As general manager of the Ryman Auditorium in downtown Nashville, revered as the Mother Church of Country Music, Buchanan oversaw the building’s million dollar renovation and reinstatement as one of the world’s premiere music venues.

Flood waters at the Opry stage door, May 3, 2010

On May 2, 2010, the momentous flood that destroyed parts of Nashville also devastated the Grand Ole Opry House at Opryland in Donelson, the home to the Grand Ole Opry since the 1970s. In the hours when floodwaters entered the building and rose, Buchanan and a team of 10-15 workers courage-ously stayed in the flood zone to protect and preserve instruments, historic recordings and other artifacts by moving them to safety. Even so, not everything could be saved.

When the rain stopped, the ground floor of the 4,400-seat Opry house was covered with muddy water up to its back four rows. Forty-six inches of water covered the stage. Almost everything would need to be replaced: seats, retail store, lobby, dressing rooms, green room, control booth, stage, stage curtains and rigging, along with the mechanical and power systems.

Buchanan once again found himself charged with restoring another cherished building. “It breaks your heart, but it’s our responsibility to be sure that that building comes back to life, and it will,” Buchanan told USA Today.

In addition to overseeing the physical renovation of the building, Buchanan immediately hired restorers, conservators and luthiers (specialists in string instruments) to care for the historic artifacts, photos, tapes, costumes and instruments impacted by flood damage.

“After the flood waters receded, Steve led the recovery of the property—literally and figuratively,” noted Dave Kloeppel, BS’91, MBA’96, former president and COO of Gaylord Entertainment Company. “Importantly, Steve insisted the Opry never miss a show—and it didn’t. Using venues all over Nashville, the Opry never missed a beat.”

Steve Buchanan on the Bluebird Cafe set of TV

Five short months later, Buchanan and the cast of the Grand Ole Opry stood on a new stage in a renovated Opry House and welcomed audiences back with a celebration dubbed “Country Comes Home.” Backstage, performers marveled over 17 dressing rooms, facilities, instrument lockers and a comfortable, cheery green room that featured a new artifact—a marker showing how high the waters reached in the historic flood.

In recognition of his resilience, courage and dedication to excellence, Owen honored Buchanan with the school’s inaugural Distinguished Service Award at Owen’s annual alumni dinner in 2012.

Ryman Hospitality Properties Executive Vice President Steve Buchanan at the historic Ryman Auditorium.

The man the crowd knows as Deacon from the popular television show Nashville takes the stage at the Grand Ole Opry to screams of recognition. He starts with a sensitive ballad, and women of all ages stream past the lip of the stage and take his photo before being urged by ushers to make way for the next in line. Charles Esten looks to be having the time of his life. Is he a country music star, an actor playing a country music star or something in between?

Who knows, and really, why would it matter? Everybody is having a good time. Esten segues into a drinking song. “Pour, pour, pour some more,” he sings, “just like the four you poured before.” The crowd eats it up.

Off to the side of the stage, a low-key, conservatively dressed man looks on. The man is Steve Buchanan, BS’80, MBA’85, president of Opry Entertainment and co-creator and executive producer of ABC’s nighttime TV drama, Nashville.

The TV show gives audiences a new look at the city--and reasons to visit.

At Ryman Hospitality Properties, Buchanan is also a music business executive, a type represented on Nashville as the heartless and manipulative character Marshall Evans, head of fictional Edgehill Records. But Evans, Deacon, Rayna, Juliette and the rest of the television Nashville world exist only because of the vision of this real-life executive with a heart for the music and a business sensibility forged at Vanderbilt University and Owen Graduate School of Management.

Scientific Beginnings

Raised in Oak Ridge, Tenn., the son of a nuclear engineer and a chemist, Buchanan first enrolled in Vanderbilt as an undergraduate in the engineering school, intending to become an environmental engineer.

“I loved music and I very quickly got involved in the concert committee as a freshman,” Buchanan says. “In fact, that and the fact that engineering school was very challenging contributed to less than stellar academic performance for me.”

Buchanan and his cohorts brought many memorable shows to campus. Some of his favorites include Ray Charles, Bonnie Raitt, Muddy Waters, Pat Metheny, Lester Flatt, David Bromberg, George Thorogood and Karla Bonoff.

“We were freshman hallmates in 1975 at Vanderbilt and immediately became best friends,” remembers Ken Levitan, now an artist manager whose clients include Kings of Leon and Emmylou Harris. “We were both involved on the concert committee and Steve was unbelievably hardworking at everything he did.”

“Steve brought Bob Marley to town,” Levitan says, still sounding astounded decades later that the reggae legend played Vanderbilt. Buchanan shakes his head, calling the Marley concert “an amazing experience.”

Buchanan says a course with Vanderbilt’s legendary cultural sociologist Richard “Pete” Peterson led him to transfer to the College of Arts and Science and major in sociology and psychology.

But it was really his extracurricular activities promoting music shows that allowed Buchanan to discover his vocation. “It was enlightening for me because despite my complete love for music, I had never necessarily thought of it as being a business,” Buchanan says.

First Job on Music Row

Fresh out of Vanderbilt, Buchanan worked with new and legendary artists at booking agency Buddy Lee. From left, Buchanan, Dwight Yoakam and Bill Monroe.

Upon graduation, Buchanan rejected suggestions that he move to Atlanta or New York, where he was told he could probably find work at a promoter or record label. Instead, he placed his bets again on Nashville. Levitan had already graduated and gone to work at Buddy Lee Attractions, a booking agency on Music Row.

“I helped Steve get a job at Buddy Lee,” Levitan says. “At that time there were still a lot of independent booking agencies in Nashville and you could make a mark there.”

At Buddy Lee, Buchanan was in a position to meet music industry people in Nashville, New York and Los Angeles.

“Two of the agents I worked with had played with Hank Williams (Sr.),” he recalls. The two, Jerry Rivers and Don Helms, still worked weekends as the Drifting Cowboys. “So I was both learning the business and learning the history of the business.”

Still, Buchanan had a nagging feeling that there was too much he didn’t know. He questioned if he even wanted a career in the music industry.

Once Again, Vanderbilt is the Answer

“I made the decision to quit my job and go back to school full time because I wanted to do a specific concentration and immerse myself,” he says.

Buchanan entered the MBA program at the Owen Graduate School of Management, focusing on marketing and gaining a strong foundation in the fundamentals of management.

Like his undergraduate career, getting started was rough.

“It was a rocky start, because it’s very difficult to just disconnect yourself when you’re still in the same playground that you were in before,” he says. “You’re still in your mid-20s and you still like to go out and listen to music, and your friends are still around and you’re supposed to be totally bathed in academics. It finally kicked in second semester.”

At Owen, Buchanan learned to be disciplined in his approach to business. “It really made me focus,” he says. “I learned to be methodical and strategic about things.”

Coming out of Owen, Buchanan faced a crossroads between a managerial training program at Northern Telecom and becoming the first marketing manager in the history of the Grand Ole Opry.

Today, sitting in his office dominated by a picture-window view of the Cumberland River, Buchanan explains what made him choose the Opry. “You want to know what it was?” Buchanan says. “I just loved Bill Monroe.”

Monroe, for those who don’t know their bluegrass, is the legendary musician whose band, the Blue Grass Boys, put together the high lonesome elements that became bluegrass music in the 1940s. By the time Buchanan crossed paths with Monroe in the 1980s, the master was in his 70s.

“Buddy Lee booked Bill Monroe. I would come out to the Opry to see Bill and I developed a deep appreciation of what the Opry is,” says Buchanan, casual in jeans and blue sweater. “That was a passion that would only grow.”

“It ultimately wasn’t a hard decision to pass on the Northern Telecom job,” Buchanan says. “Yes, it was a better paying job and had a more defined career path. But I thought that the Opry job offered me the opportunity to be in a more traditional business environment while at the same time being engaged in the entertainment and music industry.

“It felt like it was the perfect fit, especially because Bill Monroe, who I’d grown to love booking at Buddy Lee, was a member of the Opry as well,” he says.

Marketing from Scratch

Buchanan found himself walking into a unique situation.

“The Opry had never had a marketing manager, meaning it had never had a marketing budget,” he says. “Most freshly minted MBAs don’t really want to go to work for a place where they don’t have a budget. That doesn’t fit in with the typical scenario.”

Hal Durham, then general manager of the Opry, put aside a modest amount for an advertising budget. Buchanan created a small, simple campaign, which started to address the identity problem his market research showed was holding the country music institution back.

First broadcast in 1925 as a radio show and for many years a national broadcasting powerhouse, the Opry was part of Gaylord Entertainment, today Ryman Hospitality Properties. By the 1980s, the Opry was overly dependent on Gaylord’s Opryland USA theme park and hotel for its audience. Both brought thousands of tourists to the area regularly, which translated into tickets sales for the Opry.

Buchanan’s efforts to revitalize and separate the image of the Opry from the theme park were successful business strategies, which was fortuitous as the park closed in 1997.

“We were also dealing with a much more competitive marketplace from a destinations perspective,” Buchanan says. “Branson, Missouri, became a major competitor. There was huge investment in the ’80s and ’90s in Orlando and then there was the proliferation of casinos around this country. That is still what we deal with today.”

The Ryman Auditorium

If there’s a proudest moment in Buchanan’s early Gaylord career, it would have to be the revitalization of the historic Ryman Auditorium. Along with much of downtown Nashville, the legendary building—former church and for years home of the Grand Ole Opry—had fallen into disrepair during the 1960s and ’70s. The Opry itself had left the building in 1974 for a new facility on the grounds of the Opryland theme park.

“I had never even been in the Ryman Auditorium, and suddenly it was part of my responsibility to market it,” Buchanan says. “This was way before it was fixed up. We charged a couple of bucks and people could tour through it. You could go stand on stage and there was a little gift shop in the back.”

Buchanan was captivated by the Ryman, even though it was in obvious physical distress. It had sat empty for almost 20 years and had been recommended for demolition several times. The building was rundown and the downtown area in which it sat was decidedly seedy.

In 1992, the centennial of the building’s construction, Buchanan was instrumental in arranging for the Ryman to be used for a series of concerts and a live album by Emmylou Harris, her landmark At The Ryman.

He also organized a one-man play with musical performances that included Bill Monroe performing “Working on a Building.”

“Ricky Skaggs and Vince Gill went on just before Bill doing ‘Drifting Too Far from the Shore’ and did such a great job that I think Monroe wanted to one-up them,” Buchanan says. “He did. He was outstanding.”

The two events were fortuitously timed. Downtown Nashville was about to undergo urban renewal, and Gaylord and Buchanan had the vision to lead the way.

“It was life- and career-changing for me because I was appointed general manager of the Ryman and got to develop the first business plans to oversee the renovation of the Ryman Auditorium,” Buchanan says. “There was a companywide belief that it was a worthy investment regardless of what it took, that it would be a meaningful and impactful undertaking for the company and city.”

Under Buchanan’s direction, the old building came back to life. Structural issues were addressed. High-tech sound, lighting and engineering were installed, along with the addition of a proscenium for the stage. Central heat and air were added to the now 102-year-old former church. A 14,000- square-foot support building was attached to house ticketing, offices, restrooms, concessions and a gift shop; proper dressing rooms were built (previously, a sole ladies’ room backstage had done double duty as a dressing room for the Opry’s female performers). The building’s original wooden pews were refinished and stenciled artwork on the balcony was faithfully recreated. The Ryman reopened in 1994 to public and performer acclaim, quickly earning a reputation as one of most prestigious performance halls in the world, esteemed for its astounding acoustics.

“We’re sitting here and that was basically 20 years ago and it’s great to be able to look back and see what a visionary decision that really was for (former Gaylord Entertainment CEO) Bud Wendell to make that $8.5 million commitment and investment,” Buchanan says. Gaylord also built the Wildhorse Saloon on Second Avenue in downtown Nashville during that era.

“Both of those investments were critical for the redevelopment of downtown Nashville,” Buchanan says.

Television’s Nashville

What might be remembered as the opening of the second act of Buchanan’s career began with a meeting in late 2010 between the Gaylord executive and some West Coast talent executives. Buchanan was then president of the Grand Ole Opry and senior vice president of Gaylord Entertainment. Again, like in the 1980s, he faced the need to draw people to Nashville and the Opry.

“The first thought was film opportunities,” Buchanan says. “We were kicking around maybe a period piece that captured a moment in time of the Opry’s history and building something around the characters that made up the Opry.” That led to discussions about other film projects, television and theatrical ideas. Rejected concepts included a 30 Rock-like take on the Opry.

“In looking at shows like American Idol, where country artists were sometimes winning, and shows like Glee and Smash—there was an acceptance of performance within a scripted show,” Buchanan says. “It was my feeling that with country music, so many of the barriers had fallen by the wayside. Younger generations are not as identified by genre. They’re interested in artists and songs.

“And it just felt like Nashville was really being accepted and regarded as a cool place, a very strong creative community and a place where the popular music of the day is being created.”

After finding a production partner with Lion’s Gate and a writer in Callie Khouri (Thelma and Louise, Divine Secrets of the Ya-Ya Sisterhood), they pitched Nashville to all three major networks and received offers from ABC and NBC. They chose ABC.

“I really didn’t fully understand about the Nashville vibe until later,” says Loucas George, a producer of Nashville, who says he had misgivings initially about filming the show in its namesake city—mostly because of the lack of film industry infrastructure. It took Buchanan in his role as one of the show’s executive producers to demonstrate how and why Nashville itself was an important character in the series.

The Nashville cast and crew film on a soundstage located just a few miles from downtown. From left, Director of Photography Ross Berryman, Buchanan and Transmedia Producer Lindsay Mayer monitor a scene being shot.

“I didn’t understand about the (important songwriter’s showcase) Bluebird Cafe being in a strip mall. That didn’t make sense to me,” he says. “Steve took me to the Grand Ole Opry and all these other places and I started to realize that it was important to film here.

“When I first came here, I thought Steve was going to be a silent extra production partner. He’s been anything but. He’s been the salt of the earth. He is Nashville. He constantly reminds us of the niceness of the people here.”

Khouri says that Buchanan helps to keep it real.

“He is so well-versed in Nashville that we would be very unwise not to call on his knowledge,” she says. “Personally, Steve is an absolute joy. He’s thoughtful, famously low-key and soft-spoken but with a tremendous sense of fun. He’s a fantastic ally.”

Actor Charles Esten, who plays the show’s Deacon Claybourne, calls Buchanan “the face of connectivity and the face of kindness to all of us.”

“From the start, he made everyone involved in the production feel instantly welcome in Nashville. He handles what could be an extremely demanding and stressful job with ease and grace,” Esten says.

From left, Nashville cast members Jonathan Jackson (Avery Barkley) and Charles Esten (Deacon Claybourne) talk with Buchanan following Esten's February performance on the Grand Ole Opry.

People in the fictional Nashville are not always so nice. “It’s not a documentary, after all,” Buchanan says. “It’s important to realize that you are creating a drama for network television. You have got to be able to do something that is compelling and captures people and the genre is that of a prime-time soap opera, so that means that things are exaggerated and a bit over the top.

“But it can still have heart, passion and emotion, and the city and music community don’t have to be disappointed in the portrayal from the perspective of the characters being stereotypes that are inaccurate or dated,” Buchanan says.

Putting the characters aside, almost everyone in Nashville agrees that the cinematography of Nashville represents the city beautifully. “One of the most common comments I hear from people is that they love the way the city looks,” Buchanan says.

That’s no accident. Millions of music fans, tourists and now television viewers have been influenced to see Nashville the way Buchanan sees it—as a deep musical wellspring, a must-visit destination, and now the hip town where the cast of Nashville spins webs of deceit and music each week.

It’s a classic case of supply and demand, with Vanderbilt meeting the demand for sharp human resources professionals with a supply of MBAs trained in human resource. The crunch is driven equally by changes in the corporate world and the reputation of Owen’s Human and Organizational Performance program.

The HOP concentration is among the highest ranked programs at Vanderbilt’s Owen School. Financial Times, for instance, named it No. 4 in specialty MBA programs in the U.S., and No. 7 globally.

That reputation creates competition to land Owen grads for the working world.

“Employers want to get here before anyone else and skim off the cream of the crop, find those qualified students and lock them up for internships,” says Read McNamara, executive director of the school’s Career Management Center. “They feel if they can lock them up for an internship, they have a pretty good chance of having that particular student convert the internship to a full-time offer and a good chance of the student accepting that offer. Companies will push us as hard as they possibly can to get to campus as soon in the school year as they can.”

Case in point: By January 2013, every second-year HOP student had accepted a full-time position. About 60 percent of them came back from their summer internships in the fall with offers for jobs. Vanderbilt’s rate for all MBAs is 40 percent receiving offers after summer internships.

HOP has virtually caught up with other MBAs in salaries, too; McNamara says that the average starting salary for a Vanderbilt MBA grad with a HOP concentration is about $90,000, just shy of the $92,000 average for all MBAs. He expects HOP to be on par with other MBAs by 2015.

“It’s not just the salary. The number of offers per HOP person and the credentials of the people applying to Owen with the stated goal of HOP are certainly on the rise,” McNamara says. “We’re delighted with that and if we keep doing the things we’re doing, there’s no limit to what we can do.”

And no limit to the need, either. Changes in corporate America have shifted views of the workforce. Technological improvements that handle typical HR functions have created opportunities for HR professionals to claim a seat at the table of the upper echelon of company management.

Barry Salzberg, CEO of Deloitte Touche Tahmatsu Limited

“The HR function has been elevated,” says Barry Salzberg, chief executive officer of Deloitte Touche Tohmatsu Limited and a former member of the Owen Graduate School of Management Board of Visitors. “Ten to 15 years ago, human resource directors in large organizations reported to COOs or CFOs; today chief talent/HR officers report directly to CEOs, reflecting the increasing importance of talent. While leading a winning organization looks radically different today versus five years ago, business still relies on people to succeed.”

New demands on HR professionals include using predictive analytics to identify high performers early in their careers or to identify which employees may be likely to leave, Salzberg says. “This model allows for overall workforce planning, which is just as critical to a business’ bottom line as financial planning. Human resources has become a broad and strategic driver in business. This has not only helped us identify and cultivate careers of high-performers, but shifted our development approach from reactive to proactive.”

Reflecting Current Business Needs

Whether a company is growing rapidly, winding down a segment of its business or trying to do more with less to remain competitive, people issues are at the forefront and HR professionals are finding sometimes that seat at the table means at the head.

When Virginia “Ginger” Barnes, EMBA’91, began her career as a contracts administrator at Boeing, she recalls that “empowerment and encouragement thoughts existed only in small pockets and they certainly weren’t popular.” In her first program management job of overseeing early phases of Boeing’s involvement in the International Space Station, she began to understand the importance of people management as she worked closely with Russian counterparts. “That was a real people kind of epiphany,” she says. “We didn’t look alike, but we had the same values.”

Barnes

As CEO of United Space Alliance (USA), Barnes has had the unenviable task of retiring NASA’s space shuttle program. At the peak, USA—an alliance between Boeing and Lockheed Martin—employed 10,500. That number now stands at less than 2,000.

“What I’m most proud of is that we’ve done that with an intense focus on taking care of our people,” Barnes says. “Before I got here, USA benchmarked other companies that had shut down big programs. We didn’t find good examples of people who did it well. We went out to the workforce and said, ‘What do you need from us?’ I have an 11-by-17 spreadsheet of all the initiatives that we have implemented, and I have to say, we have been wildly successful. People come back and thank us for the ways that we helped.”

In 2011, when the shuttle flew its final mission, USA garnered five perfect performance scores from NASA; it marked the first time that USA had received even one perfect score. “I’ve been criticized by some for focusing more on people than I did on profits,” Barnes says. “But at the time that I did, we received the 100 percent award. As hard as this job is, and as unglamorous as it is, it’s the most rewarding experience of my career. Part of that has to do with the people I’m doing it with. We’ve made deliberate decisions about the people that we kept on board to finalize the closeout. In every case, each of those employees has come to me and said, ‘I will take on more, and do whatever you need me to do.’”

Crises, especially over the last five years, have certainly influenced the importance of staffing in companies, whether navigating external challenges or internal issues. “Those kinds of reactive developments have made companies, at the board level, look at the alignment of their own human capital, the importance of human capital and the importance of succession,” McNamara says. “And they’ve reached the conclusion that human resources is no longer a compliance function, but an absolutely essential element in the quiver of a company in terms of the elements it has available to ensure its own success. Visionary companies that recognize the importance of human capital and human capital deployment and planning are way ahead of the curve.”

Those visionary companies are using their human relations personnel for entirely new functions. “Attracting and retaining game-changing talent is at the top of the CEO agenda, as companies and clients expand exponentially in key markets—particularly in Asia and the Middle East,” Deloitte’s Salzberg says. “In our global knowledge economy, the right employees make or break organizations, and we’re in the midst of a talent paradox: While layoffs continue and unemployment is high, many jobs still go unfilled because of skill shortages.

“For instance, in the United States alone, 3.6 million jobs were unfilled as of December 2012, according to the Bureau of Labor Statistics, even though the unemployment rate was at 7.8 percent,” Salzberg says. “Globalization and the proliferation of new technologies have forced companies to radically reconsider traditional talent and organizational models to distributed, crowd-sourced models.”

A Need to Understand

As HR gains visibility in upper management, it’s equally important that HR professionals know and understand all facets of business just like their peers with MBAs.

