-year career, half of which he has spent with the Swiss financial services company.
“I have been very fortunate,” says Perry, who was promoted from co-head of the Americas oil and gas group in December. “Most of the people I work with attended Harvard, Wharton or University of Chicago.
“The exciting thing, though, is that Owen is on an upward trajectory. It’s become well-known and respected on Wall Street, and the Vanderbilt grads we’ve hired have done very well.”
Based in Houston, Perry has spent the past two decades raising capital and executing M&A transactions for many of the leading private and public companies in the energy industry. In 2016 alone Credit Suisse executed approximately $15 billion in oil and gas equity offerings, which equates to about half of the sector’s global equity offerings completed that year. Credit Suisse’s oil and gas investment banking group ranked No. 2 in the world in 2016.
“Geopolitical events can have dramatic effects on our industry,” he explains. “For instance, when OPEC [the Organization of the Petroleum Exporting Countries] decided to increase its market share in 2014, the price of oil went down significantly, and it didn’t really recover until March 2016.”
Another factor that has impacted Perry’s business of late is the development of new technologies for oil and gas extraction. Specifically, the industry has been transformed by the combination of horizontal drilling—in which wells are turned horizontally to access hard-to-reach deposits—and hydraulic fracturing, or “fracking”—the process of injecting liquid at high pressure into subterranean rocks to force open existing fissures. The new technologies, which now account for more than half of all oil and gas output in this country, have allowed the U.S. to increase its production more rapidly than at any other time in its history.
“We hear talk about energy independence in America, and I believe it really is within reach,” Perry says. “For a long time we have been a big importer of oil, but now we’re actually exporting it. These new extraction techniques have revolutionized the industry over the last few years.”
The oil and gas industry has seen its share of ups and downs over the past few decades, and it would have been easy for Perry to step away when times got tough, parlaying his investment banking experience into something else. But then again, that’s never been in his nature. When others zig, he zags, and because of that he now finds himself at the pinnacle of his field, engaged as ever in his job.
“People always ask me why I’m still in it, and I tell them that I find the industry to be extremely stimulating, thought-provoking, innovative and energetic,” he says. “Plus, I work with an amazing number of super-bright people who are highly motivated. It keeps things interesting every day. That’s why I’ve done it for so long.” ■
Ask just about any investor what the key to a healthy portfolio is, and you’re likely to get the same piece of advice: diversify. But when it comes to maintaining a healthy sense of self-worth—something that’s incalculably more valuable than any financial asset—diversifying may not be the first thing that comes to mind. That is, unless you’ve had an opportunity to hear Assistant Professor of Clinical Psychiatry David Sacks speak.
Late last year, Sacks gave a presentation to business school students, faculty and staff that drew upon his experience as associate director of Vanderbilt’s Psychological and Counseling Center. Roughly one in five students visits the center during his or her time on campus, and even more attend its outreach and prevention activities.
A prevalent need among students is guidance on how to cope with stress, which is one of Sacks’ areas of expertise. Relying on his background in sports psychology, he often teaches students not just how to cope but how to excel under pressure, much like high-performing athletes. Sacks argues that when stakes are high—whether on the playing field, in the classroom or in the office—one can influence the outcome by taking steps like diversifying one’s life interests. The following are seven such tips that he says anyone can use.
1. Engage in deliberate practice.
“You’ll never find an expert in his or her field who doesn’t work hard at it, but there’s a difference between practice and deliberate practice,” Sacks says. “Deliberate practice involves setting goals. It’s not the same as just putting the time in. Ask recreational golfers what they’re working on in their game, and they probably won’t be able to tell you. But a professional golfer will. That explains why some people play golf all their lives but never improve.”
2. Focus on what is within your control.
“During times of stress, there’s nearly always something we can control,” he says. “If we attribute outcomes, whether good or bad, to things outside of our control, we’re not motivated to do anything differently in the future.
“When I talk with students about a bad experience they’ve had during an exam, they often say something like, ‘I’m just not as smart as the other people in the program.’ They’re making an internal attribution but an uncontrollable one—‘I just don’t have it,’ versus ‘I didn’t take advantage of the help that was offered’ or ‘I used a poor strategy.’ My work is trying to get them to move toward a controllable attribution.”
3. Think about the upsides of success, not failure.
“When things go badly, we often catastrophize the situation, but the truth is failure usually isn’t as bad as we make it out to be,” Sacks says. “I like to use the metaphor of walking on a tightrope. Recognizing that you have a net under you can reduce your anxiety, and it’s not your intention to fall and land in that net. Knowing that it’s not a life-or-death situation can help you keep your focus on your goal of getting to the other side.”
4. Follow a pre- and post-performance routine.
“It’s really unfortunate when we worry about a task without working on that task. It isn’t productive, and it ruins our leisure time,” he says. “To combat this, most athletes have a simple routine that gets them from their time off to their time on—like baseball pitchers between each pitch. I tell students to do something similar. Go to the same location each time to study, or during tests, do short breathing exercises between questions.
“Another suggestion I have is that, if it’s unrealistic to ask yourself not to worry, then take control and budget yourself a time for it. If something is occupying your mind, thinking through it can help, but be deliberate in your problem solving.”
5. Diversify your life interests.
“When you have tunnel vision and are into just one thing, you’re not necessarily setting yourself up for better performance,” Sacks says. “I encourage people, even when their time allocation is unbalanced, to give at least some thought to a diversity of issues. Besides hobbies and exercise, I’d suggest talking to friends or family members who have no clue what you’re invested in. If their affection for you is not contingent upon how you perform, they become your safety net.”
6. Find your optimal level of anxiety.
“Most of us have an optimal level of anxiety that we perform under,” he says. “Past that optimal point, we’re so nervous that we can’t function. One explanation for this is that when we’re highly aroused, our attentional capacity [the brain processing it takes to pay attention and act] shrinks. And when our attentional capacity shrinks, we make mistakes.
“An example is how common it is for a quarterback to throw a “pick six” [an interception that leads to a touchdown] late in the game. The stakes are high, and the quarterback has tunnel vision. If he would just take a step back and relax, he would perceive more.
“Or for instance, have you ever been taking a test when you knew the answer but couldn’t come up with it? And maybe it occurs to you only after you’ve finished? That’s because you’re more relaxed at that point. It’s ironic that caring less about something and lowering the stakes can get you where you want to be.”
7. Pay attention to self-talk.
“It’s important to be aware of how we talk to ourselves,” Sacks says. “Sometimes we tend to berate ourselves. Think about it: If that’s the message you’re listening to, then you’re working against yourself. I advise people to talk to themselves as they would to someone they really care about, or as that person would talk to them.”
Bottom line
“If you’re worried that your results are uncontrollable and you think you either have it or you don’t,” Sacks says, “your failures are going to reveal to you that you don’t have it. And if that’s a fear you have, you’re going to hold back in testing your limits because you don’t want your weaknesses to be revealed.
“If, on the other hand, you believe that outcomes are controllable, your weaknesses are absolutely what you want to target because you think that with deliberate practice you can fix them. Every day you can improve something a little bit, and the gap between you and the person just going through the motions will continue to grow.”
Soon nonprofit leaders from all over the country may line up for the opportunity to earn a Vanderbilt MBA degree tuition-free.
In spring 2014, the Executive MBA program opened up eligibility for its annual nonprofit sponsorship to those outside the Nashville area for the first time. The sponsorship, which gives deserving executives at 501(c)(3) organizations access to a business education they otherwise might not be able to afford, had previously been reserved for applicants in Middle Tennessee.
In June, the school announced that Abby Shue, vice president of the Kentucky Center for the Performing Arts in Louisville, was selected as its Class of 2016 recipient. Shue’s selection marked an important new chapter for not only the sponsorship but the school as well. By bringing in the best candidates possible, regardless of geographic location, Owen signaled its intent to play a bigger role in bridging the nonprofit and for-profit worlds.
Abby Shue, vice president of the Kentucky Center for the Performing Arts in Louisville, is the first recipient outside of Middle Tennessee and the first to focus on arts administration.
“It was the nonprofit alumni—the past recipients of the sponsorship—who came to us and encouraged us to expand our nonprofit reach,” says Juli Bennett, MBA’93, executive director of the Executive MBA and Americas MBA for Executives programs. “They saw the need to strengthen the sponsorship’s impact, and we at Vanderbilt agreed with them. It makes sense to draw from a strong nationwide applicant pool that mirrors the one we draw from for our entire EMBA class.”
Puts nonprofits on equal footing
Shue’s interest in earning an MBA stemmed from her work with senior management and the board of directors at the Kentucky Center, which is home to five resident performance companies, including the Louisville Orchestra and Kentucky Opera. The 30-year-old center hosts more than 1,000 events per year. Among her responsibilities are helping oversee general operations and directing strategy.
“Arts administration is a large field that remains relatively undefined. Like any nonprofit, we need to focus on operational effectiveness and efficiency,” Shue says. “I can’t imagine a better way to hone my managerial skills and learn to tackle complex business issues than in an Executive MBA program like Vanderbilt’s.”
The sponsorship, which began as a partnership with the Nashville Center for Nonprofit Management in 2006, is a rarity at a business school in the U.S. Unlike other schools that offer partial scholarships for such programs, Vanderbilt covers the full two years’ worth of tuition, or approximately $95,000. The program is currently funded from Owen’s operating budget, although the school would welcome a named sponsor for it.
President and CEO of Family and Children’s Service Michael McSurdy, EMBA’09, says he sees how his EMBA experience makes him better at bridging the gap between the social service sector and philanthropy.
To be considered, an applicant must meet the same criteria as any other Executive MBA candidate, including a strong GMAT score, record of academic accomplishment, previous management experience, professional recommendations and a formal interview.
Sponsorship recipients follow the same curriculum as their classmates, completing 60 credit hours of coursework over a two-year period and working closely with their peers. Part of that work includes two capstone projects that provide valuable strategic experience. They also have access to the school’s top-ranked Leadership Development Program.
“Our nonprofit students are exposed to the best practices in the business world,” Bennett says. “They learn the way their board members think and understand the expectations for how a nonprofit should perform.”
The interaction with their for-profit peers is a crucial part of the experience, Bennett notes. “They must be the voice for nonprofit in the classroom,” she says, “and cause others to ask, ‘How do I give back when I finish this two-year journey I’m on and make good things happen in my community?’
“But at the same time they must learn from the for-profit voices in the room, too, and ask questions like, ‘How are my challenges different from those in the for-profit world? And what are the challenges that don’t seem the same but really are?’”
Bridge for nonprofit and business sectors
Beth Torres, EMBA’11, is now CEO of Make-A-Wish Middle Tennessee.
Former recipient Michael McSurdy, EMBA’09, attests to the difference the sponsorship has made in his career. Today he is president and CEO of Family and Children’s Service, which provides counseling and child well-being services across the state of Tennessee.
“Five years out from graduation, the benefit of my time at Owen is clearer to me,” he says. “I’m a much more strategic thinker. I’m also more keenly aware of the value of a full team in moving my organization forward. I see daily how my broader understanding of management and finance is applicable in the nonprofit world, and I’m better at bridging the gap between the social service sector and personal and corporate philanthropy.”
Beth Torres, EMBA’11, another former recipient, shares McSurdy’s convictions about the sponsorship. She credits it with giving her the confidence to assume her current role as CEO of Make-A-Wish Middle Tennessee, an organization that grants the wishes of children with life-threatening medical conditions.
“I had good business instincts before Vanderbilt,” she says, “but Owen gave me the language to communicate. If something didn’t make sense, I learned to ask questions immediately—where I may have waited before. Owen gives you that. You’re in a room with 50 of the smartest people you’ve ever met and they’re asking questions. If they’re asking them, I have no excuse. I can admit what I don’t know.”
In working with corporate partners at Make-A-Wish, Torres sees more similarities than differences between the nonprofit and for-profit worlds.
“The nonprofit sector and the traditional for-profit are not that different, and they shouldn’t be,” Torres says. “Too often we’ve made exceptions for nonprofit, saying, ‘If we don’t reach as many people, if we don’t raise as much money, it’s OK. We tried really hard.’ That can’t be OK. If we miss on fundraising or on our mission, people don’t get served. We should be holding ourselves to higher, not lower, standards.”
Know of someone who would be a good candidate for the nonprofit sponsorship? The Executive MBA team wants to hear from you. Go to vu.edu/owen-nonprofit for more information. Contact Sarah Fairbank at 615-322-3120 or email sarah.fairbank@owen.vanderbilt.edu.
Career Path Milestones: Vice President, Junior Achievement Middle Tennessee and Account Marketing Manager, Reebok
Beth Torres, EMBA’11
As a teenage athlete, Beth Torres once dismissed the prospect of a business career as boring.
A job at Reebok after college was a huge turning point for the competitive gymnast. “Once I figured out business was competitive and I could figure it out, I wanted an MBA,” she says.
But it took a move into the nonprofit sector with Junior Achievement in Nashville to make business school a real option. Six months into a job with JA, Torres learned that Owen and the Center for Nonprofit Management offered a full scholarship to Vanderbilt’s Executive MBA program for a nonprofit executive. With her boss’s encouragement, she applied and in 2009, earned the scholarship.
Her appreciation for Owen was immediate and lasting, and it began with its faculty.
“Owen has unbelievable professors,” she says. “They’re engaged. They’re accessible. There isn’t much they taught that I’m not using, and they still answer our questions three years out. We were very lucky to have them.”
Making the move to CEO
She is as effusive about her fellow students, particularly her five-person study group.
“They are without question the people I call and bounce ideas off,” she says. She sought their counsel when she was offered the CEO position at Make-A-Wish Middle Tennessee in 2012. They helped her reach the decision to accept the role and she’s never looked back.
“I had that moment where you think, ‘How do I not do this?’” she says, of joining the organization that grants the wishes of children with life-threatening medical conditions. “Make-A-Wish is an amazing brand and at my first meeting with the board, I saw the vision they had for growth. I realized I would draft off that energy and leadership.”
She brought every bit of her competitive nature to bear on the position.
“The nonprofit sector and the traditional for-profit are not that different and they shouldn’t be,” she says. “Too often we’ve made exceptions for nonprofit, saying, ‘If we don’t reach as many people, if we don’t raise as much money, it’s okay. We tried really hard.’ That can’t be okay. If we miss on fundraising or on our mission, people don’t get served. We should be holding ourselves to higher, not lower, standards.”
The challenge of human capital
Leadership, she says, begins with resources—having the knowledge and manpower to succeed, something Owen facilitates.
“Too often we’ve made exceptions for nonprofit…That can’t be okay. If we miss on fundraising or on our mission, people don’t get served.”
“Someone in my office says, ‘We need this to be successful.’ Well, I know someone who runs a business, who may have access to that resource and I call somebody in the Owen network,” she says.
The biggest challenge, she says, is human capital. “Leadership involves keeping people motivated, inspired and engaged. Can I teach my staff to lead each other? If I have to go in every day and I’m the only cheerleader, it doesn’t work,” she says. “But if they can lean on each other and help each other succeed, the results are unbelievable.”
She also wants to see in them the adventurous spirit she brings to the table.
“In the culture we’re building, it’s okay to make a mistake,” she says. “It’s not okay to do nothing. I’d rather try something new and if it fails, we don’t do that again. If it works, how do we build on it?”
Preparation, she says, should begin with the individual.
“For me,” she says, “college was about the things I could try, organizations I could join. That’s where you learn about networking and about contributing.”
Prepared to make important decisions
She sees Owen as another rich opportunity.
“The onus is on the student. It’s our responsibility to meet as many people as possible—classmates, professors and administration. This is the chance to pick their brains,” she says. “If you’ve been a true student, by the time you hit a leadership role, you can trust your gut.
“I had good business instincts before Owen, but Owen gave me the language to communicate. If something didn’t make sense, I learned to ask questions immediately—where I may have waited before. Owen gives you that. You’re in a room with 50 of the smartest people you’ve ever met and they’re asking questions. If they’re asking them, I have no excuse. I can admit what I don’t know.”
Just as in athletics, setbacks can be key to development.
“If I’d been told how tough that first year as CEO would be, I don’t know if I would have signed up,” she says. “But if I hadn’t had those challenges the first year, I wouldn’t love it as much today. Owen prepared me to make important decisions.”
When Dean Eric Johnson thinks about Vanderbilt Owen Graduate School of Management, pianos are not far from his mind. Not just any pianos, that is, but those made by Steinway & Sons—the 160-year-old brand played by 98 percent of the concert pianists around the globe.
Odd as the pairing seems, Johnson believes there is more of a similarity between the school and the world-renowned piano manufacturer than what their disparate business models would suggest.
After starting his academic career at Owen, Eric Johnson taught at the Tuck School of Business for 14 years. He returned as Owen’s dean on July 1.
“At Steinway, they’ll bring the very best lumber from all over the world. They’ll go through this very long process—it takes them two years actually, kind of like getting an MBA,” Johnson told a group of incoming students in June. “But their whole thing is this personal scale; they’re going to take that wood and they’re going to make the very best piano that they can.”
Johnson, who serves as the Ralph Owen Dean and the Bruce D. Henderson Professor of Strategy, left Dartmouth College’s Tuck School of Business to succeed Jim Bradford in July. He has written two case studies about Steinway in his research and points to the company’s “intense focus on detail and personalization” as the key to its longevity. He sees those traits as the key to Owen’s success as well.
Johnson taught at Owen from 1991 to 1999. “I chose to come back to Owen for some really specific reasons,” Johnson says. “Yes, I love Nashville. It’s a great city and a great place to live. But it’s really the excitement of being at a school like Owen, at this place and time, that brought me back. Part of that has to do with the size of Owen.
“At Owen, we still have the luxury of working at this personal scale, and it’s that scale where I think real transformation occurs—a breakthrough kind of scale.”
In short, Johnson expects big things from Owen’s small community. He believes the school’s close-knit culture can help students live up to their potential by encouraging more collaboration not only with each other but with alumni, faculty and staff as well.
Johnson says an Owen education should reflect each of these groups’ hard work and attention to detail, and in this regard the learning process at the school is a lot like what goes into making a Steinway. There are no shortcuts, and neither one can be mass-produced.
“At Owen, we still have the luxury of working at this personal scale, and it’s that scale where I think real transformation occurs—a breakthrough kind of scale.”—Dean Eric Johnson
And like a Steinway, an Owen education is attuned to something greater than the sum of its parts. A calling in business may not conjure the same feelings as a piano concerto, but it can be heady and inspiring in its own way—especially in the hands of someone like Eric Johnson.
Curious and interesting
Early on in his career, Johnson was an unlikely candidate to teach at a business school, much less be the dean of one. In fact, working in academia was the furthest thing from his mind when he was earning his Ph.D. in industrial engineering and engineering management at Stanford University in the late ’80s and early ’90s.
“I had no plans at all to go into academia,” he says. “And if I had, it probably would have been in engineering rather than business. If you look at my C.V., you’ll see I don’t have any degrees in business. Well, not quite—I have an undergraduate degree in economics—but all the others are in engineering.”
While finishing his Ph.D., Johnson worked for Hewlett-Packard in Palo Alto, Calif. He was part of a team developing an automated vehicle for health care that was designed to deliver drugs to patient rooms and navigate hospital hallways. “It used an HP calculator as its brain, if you can believe it,” Johnson says with a grin.
Johnson’s interests and abilities made him a natural for Silicon Valley, but his career took an abrupt turn in 1991. That was when he received an unexpected phone call from Gary Scudder, an operations professor at Owen.
“I had been introduced to Gary through a friend of a friend, and one day he called me out of the blue,” Johnson says. “He said, ‘Eric, have you ever thought about teaching at a business school? And would you consider coming to Nashville?’”
Johnson and his wife, Nancy, had thought about settling down in a more affordable part of the country, and Nashville presented an intriguing possibility. If anything, it was the unfamiliarity of the situation—with Nashville, with Vanderbilt, even with just being in a business school itself—that convinced him to consider the job.
“The whole thing was curious and interesting. So I decided to come for an interview,” he says. “After I spent a day here, I fell in love with the place. I thought it was a neat opportunity. At the time Owen felt a lot like a startup company to me. It was really young and vibrant.”
Passion for teaching and learning
Once Johnson accepted the job as assistant professor of operations management, he never gave a second thought to his decision to enter academia. “I found that I actually loved teaching. Being in business school was nothing that I’d really expected,” he says.
In particular, teaching operations to MBA students provided him with an exciting challenge.
“Most MBA students come to business school having no idea what operations is. They don’t have a lot of feelings about the subject, either good or bad,” he says. “But by the end of that core class, many are considering a career in an operating role. They see that operations is really the guts of executing business. It isn’t marketing it or accounting for it or financing it. It’s actually running a business.”
Johnson’s Owen faculty photo from the 1990s
Johnson quickly became a widely admired professor, winning the Dean’s Teaching Excellence Award twice in eight years and becoming one of the youngest faculty members ever to receive tenure at Owen. “Eric was an excellent teacher and had a great rapport with the students. He is still in contact with many of the alums from that time period,” says Scudder, the James A. Speyer Professor of Production Management. “He also has one of the best laughs of anyone I know and enjoys life to its fullest.”
Anyone who has spent time with the dean knows the distinctive laugh Scudder is referring to. It is as infectious and genuine as Johnson’s own passion for learning.
The new dean has quickly become known for his hands-on and approachable manner.
“Other than his laugh, which I’m sure is well documented by everyone who knows him even a little bit, what I remember most about Eric is his passion for his subject,” says Paul Stanley, MBA’94, vice president for marketing at Mercury Intermedia. “For his simulation course, I would see him in the computer lab (where I worked) at odd hours testing new ways of simulation and ways to teach it. His examples, often gleaned from personal experience, always hit home and made the theoretical a practical tool for students.”
Former students also recall the importance that Johnson placed on experiential learning. For example, Emily Anderson, MBA’99, remembers a field trip to FedEx Corp. headquarters in Memphis, Tenn., that former FedEx vice president Mike Janes, MBA’84, helped coordinate.
“Eric wanted us to really experience operations,” says Anderson, who now serves as director of internal operations and coaching for Owen’s Career Management Center. “At FedEx in Memphis, we saw how the planes came in around midnight and how all the packages were sorted, moved and transferred in like a 3- or 4-hour window. It was amazing to watch.”
Janes, who today serves as CEO of FanSnap, adds, “I hosted Eric and his student groups several times at FedEx, and I was always impressed by his passion and ability to aggressively bridge the classroom and the outside world.”
Importance of vision and time
In 1999, then Associate Professor Johnson departed Owen for the Tuck School of Business in Hanover, N.H. It was by no means an easy decision. His two oldest children—Wesley, 20, and Hannah, 18—were born and raised in Nashville (his youngest, Nathan, is 13), and he had grown attached to the city, and Vanderbilt in particular.
“Eric was a trailblazer … He brought to campus the latest in technology through the center’s Tech@Tuck days, where the latest innovations were highlighted.”—Paul Danos, dean of the Tuck School
However, the opportunity at Tuck was too great to turn down, especially since the school was similar to Owen in many ways. “When I first went to Tuck, it was the same size as Owen is today,” he says, “and that was one of the things that attracted me there.”
During the 14 years that followed, Johnson continued to win respect not only as a teacher and researcher but as an administrator, too. In addition to being the Benjamin Ames Kimball Professor of the Sciences of Administration, he served as associate dean for Tuck’s MBA program and faculty director of the Glassmeyer/McNamee Center for Digital Strategies.
“Eric was a comprehensive contributor to the Tuck School in his superb teaching, his departmental leadership, his research and the many contributions his Center for Digital Strategies provided students, alumni and the corporate world,” says Paul Danos, dean of the Tuck School.
“Eric was a trailblazer,” Danos adds, “with activities such as the center’s roundtables for corporate leaders where chief information officers, their staffs and academics gathered around the world and engaged in dialogue about the challenges they all confront in today’s digital environment. He brought to campus the latest in technology through the center’s Tech@Tuck days, where the latest innovations were highlighted.”
In return, one of the things Johnson learned from working with Danos is the importance of having not only a long-term vision for a school but also the time and resources to implement it. Johnson attributes much of Tuck’s success to the fact that Danos has had 18 years at the helm to execute his strategy.
“Continuity in this kind of environment is particularly valuable,” Johnson says. “Many times people will look at business schools and think of them as a business—and they are in a way—but there are some very big differences. With business schools you’re really talking about a community, and communities and cultures don’t change quickly.”
That feeling of community
As Johnson embarks on his own tenure as dean, he is mindful of keeping Owen’s community central to the school’s mission. One example where he says it is already in effect is the young professional programs, like the master of accountancy and master of finance, which Jim Bradford and others helped build.
“Many times business schools can get distracted by creating so many different peripheral programs where the students don’t really interact at all,” he says. “Maybe the same faculty is servicing them, but the students themselves are not really enriched by each other’s presence.”
“What Owen has done so well with these young professional programs is that they’ve found a way to ensure not only that they’re successful for those groups but that those groups themselves add to the overall MBA experience by bringing really bright, talented folks into the community.”
Shortly after accepting the job as dean, Johnson had custom Owen Converse sneakers made. He wore them to Orientation.
Likewise, Johnson sees a similar role for the school’s research centers. “The thing we found successful at Tuck is this notion of a center that has a research core but is also a key part of the life of the school,” he says. “It’s about creating activity that’s not separate or independent but that really builds on the synergies of the school itself and brings ideas, innovation, curriculum and speakers back into the community.”
Even the Owen building itself plays a role in that sense of community. “One of the things I’ve always viewed as a huge asset is the very unusual architecture of the building that we’re in,” Johnson says. “I travel to other top business schools that have built large new buildings, but many of them are soulless—just long hallways and offices with doors that are shut. The openness of Owen’s building, on the other hand, focuses all of the activity into the lobby or the courtyard outside when the weather’s nice.”
“As we think about anything, whether it be growth in our physical structure or growth in faculty, staff and students, it’s something we will constantly be attentive to—how do we maintain that feeling of community?”
One answer to that question, Johnson says, is technology. Given his background, it should come as no surprise that digital learning is a key interest for him. It also happens to be one of the university-wide initiatives being promoted by Chancellor Nicholas S. Zeppos as Vanderbilt plans its future.
“What’s exciting about digital education for a school like Owen is not so much trying to change whom we target or how we interact with the world, though we can do that,” Johnson says. “It’s really more about enhancing the education that we offer right here in Nashville. Technology can enable us to transform the educational experience from something that’s historically static to one that’s much more dynamic, interactive and experiential.”
Johnson also sees digital technology as a tool for engaging the school’s most important audience—its alumni. “Owen students don’t often think about this when they come on the first day, but they become part of the Owen family at that moment, and it’s something they will carry the rest of their lives,” he says. “Technology enables us to take a lot of the neat things we’re thinking about and doing here and share them with alumni in ways we never could have before.”
“Those are areas we’re experimenting in—real breakthroughs.”
On our toes but looking forward
Asked how it feels to return to Owen after all these years, Johnson lets his daughter, Hannah, do the talking—or texting, as it were. After packing up their belongings this summer, he and the rest of the family piled into two cars and made the 1,200-mile trip from New Hampshire to Tennessee. As they neared Nashville’s city limits, he says Hannah texted an old family friend:
“Two words: We’re home.”
This sentiment—that Owen is as much a home as it is a school—is a common refrain among its community, and there is a shared feeling that Johnson will be an excellent steward of the culture.
Johnson and then-Dean Jim Bradford spoke to alumni and incoming and current students at luncheons in Nashville and New York in June. The two worked tirelessly to ensure a smooth transition. From left, Johnson, Bradford and Chief Recruiting Officer Tami Fassinger, BA’85.
“I still think the best feature of Owen is that it felt like it was my family, not just a school,” Paul Stanley says. “Eric has the ability to keep that intact while continuing to improve the academic, scholarly and job-performance reputation of Owen. If you know Eric’s family personally, you know beyond a shadow of a doubt that Owen is in good hands.”
Brent Turner, MBA’99, chair of the Owen Alumni Board, points to alumni relations as one area that can benefit from Johnson’s experience at Tuck. “Eric is a longtime friend of Owen, and he has spent several years at a school that has built fantastic relationships with its alumni,” says Turner, president at Code Fellows. “I look forward to applying the lessons that he learned to our community and family.”
Anderson, who is both an alumna and Owen staff member, is excited about Johnson’s hiring for several reasons. “From the standpoint of the Career Management Center, we’re very excited about Eric’s ties to the corporate world through his research, case studies and consulting, and we’re anxious to have him meet our recruiters,” she says. “I think he’ll help us make even more connections.”
Anderson also believes Johnson will push the school itself to think and grow alongside its students. “I think he’s going to have some new ideas and maybe challenge us about the way we do things and how we can share and cooperate,” she says. “He’ll keep us on our toes but also looking forward.”
It should come as no surprise that those who know Owen best frequently use words like “cooperate,” “community” and “family” in talking about the school and Johnson’s vision for it. These concepts are more than just buzzwords; they are a way of life at Owen, exemplifying the personal scale of business that Johnson described to incoming students over the summer.
This personal scale is a difference maker, Johnson argues, whether one is looking at business schools or, yes, even pianos. Ultimately it boils down to one question: How much care goes into this product?
“What Steinway figured out is that there’s a market, an important market, way up there at the top, where no two pianos are alike. But they’re the best pianos in the world,” Johnson told the students in June. “And pianists will sit down and play on two or three or four of them and they’ll find the one that they love and then they’ll keep that thing for the rest of their lives.”
In a way, Johnson could just as easily be talking about the connections that exist between Owen and the members of its community. As he himself can attest, the school never really loosens its hold on the people who value it most. Owen has a way of bringing its community close together even when time and distance intervene, and it is through these relationships—the ones operating at a personal scale—that great things are accomplished.
Jacqueline Parker, recently named Chief Strategy Officer at Covenant, has been with the company since it opened in 1986.
In 1986 Jacqueline Parker had to make one of the toughest decisions of her life: either complete her senior year in college and earn a bachelor’s in nursing, or join her husband, David, in an ambitious startup in the trucking business. Parker chose the latter, setting the wheels in motion for a career at Covenant Transportation Group that has lasted more than 26 years. She hasn’t looked back since.
“At the time I thought, ‘You know what? My efforts are better spent with Covenant. That’s where my future is,’” says Parker, who serves as the company’s Chief Strategy Officer. “With a startup, there’s so much work to be done. You need a lot of hands. So I signed up, and I just stayed.”
Covenant opened for business with just 25 tractors and 50 trailers. Since then, the Chattanooga, Tenn.-based company has grown considerably, acquiring other carriers along the way. Covenant now operates approximately 3,000 trucks, which transport a variety of goods across the United States.
Parker attributes much of Covenant’s success to her and her husband’s strong faith. “Some people call it chance; others call it luck. We call it God,” she says. This philosophy is reflected in the name of the company, which she explains is about not only a spiritual commitment but also “an agreement that we have with our customers, employees, vendors and shareholders.”
This sense of commitment is what spurred Parker to enroll in the Vanderbilt Executive MBA program in 2010. When Covenant encountered a rough stretch during the late 2000s, Parker remembers wishing that she could have done more to help the company. “You’re disappointing stakeholders on all fronts, and you feel responsible,” she says. “I had a lot of institutional knowledge, but I knew I was lacking some valuable skills.”
That’s when Parker made perhaps the second toughest decision of her life. “Going back to school was one of the hardest things I’ve done,” she says. “But I thought, ‘It’s going to be worth it in terms of time and money and effort.’
From left, Director of Corporate Relations Peter Veruki; JAMI SMITH, MBA’05, Global Marketplace Program Manager at Microsoft; MAYANK VERMA, MBA’08, Senior Partner and Channel Marketing Manager at Microsoft; Dean Jim Bradford; BOB GROHOVSKY, MBA’90, Worldwide Services Partner Director at Microsoft; and JUDSON RANDOLPH, MBA’91, Web Analytics and Online Customer Satisfaction Analysis and Improvement at Microsoft, gathered at the company’s headquarters in Redmond, Wash., on Aug. 3, 2012.
From left, Ziya Alemdar, MBA’98, Managing Director of ProAd Media Solutions; Judy Spinella, EMBA’93, Vice President and Project Leader at B.E. Smith; and Mehmet Baser, MBA’95, Managing Director of BT Global Services, enjoyed a mini reunion along the Bosporus in Istanbul this past June.
Jim Steele, MBA’82, knows what it’s like to be up against tough odds. Eight years ago he was diagnosed with Charcot-Marie-Tooth disease and spinocerebellar ataxia, both genetic neuromuscular conditions that have since left him disabled.
“I have partial symptoms of both, but the doctors can’t do anything for either one,” he says. “They’re progressive diseases, and unfortunately they’re doing just that—progressing.”
Steele
Steele, however, also knows that even the toughest of odds can lead to surprising outcomes. His work with Uganda Children’s Project, a nonprofit organization that he and his wife, Lisa, founded 11 years ago, is a testament to what can be accomplished in the face of adversity. Thanks to the group’s efforts, countless orphaned and desperately poor Ugandan children have enjoyed educational opportunities that otherwise would not have been possible.
“Something has to be done to help this disenfranchised class climb out of the ghetto,” he says. “Education gives them that chance.”
Uganda Children’s Project, which grew out of mission work at Steele’s church near Chattanooga, Tenn., currently has around 240 children and young adults paired with sponsors throughout the U.S., Europe and Australia. The group’s two full-time Ugandan employees are responsible for identifying potential children for the project, while Steele and his wife focus on the sponsorships.
“I draw upon my MBA experience for all of the finance, marketing and operations that go into this,” he says. “For example, we work in several foreign currencies right now, and trying to manage the exchange rate against a very unstable Ugandan shilling is difficult.”
An unstable currency is just one of the problems facing Uganda these days. Years of political turmoil, corruption and a devastating AIDS epidemic have all left their mark on the country. Yet Steele isn’t daunted by the challenges.
“We’ve never felt like we were called to deal with the big problems in Uganda,” he says. “We can only keep working our own way—child by child, sponsor by sponsor.”
Fittingly it’s the same philosophy that defines Steele’s own personal struggle against tough odds: Take things day by day, step by step, and relish the small victories.
June 4: Every year around this time, a wave of anxiety ripples through most of the nation’s newly admitted business school students: How to depart a job without burning any bridges, and ideally, leaving a positive, lasting impression? Tami Fassinger, Chief Recruiting Officer, writes in this op-ed about how to resign gracefully.
July 13: The admissions interview is the business school’s opportunity to meet potential students face to face and go beyond the pages of their applications. For applicants, the interview is a chance to show their true colors. Consuela Knox, Senior Associate Director and Diversity Recruiting Manager of Admissions, offers tips to students about the interviewing process.
Sept. 25: The number of people taking the Graduate Management Admission Test (GMAT) is on the rise this year, bolstered by a surge of people trying to take the exam before the addition of a new section, as well as by growing interest in the business programs from students outside the United States. Dean Jim Bradfordis quoted.
Christian Science Monitor
Aug. 13: Could “liking” something on Facebook get you fired? That’s what six sheriff’s deputies say happened to them after they liked the political opponent of their boss. A district judge ruled that Facebook likes aren’t protected speech, but the case is being appealed. Bruce Barry, the Brownlee O. Currey Jr. Professor of Management, is quoted.
CNBC
Aug. 29: Many of Paulson and Co.’s investors stayed with the company last year even though its flagship hedge fund lost 35 percent. But with returns continuing to sag amid a rising equities market, some of those investors are now jumping ship. Nick Bollen, the E. Bronson Ingram Professor of Finance, is quoted.
NBC.com
Aug. 13: As the Olympics wind down, experts are awarding a gold medal in ambush marketing to Nike, which scored with bold commercials, smart PR moves and its distinctive, ubiquitous neon-yellow Volt shoes. Jennifer Escalas, Associate Professor of Marketing, is quoted.
USA Today
May 21: Facebook raised about $16 billion through its IPO, which gave the company a market value of $104 billion. But its lackluster public debut deflated the pre-IPO hype that had floated in the business press and on Wall Street for weeks. Bill Christie, the Frances Hampton Currey Professor of Finance, is quoted.
The Wall Street Journal
May 21: When the economy tanked four years ago, corporations reduced their presence at business schools. So, universities started reaching out to smaller employers—something they had never really done before. Owen alumna Julie Brink, MBA’11, went to a small consultancy firm in Nashville and is quoted.
July 12: Consumer-products companies are turning to new technology to overcome the biggest obstacle to learning what shoppers really think: what the shoppers say. To find out what really draws their test shoppers’ attention, companies are combining three-dimensional computer simulations of product designs and store layouts with eye-tracking technology. Steve Posavac, the E. Bronson Ingram Professor of Marketing, is quoted.
Read McNamara, MA’76, Executive Director of the Career Management Center at Owen, describes the CMC’s mission as something akin to moving mountains. The days when companies recruited exclusively on college campuses—“when the man went to the mountain,” as he puts it—are long over. Today’s marketplace demands that the CMC “get the mountain to the man,” he says, by figuring out more focused and creative ways of putting Owen students in front of prospective employers. Ultimately it’s about going the extra mile for every customer, including not only students and recruiters but also Owen alumni, who play a key role in the job placement process. What follows is an assortment of facts, figures and other details that highlight the CMC’s efforts.
A personal touch
Fassinger
In 2011 Tami Fassinger, BA’85, was named Owen’s Chief Recruiting Officer, a role that closely aligns the Admissions office with the CMC. The appointment reflects the school’s initiative to take a more personalized, career-centric approach to finding the right B-school candidates and then giving them the resources to land their dream jobs. “Rather than just blindly pursue candidates with the highest GMAT scores and slot them into one of our programs,” Fassinger says, “our team strives to understand the career goals of each person who comes through our doors, and then do what we can to support each one through the enrollment decision, graduation and far beyond.”
By the numbers
No. 19
Vanderbilt’s placement on Bloomberg Businessweek’s rankings of MBA pay by career totals (2012)
$96,500
The median base salary for the MBA Class of 2012 at graduation
2.5
The average number of job offers received by each student in the Class
of 2012 with a Human and Organizational Performance concentration
25
The number of companies extending multiple full-time job offers to the Class of 2012, including Amazon, Credit Suisse, Goldman Sachs, Hanesbrands, McKesson, Johnson & Johnson and Nissan
40
The number of companies extending multiple internship offers to the Class of 2013, including Deloitte and Goldman Sachs
AndersonGoreKinnettFend
Coaches’ Corner
The CMC has four coaches on staff, each with their own expertise. All first-year Vanderbilt MBA students select a coach to assist them with their job search strategies and have access to Read McNamara and Tami Fassinger—both with deep industry experience and connections. The four student coaches are:
Emily Anderson, Senior Associate Director, Director of Internal Operations Expertise: consulting, finance and health care
Blake Gore, Senior Associate Director Expertise: finance and international
Sandy Kinnett, Associate Director, Employer Relations and Events Expertise: HOP, real estate and operations
Amanda Fend, Associate Director Expertise: marketing
On the road
Cities where the CMC has arranged interview events in recent years
Mark Cohen, Professor of Management and Law, is a University Fellow with Washington, D.C.-based Resources for the Future (RFF), an independent, nonpartisan research institute focusing on environmental and natural resource economics policy issues. In 2010 he led an RFF research group that consulted with and wrote key position papers for the National Commission on the Deepwater Horizon Oil Spill and Offshore Drilling. He also serves as one of five members of Exxon Mobil’s External Citizenship Advisory Panel, providing strategic and objective advice on the company’s corporate citizenship activities.
What are some of your current research interests in energy?
Most of my recent research in the energy sector is related to deep-water drilling. Right after the BP spill, President Obama put a moratorium on drilling for six months and established a commission to advise him on several things—causes, how to prevent future spills and recommendations on opening up again. One task was looking at the role of risk and insurance. We looked at questions such as, “How do you determine the incentives for firms to prevent a small risk of a highly catastrophic spill?” Those types of spills are infrequent, but they can have disastrous consequences. One of our recommendations was the elimination of liability caps, but Congress did not act on that.
Another area of research is the role of inspections, monitoring and enforcement of spills. One of the questions we looked at was whether deep-water drilling is riskier than the shallow-water kind. Industry was saying it is no more dangerous and that there is no empirical evidence of higher risk. However, from our analysis of the data we concluded that it is riskier. It sounds like a simple question, but just establishing empirically that the risk is higher was important. Continuing research focuses on the role of inspections and monitoring on accidents, spills and noncompliance. RFF also has a big project about hydraulic fracturing—looking at public perceptions, risks and how they match up.
What kinds of issues are at the forefront of the energy business today?
Natural gas has really changed the landscape of the energy markets and in some sense slowed down the push toward alternatives. It has hurt solar and wind because natural gas prices have gone down so much. These new kinds of technologies to extract oil and gas bring with them new issues that are much more localized. Perceptions and fears become important.
How should the energy business address those perceptions and fears?
There’s got to be a much more informed discussion about what the risks are and what’s appropriate for companies to do. In the case of fracking, there’s been a call for disclosure of fracking fluids. Companies initially didn’t want to fully divulge what was in the fluids because they considered it proprietary. But they’ve got to be transparent, or it creates a perception that they’re hiding something. They have to figure out how to address societal concerns and navigate through them in an informed way.
On the teaching side of your academic work, what do you think business students need to understand about the energy sector?
The world is changing. We’re not doing away with traditional energy sources, and yet we’re expanding dramatically in different areas. In my class, we take a look at the entire energy sector both from the point of view of students interested in going into the field and also for students who are going to be consumers of energy in their businesses.
How should tomorrow’s leaders prepare themselves to meet future market demands in the energy sector?
It used to be that energy markets were more insulated. It was very much technology- and engineering-based. MBAs would come in on the finance side, with business plans, contracts, pricing market predictions, those sorts of things. Those kinds of standard finance and accounting tools are still needed, but what I think is changing is that, more and more, the energy sector needs to understand the external environment. Climate is just one issue.
What’s currently happening with renewable energy sources?
It’s going to be a long time before most energy sources are coming from renewables. It may be hundreds of years—or just 10, 20 or 30. A lot has to do with technological development and other factors we can’t predict, such as war. And if climate change gets really bad, really fast, societies may decide to tax carbon very aggressively. Or they might not. Those kinds of things can speed up technological change. Right now renewables are a very small portion of today’s portfolio. A big portion of growth will continue to be from oil and gas because of recent technological innovations. Nobody predicted that was going to happen. With these technological breakthroughs, gas prices plummeted, and alternatives now don’t look so good. But one of the interesting things I learned while serving on the Exxon Mobil citizenship panel is that, as they do their world energy outlook every year, they assume a price on carbon. They’re planning as if carbon will be taxed, and some people don’t realize that is a possible factor.
Corporate social responsibility has been a major research interest for you. What is its role in the energy sector?
Recent evidence is that firms that perform well also do well on the social metrics. It doesn’t hurt you, and it may help you. It’s at the very least a sign of good management. It could also be, in some cases, consumer- or public-driven. People vote with their feet. That whole issue has been around a long time. It’s not how or why you should be good. It’s how firms use corporate social responsibility in positive, strategic ways—whether it’s workers’ rights, safety, the environment or diversity. Voluntary social and environmental disclosures are starting to become more mainstream and almost a cost of doing business. You’ve got to do that if you want to be a leading firm. We are starting to move in the direction of disclosing more of these nonfinancial performance metrics. That is becoming more and more material to investors.
When it comes to the energy sector, companies who are looked upon as leaders take these kinds of issues really seriously because they know that they have to more and more. They put out sustainability reports, measure and manage against a lot of these social performance metrics. All the major oil companies know there are human rights issues in countries where they drill. There are issues about social welfare, issues about governance, even bribery. They have to make sure that they don’t get involved in those kinds of things, and they must maintain strong standards. They are making sure that there’s money and infrastructure built into the communities they go into. There are so many issues in the energy sector that have to deal with social responsibility.
What can the energy sector do to stay ahead of the curve on issues of social responsibility?
What big companies do nowadays is they try to be on top of the current issues, but even more than that, what leading companies are trying to do is figure out the emerging issue. It’s sometimes hard to know what those are, but there are signs. When you start to see some of the fringe nonprofit groups sort of raising questions in any form, you have to ask yourself, “Is that something I’m really going to have to worry about? I would have to really change some of my business operations, and how do I plan for that?” Government is just a reflection of people’s desires, so society’s norms become government regulation in the future.
Do you think it’s possible, given the recent technological breakthroughs and the push for less government regulation, for the United States to achieve energy independence?
It is important to understand that “energy independence” is somewhat of an elusive goal that isn’t even desirable. What we really want is “energy security,” which means that we are not beholden to threats from foreign sources of oil that might dry up due to war, boycotts, etc. Perhaps even more important, we don’t want to be in a position where our foreign policy is dictated by our need for foreign oil. Would we care if much of our oil came from Canada and Mexico—two good friends? So it is more about energy security.
On regulation itself, it is important to ask: What are the benefits and cost of every regulation that is currently in force (or being proposed)? Some regulations are clearly burdensome to industry but good for society. Burning high sulfur coal is just one example—the health risks to the public alone justified reducing pollution from coal-burning power plants. Similarly, high levels of carbon emissions from coal-burning power plants are not in the public interest. Of course, some regulations might impose social costs that outweigh their benefits. But the question should not be what is good for any one industry or, for that matter, what will increase jobs. Regulation of the coal industry not only has improved health but has also created jobs in the pollution control sector, as well as in the renewable energy sector. Thus, the question should be on balance, over the entire population: Do the winners from regulation outweigh the losers?
From research scientists working in drug discovery to portfolio managers waiting for the markets to bear out their investment theses, how do certain types of professionals sustain their energy and enthusiasm over long periods?
That’s the question undertaken in a new study co-authored by Bruce Barry, the Brownlee O. Currey Jr. Professor of Management.
“Why and how do people stay motivated in their work when goal accomplishment is at best many years off and may never occur at all?” Barry and co-author Thomas Bateman, of the University of Virginia’s McIntire School of Commerce, ask in a paper for the Journal of Organizational Behavior.
Professionals who are able to sustain the long-term pursuit of their work goals start like anyone setting out to accomplish a set of tasks. They start by focusing on a specific goal, expending some initial effort and show some perseverance over the short term.
But then, these professionals enter “a complex set of cognitive and affective phenomena that implicate perceptions of self, the future, task activities, and a variety of other gratifications,” Barry and Bateman write.
To understand the psychological forces at play when pursuing long-term goals, the co-authors identified and conducted in-depth interviews with 25 professionals whose work goals included the following traits: Eventual success could take years, or perhaps generations; real progress comes very slowly; there is a significant chance of failure. While these conditions may define the most extreme cases of pursuing long-term goals, Barry and Bateman say the insights generated from the interviews have wide-reaching implications for both professionals and managers.
The researchers then distilled the key elements of the interviews into eight sources of motivation that provide “psychological sustenance” in the pursuit of long-term goals:
Allegory: figurative representations or abstractions that offer significant, consequential meaning (e.g., comparisons to the Wright Brothers or the moon landing)
Futurity: allusions to the long-term impact and possibilities associated with the ultimate outcomes that may result from the realization of a long-term goal (e.g., setting the stage for children and grandchildren)
Self: statements that invoke personal identity, reputation or personal belief systems (e.g., expressing personal creativity)
Singularity: references to the perceived uniqueness of the endeavor (e.g., the big exploration that nobody could have done before)
Knowledge: statements that refer to skill development, new understanding, acquiring truth and finding ways to control events (e.g., any knowledge that’s created is good)
The Work: allusions to the nature of the work, including challenges, methods, risks and uncertainties, as well as elements that are fun or surprising (e.g., like a puzzle that needs solving)
Embeddedness: ways in which individuals see their work situated within social contexts, as well as ways in which their work garners social legitimacy within their professions and in society (e.g., an enjoyment from disproving the skeptics)
Progress: statements that emphasize the notion of forward movement, often short-term, in the direction of long-term goal pursuit (e.g., advancements in tools and techniques that facilitate the work)
These motivational themes incorporate near-term (proximal) and long-term (distal) features that weave together immediate payoffs with a perception of doing important and lasting work. In addition, all the subjects interviewed by Barry and Bateman for this study mentioned the important role self-regulation plays.
Bruce Barry
“We saw [self-regulation] as an overarching process and set of strategies implicated in many of the motivating themes identified in our analysis,” they write. The co-authors highlight six forms of self-regulation that include maintaining focus on goal-directed actions, controlling emotions, and coping with failure—using it as a basis for improvement rather than an injurious setback.
While the sample size may have been limited, with no means to compare similar data sets, Barry and Bateman write that the study is meant to offer meaningful conceptual extensions to well-established theoretical areas, setting the stage for future investigations.
“Long-term goals arguably are at least as important as short-term goals in their ultimate consequences for individuals, organizations, and societies,” Barry and Bateman write. “Now, we believe, is the time to expand our field’s search for theories and strategies that can help people and organizations pursue and achieve important long-term goals.”
A version of this article originally appeared in VB Intelligence on July 25, 2012.
In a pivotal scene from the film The Social Network, the Hollywood retelling of Facebook’s founding, an exasperated Mark Zuckerberg exhorts business partner and Harvard classmate Eduardo Saverin to join him in Silicon Valley.
“You’ve gotta move here, Wardo. This is where it’s all happening,” the Zuckerberg character pleads.
Whether this piece of dialogue is true or not, the sentiment behind the statement is perhaps more accurate than Zuckerberg—or the movie’s writers—could have known.
In a recent paper examining performance differences within geographic business clusters, Assistant Professor of Strategic Management Brian McCann, MBA’04, finds that younger firms, as well as those with a “deeper knowledge stock” (i.e., more patents), gain the biggest boosts from geographic clusters.
By locating in a geographic cluster, “entrepreneurs may accrue particular benefits to agglomeration during the early phases of a firm,” McCann writes with co-author Timothy B. Folta of Purdue University’s Krannert School of Management. The paper was published recently in the Journal of Business Venturing.
While scholars such as Paul Krugman and Michael Porter have long written about the positive business effects of geographic clusters, this research is among the first to investigate which firms benefit the most from agglomeration.
Brian McCann
McCann and Folta examined 806 biotechnology firms founded in the United States between 1973 and 1998. Although the firms were spread across 85 Metropolitan Statistical Areas, the co-authors found that the top 10 clusters in 1994 (the peak of the industry in terms of the number of companies operating during the study’s time frame) provided locations for nearly 75 percent of the firms in the industry.
McCann and Folta also measured the “knowledge richness” of each cluster by totaling the number of patents held by all the biotech firms in each cluster. Statistical analysis of these data sets yielded several findings of note:
Locating in a cluster is beneficial for firms: Firms in larger and more knowledge-rich clusters have a higher probability of patenting in any given year.
For each firm that’s added to a cluster, companies within that location have a 1 percent higher increase in the odds of patenting. While that figure may seem small, the effects add up quickly. Increasing a cluster size by 10 firms raises a firm’s patenting probability by nearly 10 percent.
Within clusters, the increased patenting probability is even higher for firms that already have a richer knowledge base—that is, a higher number of patents. “Our conjecture is that such firms are better able to benefit from knowledge spillovers,” McCann and Folta write.
Younger firms enjoy a similarly higher patenting probability within clusters, according to the analysis. “This result is consistent with prior scholars who have speculated that young firms might more effectively draw benefits from their clustered regions,” the co-authors write. This is because younger firms tend to have more flexible organizations and a greater need to rely on outside knowledge sources because of their limited resources.
McCann and Folta write that these findings hold relevance for researchers, business practitioners and policymakers.
The evidence regarding what types of firms benefit most from clustering “should be of principal importance to scholars of entrepreneurship or strategic management wondering about the relationship between location and competitive advantage,” they write. “For those deciding whether to locate in an agglomeration or for those attempting to recruit firms to an agglomeration, it provides advice on those firms that are most likely to benefit.”
A version of this article originally appeared in VB Intelligence on July 25, 2012.
From Bob Hope’s hawking American Express Travelers Cheques in the 1950s to quirky actress Zooey Deschanel’s selling the latest iPhone today, celebrities have long served as the advertising industry’s not-so-secret weapon.
As consumers, we want the same services and products as the good-looking, glamorous set—or if nothing else, we tend to remember the famous associations these figures bring to whatever they’re endorsing.
And while these celebrities may be among the most commonly familiar and well-liked people, the vast majority of the population knows very little about their political and religious attitudes and values.
In fact, the less that is known about a famous figure, the more the public views them in a favorable light, according to new research co-authored by Steve Posavac, the E. Bronson Ingram Professor of Marketing.
“As perceivers learn more, there is an increased likelihood that the evidence will indicate that celebrities have middling attributes” that show just as many flaws as other people, Posavac and his co-authors write in a paper for Basic and Applied Social Psychology. “Perhaps more significantly, evidence may reveal to perceivers that celebrities’ political views, religious practices and social attitudes are different from their own, leading to less liking.”
So carefully controlled are the images of most celebrities that the researchers in this study found it difficult to compile reliable information on possible test subjects in preparation for their experiments. For one of the main experiments, however, they did find two famous figures whose personal viewpoints are well-known and diametrically opposed: Tom Hanks and Mel Gibson.
With 131 undergraduates participating in the study for extra credit, the students were randomly given descriptions about Hanks and Gibson—one innocuously detailing each actor’s film career, the other discussing specific political and religious points of view.
Steve Posavac
When asked about the likability of each, “liberals and conservatives did not differ in their evaluations of Hanks and Gibson when information was not presented,” according to the study. “However, when descriptions of the practices and attitudes of the celebrities were provided, liberals and conservatives diverged in their evaluations of the actors, particularly Gibson.” (It should be noted that the study was conducted prior to widespread news coverage of Gibson’s domestic conflicts.)
In another experiment, student participants were chosen based on the results of a pretest in which they favorably rated six celebrities: Will Smith, Jennifer Aniston, George Clooney, Natalie Portman, Johnny Depp and Scarlett Johansson. They were then asked a series of questions about the celebrities’ political and religious views.
For the researchers, this served as a mental prompt that allowed them to compare attitudes for celebrities prior to thinking about how much participants knew of them personally, versus after completing the questionnaire. What Posavac and his colleagues found is that, “participants perceived the celebrities to have significantly less credibility” when they were made aware of how little they knew about them.
This dynamic can be seen in many real-world contexts. Tom Cruise, Lindsey Lohan and Tiger Woods, to name but a few, all experienced sharp declines in popularity (and celebrity endorsement deals) after personal shortcomings were revealed. Posavac and his colleagues also point to the case of Rashard Mendenhall, an NFL running back who posted unpopular views about the killing of Osama Bin Laden on Twitter. The backlash led the apparel manufacturer Champion to end its endorsement deal with him and endangered his spot on the Pittsburgh Steelers.
“People appear to be taken by celebrities, in part, because they are highly familiar while being simultaneously unknown,” the researchers write. That is, in the absence of information, people fill in the personality blanks of celebrities with their own views and values.
What’s more, distinct groups differ in how they perceive celebrities once they have more information about their views. In the experiment with Hanks and Gibson, liberals and women tended to rate Gibson less favorably with more information. Similarly, likability ratings among conservatives and men dropped as they learned more about Hanks’ views.
“The findings reveal one of the important foundations underlying the adoration of celebrities: ignorance,” Posavac and his co-authors write. “Unless celebrities harbor mainstream attitudes that have widespread appeal, they are probably better off financially keeping their opinions and practices private.”
A version of this article originally appeared in VB Intelligence on July 25, 2012.
Tim Perry has never been one to follow convention. When most of his high school classmates in Kansas City decided to attend nearby state universities in Kansas, Perry instead went south to the University of Arkansas at Fayetteville, where he majored in finance. Upon graduating, he again bucked the trend, choosing to enroll directly in what was then a relatively young business school, rather than seek an entry-level job at a bank or investment firm.
From research scientists working in drug discovery to portfolio managers waiting for the markets to bear out their investment theses, how do certain types of professionals sustain their energy and enthusiasm over long periods?
In a pivotal scene from the film The Social Network, the Hollywood retelling of Facebook’s founding, an exasperated Mark Zuckerberg exhorts business partner and Harvard classmate Eduardo Saverin to join him in Silicon Valley.
From Bob Hope’s hawking American Express Travelers Cheques in the 1950s to quirky actress Zooey Deschanel’s selling the latest iPhone today, celebrities have long served as the advertising industry’s not-so-secret weapon.