Tag: fall2008

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.”