King

Erika Bogar King, MBA’99, began her career as a recruiter before moving into more of an HR generalist role, where she found herself recruiting those with graduate degrees to fill banking positions. “I hadn’t really thought of it before, but one turned to me and said, ‘So when are you going (to graduate school)?’ I looked at Owen because the professionals that I knew came from there were more accessible, more balanced in their approach,” says King, now talent director for Deloitte Consulting. “I liked the cultural sense that I was getting from the talent as well as the quality. I knew it fit would me.”
She also was attracted to the business background that embodied the HOP concentration. “I knew I wanted to stay in professional services and Owen’s HOP program was not from a psychology or people basis, but from a business basis first with the people element,” she says.

Nancy Abbott, EMBA’91, wanted to change fields and move out of the IT function at her company, GE. Her undergraduate degree in behavioral science made human resources the logical choice. “I wanted to immerse myself in areas I hadn’t studied in undergrad. I needed to know how to read a balance sheet, get better grounded in economics and learn the language of business,” she says. “That was my goal in choosing Owen. In the job that I had, I realized I didn’t truly understand finance, business metrics and key drivers. I wanted to build my skills to be a credible business partner. We continue to have a strong relationship with Owen and recruit here every year because of the talented, business-focused HOP graduates.”

“I think I’ve been lucky to be in a company where it’s assumed that HR has a seat at the table,” says Abbott, who leads organization and talent development for GE Capital. “Although it’s expected that you have a seat, you have to understand how the business works and contribute broadly to the business’s success, or you’ll lose that seat.”

Abbott

When Abbott worked on an acquisition, one of the biggest learning curves was helping the new employees to understand the role of HR. “They viewed HR as very tactical, more about benefits and payroll transactions,” she says. “They had no vision of the value we could add, such as attracting, growing and developing terrific talent.”

Abbott sees traditional human resource functions such as payroll and benefits as activities many companies are outsourcing to specialists or centralized centers of excellence. “That’s an evolution that has allowed HR people at GE to focus on the most critical and strategic needs of the business,” she says.

In her role, Abbott must have a clear understanding of the company’s worldwide business goals. “Without really knowing the needs of a particular business unit, and its plans for the future, I can’t help to identify the best possible talent to help it reach its goals. In my role, I’m one of the few people in GE Capital who looks across the top performers in all our businesses to see where in the world they might be matched with a great new opportunity,” she says.

Success Secrets

In business, timing is everything and Vanderbilt has a strategic advantage: It’s growing its HOP concentration at a time when other business schools have eliminated programs. “A number of premier programs either de-emphasized or dropped human resources,” McNamara says. “I think they’d love to have that one back and do it again.”

McNamara

While others may have stepped out of the HOP studies, Vanderbilt has stepped up. McNamara sees the possibility of doubling the number of students specializing in HOP to as much as 15 to 20 percent of its MBA class. The secret to the success? “No. 1 is faculty,” McNamara says. “If you look at the accomplishments of our management department faculty, and specifically people who teach HOP, these are folks who have gained a reputation inside the classroom and out, in terms of research and recognition. The kind of people who come to study HOP do their homework and understand the value of the faculty.”

McNamara also cites Owen’s forward-looking curriculum and association with Peabody College of education and human development, which is widely recognized for its organizational performance programs. “There’s a spillover effect of the wonderful reputation of Peabody on Owen,” he says. “We’re recognized as having two of the premier organizational programs. Finally, it’s the self-perpetuating excellence in that our HOP people go on to great careers in corporate or consulting, and they’re people who come back and get involved. The alumni involvement will not permit this great program to slip.”

Transforming the Future

Human capital has risen in importance along with other corporate functions, but it is not without unique challenges.

“Because people associate HR with the touchy-feely things, it does not get the respect that finance does,” King says. “I do think there are probably HR organizations that still are the people who organize the company picnic and other events. It’s hard to pull away and tell your clients that you’re not going to do this anymore.”

At Amgen, the transactional aspects of HR have been moved back to the staff level, and human resources has shifted to coaching and advising. Centers of excellence handle recruiting and scheduling job interviews, says Joe Parise, MBA’10, Amgen human resources manager. “Having a business background helps you speak the client’s language much faster. Transactional work is not what our clients need,” he says. “Clients come to me for decisions on what they want to do. My job is really to hold a mirror up to them, to explore unintended consequences, to be a sounding board.”

Parise

And to be a sounding board requires a strong understanding of the issues, the kind of understanding gained through an MBA.

“It’s doubly important here at Deloitte,” King says. “My clients have the degree. My clients are advisers to their clients. They expect that I have the ability to manage change, to be able to craft a vision, to understand project management and how we extract value from our practitioners.”

When all the elements come together, the role that HR professionals play in their corporations can—and will continue to—be a formula for success. “When an organization becomes known for cultivating and developing talent, the market brand is strengthened,” Salzberg says. “This ultimately increases their ability to attract and retain high performers. When a company attracts top talent, it can quickly fill new and open positions without missing a beat. Keeping unfilled positions to a minimum can lead to increased productivity and profitability, greater innovation and faster time to market.”

After nine years as dean of the Vanderbilt Owen Graduate School of Management, Jim Bradford is stepping down from his position at the end of the academic year in June. Jim recently discussed some of the highlights of his time as dean with Vanderbilt Business magazine. He also laid out some of the broad areas he thinks will shape Owen in its next era of leadership. Here’s Jim in his own words.

On Passages

When we were writing the announcement that I’d be stepping down, it felt at times like crafting my own obituary. What do you say about a 40-year career in both the private sector and academia in just a couple of paragraphs? It reminded me of the book Tuesdays with Morrie.

What’s been great fun and interesting is visiting with alumni. My message to them is simply that this is an incredible school worthy of their time, energy and support. And in that process, I’ve greatly enjoyed hearing how Owen has influenced people’s dreams and how appreciative they are of the education they received here.

Of course, anytime there’s change you’ll find pockets of worry. But I tell people this is a team sport, that whatever course a new dean charts, the intimate, collaborative culture of Owen will carry the school forward. That’s one of the most valuable lessons the alumni taught me when I started my tenure: Make whatever changes are necessary to help the school thrive, but don’t lose the culture.

On Strategy

I believe the school—or any organization—has to be guided by two things. First, it needs a mission or a vision that works for it. What are we about? What are we doing? Second, there needs to be a sustainable business model that allows for smooth functioning. If those two priorities get out of whack, it doesn’t matter how great the mission is if you can’t make it work financially. Likewise, if you are rudderless and just go where the wind blows, you might get through in good times, but if you forget who you are and what you’re doing, you won’t be able to make it through in hard times.

For me personally, it has been gratifying to see the Leadership Development Program reach the levels it has. It’s sustainable and it’s something that we’re now being noted for by incoming students, employers and peer schools. We’ve also been fortunate that—starting with the Accelerator program in 2004, the Health Care MBA and MS Finance degree in 2005, then adding a Master of Accountancy, Master of Management in Health Care and the Americas MBA—all these new programs continue to thrive. They may need to morph over time to accommodate what the global economy demands. But I feel like we have met an obligation to build programs that business wants.

On Priorities for the Last 100 Days

The last 100 days are a wonderful time to look back at what has been accomplished and what’s still left to do. When I began thinking about this notion of the last 100 days, I remembered when I sent my own kids off to college. As a parent, you want to impart every article of wisdom that you can. Of course, you can’t do that in the last hour—the morals and values you instill have to begin at a very young age.

So while I certainly can’t plot a strategy for Dean Johnson, I want to do whatever I can to leave Owen in the best condition I possibly can. Right now that means communicating just how strong this school is. You can see that in the quality of our faculty, our students, and our staff. The rankings have all validated our strengths as well.

Bradford (center) joined students for the last Thursday Social at Owen in April. He also presented the 100% Owen Clash of the Class Trophy to the Class of 2014.

Second, I feel confident that as some optimism comes back into the economy—and we at least know that we’ll see some interest rate stability—our base of giving will continue to grow. It’s important to keep raising money for scholarships as a way to help recruit the best students possible.

I also have an eye on the faculty recruiting process. We have three major faculty members taking emeritus status this year—Germain Böer, Dick Daft and Hans Stoll—and I want to ensure that we are supporting and identifying the next generation of stars.

On Areas for Growth

The levers are there to ensure the continuing quality and vigor of the faculty. Along with that, you want to have the resources and facilities to attract the best students and stay plugged in to the employment market. Those types of levers can be pulled to guarantee our continued status as a highly ranked, intellectually robust school.

And when I talk about facilities, I don’t just mean a new building or additional classrooms. I also mean technology. What is Owen’s role in the world of MOOCs (massive open online courses)? Vanderbilt University and Owen have already taken a lead in this. So while technology may ultimately help lower the cost of providing an education, we want to make sure we protect the quality of what we offer. How, for example, do you stay in control of a classroom with 40,000 students? The school will need to understand those hurdles and be able to jump over them.

I think you’ll also see the nature of global education change. We’ve already come down that path somewhat with the Americas MBA, where students are having more immersive experiences and working with teams across borders, for example.

In addition to being dean of the Vanderbilt Owen School of Management, Jim Bradford is the Ralph Owen Professor of Management. He plans to take a yearlong sabbatical before returning to Owen, where he will once again teach strategy.
— Ryan Underwood

A section of the Great Wall near Beijing

April 29: Beijing
Although the buildings were beautiful, what struck me most on this part of the visit were the Chinese people. The younger people clamored to have their pictures taken with us. Parents would bring their small children to say hello, and we were obvious objects of attention. ~Sherie Edwards

The Great Wall

Tiananmen Square

April 30: Beijing
Today marked the first day of visits to businesses—the true reason for the trip. I joined the health care group since my career for the past 19 years has been in risk management and medical malpractice. Our first stop was Peking Union Medical College Hospital. It was well-equipped, clean and similar to hospitals in the U.S. ~Sherie Edwards

Peking Union Medical College Hospital

Apple Store

Street food

Hong Kong skyline

May 1: Hong Kong
Once we landed in Hong Kong, it quickly became apparent that there was an entirely different mentality here than in mainland China. Buildings towered into the clouds, and the influences of British rule were starkly felt. We took a tram up a near 45-degree slope to the peak of the island, where hot and humid jungle trails were interspersed with shops and eateries. ~Brett Wade

Victoria Peak

May 2: Hong Kong
We started our first full day of business tours in Hong Kong with a visit to the American Chamber of Commerce. We were presented information on business challenges facing both Hong Kong and the mainland. It was interesting to learn how high the cost of living is in Hong Kong and the amount of lavish wealth there is in turn. ~Brett Wade

View from JPMorgan office

Victoria Harbour

American Chamber of Commerce

China International Marine Container headquarters

Huawei headquarters

May 3: Shenzhen
Huawei is developing cutting-edge communications products to integrate into all aspects of a person’s life. It was fascinating to see the products that will be launched in the next year. It was also unnerving to realize the potential applications of such technology and the implications these applications could have on individual privacy. ~Sherie Edwards

Wal-Mart office

High roller suite

The Venetian lobby

May 4: Macau
With more than six times the gaming revenues of Las Vegas, the casinos of Macau are immense, impressive structures. The Venetian is no different. We were given time to explore its casino, shops and restaurants before a quick Q & A and a behind-the-scenes tour of the kitchen, the built-in stadium and an impressive 6,000-square-foot “high roller” suite. ~Brett Wade

Turns out he was right.

“It’s definitely a really tough job market, but the master’s helped me get the job I wanted,” he says. This past summer Maloney, BS’11, MSF’12, began working at Morgan Stanley as an Analyst. His focus is largely in fixed income, foreign exchange and emerging markets.

Preparing students to enter a variety of finance jobs is at the core of the yearlong Vanderbilt MS Finance program—a goal made all the more important after the financial sector was hit particularly hard with job losses during the recession.

“What we aim to do is give students a broad-based skill set so that they can go into almost any area—banking, investments, corporate finance—and start tackling real problems right away,” says Kate Barraclough, Senior Lecturer of Finance and Faculty Director, MS Finance. “We want them to be able to deal with any type of problem that comes up and deal with it quickly and effectively. They may be starting at entry level, but they should be star performers.”

MS Finance versus MBA

For Maloney, the MS Finance program was not merely a stepping stone to an MBA. “In my field, sales and trading, it may not help to have an MBA,” he says. “Even if I do eventually become a manager, I don’t think I’ll pursue an MBA.”

He’s not alone. Students in the MS Finance program are “seeing it as a terminal degree and they’re not coming back for an MBA,” Barraclough says. “In the six years of the program, there have only been a handful who have come back.”

When compared to MS Finance students, those on the MBA track typically have a bit more job experience, with most pursuing the degree about five years into their careers. MS Finance students, on the other hand, tend to come with fewer than two years’ experience. “There is the benefit with the MS Finance that students don’t have to take two years off to go to business school and then come back to the job market,” Barraclough says.

While the comparisons to the MBA program may be obvious, there’s no sibling rivalry between the two. Students in both programs take classes together, and the MBA students often mentor those in MS Finance. In fact, the MBA program was somewhat responsible for MS Finance being developed in the first place.

“Having a smaller MBA program allowed us to expand our offerings through a portfolio of one-year master’s programs, including the MS Finance,” Barraclough says.

Besides filling an important niche among specialized postgraduate programs, a one-year degree in finance makes sense because Owen is well-stocked with professors who are among the world’s leading experts in the field. The close alignment with the MBA program, however, causes some confusion over which degree a student should pursue.

One rule of thumb for deciding is the student’s career goal: “If someone comes to us with a few years of work experience wanting a less specific finance education or a job in consulting, we’ll typically suggest the MBA path,” Barraclough says. “Do they want a more generalist business education so that they can move into a higher position, or a targeted master’s and an entry-level position? That’s usually the determining factor.”

The MS Finance program also can be useful in switching career focus. Zach Eskelson, MSF’07, Assistant Vice President at Redwood Trust near San Francisco, had worked in account management but found that he wanted a more quantitative finance role. “I started looking at job opportunities and educational options and decided, based on what I wanted to do and my experience, that MS Finance was a better fit for me,” he says.

Master’s degrees in finance are growing in popularity at colleges and universities throughout the country. “It seems like every week we’ve got a new competitor,” Barraclough says. Yet Vanderbilt made Eskelson’s list even though he graduated from the University of Washington in Seattle. He had visited Nashville several times before, and all it took was an official visit to campus to help him make up his mind.

“My decision was made,” he says. “The program is part of the business school. I wasn’t attracted to programs where they were part of the math or engineering schools. The fact that some of the classes were MBA classes—that attracted me. I’d be getting that exposure. There were only a few schools that had that.”

Access to the Very Best

Most students who enroll in the MS Finance program have received their undergraduate degrees elsewhere. In fact, only five of the 41 in last year’s class had attended Vanderbilt for their undergraduate studies.

“Our students tend to come from all over,” Barraclough says. “Students are attracted to the Vanderbilt brand and the strength of our alumni network.”

Kate Barraclough, Faculty Director of MS Finance, has helped the program fill a niche among specialized degrees offered at Owen.

In addition to Vanderbilt’s overall reputation, it helps that students have access to professors who have authored landmark studies on virtually every aspect of finance. For example, the faculty includes Bob Whaley, the Valere Blair Potter Professor of Management in Finance and Co-director of the Financial Markets Research Center. Among his many industry innovations is the development of the Market Volatility Index (VIX) for the Chicago Board Options Exchange.

“The classroom was generally a really interactive environment,” says Tony Cox, MSF’09. “It was really challenging, so we had to have a lot of interactions outside normal class hours or just talking to faculty in their offices. That kind of interaction was helpful. Being able to pick their brains whenever I wanted was definitely a great part of the experience. Bob Whaley’s class was one that I wanted to take just because he was teaching it. Having the opportunity to be around those people every day made Vanderbilt stand out.”

For Cox, a Financial Analyst with Goldman Sachs, another valuable benefit of a Vanderbilt education is access to the alumni network. “I know I wouldn’t be at Goldman without it,” he says. A graduate of the University of Kentucky, Cox connected with a fellow Kentucky alumnus who had received a master’s from Vanderbilt. Though the two had both schools in common, it was the Vanderbilt alumni network that connected them. “That’s how I was introduced to him and to Goldman and the office here in Atlanta,” he says. “Without that, I don’t think I ever would have had the opportunity to get the job here.”

Cox represents his class as an Owen Alumni Council representative to ensure that the network remains helpful for those who follow. “Coming in, one of the things that I heard about Vanderbilt was the alumni network was really strong, and not just that they had a lot of alumni at great places, but there was a huge sense of community and people willing to return your calls,” he says. “The alumni network was a big drawing point for me, and I think it will be a big selling point going forward. If someone’s looking at any number of great schools, being able to show that you have an alumni network that’s willing to help you out, that’s something that you can use to compete against anyone. That’s the best resource you can have. It helps to keep the school strong and helps the school recruit.”

Eskelson, an Alumni Council representative for the Class of 2007, agrees. “One of the benefits of going to a school like Vanderbilt is that the alumni are so great,” he says. “Staying connected and keeping the program successful is an important way to give back, but I’m doing it because I think it adds value to my degree.”

Pursuing a master’s degree in what amounts to nine months creates an intensity, with every minute made to matter. It also forges deep relationships that carry on for years after graduation. “At University of Kentucky, it was easy to go through and not make a lot of connections,” Cox says. “Part of it was that you went from semester to semester and may never have had another class with someone. At Owen we had classes with the same people all the time. You really had to rely on your fellow classmates to make it through.”

Exposure to MBA students also makes a big difference, both inside the classroom and in extracurricular activities like the Owen Finance Club, which offers programming specifically for MS Finance students. Since many of the MBA students have had several years of work experience, their insight as mentors and career coaches is particularly valuable.

“Coming out of an undergraduate program and into a master’s is a different teaching environment,” Barraclough says. “Being in a classroom with a group of people who have, on average, five years under their belts is a wonderful experience for MS Finance students. They get a different style of learning, and they’re exposed to people with some background in their areas of interest.”

Ready for the Working World

Students in the MS Finance program usually fall into two categories: economics and finance undergraduates who want to differentiate themselves in the job search, or liberal arts majors wanting to home in on a career. The first semester follows a core curriculum, while the second allows a student to specialize in an area of finance based primarily on where they’d like to work, such as in corporate finance or at an investment firm.

Much of the academic year is devoted to the job search process. In fact, for many the job search often begins much earlier. Owen’s Career Management Center is in contact with students before they arrive on campus, and quite a few pursue internships the summer before classes start.

Sheila Swedberg landed a position as a Financial Analyst at Caterpillar Financial Services more than six months before graduation.

Sheila Swedberg, MSF’12, didn’t start quite that early, but might as well have. After receiving a bachelor’s in business from Boston University, she worked in accounting at a university for two years—long enough to determine she didn’t want that as a career. Arriving at Vanderbilt in mid-August 2011 (MS Finance students come two weeks early to plan for courses and career preparation), she immediately set to work on finding a job.

“We were told that there has to be an equal balance of school work, personal life and job search,” she says. “You can’t put too much effort in one area. That approach was new to me. When I’ve been in school, the message has been, ‘Focus on school work. Everything else will work out later.’”

Swedberg took advantage of the exposure to MBA students and the Owen Finance Club. She also participated in mock interviews through the club and set goals for herself, which she then emailed to the CMC’s career coach assigned to MS Finance students.

By November 2011—more than six months before graduation—she had landed a position as a Financial Analyst at Caterpillar Financial Services in Nashville. “There’s a lot of emphasis on networking, which was somewhat new to me,” Swedberg says. “I was terrible at it before, but it became a process of learning how to talk to people, making connections, reaching out and hoping that something will materialize from it.”

The MS Finance program is perhaps best described as a “really short runway,” says Barraclough. “Students can come out of undergrad pretty green, and in a short time they have to become accustomed to grad school and be ready to go into the job market.”

With such a rapid turnaround, every interaction with students matters—and translates into the working world. For Cox, it was the emphasis on communications. “The curriculum stressed it so much early on, from orientation and all the way through the first set of classes,” he says. “It was one of the biggest insights I got.”

He also gained technical skills, like something as simple as using Excel, which has helped him in his work. And then there is the intangible aspect that comes with the confidence of being able to engage in high-level discussions with fellow students and professors. “Because it was such an interactive and dynamic environment, being able to take the things that we were learning and turn them into a conversation was hugely helpful,” Cox says. “I interact with clients every day where I’m able to take what we see in the markets and distill it.”

For Eskelson, working at a small boutique firm has required virtually every aspect of his degree. For instance, the accounting courses have provided a high level of understanding about financial statements. “That has probably been the one single skill that lots and lots of people with high titles don’t have. Understanding complex financial instruments and being able to talk intelligently helped me get the job. It’s not that I can come into the job and do it immediately, but it is valuable being able to understand what, to most of the world, is very opaque.”

Vanderbilt MS Finance graduates may not be ruling the world of finance just yet, but they’re working their way up the ladder, reaching a hand behind to help those a few rungs below on the alumni network.

“Most of the people in my class have been lucky and have had some success in their careers over the last couple of years,” Eskelson says. “If I were to look for another job, that would be one of the first resources I would reach out to. I know people keep in touch and let each other know when they’ve moved. If someone came to me, I’d try to help them out, and other people would do the same.”

Years later, in 1988, Lazenby would found her own oil and gas production company, Bretagne LLC. A second photograph reminds her why she keeps going when prices sag and equipment breaks. In that photo, 40 oil field workers—blue-collar guys in overalls living off the sweat of their brow—look happily into the camera at lunchtime. “Without Bretagne, they wouldn’t have a job,” she says. “This is why I keep going.”

In addition to running her own company, Lazenby has a national advocacy role in the oil and gas industry, serving as Board Chair of the Independent Petroleum Association of America. Often the only woman in the room, she promotes understanding about industry concerns, including taxation, accessibility and regulation.

“My job is to help lead the organization so that we explain ourselves to the larger community and to Congress and presidential candidates in a way that helps them understand the importance of the industry,” Lazenby says. Policymakers, she explains, don’t always fully comprehend the risky nature of the business, like the fact that most exploration doesn’t lead to discovery.

The energy business is not for the faint of heart, as Lazenby and many other Owen graduates who’ve gravitated to the industry can testify. Cyclical by nature, it is filled with controversies, challenges and setbacks. Yet energy is also a dynamic and growing sector full of opportunities for the next generation of leaders, and Vanderbilt is a part of that—from the brain trust of students who formed the thriving Owen Energy Club to an impressive cadre of Vanderbilt alumni and friends who are leaders in the field.

Unlocking Reserves with New Technologies

Contributing to a domestic energy business boom are new technologies for gas drilling that have unlocked untapped gas reserves, including so-called “tight gas,” which is difficult to access because of the geology surrounding the deposit. The increase in production, jobs and profits has been accompanied by some controversy about pollution and public health, particularly in regards to hydraulic fracturing, or fracking. The process involves drilling a deep vertical well, followed by a horizontal well, and next injecting large volumes of water, sand and chemical gels into the ground to help break the rock apart and release the gas.

Gigi Lazenby examines a traveling valve for a down-hole pump system with Bretagne employees Eric Spencer (left) and Larry Oliver.

New technologies like this one are being used to unlock long dormant reserves across large swaths of the country, from the Marcellus shale covering parts of New York, Pennsylvania, Ohio and West Virginia to the Barnett shale in north Texas to the Bakken shale in North Dakota.

The current boom is creating new jobs and will ultimately lessen the United States’ dependence on foreign crude imports, says Tim Perry, MBA’81, Managing Director for Credit Suisse in Houston. The outlook for the energy industry in North America is “very bright,” he says, adding that North Dakota is a case study in how recent technology innovations can boost growth and lower unemployment.

“The Bakken reservoir is an old reservoir that many of us in the energy business have known about for 30 years, but it was considered too expensive to drill, and now it’s not,” Perry says. “As a result, there’s a huge amount of drilling going on there now and, with that, a substantial amount of job creation.”

Martin Craighead, IEMBA’98, agrees that the energy market has been permanently changed by technological innovation. “The reservoirs that our industry targets today are more challenging, the environments are harsher, and the technology required to produce oil and natural gas is increasingly more complex,” he says. “The term ‘unconventional reservoirs,’ specifically with regard to shale development, seems to be on the tip of nearly every tongue in the energy industry. The so-called ‘shale gale’ hit the U.S. about five years ago today. The combination of horizontal drilling and hydraulic fracturing technology has enabled operators to produce wells more economically, particularly in the U.S. and Canada. Now this revolution is spreading to China, Argentina and Europe. Even Saudi Arabia plans to exploit both shale gas and tight gas eventually.”

Craighead

Perry

Craighead adds, “While the geology of these reservoirs is lower risk than traditional wildcatting, say in an offshore environment, many of the shale plays are difficult to reach—often lying more than a mile underground—and even more difficult to produce. Hydraulic fracturing is simply a method of stimulating the reservoir to enhance oil and gas production.”

Craighead, who grew up in Pittsburgh near some of the world’s largest gas reservoirs, in 2012 became President and CEO of Baker Hughes, a leading supplier of oil field services, products, technology and systems to the oil and gas industry. Baker Hughes allocates nearly 3 percent of revenue toward research and development annually.

“We spend about $400 to $500 million annually on R&D, and our facilities are some of the best in the world,” he says. “When Baker Hughes goes on campus to recruit, we invite students to our research centers around the world and show them what we’re doing. Our ability to attract brilliant young minds to our industry has never been greater because helping the world find and produce the energy it needs is a very noble cause, and people want to be a part of that—maybe now more than ever.”

Craighead was a self-described “expat” living in Venezuela when he enrolled in Vanderbilt’s short-lived but visionary International Executive MBA program in Miami, flying in every third weekend to take classes. “I didn’t appreciate it as much then but it had a real international bias to it,” he says. “For the energy sector, a key criterion for success is having global-minded executives.” Last year Vanderbilt launched a successor program, the Americas MBA for Executives, which also has an international focus.

Perry also took a nontraditional road to Vanderbilt and the energy business, enrolling in the MBA program immediately after receiving a degree in finance from the University of Arkansas. When he left Owen in 1981, the U.S. economy in general was sluggish, but Texas was booming. While many of his fellow commercial banking aspirants gravitated to New York, he headed for Texas, to smaller but fast-growing banking opportunities.

“It wasn’t planned out when I was at Owen, as happens in most careers,” Perry says. “I gravitated from general corporate banking into energy corporate banking and from there into energy investment banking,” where he’s been for two decades. He is one of two energy heads for Credit Suisse, heading up operations in North and South America.

Making Connections through Owen

Jeff Olmstead, BE’99, MBA’06, for a long time resisted the call of oil and gas that was in his blood. Last year, however, he took Dallas-based Mid-Con Energy public as its President and Chief Financial Officer.
Olmstead’s father, Mid-Con CEO Randy Olmstead, got into the oil business in the early 1980s, working as an independent CPA but managing about 15 rotary rigs on the side. His son grew up helping with grunt work in the summers, building fences and painting alongside the guys in the field. “Having worked in the hot sun and watched my dad’s fortunes go up and down, I wanted to do something different,” Olmstead remembers.

The younger Olmstead majored in engineering at Vanderbilt and put that degree to work for several years in telecommunications before getting interested in the finance side of the energy business. He returned to Nashville for his MBA and then went to work for Bank of Texas, where he was an oil and gas lender. One of his customers, Primexx Energy Partners LLC, hired him as Chief Financial Officer in 2010. It is a family-owned company but many times bigger than the company his father began.

Gilliland

Olmstead

“I had intended to make a career there (at Primexx) but by that time Mid-Con, as it neared maturity, had entered its first round of private equity funding. Having the opportunity to work on an IPO with your dad is pretty unique and special,” Olmstead says. Going public was quite a ride, he admits, and there were parts of the process “I’d be happy never to do again.” On the upside, he says, a smaller company such as Mid-Con has the opportunity to make meaningful smaller acquisitions and even delve into some innovative research and development opportunities.

For example, the company has formed a partnership with researchers at the University of Oklahoma who have developed a surfactant—a surface active agent that makes it easier for water to interact with oil—to use in individual oil wells to increase production. The technology works, Olmstead says, but is not yet economically viable. Currently most of Mid-Con’s properties produce oil using a secondary method called water-flooding—injecting water in oil and gas wells and filling up the space voided by previous production to repressurize the reservoir. The process is not new or unique, he says, and the time from acquisition to production can take several years.

Representing a new generation of industry leaders, Tracey Gilliland, an MBA candidate for 2013, approached Olmstead when he visited Owen and asked him if he would consider hiring an intern for the summer. He accepted, and she soon was plunged into assignments that ranged from preparing investor relations reports to writing press releases to putting together an evaluation of a potential acquisition in the wake of the public offering.

The internship gave her renewed appreciation for her core curriculum at Owen. “My boss asked me to do a regression analysis and all I could think was, ‘Thank God for Bruce Cooil and statistics.’”

Like Olmstead, Gilliland initially resisted joining her family’s energy business, planning a career in government after graduation from the University of Texas at Austin. She spent two summers working for the U.S. Department of Homeland Security in Washington, D.C., before being pressed into service at her family’s power plant development company, Federal Power Company LLC. After a year, she helped work through the company’s sale to Australian-based Macquarie Group Limited, a global provider of banking, financial, advisory, investment and funds management services. Gilliland then spent the next three years working for Macquarie. Her decision to go back to school for her MBA “was about me taking control of my career,” she says.

She chose to pursue her MBA at Owen rather than a Texas school because, she explains, “at Vanderbilt I would have to choose to stay in energy.” Her choice seems clear now. She’s vice president of the Energy Club and in that role helped plan Owen’s first Energy Trek to Houston, along with Peter Veruki, Director of Corporate Relations, and Sylvia Boyd, Assistant Director of Employer Relations. The trip was part of a targeted effort to link the large Vanderbilt energy alumni network in Texas with current Owen students. The first stop was Gilliland’s former employer, Macquarie Group. The student group also visited Baker Hughes, JPMorgan Chase, Exxon Mobil and Credit Suisse.

The Right Kinds of Energy Leaders

Exxon Mobil has long been a pipeline for Vanderbilt MBA graduates, and there are numerous connections between the school and the oil and gas company. In fact, Mary Humphreys, daughter of Exxon Mobil’s Senior Vice President and Principal Financial Officer Donald Humphreys, is an Owen student on track for graduation in 2013.

Donald Humphreys has been with Exxon Mobil for 36 years and relishes being part of an industry that produces something people need. “It’s an industry that’s not always loved, but there’s a lot I can help people understand,” he says of his regular interaction with business students, including those at Vanderbilt.

People often are surprised by the analytical nature of the oil and gas business, he says. “We have a lot of MBAs at Exxon Mobil, but a lot of the MBAs have engineering, science, business and financial backgrounds,” he explains. As the energy sector’s workforce ages, Exxon Mobil and other companies, large and small, will be seeking out a new generation of leaders.

While he’s weathered some definite highs and lows during his long career, Humphreys has never seen a period as dynamic as the current one. Technology innovation has been a huge factor, but he also credits the industry consolidation that took place in leaner times for increasing efficiencies.

He predicts increased domestic energy production will have a continued positive impact on manufacturing and job growth. A next focus for energy companies, he says, will be advocating for “reasonable regulation” to protect jobs and balance of trade.

Perry agrees. “We literally could become energy-independent in this country, given less government regulation,” he says.

Meanwhile Lazenby is among those knocking on doors in Washington on that score. The industry has a responsibility to have a place at the table, she argues. “You have to be an advocate, you have to be a manager, you have to be able to explain what you do, have the facts, be civil,” she says. “You have to understand world finance and economics. That’s one of the exciting things about this industry—that you’re not insular. You have to understand what’s happening in the world, in politics, in regulation, in government. You can’t just plunk your oil well down and calculate your numbers.”

Her workers operate “stripper wells,” which produce less than 15 barrels a day by injecting nitrogen into the wells, letting it soak with the oil and then “puff” it back out. It’s slow going, but as much as 18 percent of the oil in the United States is produced in such a fashion, she says, adding that she sometimes begins presentations by jokingly referring to herself as “queen of the strippers.”

While a technological background would be beneficial to the next generation of industry leaders, Lazenby, Humphreys and Craighead say that the ability to think critically and strategically is the most beneficial. Perry notes that the energy business currently is experiencing “a real shortage of people” due to recent growth, but some of this, according to Craighead, can be attributed to the fact that the industry is looking for just the right kinds of leaders.

“There’s going to be a need going forward to develop leaders who can think critically and who are sensitive to more issues than just an income statement,” Craighead says. “We want leaders who are willing to do the right thing and who are open and transparent with the communities in which they live and work.”

Public scrutiny of the oil and gas industry has only heightened since the BP oil spill in the Gulf of Mexico in 2010, which exposed the dangers of deep-water drilling. (For more about the spill and other energy controversies, see the sidebar.)

The nature of the energy business is that there’s always going to be constant change and the potential for surprise, both of which Olmstead likes. “Most exciting is what some of us like to call the stumble factor,” he says. “Many times, you might be drilling a well and happen to drill through something you didn’t know was there and you make a new discovery. It can happen anytime, anyplace.” He chuckles and adds, “You try to keep it quiet so you can lease everything around it, but suddenly 10 of your best friend competitors are trying to beat you to it.” That, too, is the nature of the business.

Olmstead advises new graduates to be willing to start at the bottom. “There are so many things you would miss otherwise,” he says. It’s important as well to understand and embrace the risks. “There are plenty of booms and busts, and lots of very good business people get caught on the wrong side of a cycle, and it will happen again. It always does.”

Starting at the bottom is a humble lesson that Lazenby will never forget, thanks to her father. “You can always work—he always told us that,” she says. “You can find something. You should never stop trying.”

His persistence and dedication are characteristics that Lazenby has taken to heart in her own career, and one doesn’t have to look very hard to recognize the same traits in her fellow alumni in the energy business. Bust or boom, they will tell you that it’s important to carry on with what you believe in because you never know when you might hit pay dirt.

Health Care Immersion

Click to expand!

Wall Street Week

Click to expand!

“Wall Street Week is the primary mechanism for introducing careers in financial services to first-year MBA students. When they meet alumni and other firm representatives, it brings a sense of reality to career paths they may have only read about. Students come back much better educated about their options and what it takes to get to Wall Street from Owen.”

—Emily Anderson

The Career Management Center’s Executive Director Read McNamara, MA’76, and Senior Associate Director Emily Anderson helped coordinate this weeklong trip to New York for 34 first-year MBA students exploring careers in finance. The group met with representatives of 11 different financial services firms: Bank of America Merrill Lynch, Barclays Capital, Citi Commercial Banking, Citi Investment Banking, Credit Suisse, Goldman Sachs, Guggenheim Partners, JPMorgan Chase, Paulson & Co., Petrus Partners and UBS. Representatives of the firms gave presentations about the economy and discussed MBA career paths within their organizations. Students gained additional insight into Wall Street from alumni who joined Dean Jim Bradford for the annual Wall Street Week Alumni Reception at the Union League Club.

“Wall Street Week was very important for my internship search,” says Neena Sinha, an MBA candidate for 2013. “Not only did I learn more about the banking industry, I gained a valuable network that will help support my career in the future.”

Brand Week

Click to expand!

Global Business Association Trip to Turkey

Click to expand!

For David Owens, innovation on a personal level can be hard-wired.

“I am genetically an engineer,” he says. “My wife remarked one day as we were traveling, ‘Why do you always have a bag full of wires when we go on vacation?’ It’s just always been part of my identity.”

On a business level, innovation is a much slipperier commodity, says Owens, who studies the subject as Professor of the Practice of Management and Innovation at Vanderbilt. Although all businesses rely on timely innovation, most of them too often block it, according to Owens’ latest book.

Creative People Must Be Stopped: Six Ways We Kill Innovation (Without Even Trying), published in 2011 by Jossey-Bass, takes a clear-eyed look at six levels of stumbling blocks we unintentionally place in front of new ideas and their implementation. “I believe that everyone is creative, that everyone can and will move toward positive change given the opportunity,” Owens says. “My interest is understanding ways we stop people from doing that.”

At each of those six levels—self, group, organization, industry, society and technology—innovation faces resistance. “Take the organizational level,” he says. “Imagine the monumental courage it would take at Kodak in the ’80s to say, ‘Guys, I think we should stop doing film.’ It would be hard even for those people who knew that film’s days were numbered.”

He cites the Segway, a two-wheeled electric vehicle, as an invention whose potential on paper hit the brick wall of societal realities. “The Segway was too fast for the sidewalk and too slow for the streets,” he says. “That’s not a technical problem. They didn’t need the battery to last longer or to make the handlebars more comfortable. It was the societal restraints that they failed to address.”

Fighting the roadblocks that we and others throw in front of our own and each other’s creativity is at the core of Owens’ work as a teacher, mentor and consultant to organizations like NASA and the Smithsonian Institution. His is an almost counterintuitive approach.

David Owens

“It’s not, ‘Here’s how to be creative,’ but rather ‘Here’s how to stop your existing creative ideas from being blocked or killed,’” he says. “The punch line of the book is that there are at least six different ways to look at innovation, and you should pay attention to all of them because each one has the power to help you find the hidden barriers your innovation will face. What I find is that it’s the one perspective you ignore that ends up biting you.”

He sees creativity and innovation play out in real time as a mentor at the Entrepreneur Center, a Nashville-based nonprofit that connects entrepreneurs with investors and resources, and as Faculty Director of the Vanderbilt Accelerator Summer Business Institute for undergraduates and recent college graduates.

“Projects in the Accelerator,” Owens says, “touch all aspects of business—marketing, finance, operations, HR, manufacturing, strategy, design—and the program allows these students to experience the entire span of what happens in business in just a few weeks.”

He has watched any number of students carry ideas generated, refined or actualized at Owen into careers. He points to students who have gone on to do innovative work at places like Apple, Mattel, Microsoft, Google and Nissan. Another he cites is Jerome Edwards, MBA’04, Founder, President and CEO of Veran Medical Technologies, a St. Louis-based company that has developed cutting-edge imaging technology for surgical procedures.

Surgical Precision

Before earning his MBA at Vanderbilt, Edwards worked for Medtronic, one of the world’s leading medical technology companies. There he built a voltage-based navigation system that guided catheters inside the heart to burn tissue and regulate heartbeat. That technology, however, was spun off into another company and ultimately acquired by a Medtronic competitor in a $273 million deal. It was then that a frustrated Edwards decided to start a new chapter in his career.

“I wasn’t going to let that happen again,” he says. “Medtronic had been a great company to work for, but I decided to leave and go back to business school.”

“For us, innovation is about getting people into the field,
having them see surgeries, and coming back and sharing ideas
without barriers and without process.”

—Jerome Edwards

A Dean’s Scholar, Edwards enrolled at Owen in 2002 because he says, “I felt at home and felt the entrepreneurial spirit.” That feeling was shared by fellow student Evan Austill, BS’93, MBA’04. The two teamed up and started writing business plans for the type of technology Edwards developed at Medtronic, but for different organs. Edwards and Austill were encouraged by Germain Böer, Professor of Accounting and Director of the Owen Entrepreneurship Center, as well as former faculty member Bruce Lynskey, MBA’85. Edwards says Owen’s center “kept putting me in great opportunities in terms of business plan competitions and showcasing the plans to alumni.”

After receiving $65,000 in grant money, Edwards and Austill founded Veran Medical Technologies and paid for the first patent, which was written in the 810 Café at Owen. That patent was for a device that acts like a GPS system for the human body. An electromagnetic field and sensors are used to steer the device inside the body and then help sample or excise tissue that is suspected of being cancerous. The innovation is in making the device work in the lungs, which continue to move during surgery.

“With cancer,” Edwards says, “it’s about diagnosing as early as possible. In this case, we can get to the deepest, darkest regions of the lungs, get tissues from suspect lesions and progress to therapy if it’s cancerous.”

With just 28 people on staff, Veran is a small company where, Edwards says, “everybody participates in R&D—everybody does everything.” The company’s small size and flexible approach have helped it overcome the types of adverse group dynamics and organizational missteps that, according to David Owens, hamper innovation.

“One engineer in a small company can do the same amount of work as three in a big company because you’re freer,” Edwards says. “Process is good but it can be burdensome. Here, rather than meeting after meeting after meeting, you just walk in and ask a question, then go back to your desk and get to work again.

“For us,” he adds, “innovation is about getting people into the field, having them see surgeries, and coming back and sharing ideas without barriers and without process. Once you get to a level where it’s going to be turned into a real product, then you fold it into effective process.”

Renter’s Paradise

Adam Albright is helping RentStuff.com get a foothold in the marketplace with an unconventional business model.

For a small number of students, innovative ideas and an entrepreneurial spirit lead to the business world prior to graduation. That has been the case for Adam Albright, BE’10, an MBA candidate for 2012. Albright is Co-founder of RentStuff.com, which he describes as “a marketplace similar to eBay for renting rather than selling household items.” He teamed up with his two fellow co-founders when they needed someone with a technical background. Albright, who has been doing freelance software and website development since he was 10, earned his bachelor’s degree at Vanderbilt’s School of Engineering.

Participation in a summer-long incubator program at the Entrepreneur Center provided RentStuff.com with $15,000 in seed capital, mentoring and networking, and the chance to refine their presentations with the help of Michael Burcham, Lecturer of Entrepreneurship and President and CEO of the center. The program also gave them temporary office space.

“We have a couple of desks and white boards, and we make a lot of to-do lists and brainstorm ideas,” Albright says. “Part of my job is to explain the technological complexities behind what we want to do.”

The RentStuff.com model takes advantage of a fundamental shift in the way people access everyday goods. Albright cites a phenomenon called “collaborative consumption,” which he says is when “people try to own less stuff and rethink how they consume assets.” He and his partners have drawn inspiration from Zipcar, a membership-based car-sharing company, and Airbnb, which matches people needing short-term lodging with those offering everything from sofas to castles.

RentStuff.com handles payment transfers and security deposits, and offers reviews of people who use the service and the items rented, which include bicycles, cameras and even cocktail dresses. Recognizing that the target demographic skews younger means part of the innovation lies in finessing potential backers.

“Someone making six figures is not going to be renting golf clubs for $20 a day,” Albright says. “You have to explain to investors how it would work and who would be interested because it’s a new model and the math doesn’t add up for them. The investors aren’t the ones using it, but they’re the ones we need on our side.”

In other words, Albright and his business partners have faced some of the societal innovation constraints that David Owens writes about in his book. Society’s adherence to a conventional way of doing business sometimes prevents more creative approaches from gaining traction.

In the case of RentStuff.com, part of the solution lies in bringing small stores on board and offering to link them to potentially large audiences through the website. “We can emphasize the rental business side of RentStuff.com to investors, and then add that individuals can do it, too,” Albright says.

He finds that as a businessman, youth can be a mixed blessing. “Being young, you get a lot of helpful advice,” he says. “People are very willing to tell you about experiences they’ve had and pitfalls they’ve faced, and it speeds up the learning process. But when you go to an investor looking for half a million dollars, maybe they’d feel better if you were 50.”

Nashville, he adds, has been a good place to get attention and work out the kinks before carrying the concept to a larger city, where high-density neighborhoods and apartments concentrate the potential market for rental items like carpet cleaners and sporting goods.

Albright also attributes their early success to the company’s domain name. He believes that it has been crucial in driving people to their website. “RentStuff.com is a pretty identifiable name,” he says. “It’s easy to figure out what we do.”

Wallet Allocation

A great name is also the capstone of a highly regarded customer loyalty measure developed by Bruce Cooil, the Dean Samuel B. and Evelyn R. Richmond Professor of Management, and alumnus Tim Keiningham, MBA’89, with marketing research firm Ipsos Loyalty.

The Wallet Allocation Rule, as it’s known, came about because traditional metrics gauging customer satisfaction and loyalty “do a terrible job of linking with the share of category spending that customers allocate to the brands they use,” says Keiningham, the firm’s Global Chief Strategy Officer and Executive Vice President.

Bruce Cooil and his co-authors won the Next Gen Market Research “Disruptive Innovation” Award for their work on the Wallet Allocation Rule.

That need prompted a two-year study in collaboration with Lerzan Aksoy, Associate Professor of Marketing at Fordham University, and Alexander Buoye, Vice President of Analytics at Ipsos Loyalty. The study examined more than 17,000 consumers in nine countries and covered purchases in more than a dozen industries. A key datum was the number of brands being considered along with relative rank.

In the end, Cooil and his collaborators found that companies would be better served paying attention to how well they rank in comparison to rivals, rather than concentrating on achieving high customer satisfaction levels. According to their research, being a customer’s first, rather than second, choice can have a significant financial impact.

“What we found shocked us,” Keiningham says. “Our research uncovered a heretofore unknown relationship between customers’ perceptions of the brands they use and their share of wallet that could be easily calculated using a simple mathematical formula: the Wallet Allocation Rule.”

The rule makes it simple for managers to determine the financial implications of rank and of moves up or down, he says. Its implications include the fact that customer satisfaction is best understood in the context of competition, since it can rise even while per-customer spending declines.

“We looked seriously at alternatives,” says Cooil, who analyzed the data. “You see other papers that look at converting ranks to market shares using industry-specific parameters. We were expecting to have to go that way, but Alex suggested this other approach, and more complicated methods couldn’t do any better.”

Tim Keiningham

It’s an approach that breaks through the kind of industry constraints and societal barriers that David Owens studies. “We all start out with an idea of how things work,” Keiningham says, “and this view causes us to seek out information that supports that view and discount information to the contrary. As a result, we get a lot of ‘motivated’ research to prove what we want to believe.”

Keiningham and Cooil have become close friends through the years: Cooil was a best man at Keiningham’s wedding in Istanbul and has collaborated often with Keiningham and Aksoy, who are husband and wife. Their collaboration plays off their differing approaches and personalities.

“They get me interested in projects I might not find interesting otherwise,” Cooil says. “I have very different talents from Lerzan and Tim. They’re much more organized, much more focused on what industry really needs to know about, what would really help companies—and they get projects started.

“They’re the ones asking the questions and telling me what the current theory is. I go through and see how the models are working. Then they ask, ‘What can we do? We have this really interesting data. Can we come up with another approach or do something different with the data or clear up an issue that everyone’s convinced they understand but we’re convinced they don’t understand?’ They’re pretty demanding. They want answers and they keep projects going.”

Their four-way collaboration with Buoye on the paper “Customer Loyalty Isn’t Enough. Grow Your Share of Wallet,” published in the October 2011 Harvard Business Review, earned them the Next Gen Market Research “Disruptive Innovation” Award. It’s a major acknowledgement, although Cooil laughingly dismisses one of the accolades that went with it.

“They called us ‘thought leaders,’” he says, “It’s a mixed blessing because I’ve always hated the phrase. Doesn’t it sound Orwellian? But they did give us these really artsy trophies. I can’t even put mine in my study because my wife wants to put it on the mantel as an art piece.”

Special Resonance

Cooil’s and Keiningham’s work is another example of the worldwide impact of innovation with Owen ties. It is a key to what makes Nashville a city with special resonance as a business center for David Owens.

“I feel a real energy here once again,” he says, “with new startups and tech companies and a level of creativity in Nashville that really make it exciting for me.”

His work in breaking through innovation barriers is aimed at helping to keep the Owen School in the thick of that creative energy, as a meeting place of education and innovation that is as good for human development as it is for business development.

“With Accelerator, as with everything else,” he says, “we want to help students find that part of the wide spectrum of business that talks to them. I try to expose them to a lot of things to do, to give them enough diverse projects and experiences that they find something that makes them say, ‘I like marketing’ or ‘I’m good at managing teams.’

“I want to offer a perspective on business’ role in society, one that often gets lost,” he says. “It’s so much more than making money. It’s about feeling good about what you do and helping make the world an amazing place. How can you be a contributing member of society? Business is a great way to do that.”

Brent Turner at Pier 66 on Seattle’s Puget Sound

For a guy from Middle Tennessee, Brent Turner, MBA’99, sure uses a lot of nautical terms. That may be the impact of having lived near the Puget Sound in Seattle for the past 12 years, but his choice of words is fitting nonetheless. Turner is helping steer the future of Owen as chair of the school’s Alumni Board, and his enthusiasm, drive and leadership are just the types of invaluable assets you’d want in someone at the helm.

When Jim Bradford, Dean of the Owen School, asked him to lead the board last year, Turner was both honored and surprised. Even Turner’s assistant good-naturedly asked him if he was absolutely sure Bradford was serious. (Those are the kinds of self-effacing stories Turner likes to tell about himself.)

“I didn’t immediately tell [Bradford] yes, but I didn’t have to think about it long,” says Turner, Executive Vice President of Call Products for Marchex, a Seattle-based digital call advertising company.

That’s because of his deep-running zeal for all things Vanderbilt. Turner is one of the youngest members of Owen’s Board of Visitors, composed of corporate leaders from some of the world’s most prominent companies, who advise the dean on curriculum, the needs of the business community and the overall strategic direction of the school. He also serves as a class representative on the school’s Alumni Council, which encourages alumni participation and promotes philanthropic support. He even keynoted last year’s Discover Weekend for prospective students and has helped hire Owen graduates. And as if that isn’t enough, this marks his third year on the Alumni Board and second as its chair.

“He’s a passionate guy,” says Dave DiFranco, MBA’99, a Principal at private equity firm Blue Point Capital Partners. “Whatever he decides to spend his time on, it’s 100 percent. That’s true about SEC football, the Titans, the Owen School. That’s how he is, and he inspires others, like me, to get involved, too.”

Having a well-respected classmate lead the Alumni Board gives DiFranco a sense of confidence. “He’s not afraid to deal with tough stuff,” he says of Turner. “You might not always like what Brent has to say, and he doesn’t shy away from the tough issues. But that’s what a leader does.”

Turner’s decision to immerse himself in board activity at the school was fueled in part by Bradford’s all-hands-on-deck approach to bringing Owen closer to its goals. “He understands,” Turner says, “just how important it is to have as many people in the boat as possible if you’re trying to turn it.”

Part of the Returns

Turner was inspired to accept a leadership role because he saw that Bradford valued alumni input and sought answers to difficult questions. “I was impressed,” Turner says, “that he was willing to tackle what had been the central issue at Owen, which was: ‘What is the school’s strategy going to be? What’s going to be the role of rankings in determining our success?’ That’s a very hairy conversation to have, but I noticed him having it at both the Alumni Board level and Board of Visitors level as well as with faculty and staff.”

“Brent is a doer, a no-nonsense guy who is passionate about Owen and committed to its success,” Bradford says. “These qualities are the reason I picked him for this job.”

Turner bears in mind that many of his fellow board members travel thousands of miles for meetings because of a strong desire to “move things forward,” as he says. He has redesigned the Alumni Board into a working board, with teams to help support the school in targeted areas, such as alumni connectivity, student recruitment, career placement and fundraising.

Members have assignments and goals and report their progress regularly. “The idea is to make it meaty enough that it’s appealing but not so bad that it smacks of volunteer labor,” Turner says.

Fellow Alumni Board member Russ Fleischer, MBA’91, who is CEO of HighJump Software, a supply chain management software company, offers his own take on Turner’s style. “He’s not shy about reaching out and getting people involved,” Fleischer says. “Like so many of us, he has a strong passion for the school. That’s the attribute we both share—a deep passion for the school and a deep willingness to do whatever will help the school succeed and thrive in the future.”

Turner’s personal focus as a board member—improving alumni engagement—is approached with his usual fervor. His challenge for his fellow alumni: “I’m going to invest now with my time, talent and treasure because I want to be part of the returns.”

Turner’s board experience has helped him see the value of every contribution. With classmate Alli Zaro Fitzgerald, MBA’99, he hosted a well-attended webinar in 2011, in which he presented his thoughts about the school’s strategy. He followed with a live presentation to Seattle alumni.

“I think that everyone who attended left the call with a renewed enthusiasm for Owen,” says Fitzgerald, Director of Finance and Marketing at SecuriCheck LLC, a background research company. The positive vibe was created in part, she says, by Turner’s characteristically frank discourse, particularly about the elephant in the room—the perception by some alumni that the Owen School is undervalued in rankings. His message was clear: Any advancement will come about in large part from increased alumni involvement on many levels.

Turner is quick to say that no one considers rankings the only end goal, knowing that a school’s position can ebb and flow for no apparent reason. However, he says most people acknowledge that some of the rankings contain legitimate, objective measures of success and have to be heavily considered when planning and building strategy. In particular, they matter to prospective students and recruiters, who often perceive rankings as a litmus test of a school’s performance.

“The philosophy for a long time has been to build a world-class business school and the rankings will follow,” he says. “There’s a lot of that that’s true, and a big part that’s not true. There are some tough choices that have to be forced by the market. The dean’s big contribution is the message that we ought to take these more seriously, but we shouldn’t sell out.”

Alumni support is “the real chicken or the egg issue,” Turner likes to say. He believes that, if Owen is to make significant strides forward, alumni need to engage and support the school now instead of waiting to see if the new strategy works. It won’t be successful, he says, without their participation.

After receiving some lackluster class alumni giving numbers via email in January, Fitzgerald recalled that it took about 30 seconds for another email to hit her inbox. This one, from Turner, simply said, “Let’s talk.” Within minutes, a five-point plan was in place to stimulate class participation.

“He’s not afraid of difficult truths and approaches them head-on,” Fitzgerald says. “Yet he’s very approachable. He doesn’t lead by intimidation or try to impress everyone.”

Getting Somewhere Together

When analyzing problems, Turner relies on his training as an engineer to help him remain dispassionate. “That’s a gigantic asset in the business world,” he says. In the same breath, though, he admits to being not as strong in other areas. “On the other end, I struggle a lot with ideation and creativity,” he says. “I’m completely lost in a marketing meeting or going over advertising copy.”

Turner majored in electrical engineering at the University of Memphis and went to work for Porter-Cable, a power tool company in Jackson, Tenn., after graduation. He was with Porter-Cable for nearly four years as parent company Pentair positioned the brand for sales in big-box stores.

“As an engineer, I had a chance to be in a lot of the management meetings,” he says. “But I also walked the shop floor a lot and got to understand the differences between what the management team was trying to accomplish and what was actually happening on the front lines. It was very valuable. I learned how important it is to care about the people you are working with and who work for you. I learned the importance of clarifying their roles and making them feel safe if you wanted their best performance.”

That perspective led him to think seriously about entering management. “I can do this,” he thought.

Turner got to know an MBA intern from Kellogg Graduate School of Management at Northwestern who was sent by Pentair to evaluate Porter-Cable’s progress. The intern encouraged his interest in business, and Turner enrolled in some accounting classes locally. Surviving those, he then decided to take the GMAT, apply to “the big MBA schools,” as he says, and see what happened.

“The best fit, easily, was Owen,” Turner says. His interview was affirming and straightforward. Everyone he met “was being real with each other,” he says, “and I did not forget that.”

His Vanderbilt degree gives him a great deal of pride these days. “I will say that easily the period in my life when my perspectives on the business world, and the world in general, opened the most was the two years I spent at Owen,” he says.

His classmates were “phenomenal,” he says, and his training matched that of his peers in the industry, adding, “I can’t imagine it being much better.”

While there was pressure on Turner and his classmates to do good work, “what emerged was a collaborative, participatory environment,” he says. “It was a culture where everybody kind of understood we were all trying to get somewhere together. That’s not necessarily true in a lot of schools.”

Ray Friedman, the Brownlee O. Currey Professor of Management and Associate Dean of Faculty and Research, remembers Turner as a stellar student, respected by his classmates. “He was focused on managing people and had a sense of the importance of relationships,” Friedman says.

He’s been equally impressed by Turner’s work as an active alumnus. “He’s got a level head about him and a way of building relationships,” he says. “He’s focused on what we have to do and the need to get beyond planning and brainstorming to saying, ‘Let’s make things happen.’”

After graduating from Owen, Turner did a short stint with a private equity group in Dallas before moving to Seattle and a company called Avenue A, a startup focused on Internet advertising. Over the next nine years, Avenue A became aQuantive, which in turn became the biggest acquisition in Microsoft’s history at a reported $6 billion in 2007.

Turner, who had been Vice President of Operations for aQuantive, moved into the role of General Manager for Search and Media Network Businesses for Microsoft. He was part of the 2008 global rollout of Microsoft Media Network, Microsoft’s online display media business. Then, in 2009, he helped lead the global launch of Bing, a Microsoft Web search engine that now also powers Yahoo! Search.

From Microsoft, Turner headed to Marchex, a publicly traded company that is experiencing rebirth through a focus on digital call advertising. Marchex helps companies reach the right prospective customers using mobile media.

Instead of advertisers calling customers, smartphones provide the opportunities for consumers to place calls through the digital ads that they encounter while searching and browsing the Internet. “Most advertisers are intimidated by the complexity of figuring out how to place all those ads effectively,” Turner says. “That creates a role for an intermediary. We develop relationships with publishers of mobile advertising and make placing ads with them easy. Our job is to drive phone calls for our advertiser partners in a way that works for them economically and is not overly complex.”

Turner enjoys being on the front end of this new frontier in advertising. “There are a lot more opportunities than most people realize in these early stages,” he says.

Understanding the Conversation

Not surprising, Turner directs his energy into volunteer work in Seattle as well, chairing the board of REST, or Real Escape from the Sex Trade, a faith-based organization that seeks to divert at-risk minors from being trafficked into prostitution. There are a surprisingly large number of minors working as prostitutes in the Seattle area: REST puts current estimates at 450.

“In the garden variety case, a girl has a broken relationship with her parents and becomes a runaway,” Turner says. He explains that she might take a job in a strip club or a bikini barista stand where she is then befriended by a pimp who makes her feel special, at least initially.

Turner channels his business acumen into understanding, as he says, “the demand side of the equation so we can come up with strategies for reducing the number of ‘johns’ hiring the girls.” REST also works to proactively identify girls who are at risk and give them alternatives.

“We want to find choke points where we can prevent them from entering the life. We want to help them find work and understand their identity—that they are children of God,” he says.

The work is difficult and emotionally demanding—“This ain’t for everybody,” he explains—but it’s ultimately rewarding when girls come out of life on the streets.

Although Turner loves Seattle and is connected to the city in many ways, he relishes each opportunity to return to Nashville. When not in meetings at Vanderbilt, he often hops in his car for a visit to Columbia, Tenn., where his mother lives.

“I probably see her more often than most parents with local children,” he says with a laugh.

That filial devotion is not unlike the commitment he feels toward Owen. Turner believes that the school and its focus on an intimate community should not be taken any more for granted than a parent. It’s a message he hammered home in a speech to last year’s graduating class. “Make sure you appreciate just how special our culture is at Owen. Don’t forget just how awesome your classmates, faculty and fellow alumni are because you have had the opportunity to get to know them so well,” he said in the speech.

Turner is frequently reminded of the high caliber of people associated with the school, particularly in his work with the Board of Visitors. “This is an impressive stakeholder group,” he says. “These people are used to board seats and understand the conversation. They’re very good at getting their fingers right on some of the key issues or root drivers of problems and then stating their views on how to solve them. It’s pretty amazing in that crowd how quickly you go from stating an issue to some fairly clear and prescriptive input at a tangible level.”

As deserving as Turner is to be among those Board of Visitors members, he can’t help but inject some self-effacing humor into the discussion of his own place on the board. “They’re lowering their standards to have me on this thing,” he says. And then, he pauses to reflect on the scope of his alumni work at Vanderbilt.

“In my life, I’ve had the opportunity to do lots of things that are pretty amazing,” he says. “This is one of them.”

“I had to learn it the hard way,” says Ramos, Vice President of Engineering at Schneider Electric, one of the multinational companies that not only have a huge Nashville presence but also make Vanderbilt and Music City an ideal hub for this new style of international education.

Schneider Electric brought Ramos, a native of Mexico, to Nashville, and he has since grown with the company, tasting the increasingly global flavors of modern business firsthand. His experiences have afforded him valuable insight, which Tami Fassinger, BA’85, Associate Dean of Executive Programs and head of the Americas program at Owen, gladly welcomes. Ramos is among several alumni who have helped shape the program with their advice.

Mario Ramos

Fassinger stresses that businesses cannot rely on the same old parochial strategies in this global era, and so the Owen School has tailored the Americas program, which officially launched in early August, to offer its participants something new and different. To borrow a phrase from modern combat journalism, the program “embeds” students in international experiences while they work toward their MBAs. In addition to learning about global business management practices in the classroom, students gain real-world preparation on the ground, both in Nashville and thousands of miles beyond.

All about Relationships

Owen isn’t alone in this Americas venture. Three other business schools of similar prestige—Fundação Instituto De Administração (FIA Business School) in Sao Paulo; Instituto Tecnológico Autónomo de México (ITAM) in Mexico City; and Simon Fraser University’s Beedle School of Business in Vancouver, British Columbia—also are participating. The four partner schools plan to each enroll 15 students in the future, capping the total for every class at 60.

The Americas students spend the first year at their home schools, with some interaction with one another via the Web. Global study teams are then formed during the second year by making use of technology for conferences and virtual meetings. The second-year students also rotate together to each campus for immersion in weeklong residencies that incorporate each locale’s cultural advantages and challenges.

Fassinger says that students will work both virtually and hands-on “across borders, language, culture and time zones … on various coursework assignments and a yearlong capstone project.” The academic payoff is that each student will graduate with an Americas certificate conferred by the four participating universities as well as an MBA from his or her home school.

“More important,” she says, “they will have taken a deep dive into expert topics by Americas region and school, spanning everything from family-owned enterprises unique to Mexico to cross-cultural negotiations in Canada to sustainability models in Brazil to launching new ventures in the U.S.”

As a practical matter, managers will be sharpening international networking skills each step of the way. Learning how to apply those skills across linguistic and geographical borders is one of the most important aspects of doing business globally, says Ingrid Calvo, EMBA’09, a native of Colombia who works as International Controller for Gibson Guitar.

“In other countries it’s mostly about relationships,” as opposed to in the U.S., where “you get down to business right away,” she says. In her work, which now has her heavily focused on China, it’s critical to establish and maintain business relationships with government officials and business partners.

Ingrid Calvo

Calvo can testify to the effectiveness of her Vanderbilt MBA in these situations. “It has provided opportunities for me, has strengthened my core skills in managing global business, and has better prepared me for additional expatriate assignments,” she says.

She admits, though, that the international component of the Americas program would have been ideal, had it been available. “If given the choice,” she says, “I would have preferred to have been part of the Americas program.”

Ramos, who hopes to direct Schneider employees into the program in the future, knows from experience how valuable cross-cultural pollination can be. “When Tami first mentioned the possibility of opening up an Americas program, I was pretty excited,” he says. “It’s a tremendous opportunity. There are a lot of people in Latin America who could benefit from this type of program.”

And it’s equally valuable for Americans looking to the greater world market for production and distribution, Ramos adds. “It will help companies managing teams or trying to build their businesses in Latin America,” he says. “It will give them a lot of insight into the local environment—how to do business there, how to deal with the government, how to do business in a different culture.”

Schneider Electric, a global specialist in energy management, has 130,000 employees worldwide, producing a variety of systems that are designed to manage and conserve energy. The company has spread into markets like India and China, but Ramos says the Americas program’s lessons will translate anywhere. “There are various ways of going to market. Organizational behaviors are affected by different cultures with different values,” he says. “You need to understand how that works to really be able to do business in these countries.”

Looking at an Entire Hemisphere

As new as the Americas program is, international business has long been a focus for Owen. The idea for such a program was first planted soon after the establishment of the North American Free Trade Agreement (NAFTA) between the U.S., Canada and Mexico in 1994. “About 15 years later, we were finding that our Executive Development Institute client companies were looking at an entire hemisphere rather than individual countries for management decisions,” Fassinger says. “When we started to notice that, we thought that we needed to address it pragmatically.”

In the late ’90s, Owen experimented with a short-lived International Executive MBA program based in Miami. The IEMBA students were bright and hard-working—many of them have since gone on to prosperous careers in the Americas—but the logistics of the program itself proved too challenging. Among the roadblocks to the Miami venture were the lack of a Vanderbilt facility in the city and the added complications of monthly travel time and expenses for participants.

After talking with IEMBA alumni, Owen took steps to ensure that the Americas program is more practical than the Miami experiment. Fassinger says physically locating the new program at Vanderbilt is important because the university already has an acclaimed Center for Latin American Studies with which Owen can share human and academic resources. Also the decision to schedule weeklong residencies during the second year, as opposed to biweekly or monthly classes in each location, means less travel for those involved.

Tami Fassinger

In all, the Americas program provides a more balanced approach than its IEMBA predecessor—as Fassinger says, it’s “a complete immersion experience and a complete Vanderbilt experience.”

Of course, practical concerns, such as tuition, credit and diplomas, had to be worked out prior to launch. “One of the things institutions struggle with is: How do you transfer credit? How do you figure out admission differences?” Fassinger says. “We decided only to enroll our own students and not share revenue, so we went with schools that have great admissions standards of their own. Second, we figured out a formula where we all are responsible for an equal part of the delivery of the second-year residency experience.”

Each of the partners brings something unique to the residency weeks. For example, in Vancouver, an international city with strong Asian business interests, focus will be placed on cross-border negotiation and collaboration. Meanwhile Brazil will offer lessons in sustainability and bottom-of-the-pyramid marketing. In Mexico, where most of the businesses are family-owned, attention will be paid to global competitiveness among such companies.

“When they come to Vanderbilt, they will look at American innovation,” Fassinger says. “We’ve been talking to the big companies that make Nashville great: Nissan, Bridgestone, LP, Schneider, Gibson. And we will use the Nashville Entrepreneur Center to show how to launch startups that can become the next multinational companies.”

Interaction with prospective students in the U.S. showed there was a need for the Americas program. “They wanted a deeper global experience than what we had previously offered,” she says. “We surveyed our pool of candidates, and it was clear there was a demand for it.”

Ramos says that Vanderbilt already has an international mindset, but in the past, much of the discussion was “very U.S.-centric” by nature. “One of the important things about this program is that by having discussions with people who do business directly in those countries, we’ll have debate and ask questions as to what is the right answer,” he says. “The conversations will be diverse.”

William Thomas

Universal Business Principles

William Thomas, BE’92, EMBA’11, Executive Director of Quality and Sales Engineering for Bridgestone Americas, just graduated from the Executive MBA program in July. Like Ramos, he is somewhat envious of the opportunities that await the students enrolled in the new Americas program.

“If this international program had been available when I was starting in ’09, I absolutely would have taken it,” he says. “Our business, the tire business, is becoming more of a global game. The managers in the 21st century need a global perspective.”

Bridgestone provides training to prepare employees for the international market, but Thomas emphasizes the value of the Americas program. “By having them physically take classes in Canada, Mexico and Brazil, it puts them in contact with other cultures and begins the process of changing the way they think about doing business in another country,” he says.

With Bridgestone, Thomas learned international business by serving as Assistant Plant Manager, Responsible for Quality Assurance, at the company’s Buenos Aires facility. “What I discovered with my experience in Argentina is that there are universal business principles that can be applied across borders,” he says. “But the cultures you operate in require you to modify your approach to make yourself more effective.”

Thomas is now investigating how this new program might benefit his staff. “I’m talking to two of my managers in Argentina who are contemplating going back to school and getting their MBAs in Buenos Aires,” he says. “I asked them to consider going to Sao Paulo and getting in this Americas program instead [through FIA, Vanderbilt’s partner in Brazil].”

Thomas also looks around the Nashville office to identify Bridgestone managers who are hoping to supplement the international preparation they already receive at the company. One such employee is enrolled in the inaugural Americas class: Bridgestone’s Phillipia Pundor, Section Manager, Global Mobility and Immigration.

Phillipia Pundor

“We have a number of teammates who work on foreign assignments outside their home countries,” Pundor says, pointing to the approximately 50 expatriates she assists throughout South and Central America as well as in the Netherlands, Portugal, Liberia, the Democratic Republic of the Congo, India, Thailand and Japan.

Pundor, who has a background in industrial/organizational psychology, says the Americas program offers precisely what she needs. “I’ve looked at a number of different graduate programs, and Vanderbilt was definitely the most attractive,” she says. “This will put me in a position of growth and opens a lot of avenues into roles across the organization.”

Fellow student Jon Haworth has a similarly positive outlook on the program. He, however, took a more indirect path to it. The Vice President of Product Innovation and Plant Operations at Des-Case Corp., which manufactures filtration products for industrial lubricants, was set to enter the Executive MBA program a year ago, but the birth of his son put his enrollment on hold.

It was a fortunate turn of events.

“As they rolled out the Americas program, I quickly jumped over to that, because the international component of our business has been growing so fast. There will be things I learn from Day One in this program,” he says. “It’s exactly what I need to move up in this company.”

Jon Haworth

The son of Baptist missionaries, Haworth grew up in Brazil and is fluent in Portuguese. He also has worked abroad quite a bit for Des-Case, which sells products in 52 countries. His experiences overseas have impressed upon him the need for broader international skills.

“The American way doesn’t always get the job done,” he says. “On the other side of the world, they approach it from a totally different perspective.”

His understanding of this fact has made him appreciate the opportunity at hand all the more. “It’s not just a typical international program where you talk about how business is done elsewhere,” he says. “In this case, you actually experience it.”

He adds, “I haven’t heard it stated this way elsewhere, but in my opinion, while this program focuses on the Americas, the things you learn can transfer elsewhere. It’s really a global program, even though it’s not marketed that way.”

Fassinger agrees. “Jon is right that the learning can transfer,” she says. “We just made the decision to be more thorough about the nuances in the Americas, rather than spread ourselves too thin across many cultures.”

Michael Bowling

Congruent to the Culture

Michael Bowling, EMBA’97, grasps the idea of transferring knowledge as well as anyone. He talks with satisfaction about his experience as an Executive MBA student and how it helped him prepare for his current role as President of AT&T Mexico—a remarkable leap considering that he had never traveled outside the U.S. prior to his Owen experience.

Bowling went to work for AT&T 21 years ago with an electrical engineering background, but it was his desire to explore a different career path that brought him to Vanderbilt.

“I looked for a program that had the kind of impact that I thought I wanted on my career,” he says. “I wanted an executive program to learn the business half to help in my progressions.”

The lessons he learned were invaluable, he says, adding that Owen planted the seed that led him to work in Venezuela, Peru and now Mexico. “On our class trip [the required international residency], I think it was the first one for the EMBAs, we were here in Mexico City,” he says, recalling that he sat in the city center and “sketched out a plan to be an expat.”

After that trip, he became determined to take his career global.

“And here I am,” he says with a laugh.

These days, he’s loaning his expertise to Fassinger and her colleagues at ITAM in Mexico City. “I’m very positive about the program,” he says. “I think it will be great.” In particular, he believes the expanded international study component will pay off.

“It’s critical for leaders in business today to not just understand, but to be able to be effective in a global environment,” he says. “What you’re trying to do is reach your business objectives, but they should be congruent to the foreign culture you’re operating in. You aren’t going to be able to change the foreign market to fit your paradigm.

“The ones who aren’t successful are the ones who can’t drop out of their own mindset, the ones who say, ‘This is how we do it in the U.S.’ You might as well say, ‘This is the way we do it on the moon.’”

From left, Faith Rhoades, Carol Slivka, Kelli Powers and Nat Richardson

Few people get to witness the evolution of a brand new hospital from an insider’s perspective. Even fewer get to play a hand in how it takes shape. Yet, thanks in no small part to Vanderbilt’s Master of Management in Health Care program, four health care administrators from Huntsville, Ala., have had just such an opportunity.

Kelli Powers, Nathaniel “Nat” Richardson, Faith Rhoades and Carol Slivka—all members of the MM Health Care Class of 2011—spent the better part of the yearlong program collaborating on a capstone project to evaluate a new facility being built by their employer, Huntsville Hospital. Their project has continued to influence decision making in the organization well after graduation, but it isn’t the only part of their studies that has left a lasting impression. During their frequent trips up Interstate 65 to the Owen School, the four forged deep bonds with each other and their classmates, and the resulting friendships and experiences they’ve taken back with them on the southbound return have been life-changing.

“I haven’t felt so pumped about a program and the educational experience in a long time,” says Richardson, Vice President of Operations at Huntsville Hospital. “What’s been energizing has been the number of individuals in the classroom who are so spread out across the health care spectrum. We sit in a room with so many dynamic minds.”

Richardson was the first from the Huntsville team to commit to the MM Health Care program, which is designed to provide students with the business fundamentals and skills to manage people, programs and processes within health care organizations. While firmly entrenched in his present position, he wanted to further his education through a degree that would have direct benefits for his current job and career trajectory.

Jeff Samz, who had previously worked at Vanderbilt University Medical Center, brought the MM Health Care program to the attention of his colleagues at Huntsville Hospital.

Richardson heard about the MM Health Care program from Jeff Samz, Chief Operating Officer of Huntsville Hospital and former CEO of the Vanderbilt Heart and Vascular Institute. “He knew I was seeking the next level in my career,” says Richardson, who aspires to a C-level position at a large hospital system. “This program seemed to provide the most value and also aligned with where I am in my career.”

Samz’s and Richardson’s enthusiasm soon caught the attention of Slivka, Huntsville Hospital’s Director of Finance; Rhoades, Director of Medical Staff Services; and Powers, CEO of Athens Limestone Hospital, which is affiliated with the Huntsville system. Rhoades had begun graduate work elsewhere but readily switched gears for the chance to study at Vanderbilt with her colleagues.

“When the human resources director asked me if I was interested in changing to Vanderbilt, I said, ‘In a nanosecond,’ because of the reputation of the school and because I had a chance to take it with three other people from my organization. That’s life support,” Rhoades says. “The other contributing factor was the health care focus.”

Slivka shares this sentiment. “I don’t see myself doing something outside of health care. If you’re going to do this at this point in your life, you want to have some immediate take-away and provide some real-life value back to your company,” she says. “Huntsville Hospital has been willing to make an investment in me for knowledge I’m going to bring back and use. I really like that part of it.”

Huntsville Hospital enthusiastically backed the team approach to graduate education as it naturally aligned with the organization’s succession planning. “They’re interested in advancing their careers, and it’s a way for us to retain some of our top people,” Samz says. “Investing in them, we think, will pay off not only in the skills they learn in the program but it will keep them with us.” Samz also believes the fact that the four formed a “working pod” will continue to benefit the organization in the long term.

The program was appealing to Huntsville Hospital in other ways, too. There was Vanderbilt’s stellar academic reputation to consider, as well as the MM Health Care program’s flexible format, which is geared toward working professionals. Plus, the students were exposed not only to Vanderbilt University Medical Center, which is widely regarded for its patient care, research and biomedical education, but also to Nashville’s dynamic health care business community, which includes Hospital Corporation of America and a variety of other health care companies.

“There’s just nothing else like the Nashville market,” Samz says.

The Future of Health Care

“What the world needs is changing,” says Dr. Mark Frisse, MM Health Care Faculty Director, Professor of Management and Accenture Professor of Biomedical Informatics at Vanderbilt. He explains that the MM Health Care program helps students see way beyond the limits of their institutions to the future of health care.

“First we expose them to a radically broader view of the world,” he says. “Then we bring the world into the classroom. This can only be done a few places in the country.”

Larry Van Horn played a key role in launching the MM Health Care program.

Larry Van Horn, Associate Professor of Management and Executive Director of Health Affairs at Owen, adds, “The cost, quality and access problems facing the U.S. health care system are monumental. The clinician who understands the science of medicine and the science of business is in a position to create more value for our health care system.”

MM Health Care students attend classes every Thursday night and one weekend each month. Traditional B-school classes—such as marketing, finance, accounting, logistics, operations and leadership—are taught on weeknights, while the weekends are dedicated to health care. Frisse believes the classroom experience serves as a great leveler for everyone in the program. “You can’t tell the doctors from the administrators,” he says. “They have a uniform identity. They’re all students.”

The classroom benefits the faculty as well, he adds, noting that the high caliber of students helps energize the instructors. “The best teachers want to run these classes because they learn from these experiences,” he says.

Mark Frisse

During the course of the year, students develop close friendships, becoming sounding boards for one another. “Every day we’re texting or Skyping or emailing. Everyone relies on one another. Everyone wants everyone to succeed,” says Rhoades, who came into the program with a bachelor’s degree in health care management.

Richardson echoes that sentiment. “There’s a wealth of knowledge in that room. Everyone is from different walks of life and different regions of the country,” he says. “You can’t put a price on that much mind value.”

For Rhoades, the lessons of the classroom often can be implemented at work on Monday morning. She credits the high-quality instructors. “That started from Day One in the very first class. That is what knocks the socks off me. They are beyond experts,” she says.

Powers agrees. “It could not have been timelier. I’m looking at productivity and wait time [at Athens Limestone], and I’ve been able to bring what I’ve learned back to work,” she says. “It’s wonderful to be able to discuss ideas with people who don’t necessarily report to me.”

Meanwhile Slivka’s co-workers noticed a positive change in her right away. “I have a different set of eyes and I analyze things a little bit differently,” she says. “My boss said he can tell a difference in the way I look at things and in the comments I’ve made.”

The degree is perfectly suited for students like the four from Huntsville, says Sarah Fairbank, MM Health Care Program Director. “I tell prospective students we are designed for two kinds of people,” she says. “It’s for people who have been ‘siloed,’ who are working in a narrow field with lots of specialization. That might be a contracts person, a supply chain specialist, someone from the finance side or a physician with a narrow specialization in medicine. These are people who need a broader view of health care, along with management tools.

“The other type of person we see is someone who is coming into the health care field with a generally technical background—an operations specialist or IT specialist who has worked in other industries and is now in health care.”

Students range in age and experience. Some are young professionals preparing for a future in health care, while others are midcareer and ready to move up the ladder. There are also physicians who later in their careers want to use their accumulated wisdom in new and different ways.

A key element of the curriculum is personal coaching since the students are often transforming their own roles within their organizations. “The coaching was phenomenal,” Powers says. “It has helped me get on track and be more productive. I’m a very organized person, but I’ve learned that I need to devote specific time to reading articles and delegating.”

Sarah Fairbank

The average time commitment outside the classroom for the MM Health Care degree is at least 10 to 15 hours per week, though the initial learning curve may be steep at first for students who have been out of school for many years. In addition to these hours, the Huntsville students had to shoulder the extra commitment of traveling further than most students—approximately 100 miles each way. The routine is intense, Rhoades admits, but still very doable. “It’s such an achievable goal, so it takes the pain out of the travel,” she says.

Rhoades says it helped that members of the Owen community were standing ready to ensure their success throughout the whole process. This was no more evident than when deadly tornadoes ripped through northern Alabama last April. Staff, faculty and fellow students rallied to assist the Huntsville team and their communities.

“The support has been incredible. They pay such close attention to the needs of the students,” Rhoades says. “We in Huntsville have especially realized that. In bad weather, when it became clear we couldn’t get there, they quickly rounded the wagons and got some technology together. We had a live class by tapping in electronically.”

Breaking New Ground

As professionals make their way up the ladder, Fairbank explains that the challenge becomes, “How do you get people to look at you differently?” An integral part of fast-tracking that change in perception is another key part of the curriculum: the capstone project, an eight-month consulting engagement during which a team, usually of four people, takes on an institutional problem as if they were professional consultants. Through the project, the students are able to demonstrate immediate economic value by tackling important organizational issues.

“We seek to ensure that everyone coming out of our program projects a dramatically enhanced identity within their organization,” says Frisse, who oversees the teams’ work.

For the Huntsville team, their capstone project’s focus was evaluating the potential impact of a brand-new hospital in Madison, Ala., a community outside of Huntsville. The Madison area is growing, vibrant and affluent, with an average household income of $90,000. Many residents are scientists and engineers working for NASA, the defense industry or technical firms.

The group concentrated specifically on how to position obstetrics services in Madison. “This is the first hospital to be built in Alabama in many years,” Rhoades says. “Not very many people get to participate in building a hospital from scratch. But we also had to consider that we belong to a hospital system with other hospitals that we need to be concerned about. It’s not all about us. This is about creating the best business for everyone so that we’re all successful.”

The Huntsville system first built a wellness center, physician office building and urgent care center on the property in Madison. The success of those ventures demonstrated the viability of a hospital. “Owen helps you think strategically, and that’s what [the new hospital in] Madison is all about,” Rhoades says. “Many years ago, the strategic planning began with a purchase of land. It began with a vision and a goal. Everything you gain from Owen classes and programs ties into that kind of scenario. I put it into practice every day in my job.”

For Powers, the capstone project was particularly interesting since the new hospital in Madison had the potential to impact her facility, Athens Limestone Hospital, the most. While some factors will remain unknown until the facility is up and running next year, Powers says the planning process helped alleviate undue concern about the new hospital’s potential impact and shifted the focus to the strategic side.

Richardson adds that building obstetrics services around the strategic mission of each of the hospitals makes sense, since the birth of a child often provides a family’s first exposure to a medical facility. “We have to get it right so that the mother and the child have the absolute best experience,” he says. “And we have to make sure that we design it so we don’t hurt the other hospitals. We may eventually find that it’s best to provide those services primarily at one hospital. It’s a very delicate situation, and we have to get it right.”

Besides generating practical ideas for Huntsville Hospital to implement, the project also helped the students learn how to work together as a team. “The strength of our team is that we’re coming at the project with different knowledge skill sets. We all come from diverse areas that are all important to the outcome we seek,” Richardson says. “I love writing and doing the research and pulling things together. Kelli has a global perspective on what other organizations are thinking. Carol looks at everything from the financial standpoint: What’s the bottom line impact from the standpoint of income statements or the balance sheet? Faith brings the whole physician perspective to the table.

“Now I appreciate my team members at a whole different level.”

Richardson also appreciates just how far he himself has come during a year’s time. It has been a journey marked not so much by miles logged on the odometer or hours in the classroom, but rather by immeasurable moments of progress. In the end, the MM Health Care program delivered him closer to his lifelong goals and gave him something that should pay dividends the rest of his career—confidence.

“I know I’m ready for my next project,” he says, “no matter where or what that’s going to be.”

Bappa Mukherji is the CEO of Gics Foods, which packages food into convenient microwaveable retort pouches.

Ashoke “Bappa” Mukherji is no stranger to pressure. Soon after graduating from Vanderbilt with both an MBA and a law degree, he was thrust into one of the more challenging roles a budding young attorney could ask for—sitting second chair in a first-degree murder trial. It was his first trial ever.

When asked about the stress he was under, he laughs, “It could have been worse. At least I wasn’t the one on trial.”

Mukherji spent the ensuing years at a Nashville law firm, where he concentrated mostly on mergers and acquisitions. Advising clients on these deals suited his Owen School background, but he always wondered what it would be like to “move to the other side of the table,” as he puts it, and go into business for himself.

In 1997, with the help of two business partners, Mukherji did just that, launching a startup that manufactured recycled toner cartridges. That idea eventually blossomed into Guy Brown Products, a Brentwood, Tenn.-based office products distributor that had revenue close to $200 million in 2010. Mukherji served as CEO of the company until he stepped down last fall.

“At Guy Brown we differentiated ourselves from competitors by focusing exclusively on selling to large, geographically dispersed organizations and doing it better than anyone else,” he says. “It’s similar to what I’m doing today—studying the market and figuring out where our company has room to operate.”

The company he’s referring to is Gics Foods, a food packaging business in Greenville, S.C. Appropriately enough, this latest venture is all about pressure—albeit a different sort from what Mukherji is used to.

Under his guidance as CEO, Gics packages food into retort pouches, which are plastic laminate and metal foil containers that can withstand the high temperature and pressure used to cook what’s inside them. Convenient microwaveable bags of rice are just one example of this growing technology that’s revolutionizing not only how food is preserved but also how it’s prepared.

“We’re the first company focused solely on retort packaging,” he says. “That’s what makes us stand out.”

That, and of course, a bit of pressure.

It turns out that the process of encouraging entrepreneurship is remarkably similar, according to Germain Böer, Professor of Accounting and Director of the Owen Entrepreneurship Center. “One of the best ways to stimulate a lot of entrepreneurial activity is to create occasions for entrepreneurs to bump into one another,” says Böer. (Watch Böer’s video about entrepreneurship.)

These days entrepreneurs in Middle Tennessee have lots of opportunities to rub elbows, thanks to Vanderbilt and its collaborations with two local organizations: the Nashville Capital Network (NCN) and the Nashville Entrepreneur Center (NEC). NCN supports entrepreneurs and startup companies by providing feedback on business plans and assistance with raising capital. NEC, on the other hand, is a 501(c)(3) public-private partnership that gives its members access to training classes, mentoring resources and networking events.

In addition to the school’s own classroom offerings and funding opportunities, Owen students can get a taste for entrepreneurship by participating in internship programs at both organizations. These internships give them direct exposure to the process of refining a business plan, securing financing and getting a new venture off the ground. Meanwhile the organizations (and entrepreneurs they serve) benefit from the intelligence and enthusiasm that the students bring to analyzing business plans and improving presentations or pitch materials. In sum, it is a winning formula for everyone involved, and at the center of the equation is the Owen School, providing just the right catalyst to spark business growth in Middle Tennessee and beyond.

Germain Böer

NCN: Matching Entrepreneurs with Angels

Getting a business off the ground is always a challenge, particularly for first-time entrepreneurs without the network or connections to raise capital. That is where NCN comes into play. Started as a joint initiative between private investors and the Owen School, NCN maintains close ties with Vanderbilt. Its Executive Director Sid Chambless, BA’96, MBA’03, and Director Chase Perry, MBA’08, are both Owen alumni. Dean Jim Bradford and Professor Böer sit on its board of directors.

NCN has an interesting hybrid structure. The organization is structured as a taxable nonprofit but also manages two venture capital funds: NCN Angel Fund and a TNInvestco Tennessee Angel Fund. The first fund pools the resources of angel investors who also invest individually in NCN-supported companies. The second fund represents the proceeds from $20 million in tax credits that NCN accessed through Tennessee’s competitive TNInvestco program, which seeks to foster entrepreneurial “innovation clusters” across the state by awarding tax credits to a select group of venture capital funds. In addition to the economic development benefits, the state also shares any profits from TNInvestco investments.

To ensure that worthy entrepreneurs have access to an enthusiastic network of angel investors, NCN must provide those angel investors with high-quality, well-vetted investment opportunities. Interning as NCN associates, Owen students work with entrepreneurs to refine their presentations and clean up their business plans. The interns also participate in meetings where experienced local advisers give the entrepreneurs feedback on their ideas. Meanwhile, on the other side of the deal, the students provide deal context and analysis to help angel investors assess the quality of a potential investment. Since its founding in 2003, NCN has helped 23 early-stage companies secure financing, with NCN angel investors providing more than $20 million in funding.

Alumni Chase Perry (left) and Sid Chambless direct the Nashville Capital Network, which supports entrepreneurs by providing feedback on business plans and assistance with raising capital.

Chambless credits Professor Böer and Dean Bradford with forging a strong partnership between NCN and Vanderbilt. “For Owen students who may want to start their own businesses, an NCN internship provides a great opportunity to learn all about the process of capitalizing and growing a business,” Chambless says. “The real benefit for students is to be in the room with entrepreneurs as they pitch to investors, to see the kinds of questions that investors ask. I really think this program is one of a kind in the way it enables business school students to work on live venture capital funds and influence the deployment of those funds while simultaneously working with entrepreneurs in the community.”

NEC: Students in the StartUp Studio

Founded in fall 2009, NEC has met with more than 150 companies and helped 13 of them raise $3 million in angel financing. Four of those companies have since officially launched their businesses. “That’s a pretty good hit rate,” says NEC President and CEO Michael Burcham, who has firsthand entrepreneurial experience himself. Burcham founded three separate venture-backed health care companies before taking on the leadership role at NEC. Burcham also serves as Clinical Professor of Entrepreneurship at Owen, teaching classes about health care innovation and launching ventures.

Michael Burcham

From formal internships and independent study programs to extracurricular volunteer projects, Owen students are involved at NEC in numerous ways. As part of its mission to promote entrepreneurship and economic growth in Middle Tennessee, NEC evaluates new business ideas and offers a series of popular classes and coaching sessions on basic topics, including starting a business, raising capital and building a leadership team. Students assist with these services by organizing classes, delivering training, assessing business plans and offering feedback.

Burcham says there are typically several Owen students working at any one time with the entrepreneurs in NEC’s StartUp Studio incubator space. This temporary work arrangement gives the highest-paying members a business address, access to meeting rooms and classrooms, and face-to-face time with mentors. Students also help organize and run NEC’s technology microfund, which invested in seven new technology startups in 2010, including a company founded by Mark Harris, BS’03, PhD’09, an MBA candidate for 2011.

“A lot of these students either want to work in a startup company or have some interest in moving into investment banking or venture capital,” Burcham says. “By working with NEC, the students gain valuable experience that can give them a competitive advantage when they graduate.”

Learning Entrepreneurship in the Classroom—and Beyond

Henry Oehmig, an MBA candidate for 2011, used his summer stipend to develop a business plan for an environmentally friendly charcoal lighter fluid.

“Our goal in teaching entrepreneurship is to create wealth in the region,” Germain Böer says. “We want to help lots of startups and ultimately create a lot of very successful companies.” In the Vanderbilt MBA program, a lot of this learning takes place inside the classroom in courses such as Launching the Venture, Business Plan Development, Product Design & Innovation, and Accounting & Finance for Entrepreneurs.

Many Owen students, however, learn just as much if not more about entrepreneurship through the aforementioned internships with NCN and NEC. The school also offers its own Summer Enterprise Development internship program. Instead of taking a typical internship in a corporate environment, students can apply to receive a stipend of $15,000 to work on their own startup ventures during the summer between the first and second years of their studies.

Henry Oehmig, an MBA candidate for 2011, was one of three Owen students to receive a stipend last summer. He entered the process with a business plan for an environmentally friendly charcoal lighter fluid made from recycled restaurant grease. Oehmig had been thinking about building a business around a green lighter fluid product for a couple of years, but the Walmart Better Living Business Plan Challenge provided the impetus to build a true business plan around the idea. The annual competition encourages students to invent sustainable products or develop sustainable business solutions and present them to a panel of Walmart executives, suppliers and environmental organizations. The plan developed by Oehmig, fellow 2011 classmate Ian Prunty and three other Owen students won the regional level of the 2010 competition and made it to the national semifinals at Walmart’s headquarters.

After the competition, the other students peeled off to pursue their own summer plans, but Oehmig felt the lighter fluid idea had potential, so he revised the business plan and prepared to make his pitch to the panel of Owen professors, alumni and local businesspeople, including investment bankers and marketing analysts, who were awarding the summer stipends.

“The application process was a great learning experience,” Oehmig says. “Going through the process of pitching our businesses and trying to convince potential investors gave all the applicants a taste of what it is really like to try to raise money when starting a business. There was a lot of camaraderie among all the students who were pitching business plans, and I really enjoyed hearing the other pitches.”

A couple of days later Oehmig was thrilled to learn that he had been awarded one of the stipends. “If you have a business idea that really excites you, there’s no better situation than to be given $15,000 in seed capital without having to give up any ownership stake in the company,” he says. “As a student, it’s terrific because it really gives you a chance to practice entrepreneurship with a safety net in place. If the business does not work out as you’d hoped, you can still go back to your second year of business school with valuable skills and experience, plus a great story to tell recruiters.”

Of course having that safety net did not mean that Oehmig rested on his laurels. To the contrary, Oehmig dove wholeheartedly into making his business a success. He ended up plowing all of the stipend into the venture and then even supplemented it with his own personal funds. During the course of the summer, his vision for the business evolved. Where Oehmig had originally planned on setting up his own manufacturing facility to create the lighter fluid, his talks with biodiesel marketers and manufacturers convinced him that he could launch his venture more quickly and more cost-effectively by outsourcing manufacturing to third-party manufacturers.

His biggest change in direction, however, came when Germain Böer introduced Oehmig to Nashville-based consultant Rick Neitz, who suggested that Oehmig consider licensing the intellectual property behind the product rather than attempting to produce and market the product on his own. For Oehmig, who had a provisional patent on a green lighter fluid formula, the licensing idea had several attractions: He could launch his product faster with less upfront capital and earn revenue from sales royalties. When Oehmig saw that Clorox, which dominates the lighter fluid market through its Kingsford brand, was soliciting ideas for an eco-friendly lighter fluid, he made the decision to pursue the licensing route.

The bulk of the stipend money went toward hiring a professional chemical development lab that could formulate a biodiesel product that closely matched Clorox’s environmental and performance considerations. Although the product formulation was originally supposed to take only six weeks, it ended up lasting more than four months, teaching Oehmig a valuable lesson that product development can take longer than anticipated.

With the product in hand at the end of November, Oehmig has since been in serious discussions with representatives of Clorox and the senior management of other manufacturers. He recognizes that the success of his company will ultimately hinge on whether he can land a licensing deal. “If it doesn’t work out, I’m definitely interested in working with venture capital or private equity firms on investing in early-stage companies,” says Oehmig, who recently interned with Nashville-based venture firm Mountain Group Capital. “I also think I would really enjoy working for a startup company, but a venture capital job might give me a bit more stability while also providing an avenue to stay plugged into the world of entrepreneurship.”

A Great Place to Be an Entrepreneur

As recently as 2009, Christopher Rand, MBA’04, was working in Vanderbilt’s Office of Technology Transfer and Enterprise Development (OTTED), helping the university create and invest in companies based on its faculty’s intellectual property. Today Rand is a Partner at TriStar Technology Ventures, an early-stage venture capital fund that focuses on health care innovation including biotech, pharmaceuticals, personalized medicine, medical devices, health care information technology, and health care services. Both of Rand’s partners have Vanderbilt connections too: Dr. Harry Jacobson, former Vice Chancellor for Health Affairs, and Brian Laden, former Assistant Director in Vanderbilt’s OTTED.

Like NCN’s Tennessee Angel Fund, TriStar is a recipient of TNInvestco funds. During the past year TriStar has used the proceeds from its sale of TNInvestco tax credits to invest in five health care companies. Four of them were already local and one—VenX—relocated to Nashville from Florida to receive funding from TriStar. (TNInvestco rules mandate that companies receiving TNInvestco funds must have their headquarters and at least 60 percent of their staff based in Tennessee within one year of receiving funding.)

“We have seen a great number of opportunities from companies outside the state that are willing to relocate to Middle Tennessee,” Rand says. “Not just in order to receive our investment, but also to take advantage of the strategic value that our group can bring, particularly the connections of someone as well-known and respected as Dr. Jacobson.”

Alumnus Christopher Rand is a Partner at TriStar Technology Ventures, an early-stage venture capital fund that focuses on health care innovation.

Rand and his partners may no longer work at Vanderbilt, but they are still more than willing to invest in great ideas that come from Vanderbilt researchers. One of TriStar’s other portfolio companies is Pathfinder Therapeutics, a company that has developed a trademarked image-guided device called Explorer to help physicians deliver ablation therapy within soft-tissue organs. The technology behind Pathfinder came from the lab of Robert L. Galloway Jr., Professor of Biomedical Engineering at Vanderbilt. In the company’s early stages, Rand worked with Pathfinder’s current Chief Operating Officer Jim Stefansic, MS’96, PhD’00, who happened to earn his doctorate working in Galloway’s lab.

Rand also represents the close ties between Vanderbilt, Nashville’s venture capital community, and groups like NCN and NEC. While working at the university, Rand joined NCN’s board as a Vanderbilt representative and collaborated with Sid Chambless to get promising Vanderbilt-based entrepreneurial concepts in front of NCN investors. Now Rand looks at NCN’s deal flow more from the perspective of a potential co-investor. In his spare time he also serves on NEC’s finance committee and tries to be a resource for that organization’s members.

Rand would like to encourage more involvement between Owen students and Vanderbilt researchers looking to commercialize their ideas and build business plans. He acknowledges, though, that the students already have plenty of entrepreneurial opportunities— not only through Owen’s efforts to promote entrepreneurship, but also thanks to the exciting business climate that has taken shape in Middle Tennessee in recent years.

Before attending Vanderbilt, Rand worked in Atlanta during the dot-com boom, and that experience has afforded him insight into Nashville’s stature as a business hub. “Atlanta had a pretty entrepreneurial environment back then, but I think Nashville is still a much easier business climate to maneuver in,” Rand says. “It’s smaller, more open and more welcoming. It’s actually pretty easy to get in front of C-level people at almost any company in Nashville. In fact, I believe that the entrepreneurial environment in Nashville now rivals almost any place in the country. With TNInvestco, NEC, NCN, the angel investor community … and other programs at the state level, Nashville and Tennessee overall are simply great places to be an entrepreneur.”

At the Center of Research

The sweep of history represented by the finance faculty is nowhere more dramatically represented than in the Financial Markets Research Center (FMRC). Founded in 1987 to foster research in financial markets, instruments and institutions, it has long promoted interaction among executives, researchers and the Owen faculty, particularly through its renowned annual conference. Hans Stoll, the Anne Marie and Thomas B. Walker Jr. Professor of Finance and Director of the FMRC, calls the center “our window on the real world and our connection to what’s going on and the issues that face policymakers and financial executives.”

Hans Stoll and Tom Ho

Stoll is known for developing put-call parity and for seminal work in market microstructure, which has become a major subfield within finance. He is also credited with providing analysis that demystified the role of futures in the crash of 1987, leading to a more balanced approach to regulation amid calls for drastic measures. The breadth and depth of his work have earned him one of the industry’s most stellar reputations—he has been elected President of both the American Finance Association and the Western Finance Association—and the markets still bear the stamp of his contributions.

Tom Ho, who has worked with Stoll since they co-authored papers at the Wharton School in the late ’70s, serves as the FMRC Research Professor of Finance. Through voluminous research, papers and books, Ho has been key to introducing rigorous mathematical modeling to securities. His work with the Thomas Ho Company, providing analysis and consulting to financial institutions, is an example of the integration between Vanderbilt finance research and the business world. It also demonstrates how the FMRC is bringing together all the elements of financial education, research, practice and policymaking.

Watch Stoll’s video about the FMRC.

Watch Edward DeMarco, Acting Director of the Federal Housing Finance Agency, deliver the keynote address for the 2011 FMRC Conference.

Academic Firepower

Bob Whaley and Jacob Sagi

The huge impact Owen has had on the world of finance grows larger this year with the introduction of NASDAQ OMX Group’s Alpha Indexes. Developed by Bob Whaley, the Valere Blair Potter Professor of Management, and Jacob Sagi, the Vanderbilt Financial Markets Research Center Associate Professor of Finance, the indexes help investors isolate the performance of individual stocks or commodities from broader shifts in exchange-related funds. This will, according to Sagi, “allow investors to understand correlations better and allow for interesting hedging opportunities.”

The idea for the indexes started when alumnus Eric Noll, MBA’90, who serves as NASDAQ OMX Group’s Executive Vice President of Transaction Services, turned to what he calls the “academic firepower” of Whaley and Sagi for help in developing new NASDAQ products. Noll was looking for something of the caliber of the Market Volatility Index (VIX), or “Fear Index,” created by Whaley for the Chicago Board Options Exchange in the early ’90s. The VIX, which quantifies the market’s expectation of short-term volatility, has become a highly influential measure; a futures contract based on it has traded publicly since 2004. Sagi, an expert on asset pricing and decision theory with wide-ranging research and practical interests, has conducted research with Whaley on relative performance indexes.

The NASDAQ OMX Group is offering derivatives of the indexes that will allow investors—primarily institutional at first—to bet on or guard against fluctuations in the worth of securities or funds. The products are designed to help investors hedge against the kind of market swings exemplified by last year’s “flash crash.” The collaboration between Vanderbilt and NASDAQ is, Sagi says, “the kind of thing that demonstrates how you can take research-based knowledge and apply it in a way that helps people and brings value to the market.”

Read more about Whaley and Sagi’s research.

Watch Sagi’s video about the creation of the NASDAQ indexes.

Wellspring of Knowledge

David Parsley, Bill Christie and Nick Bollen

As veterans on the finance faculty, Professors Bill Christie, Nick Bollen and David Parsley represent a wellspring of theoretical and applied knowledge, transmitting real-world experience and academic rigor to the classroom. Their accomplishments are among the school’s most noteworthy.

Christie, the Frances Hampton Currey Professor of Finance, analyzed NASDAQ pricing in the ’90s and found that market makers were implicitly colluding to maintain artificially high trading profits at the expense of investors. His research led to sweeping reform of the NASDAQ market, the introduction of the SEC Order Handling Rules and a billion-dollar settlement. Christie also served as Dean of the Owen School from 2000 to 2004.

Bollen, the E. Bronson Ingram Professor in Finance, authored a cutting-edge 2008 study of hedge fund liquidity that quantified the risks to investors facing the restriction or suspension of withdrawals from hedge funds during market turmoil. The subsequent financial crisis bore out his conclusions, as many funds closed and others were revealed to be fraudulent. His most recent research focuses on predicting which funds are at a higher risk of fraud by examining their statistical footprints for peculiarities best explained by misreporting.

Parsley, the E. Bronson Ingram Professor in Economics and Finance, has shown through his research into political connections and lobbying that the portfolios of firms with higher lobbying intensities and expenses outperform those of firms without such connections. He also has discovered that politically connected firms appear to be less sensitive to market pressures to increase the quality of financial information given to minority shareholders. His current work includes seeking explanations for the globally declining impact of exchange rates on prices.

Watch Christie’s video about the real-world consequences of research.

Watch Bollen’s video about the study of hedge funds.

Watch Parsley’s video about the world economy.

Emerging Ideas

Miguel Palacios and Alexei Ovtchinnikov

The Owen finance faculty’s reputation continues to grow thanks to newer members like Alexei Ovtchinnikov and Miguel Palacios, both Assistant Professors of Finance. Ovtchinnikov has done widely cited work on corporate political contributions, showing in a large-scale study published in The Journal of Finance that there is a positive and significant relationship between such donations and both stock returns and return on equity. His follow-up study examined the nature and effectiveness of individual contributions, particularly to politicians with oversight of industries having economic impact on contributors. Ovtchinnikov is now looking at the flip side of the coin, studying the way government policy affects corporate decision-making.

Palacios’ work on human capital, its quantification and its effect on other assets’ prices, is decidedly and excitingly off the beaten path. One question he raises is what effect the retirement of baby boomers, who will no longer have future earnings as an asset, will have on the value of stocks. Another is the possibility of a financial instrument tied to future earnings, and whether such an instrument “might make people willing to take more risks in stocks and other investments, changing their price and return,” he says. He and a business partner have explored the practical aspects of his questions for the last nine years, founding a company called Lumni Inc., which pays for the education of young adults—many who could not afford college otherwise—in exchange for a small stake in their future earnings. His book Investing in Human Capital: A Capital Markets Approach to Student Funding was published by Cambridge University Press in 2007.

Read more about Ovtchinnikov’s research.

Read more about Palacios’ research.

Watch Ovtchinnikov’s video about political donations.

Watch Palacios’ video about the value of human capital.

Steering a New Course

Kate Barraclough

Australian-born Kate Barraclough jumped at the chance to take a more active role in oversight of the school’s Master of Finance (MSF) program. As its Director, she says, “I see myself as taking an already excellent product and raising its profile by engaging and coordinating its stakeholders—faculty, alumni, employers and current and future students. My aim is to build a great program, recognized as one of the best in the country.”

Her background is yet another example of the way in which research, teaching and real-world experience come together within the Owen faculty. A former manager at KPMG Canberra and financial consultant to the Australian government, she has research interests that include asset pricing, derivatives and bond markets. Under her guidance, MSF has introduced a new course on financial modeling (which she teaches), formed a board of advisers made up of distinguished alumni and friends of the school, and created an internship program for the MS Finance Class of 2012. The latter was an initiative proposed by alumnus Bruce Heyman, BA’79, MBA’80, who is Managing Director and Partner at Goldman Sachs in Chicago and a member of Owen’s Board of Visitors.

Barraclough is working to encourage cohesion within the MSF group with a number of MSF-only classes. “A key part of my role is mentoring our students, encouraging and supporting them while they are at Owen,” she says. “Seeing them grow through their experiences at Owen is extremely rewarding for me.”

Wall Street Presence

Sean Rogers, BA’87, MBA’95

It would be difficult to overstate the Vanderbilt presence in the world of business and finance. Thousands of graduates carry the lessons learned here into boardrooms, exchanges and regulatory offices worldwide. One notable example is Sean Rogers, BA’87, MBA’95, a key figure in one of the two largest financial institutions on Wall Street.

Rogers serves as Managing Director at Bank of America, overseeing communications technology. He works closely with senior management at companies like Nokia, Ericsson and Motorola, advising them on an array of financial matters, including capital formation and structure, corporate finance, mergers and acquisitions, joint ventures and IPOs. It is a job that requires wide-ranging knowledge applied to complex but specific situations in real time, and he cites his increasing appreciation of the “softer skills” he learned at Owen.

“It’s learning how to study,” he says, “how to work in teams, how to communicate with your counterparts. As you become more senior in investment banking, what makes someone good or bad comes down to qualitative skills. You’re more concerned with building relationships, with understanding issues. You become results-oriented.”

More and more, those relationships transcend borders and backgrounds. “That’s why both the student mix and the interdisciplinary possibilities at Owen, like those with the Vanderbilt University Medical Center, are so valuable,” he says. He also cites the class size and the close relationships he was able to develop with both students and professors. He has long since been returning the favor, bringing his business expertise to Owen as a member of its Board of Visitors—something that is particularly important in that Bank of America has become the single biggest recruiter of Owen grads.

Tools of the Trade

Vikas Dwivedi, MBA ’00

Vikas Dwivedi, MBA’00, says his career has become “all energy, all the time.” After stints at Shell Oil, Enron, Prudential Equity Group and Morgan Stanley, and a rating as No. 1 stock picker in electric utilities in 2004, he is bringing his experience in energy and commodity trading, private equity, project development, operations and engineering to bear on his own firms. He is a Principal at BTU Capital Management, a Houston-based hedge fund focused squarely on energy, and Quantum Energy Partners, a $5 billion private equity firm.

“It’s focused on natural gas,” he says of BTU, “and our trades will allocate capital directly into futures and options on the commodity itself.” He came to Owen as an engineer and an energy trader, but says, “I didn’t have any real sense for the broader capital markets and the bigger world. Seeing how those markets work and how they impact each other and impact energy was very helpful. It gave me a much bigger perspective on how stuff is really put together. And not having a financial background, it was a really good rounding experience to learn accounting and a little more on corporate valuation.”

In addressing students and recent graduates, he encourages creativity and daring. “Never assume everything’s been solved,” he says. “There are always other markets and other problems if you can help solve or even identify them. I’d also recommend a bit of irreverence for the way markets work. They’re not perfect. See if you can insert yourself into something that’s not quite right, which is always an opportunity.”

Professor Gary Scudder, who was diagnosed with aggressive stage IV mantle cell non-Hodgkin’s lymphoma in August 2009, has been cancer-free for more than a year.

This article and the accompanying sidebars discuss cancer from the perspective of two patients—Professor Gary Scudder and alumnus Michael Oyler—and a caregiver, student Sarah Burfitt. All three express gratitude for the help and encouragement they have received from Owen’s close-knit community, and they hope their stories provide solace for others facing similar journeys.

Imagine going to see your dermatologist and leaving her office knowing you have several swollen lymph nodes. That is exactly what happened to me in early August 2009. I was told “run, don’t walk” to my primary care physician, which I did—the dermatologist’s office even called to make sure I had followed their directions. My physician quickly ordered a CT scan, and it verified that my numerous swollen lymph nodes were likely a sign of some form of lymphoma. It actually took 20 more days until we had the final diagnosis: aggressive stage IV mantle cell non-Hodgkin’s lymphoma.

When any cancer is diagnosed, the words “stage IV” and “aggressive” are not what you want to hear and serve to raise anxiety levels to new highs. Immediately my mind jumped to scary questions like “How long do I have to live?,” “Is this kind of cancer curable?,” and so on. These questions and fears became an everyday part of my life for the next nine months.

At the beginning of September, my wife, Marti, and I met with our hematologist/oncologist at Vanderbilt University Medical Center for the first time. He spent almost two hours explaining my particular disease and his treatment plan: six 21-day cycles of intense chemotherapy. In addition, at the end of these six treatments, I would be having a stem cell transplant, which would renew my immune system with cancer-free stem cells. My chemo regime showed great promise in clinical trials—which, incidentally, weren’t completed at the National Institutes for Health until last month.

During my first month of treatment, it was necessary to identify possible stem cell donors. If I was in total remission, I would be able to use my own stem cells, but if not, a matched donor would be necessary. Transplant recipients have a fatality rate of 15 percent or more, so this was a very anxious time for us. Both of my sisters were tested to see if either was a match and could be a donor. We were overjoyed when the call came that my younger sister was a perfect match! This was the first really encouraging piece of news on our journey.

Scudder with wife, Marti, at home

Thankfully I was spared the extensive side effects of chemo during my treatments. I believe one of the major reasons why was prayer. Yes, I had to deal with low blood counts, increased risk of infection, fatigue and other issues. I also ended up in the hospital twice during my stem cell transplant, going in both times late at night for high fevers. But overall I had little nausea, and my symptoms were not as bad as they could have been.

My first post-chemo scans were not until Nov. 23, or 11 weeks after the start of my treatment. We teach Owen students in our operations courses about managing waiting times and reducing anxiety, but I must admit it was very difficult to wait a week for the results. I felt like I had started a class, so to speak, when I was diagnosed back in August and there had been no feedback on my progress until those tests. It was as if all the weight was on the final exam.

On Nov. 30 we received news that most of my scans were clear, but there was one final result needed before I could be declared “squeaky clean.” My nurse practitioner had told me not to expect anything until the next day, but during her drive home she received the great news that my final scan was clean and called me from her car.

Having determined that I was in total remission, we proceeded with the stem cell collection and transplant. I was thankful that I was able to use my own cells and not those of my sister. The transplant occurred in March after two more rounds of chemo and a final, more intense round to kill my existing immune system. This last one was the hardest to tolerate, but we knew it was necessary for my future health.

As I write this, I have been in remission for more than a year, but doctors do not use the term “cured” for this disease. I am instead “cancer-free” and taking little medicine—a miraculous outcome given where I started in August 2009. I finally came back to Owen full time at the start of the 2010–11 school year, after missing an entire year for my treatments.

Every type of cancer is treated with its own protocol, but the journey for every patient and caregiver has similar highs, and especially lows. The hardest part for me was waiting for and receiving the initial diagnosis. Another low came when the doctor told me about the treatment. I had gone into the meeting with expectations of spending one day every three or four weeks receiving chemo (very typical for lymphoma patients), not four days in the hospital every three weeks. It also took a major change of mindset to adjust to the length of the treatment. There is no such thing as instant gratification when you get chemo—you can’t pay for a next-day cure!

How did I cope throughout the process? It took a lot of support of family, friends, our church, colleagues and the medical community. In particular, my wife and I relied on our Christian faith and took solace in the stories of the many folks who had taken this journey before us.

We want to thank everyone for the outpouring of love we have received. Many of you visited me while I was in the hospital, sent notes through CaringBridge, mailed cards, gave me rides to my semiweekly appointments, and brought us wonderful meals. We were well cared for by the Owen community, including current and past students, faculty and staff. Alums visited from as far away as California and Montana. Another alum sent me a hat to cover my bald head. (Speaking of bald heads, it has been interesting to observe how many men starting chemo are really concerned about losing their hair!)

In addition, I would be remiss not to express our overwhelming gratitude to the Vanderbilt nursing staff on 11 North, and my nurses and doctors in the hematology and stem cell transplant clinic. My care was exceptional!

Finally a special thanks is due to Dean Jim Bradford for his continuous support during this trying season of our lives. He kept me updated on major initiatives during the year, so when I returned to the faculty full time in June 2010, I was still knowledgeable about various aspects of the school.

A fellow mantle cell “journeyer” once wrote to me about blind turns in the cancer treatment process—we know the turns are coming but have no foreknowledge of what is around the corner. Hebrews 11:1 says, “Now faith is being sure of what we hope for and certain of what we do not see.” The first set of scans, the results of the stem cell donor testing, my semiweekly blood tests, my reactions to my treatments—many areas of our journey were filled with these blind turns. We received favorable news at each turn, but that is not guaranteed.

Trials like this change one’s perspectives on what is important in life. People become more important, daily tasks much less so. Trials are used to strengthen us for future trials and enable us to assist others who are suffering. My wife and I are already reaching out to several others making this journey (including Michael and Sarah, who wrote the accompanying sidebars). Please continue to keep us in your thoughts and prayers in the coming months as we pray for a durable remission—one that lasts five, 10 or even 20 years!

Gary Scudder is the Justin Potter Professor of Operations Management and the Faculty Director of International Programs.

It is a telling indictment of the daunting complexity of health care billing that Parks, despite 17 years in the industry, felt as overwhelmed by the paperwork as did his mother. It was she who put the situation into words.

“She looked at me with tears in her eyes and said, ‘Honey, I want to know who I owe, what I owe, and if it’s fair,’” he says. “To hear someone who was in chemotherapy and heading toward hospice say that as she wrote out a check for $20,000—well, that was the moment I knew I had to do something.”

Billing represents one small corner of an American health care system known for flaws that seem inextricably bound to its undeniable strengths. In technology and drug development, quality of hospitals and physicians, availability and speed of delivery, it is the world’s gold standard. But it is staggeringly expensive, needlessly redundant, and too often out of reach for tens of millions who have little or no coverage.

For Parks, his mother’s plea was the starting point for a new business venture that has slowly and sometimes painfully refined its mission to bring light to the billing process for employers and employees.

For the rest of the health care world—often-competing constituencies including physicians, hospitals, insurers, pharmaceutical companies, device manufacturers and the investment community—the future is a complex and uncertain foray into a new health care universe. All of them must sort through the thousand pages of legislation, the politically charged implementation process and the legal wrangling that are all part of the Patient Protection and Affordable Care Act, the 2010 bill that will no doubt change American health care forever.

Parks

Parks admits that his journey, begun well before Congress took up the trillion-dollar health care bill, involved any number of blind alleys. “We spent two years getting it totally wrong,” he says. “We started off trying to give everyone tons of data points, information about cost, quality, utilization, what other people thought, and so on, and we created this wealth of broad decision-making information. The feedback we got from both users and employees was, ‘Oh, my gosh. That’s too much. I just need one thing answered.’”

The process was also hampered by the fact that large insurers and the government were simply loathe to share information. Ultimately the company he formed, change:healthcare, evolved to offer self-insured companies and their employees easily understood information on medical provider cost, quality, access and performance to help them make educated decisions.

Parks, the company’s President and CEO, sees the approach as vital in the face of legislation that greatly increases the pool of covered individuals, making their decisions an important part of any hope for fiscal responsibility. “With the increase in access to coverage, there will be increased demand and desire for both information and transparency, for more insight both to control cost and make choices,” he says.
A key element is the point at which potential savings prompt behavior change, and for that Parks turned to two friends at Vanderbilt Owen Graduate School of Management.

“Luke Froeb and Larry Van Horn surfaced as two really bright, insightful guys who know how to look at problems from different angles and who could help us evolve what we’re developing,” Parks says. Froeb, the William C. and Margaret W. Oehmig Associate Professor in Entrepreneurship and Free Enterprise, and Van Horn, Associate Professor of Management, have been studying pricing and behavior. They welcome the increased pool of information for examining a pivotal portion of the health care equation.

“My simple problem with the health care legislation is that it wasn’t focused on cost,” Van Horn says, “and we will have to address cost next year, the year after and every year going forward. The reality is people will have to pay more and make difficult decisions as part of a long-range solution.”

The change:healthcare approach, Van Horn adds, involves “trying to figure out the simplest, most concise way of solving the consumer’s problem by massaging the data behind the scenes and doing analysis. They’re trying to simplify the patients’ process, walking them through a thought process that is meaningful and important to them.”

That patient is the hub about which all else in the legislation and in the health care world revolves, and every constituency faces dramatic changes. The one with the most to gain, at least in the short term, is hospitals.
“We provide a fair amount of underfunded and unfunded care,” says Larry Goldberg, CEO of Vanderbilt University Hospital and an at-large board member of the Tennessee Hospital Association (THA). “The idea that there will be more coverage—with 32 or 36 million more Americans now having insurance—is very appealing.”

Larry Van Horn (left) and Luke Froeb are collaborating on a study examining how much the price of health care has to vary before consumers will change their purchasing behavior.

He and others are very aware, however, that those gains may well be short-term. “Obviously payment reductions and questions about how all this is going to be financed concern us a great deal,” he adds.

Members of the Hospital Alliance of Tennessee, an organization of the state’s nonprofit hospitals, are hoping the rollout of health care reform draws on the lessons of the TennCare program, which saw the state tackle managed care beginning in 1994.

“If you know the history of TennCare,” says Paige Kisber, the Alliance’s President and CEO (Goldberg is its Board Chair), “you know that it was the right idea in terms of attempting to bring insurance coverage to more people, but that it just didn’t quite work the way the state hoped. My understanding is that as this federal legislation was being crafted, they looked at what has happened in Tennessee and what is happening in Massachusetts.”

Early hopes for TennCare faded amid reports of fraud and sloppy management. Costs soared, and a 2003 study declared the program was not financially viable. TennCare has since considerably scaled back enrollees and coverage. For the state’s hospitals, even the best of times were problematic.

“With TennCare we saw more people insured, but it did not take away under-reimbursements, and charity care did not go away,” Kisber says. “The state had the best intentions, but there are so many other economic pressures. Given education, prisons and many other programs, you have to prioritize, and you cannot deliver all services to all people.”

That makes it especially important, according to Kisber, that the state’s health care history remain part of the equation. “As the federal government writes these regulations, they will seek public input, and we feel like that will give us the opportunity to bring our experience and expertise to bear on things like eligibility criteria,” she says. “That input will be vital at a time when there will be increasing pressure on nonprofits, and Congress and state legislatures will be looking to cut every penny they can.”

Kisber

The economic environment for health care reform is clearly rocky for the federal government, which is adding trillions to a deficit many fear it can never repay. Add that to the fact that half a trillion dollars’ worth of planned Medicare cuts are part of the new federal approach, and investors have at least one clear starting point.

“I would be extremely careful about investing in any health care services sector or company that has significant Medicare exposure,” says Debbie Guthrie, MBA’79, Founder and CEO of Capitol Health Management Corp. in New York City. “It’s my view that Medicare reimbursement will continue to be reduced substantially over time—the economics simply do not work.”

The industry, she explains, has underlying structural problems that must be addressed.

“We should provide access to basic health care for every citizen,” she says, “and ultimately we may already have the ingredients to do that, but our delivery system has structural problems, with fragmented points of entry and reimbursement, which makes it impossible to know which Americans are getting excluded from the system and why.”

While she does support “comprehensive universal access and incremental insurance reform,” this legislation is, she says, “a mess,” adding that jealous guarding of turf by many other constituencies will make implementation, let alone cost savings, that much more difficult.

Guthrie is, not surprisingly, supportive of free market solutions in dealing with many of these problems. “I am very much a capitalist,” she says. “I believe the private sector will continue to take the lead, driving efficiency through innovation, which the government is incapable of doing. But nobody is taking a step back to understand and evaluate where the incentives should be aligned and which participants are truly delivering cost-effective health care. Everyone is protecting their turf just as everyone was looking for special deals. I don’t think anyone understands the full implications and the unintended consequences as the reform moves into the implementation phase.”

Guthrie is particularly troubled by the fact that the legislation “penalizes rather than supports specialists, which is counterproductive. If you have a cold and just need an antibiotic, you don’t really care, but if you have cancer or need heart surgery, you want to make sure you have the best physician you can get. Of course we want these specialists to keep working and have the financial incentives to do so. What’s happening now is that many of the top doctors are looking at the challenges on the horizon and are refusing to treat Medicare patients and are accelerating their retirement plans.”

Guthrie gets no argument from Dr. B. W. Ruffner, a Chattanooga oncologist who is President of the Tennessee Medical Association (TMA). “Certainly we wouldn’t come up with a public policy saying, ‘Pull out of Medicare,’ but there’s no question that some physicians are doing just that,” he says. “Concierge medicine is one option. Another is limiting your practice to commercial insurance, and yet another is retiring, and I’ve heard all three discussed.”

Ruffner

Ruffner cites the cuts scheduled for Medicare, which is “not self-sustaining as it is,” but says commercial insurance may have its own long-term pitfalls.

“A lot of these processes will start with Medicare, but the commercial side will quickly follow suit,” he says. “I think it already occurs when I’m negotiating contracts with Blue Cross. A lot of the metrics for those negotiations are based on Medicare, and that trend is going to take a quantum leap forward with the new exchanges, which will tend to have rules that come from Washington about what they can include and not include. Those physicians who say, ‘I’m just going to take commercial insurance and not Medicare,’ are going to find the two are converging.”

Ruffner says physicians are also wary of the legislation’s provisions for an Independent Payment Advisory Board (IPAB) appointed by the president. “Physicians are concerned that the group will be arbitrary in its efforts to control costs and that the health care industry—and this is as true of hospitals and device makers as physicians—will be affected negatively in due course,” he says.

Should IPAB feel costs are out of hand, it could arbitrarily institute cuts, which could only be overridden by a majority in the House and a 60 percent vote in the Senate. Those votes would have to be accompanied by equivalent Congressional cost-cutting.

Decisions on care, Ruffner maintains, need to remain with those who have expertise.

“There’s no question in my mind,” he says, “that the best person to make those decisions about what’s appropriate and what’s not is a physician, but if the physicians don’t get together and work together, Uncle Sam will make that decision, and that’s what we’re seeing right now.”

If there is a positive, at least in the short term, it is directed toward one segment of physicians.

“The thing I agree with 100 percent is putting some incentives into primary care,” Ruffner says. “In Medicare, primary care payments are going to go up significantly. In Medicaid, one of the requirements is that regular office visits for Medicaid payments will be paid at the same level as Medicare. Apparently Congress recognizes the deterioration of primary care. There’s no question that if you’ve got a belly pain, costs to the health care system are a lot less if you start with a primary care doctor who knows you as opposed to going to the emergency room at 10 p.m. Building up the primary care infrastructure is a significant step in the right direction.”

Once that bottom-line relationship is nurtured, change:healthcare’s Parks hopes to contribute to an effort to tackle the problems of paying for care typified by his mother’s experience.

“What we do doesn’t fix the system, but at least it turns on a flashlight in a dark kitchen,” he says. “At least people will be able to see the table and that broken glass over there. It’s something to help you get your bearings. There are tons and tons of data out there. There are websites and booklets and pamphlets being generated all the time, but people are wondering, ‘How do I turn that into something relevant and easy to understand for one person?’ That’s the issue du jour.”

The Owen School’s Van Horn agrees that one part of the solution is going to come from the place where policy understands and intersects with personal choice. “I think that this is one small piece of generating insight into how individuals, when faced with different prices, will change their health care consumption decisions,” he says, “and that is the future of health care.

“We can’t afford to do what we’re doing now, and the reality is we’re all going to start paying more and have to make decisions based on how much things cost. From a policy perspective, understanding how consumers make those trade-offs and decisions is important.”

Any expansion of such ideas into savings across the industry will require more cooperation among parties sometimes known for their insularity. Ruffner describes one attempt:

“I would say the THA and the TMA are working very hard to cooperate with each other and to try to have a constructive dialogue about how to move forward with these things,” he says.

“It certainly doesn’t mean we agree on everything, but we recognize the importance of working together. We’re just two of several constituencies. There are the insurance companies, there’s big pharma, then there are the device makers, and each one of these is a very powerful group with a lot to lose.”

For investors, companies in any segment of the industry are going to have to prove themselves. “The companies that are going to succeed,” says Capitol’s Guthrie, “are those that have the ability to bring efficiency to the health care system, to deliver quality and free up enough money for solid patient care.”

This may be easier said than done for most, but as America’s health care system has proven time and again, those with ingenuity and determination are capable of rising to the occasion. Physicians, hospitals, pharmaceutical companies and others in the medical community have worked together before to solve some of the most challenging problems known the world over. The question now, though, is whether or not they can do the same for the very system they are a part of.

Inspiration comes in many forms and often from unexpected sources. As business leaders we plan, budget and dream, yet we often don’t find the needed spark in the incremental day-to-day events of life. As Seth points out in his editor’s memo, sometimes it takes a calamity like the flood that devastated Nashville in early May to make us see things differently. Crisis can often be the driver of change, and in such change we frequently find inspiration.

In the early days of my management career, a mentor of mine named R.D. Hubbard offered this advice: “Never waste a crisis.” What he meant was that a crisis can inspire us to go in new directions and to think of the world in what Charles Handy in The Age of Unreason calls an “upside-down way.”

In many regards we’re witnessing today the discontinuous change that Handy predicted. It is a time of irrational markets, deflation, unsettling yield curves, overpriced tech deals and talk of the Hindenburg Omen. Yet amid all of this uncertainty, there is opportunity.

At a recent gathering for an advisory group composed of faculty, Alumni Board members, Board of Visitors members, staff and friends, I found inspiration in their longer vision for how to propel the school forward. They suggested that we in the Owen community should “think longer, think bigger, think of the tipping point.” In the coming months I hope you will seek similar inspiration in a plan for the future—to act, to engage and to make a difference for Owen.

Respectfully yours,

James W. Bradford
Dean, Vanderbilt Owen Graduate School of Management
Ralph Owen Professor of Management

Dr. Bill Bates, President and CEO, digiChart

Jack Bovender Jr., Chairman, HCA

Ron Calhoun, President, The Remi Group

Rep. Jim Cooper, 5th District, U.S. House of Representatives

Richard Cowart, Partner, Baker, Donelson, Bearman, Caldwell & Berkowitz

Deke Ellwanger, Former President, HealthSpring

Catherine Gemmato-Smith, Managing Director, Jefferies & Co.

Roberta Goodman, Health Care Analyst, Health Care Analytics

Joel Gordon, Chairman, The Gordon Group

Jay Grinney, President and CEO, HealthSouth

Dr. Lawrence Hanrahan, Global Lead, Health Facility Development, Accenture

Kathy Harris, MBA’85, Partner, Noro-Moseley Partners

Douglas Hudson, MBA’94, Chairman and CEO, Simplex Healthcare

Joey Jacobs, Chairman, President and CEO, Psychiatric Solutions

Dr. Harry Jacobson, Vice Chancellor for Health Affairs, Emeritus, Vanderbilt University Medical Center

A.J. Kazimi, MBA’84, Founder and CEO, Cumberland Pharmaceuticals

Paul Keckley, Executive Director, Deloitte Center for Health Solutions

Ben Leedle, President and CEO, Healthways

Holly Meidl, Managing Director, Marsh USA

Ken Melkus, Consultant, Welsh, Carson, Anderson & Stowe

Rock Morphis, Managing Director, Heritage Group

Dr. Wright Pinson, MD’80, Deputy Vice Chancellor for Health Affairs, Vanderbilt University Medical Center

Linda Rebrovick, CEO, Consensus Point

Thomas Sherrard, Partner, Sherrard & Roe

Brian Shipp, CEO, Southeastern Region, Amerigroup

Michael Shmerling, Managing Partner, XMi High Growth Development Fund

Tom Singleton, BA’70, President and CEO, FTI Cambio

Wayne Smith, Chairman and CEO, Community Health Systems

Dr. Mitch Steiner, BA’82, Vice Chairman and CEO, GTx

Chris Sullivan, National Director, U.S. Healthcare Provider Solutions, Microsoft Corp.

Jack Tyrrell, Managing Partner, Richland Ventures

David Vandewater, President and CEO, Ardent Health Services

Caroline Young, President, Nashville Health Care Council ]]> http://www.vanderbilt.edu/magazines/vanderbilt-business/2010/11/advisory-board-members/feed/ 0 http://www.vanderbilt.edu/magazines/vanderbilt-business/2010/11/military-discipline/ http://www.vanderbilt.edu/magazines/vanderbilt-business/2010/11/military-discipline/#comments Tue, 09 Nov 2010 17:56:41 +0000 webcomm http://www.vanderbilt.edu/magazines/vanderbilt-business/?p=2070 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.

Kyle Clay helped clear IEDs in Iraq while serving in the U.S. Army.

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.”

Henry Guy served on a destroyer in the U.S. Navy.

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.

Lindsey White oversaw airfield operations at bases across the U.S. while in the Air Force.

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.

Ray Sumner, pictured here in Iraq, served two stints in the U.S. Marines.

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.”

I was born and raised in a small town in rural Connecticut. I hadn’t seen much of the world by the time I got to college but found that I had a facility for languages and actually became a modern languages major at Colgate. Like so many liberal arts graduates, I had absolutely no idea what I wanted to do in life. I knew I wanted to work internationally because I had that wanderlust that so many 22-year-olds have, but I had no idea if I would channel that interest into the business world or into the public sector. The perfect way for me to find that out, albeit an expensive way, was to get myself into a nonterminal degree at the graduate level, and Vanderbilt had a wonderful—and still does—master’s program in Latin American studies.

International opportunities have played a big role in your career. Where have you lived and worked, and what have you learned from those experiences?

My family and I lived in Guatemala, Ecuador, Panama and Venezuela, and later in Hong Kong for three years. In Hong Kong I grew to have a tremendous appreciation for what you and I would call consensus management. The Asian way of attacking a problem is so much different from the way we do it in the West. In Latin America what I took away was an appreciation for a more emotional approach to business. In some ways it is the antithesis of what I found in Asia. I remember that my boss at Pillsbury told me, “You’ve spent enough time in Latin America. I’m going to send you someplace where you’re going to have to do things totally differently.” He was right. The two things I grew to appreciate are different approaches to solving the same problem. Also another key difference I noticed was the pace at which business and social life are done. In Latin America the pace is deliberate and methodical—often with detours. However, in Hong Kong, the pace my wife, five children and I experienced was breakneck. People had to prod me along because everything happened so fast. I’m glad, though, that I spent time in both parts of the world, as different as they are.

You mentioned your wife and children. What did they think about moving around to all of those places?

My long-suffering wife of 38 years has been through 15 moves. She is the real champion. The five children—four boys and a girl—are appreciating what they experienced more and more as they age. I just recently had a conversation about this with my eldest, who is 34. It was a very different conversation from the ones I had with my kids when they were teenagers being uprooted from one country to another. In fact, one of my kids is now involved in international work.

Speaking of change, you’re in the middle of making a big transition from the corporate world to academia. Where did you work before Owen?

Before this, I started a general management consulting practice in 2003 with four friends. I had always looked upon owning my own business as something to do in the “presunset” years. It was a wonderful experience. And before that I was in the consumer packaged goods industry at companies like Gillette, Revlon, Pillsbury and more recently Bausch & Lomb in Rochester, N.Y., where we just moved from.

How did you become interested in career management?

I’m very fortunate to have been involved in a pro-bono capacity with career services at Colgate. When I was on the alumni board there, I headed the career services committee and found that I really enjoyed it. In fact, I spent three or four years after my term was up volunteering one day every month in the career services office. That’s how I got a taste for it.

Did you envision yourself doing this for a living at the time?

Yes, my wife and I decided in 2004 over the dinner table that my last career move would be getting involved in a top-tier MBA program in a career management position. And here I am. This didn’t happen by chance. I’m just fortunate enough that Vanderbilt came to me.

What was so appealing about this particular opportunity at Owen?

Being part of a team that is absolutely committed to achieving top-tier status. In my conversations with Jim Bradford, I found that we are kindred spirits in that Jim is determined to make Owen a top 20 program. I love that challenge. I think we have all the tools in place. I did a great deal of research into where the school’s been and where it wants to go, and I wanted to be part of that.

What are some of the challenges facing the Career Management Center this academic year?

A very difficult economic environment has to be at the top of the list. It’s a challenging market for MBAs right now. Also things are changing very rapidly after a long period of relatively stable best practices. When I graduated from Wharton with an MBA degree in 1973, they were using essentially the same practices in career management that had been used 20 or 30 years before. Today, though, employers have the luxury of doing what we call “just-in-time” hiring, which means our students sometimes sit on the edge of their seats until May or June. Supply and demand factors allow employers to do that. It’s no longer so common for companies to come to campus—for the man to go to the mountain, so to speak. Of course, we have very loyal employers who come here, but that number goes down every year. And that’s not just at Owen; that’s at all of our peer schools. We have to use technology and be creative in getting the mountain to the man and putting our great students in front of these companies in different settings.

Would you say that’s the most important part—getting one’s foot in the door and being face-to-face with employers?

Absolutely. And the key to that is our alumni. I can’t stress that enough. One of the things that attracted me to Owen is the loyalty of the alumni and the great success of those individuals. We’re not that old as a school, relatively speaking, and we don’t have as many alumni as some of the schools we’re competing with. It’s a tremendous differentiator when we can point to alumni who are very active in helping our students showcase their talents in person.

If there’s one message you could convey to Owen alumni, what would it be?

Connectivity is the word of the day. To me, it’s a reality at Owen. I’ll give you a concrete example. In last year’s class, all the members of the student government association sent me a welcoming email and offered to do anything they could to help. Whether they had started their jobs or not, they said, “I’m here for you. Please let me be part of this connectivity.” That’s very gratifying. Words like collegiality and collaboration take on special meaning here. This place is different, and that’s coming from someone who has been around a bit.

Claire Brown

Some of the grandmothers—only in their 50s, but aged by the hardships of living in one of the world’s poorest places—liked the porridge so much that they started dancing, hopping on one foot and then the other, grinning toothless smiles and kicking dust onto their colorful skirts. It was mid-morning in rural Alto Molocue in the Zambezia province of Mozambique, and villagers were sampling several new flour mixes, each made of different combinations of ground corn, cashew, soy, moringa and cassava.

The gathering was the joint effort of New Path Nutrition, the nonprofit that Joe Boulier, MBA’10, and I had co-founded; World Vision Mozambique, a humanitarian organization dedicated to helping children; and CETA Industries, a Mozambican company that exports cashews and builds local infrastructure projects. Our successful taste test represented an important step in developing a nutrient-dense flour—farinha forca in Portuguese, the country’s official language—to provide rural Mozambicans with an alternative to traditional maize flour. We all shared the goal of improving the health and nutritional profile of people in the region.

Joe had recently graduated from Owen, sold his possessions, liquidated his 401(k) and moved to Mozambique to develop New Path’s concept for a more sustainable model for food intervention. I was there on a visit accompanied by Clinical Professor of Management Jim Schorr. Together Jim and I snapped pictures and entertained the kids who crowded around while the villagers answered questions about the flours they were testing: Did they like the taste? The color? Which of the five blends, including a control of pure maize flour, did they like the most and why? As the day wore on, we compiled our surveys and notes while the villagers sang and danced and the children scraped the remaining porridge out of the bowls.

Joe and I both had been interested in sub-Saharan Africa prior to graduate school. He had spent several years working with Catholic Relief Services as an auditor on Title II food distribution and AIDS relief projects funded by the U.S. President’s Emergency Plan for AIDS Relief program. I had lived and worked in Tanzania as a researcher for Africa Bridge, a microfinance organization. At Vanderbilt Joe and I became friends and found common ideological ground through Project Pyramid, the Owen-based interdisciplinary initiative focused on applying business models to address sustainable development and poverty alleviation.

We had many conversations and even a few heated arguments about the right ways and wrong ways to approach international development. While we did not always agree, we shared a fundamental desire to see foreign aid interventions accomplished sustainably, driven by local market demands, resources and preferences. The concept of “social enterprise,” using business models and market-based approaches to address social and environmental issues, became especially compelling for us both.

Cashews waiting to be processed

In October 2009 Joe and I received the William N. Pearson Scholarship Award from the Vanderbilt Institute for Global Health (VIGH). The funding allowed us to develop our plans to pursue international development in an innovative way. Fortunately for us, World Vision, which had been working on development issues in Mozambique since the end of the country’s civil war in 1992, contacted the VIGH seeking support on a public-private venture. CETA Industries was offering factory space, local managerial expertise and equipment—enough to run a small-scale flour production facility—to support their workers’ wider rural community.

White maize flour, notoriously nutrient-poor, is an inexpensive and filling food source. In much of sub-Saharan Africa, including Zambezia, it is a staple food, often consumed with every meal. Knowing this, we initially explored the idea of producing nutritionally fortified maize flour for distribution to hospitals and people living with HIV and AIDS. Eventually our idea expanded to include not only these niche areas but also the broader population of Mozambique, specifically there in Zambezia.

Rather than immediately making and distributing food-as-medicine for the poorest of the poor, we convinced the parties involved to try producing instead a maize-cashew flour mix with a taste, color and consistency comparable to traditional maize flour. Our plan would be to employ local labor, use local inputs and sell to a local market at a price equal to that of existing maize flour alternatives, while maintaining a financially viable factory operation. The new mix, we hoped, would be a substitute product that aligned with existing cooking habits and unlocked latent regional demand for healthy flour alternatives. In all, we considered it a promising opportunity to improve nutrition more sustainably in the region.

Village children lining up to taste the porridge

During the spring Joe and I refined our idea in Jim Schorr’s Social Enterprise and Entrepreneurship course. After it ended, we invited Jim to stay on as an advisor to New Path Nutrition and to accompany us on a trip to Mozambique. A visit to the area was essential if we were to determine how receptive consumers would be to a new product, test the validity of our many assumptions and projections, and begin establishing our venture.

We flew to Maputo, Mozambique’s capital city, and spent several days conducting meetings with VIGH staff, NGO (nongovernmental organization) partners and local business leaders. Further into the trip, in Quelimane and Alto Molocue, we visited the CETA cashew processing plant and the proposed factory space, met with members of the local farmer’s federation, and conducted taste tests with local villagers. Jim and I then returned to the United States, while Joe stayed on to continue working in the area.

Our taste tests demonstrated a strong preference for a particular blend of the fortified flour, outperforming even the traditional, widely consumed maize variety. Joe and I, however, knew from our days at Owen that we would have to address many other business issues if we were to make this new venture a success. An enthusiastic local response to the initial product was just the beginning.

Pending New Path’s ability to secure additional funds, Joe plans to remain in Mozambique for a year, refining the product, building relationships and proving the overall concept. By the end of his stay, we hope to have a working model for building an economically viable social enterprise that is replicable in other rural sub-Saharan areas.

New Path Nutrition is a registered nonprofit working towards 501(c)(3) tax-exempt status. Any donations will be used to allow Joe to remain in Mozambique until the completion of the project. You can reach us at newpathnutrition@gmail.com or via our mailing address: 3000 Hillsboro Pike #104, Nashville, TN 37215. We appreciate your interest and support.

During lean economic times, many business owners look for a lifeboat. In the case of David Ingram, Chairman and President of Ingram Entertainment Inc. (IEI), his came in the form of beer. Or beer distribution, that is. When IEI—a Nashville-based business that distributes DVDs, video games and other home entertainment products—was faced with a challenging marketplace several years ago, he decided to start an entirely new company: DBI Beverage Inc., which now operates beer distributorships in eight different California markets.

In becoming Chairman of DBI, David wasn’t looking to jump ship and abandon the home entertainment business. Instead, he was looking for a way to stay in it. With his feet planted firmly in both companies, he has leveraged each one’s individual strengths to help the other succeed. This willingness to diversify and evolve has enabled David to steer through difficult waters and find new revenue streams that have done more than just keep his ship afloat. Today IEI remains the nation’s leading distributor of home entertainment products, and DBI is one of the fastest growing companies in beverage distribution.

The story, however, doesn’t end there. If the ability to diversify and evolve is important in business, David believes it’s equally so for a business school, particularly one as young and as small as Owen. Since 2006 he has served as Chair of Owen’s Board of Visitors, which assists Dean Jim Bradford in determining the strategic direction of the school. In this role David has been a force in encouraging Owen to chart a new, exciting course—much as he has done in business.

Family Ties

It’s little wonder that Owen is an important part of David’s life. Yes, the school has played a key role in his success, but his devotion to Vanderbilt was fostered by his parents long before he ever earned an MBA.

His father, E. Bronson Ingram, former Chairman of the Vanderbilt Board of Trust, built a hugely successful barge company before branching out into lucrative areas of distribution, including books and microcomputers. At his death in 1995, Bronson left a tremendous legacy of giving to the university that continues under the stewardship of his wife, Martha Rivers Ingram, who now holds his former position on the board. David and his three siblings—brothers Orrin, BA’82, and John, MBA’86, and sister, Robin Ingram Patton—have followed in their parents’ footsteps by supporting Vanderbilt in a variety of ways.

In addition to their devotion to family and civic life, the Ingrams instilled in their children a tradition of responsibility and a strong work ethic. As the youngest of three boys, David was well aware of the demanding hours his father kept while running the family business. “My father had a free pass from my mother to play golf on the weekends,” he says. “So I learned that if I wanted to see my dad, I needed to play golf.”

David’s passion for golf continues and is reflected in his office decor. With characteristic modesty he notes, “I liked golf, and I had some ability.” That ability garnered him a spot on the men’s golf team at Duke University, where he earned his undergraduate degree in 1985. He met his future wife, Sarah, when she visited the school as a prospect for the women’s golf team.

“I like to tell people she chose Duke because she met me,” he says with a grin.

After graduation he worked on a $200 million capital campaign in the development office at Duke for a couple of years, partly to be near Sarah while she finished her degree. He played in amateur golf tournaments before he says he realized, “I wasn’t the next Greg Norman or Jack Nicklaus.”

Bronson suggested business school, and David, who found that he missed the quality of life in Nashville, chose Vanderbilt. Sarah was finishing up her undergraduate degree, and he knew they’d both be too busy to spend much time together anyway if he chose to stay at Duke for business school.

At Owen, David demonstrated the personal qualities that became hallmarks of his success in the business world. Classmate Justine Brody, MBA’89, was in his study group and part of a student team that conducted a marketing research project for Ingram Book Co., assessing the market for booksellers to sell prerecorded videocassettes.

“David was not only reliable and considerate to work with, but he added the needed humor and perspective to make it through long and sometimes not-so-agreeable group meetings,” remembers Brody, Director of Retail Marketing at Sony Pictures Home Entertainment.

“David had the insight to utilize the core strength of the book company to break into a new industry, build a new business and become the dominant force in the industry,” she says. “Today, as video struggles with new distribution platforms, David is again facing the change head-on and breaking into a new distribution business—beer. He’s always looking for the next opportunity to future-proof his company.”

Or, as David himself says, “One thing I definitely gleaned from my dad is that in any business, if you’re not growing, you’re dying.” His business acumen often is compared with his father’s, but David sees himself as a more collaborative leader.

“He was a demanding guy, a perfectionist, yet fair,” he says of his father, who’d taken over the family business from Orrin Henry “Hank” Ingram, a member of the Vanderbilt Board of Trust from 1952 until his death in 1963.

Another classmate, Fleet Abston, MBA’89, Chief Financial Officer of Old Waverly Investments in Memphis, Tenn., watched David use the skills he’d learned from his father and take them to the next level. “David is very serious and good at what he does, but at the same time, he values relationships,” Abston says. “He’s got a far different way of motivating people than his dad. He’s different in ways that complement his abilities. He’s taken his dad’s talents and added to them.”

David is quick to say that his success is largely due to luck and accident of birth. “Everything was given to me,” he says. It was understood that he would go into the family business just as Bronson had. David and his siblings grew up working for their father during the summers.

“Dad wanted us to have an understanding of what it was like to work in a warehouse or work on a towboat, if nothing else so we could relate to people in those situations,” he says.

Upon graduating from Owen in 1989, he married Sarah and announced that he didn’t want to work for the family business anymore. “My father and I had an interesting discussion. It got pretty tense, but I now understand why it meant so much to him,” he says. “So I came into the family business under duress.”

David took a job as an assistant to the company treasurer, Tom Lunn, because Bronson wanted him to understand the banking side of the business. After they had worked together for some time, Lunn offered David some blunt advice on a long business flight. “He said, ‘David, what do you want to do with your life? I don’t see you getting to the top of this company through the finance area.’ ”

David appreciated the straight talk and Lunn’s suggestion that he would blossom in one of the operating companies.

“I had one brother in microcomputer distribution and another in the barge business, so I picked the video side, really because I thought it was the most likely one to go out of business soonest due to changing technology. When it did, that would free me to be on my own,” David recalls. He announced his intentions to his father and started in sales at Ingram Entertainment in 1991.

DVD sales in supermarkets and drugstores account for much of Ingram Entertainment’s distribution business.

The next year Bronson cut a deal to buy a large video distributorship, Commtron, located in Des Moines, Iowa. Though it may have made more sense to locate the newly combined company there in Iowa, Bronson moved the headquarters to Middle Tennessee, near Ingram Book Group in La Vergne. He wanted to avoid traveling for board meetings, David says.

Still new to the video distribution business, David began by concentrating on building grocery and drugstore sales. “Sell-through was a new phenomenon then,” he says. In 1994 a shake-up at the top of the company led to David’s taking over the helm of Ingram Entertainment quite a bit sooner than expected.

He began by integrating the newly merged company more fully, identifying the best employees from both companies. “It’s very interesting from a culture standpoint when the small fish eats the big fish,” he says.

Just four months after David became President of IEI, his father was diagnosed with cancer and was severely weakened by the treatment. It was a difficult period for the family. Toward the end, the once powerful man was unable to speak. Still, Bronson appeared at board meetings “even when his hair was falling out on his suit,” David remembers. He is proud that his father got to see him run one of the family companies before he died in 1995.

With Martha Ingram succeeding her husband as Chair and CEO of Ingram Industries, the family had some decisions to make: At $11 billion, it was one of the largest privately held companies in the United States. First, they decided to take Ingram Micro public, as it was the fastest growing company in the group. The world’s largest wholesale distributor of technology products and services, Micro had sales that exceeded $35 billion in 2007 and currently has a market cap of $2.9 billion.

Soon after Micro went public, David, at 33, spun off Ingram Entertainment from Ingram Industries. He kept a stake in Ingram Micro. “I finally had a chance to become my own boss and do my own thing,” he says.

On His Own

Immediately after striking out on his own, David’s video business got “a nice shot in the arm,” he says, with the advent of the DVD format. “IEI was actually the original distributor that launched the DVD format for the studios in seven test markets,” he notes. The DVD format gave Hollywood the chance to resell consumers their favorite movies in a superior format. He hopes some of that momentum will continue with Blu-ray technology today.

While file sharing and piracy have hurt the video business, the impact has not been nearly as great as in the music business because video file sizes are so much larger. “What’s affected us more is the growth of Wal-Mart and other retailers that deal with studios directly,” David says. Consolidation has decreased competition from video wholesalers as well. “When I started in this business in 1991, 70 percent of sales went through the wholesale distribution channel. Now it’s less than 10 percent,” he says.

The beer distribution business is different, David says, because a retailer, in general, must go through a wholesale distributor to buy alcohol. “So if you’re a Wal-Mart in Northern California, you most likely have to buy Coors Light from us,” he explains. “Picking beer distribution was the culmination of a concerted effort to look for an industry that would likely undergo consolidation and play to the strengths of our management team.”

IEI already had a large distribution center in Memphis when David came across Crown Distributing Co., which was losing more than $1 million a year but had the Coors and Pabst distributing rights for the area.

Even though a competing Budweiser distributorship had 65 percent of the market share in Memphis, Crown was a way to “get a foot in the door to meet suppliers and show them what we could do with a troubled company,” he says. Lessons learned along the way made David ready when the opportunity arose to buy another beer distributorship in the San Francisco area, where IEI already had a distribution presence.

“We suddenly went from losing money in Memphis to a great distributorship in San Francisco with people we could learn from and with all the supplier relationships we didn’t have,” David says. The company began to expand into other areas of California—Chico, Napa, Sacramento, Stockton, San Jose, Truckee and Ukiah—and the Memphis distributorship eventually was sold.

Consolidation in the beer industry has occurred faster than expected, beginning when Miller and Coors formed a U.S. joint venture in 2007 and Anheuser-Busch teamed with a Belgian company a year later. (See sidebar above.) In early 2010 Heineken sealed a $5.4 billion deal to buy the beer unit of FEMSA in Mexico, giving the Dutch brewer a huge presence in Latin America.

The beer business is about market share, David says. It’s important for distributors to get their beers on tap handles in bars, for example, because “bar behavior translates into what happens in stores,” he explains. In stores, what matters the most is having prominent displays and taking up more space in the refrigerated aisles than the competition.

DBI Beverage distributes products from leading beverage suppliers, including MillerCoors, Heineken USA (FEMSA), Crown Imports LLC (Corona), New Belgium Brewing Co., Sierra Nevada Brewing Co., Diageo-Guinness, Pabst Brewing Co., Pyramid Brewing Co., Boston Beer Co., Anchor Brewing Co., Sapporo USA, