Category: Features

Ray Sumner, MBA’10, woke up in a bed with white sheets. He recognized his mother, who was holding his right hand. She had traveled from their family farm on Staten Island to keep vigil at his bedside in Bethesda Naval Hospital.

Sumner did not know she would be there. Until someone told him, he did not even know where “there” was. The last thing he remembered was being with his unit, the 25th Marine Division, on the debris-strewn streets of Haditha, Iraq. It was the 11th week of his second tour in the country, and his battalion was engaged in house-to-house operations in the heart of the Sunni Triangle—one reason the 25th sustained the highest casualty rate of any outfit during the war.

Sumner remembers clearly how an insurgent ran out of a house and fired off a few quick rounds as the Marines were clearing a block. One bullet struck Sumner in the right hip, severing an artery. He was in a coma for 10 days. And then, suddenly, he found himself in Bethesda, Md.

The Marines never leave one of their own behind. For Sumner, who spent 18 years as an officer, the reverse is also true. Despite the injuries and rehabilitation, he would sign up again tomorrow if the Marines called him. Sumner still misses it. In some sense that is a big part of what attracted him to the Owen School.

How is Owen like a military enterprise? The question may seem odd to someone who has never worn the uniform. But to veterans who earned MBAs at Vanderbilt after earning their stripes, the connections seem obvious. For four of them—among the surprisingly large number who gravitate to this relatively small business school—seeing those connections made all the difference in their choice to enroll and in the directions their careers have taken.

For Ray Sumner it was the camaraderie—“the biggest thing I missed about the military,” he says. “I looked at other big-name schools. Vanderbilt is extremely competitive but friendly. The others were hostile-competitive.”

Sumner particularly remembers his first campus visit in 2008. “I immediately felt like I was part of the Owen family,” he says. “That’s how the Marine Corps is. It’s the smallest branch of the service. Very close-knit. You get to know a lot of the other officers.”

Life Mission
Kyle Clay, MBA’09, by contrast, was not looking for something small. Ever since he was a football star and three-sport athlete in Lima, Ohio, Clay sought opportunities to be involved with something larger than himself. That is one reason why he accepted a scholarship to play football at West Point, and why he was drawn to the health care field after his military commitment ended.

In between his graduation from the U.S. Military Academy and Owen, parts of his service experience were a reminder why the old Chinese saying “may you live in interesting times” was originally intended as a curse.

In June 2003 Clay arrived at an abandoned water purification plant near Baghdad. The soldiers called it Dogwood, but it might have been more accurately named Hell. There was no running water. No air conditioning. Temperatures routinely surpassed 110 degrees.

“You’d get to midday and just want to take a nap because you couldn’t get anything done,” remembers Clay, who was a lieutenant in the 54th Engineer Battalion. “Nothing could have prepared me for Iraq.”

Clay and his men lived off prepackaged rations, or MREs. Sometimes, when they had to pick up arriving soldiers and supplies, they would navigate the deadliest stretch of highway in Iraq—dubbed “RPG Alley” for the prevalence of rocket-propelled grenades—and grab some hot food at the airport, where, almost surreally, there was a Burger King.

Among Clay’s responsibilities was leading convoys—an innocuous-sounding job that was a very dangerous assignment in Iraq. The supply convoys traveled under constant threat of attack from improvised explosive devices (IEDs). His convoy was hit only once during his first six months, but tension soared every time they ventured onto the roads.

Clay’s second deployment to Iraq made the first tour look civilized. Stationed in Ramadi and Fallujah, scenes of the war’s most intense fighting, Clay was assigned to “route clearance”—an Army euphemism for bomb removal.

Clay soon realized how increasingly sophisticated the insurgents’ techniques had become during the year he was back on base in Germany. “Some IEDs were buried deep enough that our equipment couldn’t detect them,” he says. One, he remembers, was planted in a manhole. It detonated as a vehicle in his battalion passed over it. The manhole cover rocketed through the underside of the vehicle, killing and wounding several soldiers. In all, he lost seven men in 12 months. All told, his engineer battalion removed 1,000 IEDs.

Even before he came home from Iraq, Clay knew he wanted to go to business school. He had become interested in health care—something that, to him, was more than just business. That led him to Owen, where he found the change he sought and the continuity he needed.

Like the Army, he says, Owen is extremely collegial, and there is a sense of purpose even among students with different career aims and areas of focus. For example, with colleagues involved in Project Pyramid, the student-led initiative to alleviate global poverty, Clay had the opportunity to travel to Bangladesh. “Even in Iraq, I’d never been face-to-face with such poverty,” he says. “It was life-changing.”

In contrast to the Army, Owen’s Health Care MBA program is extremely entrepreneurial, Clay says: “You can create your own path. After nine years of a very strict environment, Owen was a great place for me to try a smattering of academic and extracurricular activities.”

It is a far cry from Dogwood, but Clay is today, once again, in the desert—Phoenix, to be exact—where summer temperatures can reach a Baghdad-like 114 degrees. As a Regional Operations Director for DaVita, North America’s largest operator of kidney dialysis centers, Clay oversees 11 in-center dialysis clinics and two home programs.

“The position demands a very different type of management from the Army,” he says. And yet, he adds, “I entered into an environment not unlike the military. We are all focused on one mission.”

That mission is life. Without dialysis or a kidney transplant, every patient with end-stage renal disease will die. With dialysis, they can live, work and stay with their families. “That’s what gets me excited about this company,” Clay says. “We are a community first and a company second.”

The name DaVita comes from an Italian phrase that roughly translates as “he or she gives life.” Clay likes the sound of it. For someone who has traveled so closely with death, it feels good to be surrounded by givers of life.

Anchors Aweigh
As a boy, Henry Guy, MBA’98, had the power to determine whether kids in his community would have to attend school. Guy grew up on Smith Island, off Maryland’s Eastern Shore. He was the son of a son of a son of a fisherman who caught blue crabs and oysters in the Chesapeake Bay.

Getting to school involved an hour’s trip by boat. The boat’s captain had a policy for rough weather: If even one kid wanted to make the trip, the school boat would run.

“My parents were very focused on education,” Guy explains. “It didn’t matter if there was a hurricane out there, it was, ‘Get up and get on the boat.’ So on days when it was extremely windy, the neighborhood kids would congregate in our yard to see if I was going to go, and when I walked out, they’d all moan, ‘Aww, man.’ A couple of times they even booed.”

But Guy did not let this singular power go to his head. Even in the relatively small pond of Crisfield High, he looked up to others as role models—especially one older boy whom he remembers as “all the things I tried to be.” When that student pursued a spot in one of the service academies, Guy’s interest was piqued.

Guy eventually enrolled at the U.S. Naval Academy, where he was struck immediately by how accomplished so many of his fellow students already were. His first-year roommate, an Iowan, was fluent in Russian and spent his summer as an interpreter overseas. “There were guys who went on to Rhodes Scholarships or completed their graduate education while at the academy,” says Guy, who was a teammate of future NBA star David Robinson on Navy’s basketball team. “A number of experiences like that made me think, ‘Wow, if you work hard and take advantage of the opportunities put in front of you, that opens the door to a host of new opportunities.’”

He brought that mindset to his first posting as a division officer aboard the USS Comte de Grasse, a destroyer named for the French admiral whose blockade of Yorktown helped win the Revolutionary War. The Comte de Grasse focused on maritime interdiction: looking for Caribbean drug smugglers, patrolling the Red Sea to intercept materials headed for Iraq, or boarding ships in the Adriatic to stop weapons from reaching combatants during the Balkan wars.

Meanwhile, remembering his lesson from the academy, Guy soaked up all the knowledge he could from rotations involving various systems and areas of the ship’s operations. Every duty was an opportunity. It helped him move up to become an aide to an admiral, a coveted position for a junior officer.

That mentality also helped him choose Vanderbilt when his five-year commitment ended. “I very much considered myself to be raw material,” he says. “I knew nothing about the business world I’d soon be entering. The mod system allows you to take many more classes than a traditional semester system. That was very appealing to me because I felt like I had so much to learn. Every mod, I got permission to take extra classes. I wanted to sample everything out there.”

In other ways, too, the Owen experience built on what Guy liked most about the Navy. He liked the way that much of the work at Owen was team-oriented, just as it was aboard a ship. He also liked the way that Owen’s “approach is focused on how we get people to go out and be contributors right away. It’s not a stamp. Everything is structured so that it wraps itself around the individual rather than being a one-size-fits-all factory.” It was the right way to do things, Guy believes, and that, too, created continuity. “At the Naval Academy,” he explains, “there’s a huge focus on doing things the right way, honoring the legacy of the past.”

The mindset from the academy and from Owen carried over into Modern Holdings, the New York investment firm he founded. As President and CEO, Guy believes the right way to run a business is to work as a team and to think long term. “We’re not a traditional private equity firm,” he explains. “We invest our own money, and that makes for a different decision-making process. We don’t look to flip companies. To me, the value is how we can help grow the business over time.”

More than anything, Guy’s approach has its roots on Smith Island. Modern Holdings typically buys closely held family enterprises. Because he grew up around such a business, he holds a special appreciation for them. Fishermen, he reflects, are not merely people who ply a trade. “They’re entrepreneurs,” he says. “They’re huge risk takers who are up against a formidable competitor—Mother Nature.”

Leaping at an Opportunity
For Lindsey White, MBA’10, jumping out of airplanes turned out to be especially relevant preparation for Owen. A self­-described “Army brat” who split her childhood between Germany, Oklahoma, North Carolina and Tennessee, she grew up literally wanting to follow in the footsteps of her father, a paratrooper in the 101st Airborne. As a young girl, she would practice by sliding her feet into his big boots and hurtling off the living room sofa.

So, after White enrolled at the U.S. Air Force Academy, it was not surprising that she volunteered for jump school. “The first time I jumped,” she recalls, “was a frightening experience. You don’t know up or down. You’re just falling and counting and remembering when you are supposed to pull this cord. By the third time, it’s a little more automatic. On my fourth jump, the chute got twisted, but by then I knew what to do.”

White earned her jump wings but never had to leap from a plane again. After graduating from the academy, she oversaw airfield operations—a duty that also required certification as an air traffic controller—at bases from Florida to California.

When her five-year commitment ended, “I decided to try something new,” she says. “I felt like I’d been in the military my whole life.” Eventually she put her operations expertise to work as a project manager for a California company that designs and builds large-scale water features, including the landmark fountains at the Bellagio casino in Las Vegas.

There, she realized she needed to learn more. “Much of what I knew centered on the military and people management,” White says. To reach higher levels in the business world, she needed to broaden her skills. That realization led her to Vanderbilt.

“Everyone on staff seemed concerned about the fit of the students,” she says. “It made me feel that if I was selected to join Owen, it had something to do with who I was and how I could contribute and learn from the other students.”

That first mod, White recalls, was like her first jump. Learning to be a student again after eight years was challenging. “It’s not like a work assignment,” she says. “You can’t just shut it out when you get home like you can after a day at the office.”

But after the first month, as with the first few parachute drops, something clicked. “I found I had made great friends and was sharing a unique experience,” she says. “I fell into the day-to-day (and evening) routine and never looked back.”

After a summer internship in the corporate world, White realized she missed some of the structure military life provided. She won a two-year Presidential Fellowship with Voice of America (VOA), the U.S. government’s official radio and television broadcasting service, in Washington, D.C. The new job offers her the best of both worlds. Within the security of her position, she has opportunities to complete rotations in other areas besides her specialty, operations, as training that may prepare her ultimately to take over a division of VOA. It is like being able to jump from a plane, with none of the uncertainty.

Of course, White’s new position is not without stress, but her Air Force experience taught her a valuable lesson in dealing with it. “In air traffic control your life is about stress,” she says. “Nowadays when somebody comes into your office and says this is a life-or-death situation, I can say, ‘No, it’s not. Let’s talk about it.’”

Brothers in Arms
Jumping remains part of Ray Sumner’s life. He loves the adrenaline rush that comes from hurling himself off a cliff, his survival depending on a strand of bungee cord. He has jumped from three of the world’s highest bungee-accessible sites: Bloukrans, South Africa; Victoria Falls, Zimbabwe; and Interlaken, Switzerland.

Somehow jumping fills a longtime need. The love of flying, with or without a vehicle, is what led Sumner to the Marines in the first place. While he was still in ROTC at St. John’s University, the Corps guaranteed him a seat in flight school if he passed a test. He passed and went on to train on T-34 jets and pilot helicopters.

Sumner left the Marines after 13 years but rejoined in 2003, after a General Officer phoned one morning and told him, “Your country needs you.” In between he operated a fledgling import business in handmade goods from some of the exotic locales he had visited with the Corps, like Yemen. The business barely broke even. But, as an entrepreneur, Sumner had found a civilian avocation that could satisfy his need for flowing adrenaline.

Now he is returning for another jolt—this time as a beer maker with an MBA. He learned the brewer’s art from his younger brother. After taking a new product development class, he realized he might have a new product of his own. He began testing its viability at Owen get-togethers. “At one party,” he recalls, “I brought 26 different types of beer. People were saying, ‘Where can I buy this stuff?’”

With help from Owen’s entrepreneurship program, Sumner test-marketed his quaffs in the wider community. This summer he was busily researching properties around Nashville and as far afield as Austin, Texas, and Portland, Ore. To Sumner, it feels like an exhilarating jump, and his MBA colleagues are his bungee. They are continually providing support and advice, offering to serve on the board of his company for free, helping him assess logo designs, and serving as sounding boards for ideas.

That is the thing, Sumner says, about Owen. “When I got out of the Marine Corps, I thought I’d never have this again. The camaraderie at Vanderbilt is unique. That’s why I’ll always appreciate it. There were a lot of students who perhaps were smarter than me and whom Owen could have accepted into the program, but they chose me to be part of the family. When somebody gives you a chance like that, you don’t forget it. And that’s the Marine Corps way.”

Academics often like to talk about providing “real-world experience” for their students, but the real estate program at the Owen School has ventured beyond the standard rhetoric.

During the 2009 spring semester, a group of 10 second-year students took part in the inaugural Real Estate Capstone course that saw them devise a long-term growth plan for downtown Lebanon, Tenn., a city just east of Nashville. The specific thrust involved transit-oriented development. The course was led by Jacob Sagi, Vanderbilt Financial Markets Research Center Associate Professor of Finance, and Thomas McDaniel, MBA’02, Adjunct Professor in Real Estate Finance and Partner with Boyle Investment Co., a real estate investment firm with offices in Nashville and Memphis, Tenn.

“The motivation for the course,” Sagi says, “is to challenge the students with realistic development projects with tough issues—from working with professionals in diverse and often very different fields to trying to balance the value added to developers and communities.”

The Owen students teamed with 16 advanced urban design students led by Associate Professor T.K. Davis from the University of Tennessee’s College of Architecture and Design. Working in a truly collaborative process, the Owen and UT students devoted the semester to identifying four potential infill development sites within a half-mile radius of Lebanon’s Music City Star commuter rail transit stop. The stop is located near several key attractions—the historic town square, a greenway, a 200,000-square-foot retail facility, and Cumberland University—all potential drivers of future development.

While the UT students handled the design aspect of the project, the Vanderbilt team conducted a market analysis, developed marketing strategies and detailed pro forma financial analyses of the four sites, and researched legal implications and potential public/private partnership strategies to make the development projects feasible. The process was very practical, Sagi says, as the students earned hands-on experience, interacted with a variety of respected officials and—perhaps most important—made potential professional contacts and friendships that could prove invaluable.

At the semester’s end the Owen and UT students presented their proposals at the Nashville Civic Design Center to an audience of about 100, including many from the Nashville chapter of the Urban Land Institute. ULI members critiqued the student recommendations for the four sites, and the proposals were exhibited at the design center.

“Our final presentation at the Civic Design Center was very well-received,” says Shelby Pool, MBA’09, who graduated in May with an emphasis in real estate and finance. “As a group, we presented many well-researched projects and were able to touch on both the positives and negatives of the various proposals.”

Pool describes the Capstone course as “real world-based.” She says, “There was a lot of room to think outside of the box and present creative ideas and solutions.”

Building a program

Sagi says the course took the students beyond academia to help prepare them for working within a challenging economy. Real estate development focuses on uncovering opportunities and minimizing risk in a highly complex environment with various stakeholders whose interests often conflict, he adds.

“It is hard to appreciate this from a completely theoretical or traditional case-based academic approach,” Sagi says. “There are few programs in the country that offer such an opportunity to their MBA students. We’re hoping to continue and improve on our experience this year, and hopefully create a sustainable model for such a course that would be the envy of other schools.”

Sagi says the idea for the program stemmed from his interactions with colleagues in the real estate program at the Haas School of Business at the University of California, Berkeley. Haas stresses an interdisciplinary experience of real estate development and investment. The program interacts with the UC schools of architecture, urban planning, law, and construction engineering.

At the time, Sagi foresaw Owen as allowing for a different model, but one that could take cues from Haas. “Because we do not have access to such a diverse set of schools at Vanderbilt, I floated the idea of collaborating with the UT architecture students to T.K. Davis (then Design Director of the Nashville Civic Design Center). He was very excited about the idea, and the rest was simply a matter of coordination.”

Still, a star was needed since Sagi admits he has little expertise in development. To fill this role he tabbed Thomas McDaniel, a fellow professor at Owen. “Thomas is truly the brain and brawn behind it, and the course could not have been managed without him,” Sagi says. “While I tried to keep abreast of the progress of the course during the semester, in the end my contribution to the whole thing was minimal.”

Sagi’s modesty aside, his visionary move resulted in an important learning experience, according to Owen students who participated in the course.

Matthew Treble, MBA’09, says the academic experience helped him better understand the challenges developers face in a tough economic climate. Those challenges were amplified by the architecture students, who approached the effort more from a creative perspective.

“The UT students were immensely talented and did great work,” says Treble, who graduated with an emphasis in real estate and finance. “However, many of the designs were not economically feasible, and it was difficult to rein in their vision for each site’s end product. I found that to be the most interesting part of the course.”

Treble says McDaniel helped the students model the project by effectively defining the parameters of each site and the projected elements expected to yield success for those sites. “We were also forced to research different sources of funding, public and private, in order to make many of the site plans feasible,” Treble adds.

Pool says the course provided substantial experience for those students wanting full-time jobs in commercial real estate. “Many students already had some prior real estate experience,” she says. “But for those who may have just worked on the finance side in the past, this course gave them the opportunity to dig into, say, the construction and/or development side of the industry.”

Pool believes the program is a benefit not only to the students but also, potentially, to would-be employers. “The Capstone course is a great addition to Owen’s growing real estate program,” she says. “I think it will help local developers become more aware of the talent at Owen and [their] growing interest in local real estate opportunities.”

McDaniel shares Pool’s enthusiasm for the course’s long-term potential. He and Sagi continue to meet to discuss feedback. The duo wants to refine the two introductory courses: Real Estate Finance & Capital Markets and Real Estate Investment & Development. “Our new initiative is to further strengthen the school ties with real estate alumni, perhaps the one last missing link,” McDaniel says.

Creating that linkage is a worthy goal, one from which the graduate program could benefit. Given his career in the commercial real estate industry, McDaniel seems suited for the task. The adjunct instructor says Vanderbilt has made a concerted effort to ramp up its real estate course offerings. That work has resulted, he believes, in the program’s competitiveness with those at other top-tier graduate business schools.

“We want the real estate program specifically to hold its own with the top programs,” McDaniel says, recalling the creation of a formal Owen real estate program two years ago. Today Owen students can take courses within the real estate MBA emphasis (one of four emphases and eight concentrations).

The real estate emphasis comprises three required courses (Real Estate Financial Analysis, Real Estate Investment & Development, and Real Estate Finance & Capital Markets) of two credits each. At least two additional hours of course work are required from six elective courses (Urban Transportation Planning, Construction Project Management, Construction Estimation, Construction Planning, Property Law for Business Students, and Commercial Real Estate Transactions). The first four courses listed are four credits each, with the latter two being one credit apiece. The Real Estate Capstone course can be taken for four elective credits.

“We are competitive with other top-level MBA programs that offer a concentration in real estate,” says McDaniel, who graduated from Owen himself in 2002. He describes the Capstone course as the equivalent of a thesis project: “It’s intended to be a culmination and summation of all the tools the students were equipped with during their two years at Owen.”

Ryan Seibels, MBA’09, who recently obtained his MBA from Vanderbilt with an emphasis in real estate and finance, says he feels the real estate program holds its own with any other similar graduate program in the nation. He says the curriculum prepared him well for a difficult economy.

“The challenge now is growing the number of students who are interested in pursuing a career in real estate,” Seibels says. “If that number can continue to increase and those alumni are willing to give back to the school, then the real estate alumni network will only grow. That’s how the top-tier real estate schools excel.”

Future developments

Seibels describes the partnership with the UT architecture students as unique. He also says interacting with Lebanon officials and community members—and assessing how the Music City Star transit stop could one day greatly benefit the town as a mixed-use node—proved interesting. “It greatly helped shape the developments that we proposed at the end of the course,” Seibels says.

However, such a major academic undertaking does not come without its difficulties, he adds. “The logistics alone made the course somewhat challenging,” he says. “While working with UT students provided great benefits for us, it was difficult because we could not just call or e-mail them and set up a meeting to really dive into their designs. Instead we were left to assemble about once a month to hear new ideas and designs and to try to solve problems and discuss all issues.”

Sagi says the concept for the project course was very fluid and experimental. He and McDaniel anticipated the challenge—and, at times, difficulty—in coordinating between the UT and the Owen students. Lebanon officials helped ease the occasional stress.

“I think we were all pleasantly surprised by the interest paid to the endeavor from the community in Lebanon,” Sagi says. “There was significant participation in the various meetings held, and it was important for our students to see how the planning process unfolds and experience the potential excitement and tension associated with a mixed-use urban revitalization project.”

Magi Tilton, Planning Director for the City of Lebanon, served as the local coordinator for meetings and public input. She praises the Owen students’ work, which included potential lease rates, rate of return on investment and analysis of potential project phasing. Though her contact with the Owen students was minimal, Tilton came away impressed with their presentations and professionalism.

“The feedback I received from residents and business owners was that they were excited about the possibilities that were presented,” she says. “This was an educational experience for our citizens to learn about development and design opportunities. The City of Lebanon Planning Department plans to build on this work by keeping the communication lines open and continuing to provide information regarding alternative design and funding options.”

As to what the Owen students’ proposals might one day render, Tilton is optimistic. “I hope the ideas and information presented by the Vanderbilt and UT students will spark an interest and lead property owners and developers to build on the student projects in their plans for development here in Lebanon,” she says.

Time will tell if the Owen students’ analyses and recommendations actually will be realized. However, UT’s Davis, one of the state’s most respected architects/planners, says the Owen students did a “fantastic” job of learning how to balance design, construction and city planning with the art of real estate deals and the often arcane elements of the industry.

“I was very impressed with the Vanderbilt students, and I would say things went as well as could be expected given the logistical challenges,” he says. “In some ways we simulated the real world of design and development, where the client investor may be based in one city and the design team in another, with periodic face-to-face meetings supplemented by telephone and Internet communication.”

Davis says the students’ work revealed that transit-oriented development of a very high quality could be profitable for a developer if the existing Music City Star Lebanon station site (which is controlled by the Nashville-based Regional Transit Authority) could be either purchased or leased for development.

“This would be a win-win for the city and for ridership on the Music City Star,” Davis says, adding that about 250 dwelling units could yield as many as 375 daily commuters on the train.

The three other sites within a 2,500-foot walking radius of the station did not project to be profitable for high-quality development without the use of tax increment financing, he says. Tax increment financing uses future gains in taxes to finance current improvements. It is the primary urban redevelopment tool in use today in the United States.

“With the designation of an urban revitalization area in and around the historic town center of Lebanon, tax increment financing could be utilized as a tool to make other sites viable for profitable development,” Davis says.

The Owen students would be pleased to see such a scenario unfold. Actual future development that takes into consideration their financial, market and legal analyses would validate their academic labor.

“We were pretty certain if anything comes out of it, it will be years down the road,” Treble says. “But we’re hoping something happens. We’ve done most of the heavy lifting, so it would be nice if a developer could hit the ground running in the future. It would add legitimacy to the Owen program and our efforts.”

Regardless, the team benefited greatly from the experience, one that will be repeated in some form as Owen continues to use the Capstone course to elevate its real estate presence.

“The Capstone course is crucial to the real estate experience at Owen,” Sagi says. “After a ‘burning-in’ period in which we learn to maximize the value of the students’ time and how to coordinate between the various disciplines, we’re hoping to also involve at some point—in addition to architecture students—graduate students from the School of Engineering, Peabody College’s Community and Research Action [program], and the Vanderbilt University Law School.

“Yes, we like to dream big. We will have something worthy of national renown in the education of real estate MBA students.”

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.)

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.

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.’”

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.

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.”

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.”

They are among the nation’s most compelling potential customers— the nearly 100,000 men, women and children who are in line for the fewer than 30,000 organ transplants that will be performed this year. That staggering gap is caused both by a scarcity of donors and by the fact that only 70 to 80 percent of the organs actually harvested can be utilized because of problems with quality or preservation.

The work of four members of the Vanderbilt Executive MBA Class of 2008 may help change the latter half of that equation. Their start-up proposal, developed for an Owen classroom and aimed at bringing to market a system that would better preserve donated organs, has earned the top prize in a prestigious business competition and has begun moving them toward the marketplace.

Classroom Origins

The company, Organ Transplant Technology (OTT), began attracting real-world interest while it was still a project in Bruce Lynskey’s entrepreneurial course, Creating and Launching the Venture, during Owen’s fall 2007 semester.

“In seven years of teaching at Owen,” says Professor Lynskey, himself a successful entrepreneur, “I can count on one hand the number of classroom projects I’ve seen with this much potential upside.”

Three panels of judges agreed with him. The OTT proposal wowed a group of venture capitalists brought in by Lynskey to rate student projects, reached the semifinals of the Wharton Business Plan Competition, then took top prize in the MBA Jungle Business Plan Competition in New York. For the team that developed and pitched the idea—Dr. Ravi Chari, Ted Klee, Drew Bordas and Fernando Sanchez—those milestones served as validation of both the quality of their teamwork and the importance of the concept itself.

“We realized this was more than just a classroom project or a competition,” says Sanchez, who is Vice President of Finance and Treasurer of Gibson Guitar Corp.

“This is something that can really save people’s lives.”

The project is the culmination of two years of teamwork for Sanchez; Klee, who is Vice President of Square D/Schneider Electric Co.; Bordas, Director of Warehouse Management Systems for Ingram Book; and Chari, Professor of Surgery and Cancer Biology and Division Chief of Hepatobiliary Surgery and Liver Transplantation at Vanderbilt University Medical Center. The four were assigned to the team by Associate Dean of Executive Programs Tami Fassinger, who cites their disparate backgrounds as a source of strength.

“The goal of the study groups is to approximate all the skills you’d have in the executive suite,” she says, “and with this group you’ve got people representing four areas of functional experience as well as four different industries. Fernando Sanchez comes from the world of musical instruments and played the role of finance guy. You’ve got Ted Klee, who is the quintessential engineer and who understands manufacturing and operations. You have Drew Bordas, who understands distribution from a service industry point of view and has got the consumer piece. And then Ravi is the doctor at a leading medical center, bringing the scientific piece and contacts in the health industry.”

The quartet clicked at the week-in-residence at New Harmony, Ind., a getaway that kicks off the Vanderbilt Executive MBA experience, developing a style that was part think tank, part frat house.

“They’re big practical jokers and very sarcastic,” says Fassinger, “but they genuinely enjoy each other’s company and have become very good friends. It was just that typical guy thing—making fun of each other, but out of respect. It was about all four of them getting the idea right.”

A Better Solution

They used first-year projects to hone their group approach, then weighed ideas for Lynskey’s class during the summer between academic years. The one they chose grew out of Dr. Chari’s work as head of Vanderbilt Medical Center’s liver transplant surgery team.

“Currently,” says Dr. Chari, “of the 40,000 to 50,000 potential donors, more than half are excluded because of concerns with organ preservation and quality. Of those that are harvested, 20 to 30 percent are not actually used, again because of concerns about preservation and quality. It is critical that organs are optimally recovered and stored.” That led him to the work of a European friend who was “having trouble commercializing a project that from a scientific standpoint had a lot of merit.”

The project took aim at improving the decidedly low-tech means now in use for transporting donated organs, which are placed in a solution in a zipped plastic bag and carried on ice in a portable cooler. That technique risks damage to the organ through freezing or temperature variation, and greatly limits the sustained viability of a donated organ. At present the limits are six hours for a heart, 12 for a lung or liver, and 24 to 30 for a kidney. Work done in part by Dr. Thomas Van Gulik of the University of Amsterdam brings two improvements to the process. The first is a system driven by compressed air that circulates the solution through the organ, constantly supplying it with oxygen and nutrients designed to prolong its useful life. The second is an improvement in the perfusion solution itself. Both can be used in an easily portable container that keeps the organ at a stable low temperature.

In addition, one of Dr. Chari’s colleagues at Vanderbilt, medical student Clayton Knox, had developed and patented with Dr. Chari a compound designed to improve the performance of the perfusion solution even further.

The others embraced Dr. Chari’s proposal enthusiastically.

“Ravi’s idea surfaced pretty quickly because it was real,” says Bordas. “It was no contest, really.”

Bordas, Klee and Sanchez all acknowledge the centrality of Dr. Chari’s role and the importance of his technical knowledge and contacts, but Dr. Chari himself is quick to return credit.

“From a logistics standpoint,” he says, “Drew is outstanding. Ted is all over the strategy and the operations side, and Fernando is great with the financial side, so each brought different areas and perspectives. A good thing about them is that they aren’t in the medical field, and they brought a real business perspective and asked demanding questions: ‘The science is good, but how can we monetize the idea so that it’s something people would actually buy?’ They pressed those issues further than a roomful of my colleagues would, and so we were able to turn a great idea into a marketable business plan people would be interested in.”

The strength of the team and its presentation was clear by late November, when Lynskey had his students present a working draft of the proposal, weeks before their final presentation.

“Ravi’s team submitted its draft, and I brought it home and read it again and again, looking for something I could say was wrong with it,” says Lynskey, “and my only comment back to them was, ‘You need a nice presentation cover for this.’ I’d never seen anything like it.”

By the time of the in-class, end-of-semester presentation to a six-member panel of venture capitalists, the team’s message had been finely honed. Each panelist had $5 million dollars in imaginary money to distribute among 10 team proposals, and OTT garnered about two-thirds of the $30 million available.

“As they started talking about our proposal,” says Sanchez, “I turned to Ravi and said, ‘You’d better give them your business card. This thing has legs.’”

From Competition to Market

The team had already entered the Wharton Business Plan Competition, which requires that one member of the team be pursuing a Wharton MBA. That was exactly what Knox, who was still working toward his M.D. at Vanderbilt, was doing, following in the footsteps of his mentor, Dr. Chari.

“I realized,” Knox says, “that in academia, there are all these great minds and great ideas, but not a lot of people know how to get them out of the lab. Scientists are much better at thinking up new ideas than commercializing them.”

Professor Lynskey’s course had guided them toward doing just that.

“We never would have gotten this far had we not been in a program that forced us to think the project through and commit it to paper,” says Klee. “And I don’t think any of the guys in the group ever would think about doing something like this on his own, but put us together as a group, each with our own sets of talent and experience, with the university training us around these aspects important to developing a business plan, and it’s not that long of a putt.”

Their success continued as they were named semifinalists in the Wharton competition.

“When that announcement came out,” says Bordas, “The Wall Street Journal piece cited five ideas and ours was one of the five. Some of the judges said it was the best paper they’d seen in five years, and we said, ‘We should think about this more seriously.’”

They had entered the Jungle competition at the urging of Professor Lynskey. Their win capped an incredible run for what had begun as a classroom project and convinced them to pursue the company’s future, beginning with a return visit to Lynskey.

“The great thing about Bruce,” says Bordas, “is that he’s been there and done that. When you have a guy teaching you about starting companies who has started them and been very successful at it, that just gives the whole course a ton of credibility. And when we went back to him and said, ‘This looks real. What should we really do next?,’ he was able to have that dialogue with us. That’s one of the things you get by going to a university like Vanderbilt.”

The team has never lost sight of the underlying importance of the endeavor.

“More and more often, less-than-ideal organs are used, which is an unfortunate but necessary practice to manage the long waiting list,” they write in their business plan. “Ultimately, OTT’s goal is to improve the size and quality of the organ pool available for transplantation in order to increase the number of transplants performed each year and reduce the organ waitlist.”

“It’s pretty clear,” adds Dr. Chari, “that we’re excited about moving ahead with this work and with ironing out the agreements we need to get under way.” To that end, they are working to effect an agreement with the Amsterdam-based developer of the solution and the air-drive system, while awaiting approval of both in the United States and the chance to deliver the concept to a waiting marketplace.

“Some of the significant liver transport units around the country are eager to get it and put it into trials,” says Klee.

A Rewarding Experience

The value of the team’s Owen experience has become more apparent, with Dr. Chari seeing his MBA as a key to better positioning in a changing medical climate.

“Looking at the landscape of health care right now,” he says, “a premium is being placed on improved processes and improved function in the medical field. Traditional medical education gears you toward science and clinical applications for patients, but cost efficiency, process efficiency and other business principles constitute an important language to be able to speak.”

His Owen experience, he says, “changed not only how I think but how I analyze a situation—not just what information to use, but what questions to ask and where to look for that information.”

For Knox, who is part of OTT’s management team, the project’s success is “extremely rewarding and extremely validating in terms of the need for people who can understand both worlds, who can understand medicine and the business side of it—something Vanderbilt is especially good at fostering.”

As noble as the medical aims of OTT are, its principals are equally thrilled with the personal rewards of their Owen experience.

“We had a great class,” says Bordas. “Meeting those 40 or 50 people, I think, is going to pay dividends down the road. And within our group, I’m very grateful to have that core set of people you can bounce things off of. I consider them very good friends as well as mentors.”

Those friendships are likewise a prime reward for Sanchez.

“First and foremost,” he says, “I now have three or four people who I consider great friends for life. They are just good people from varying backgrounds, and I wouldn’t have met them any other way.

“The experience,” he says, “is a great one from a personal standpoint.”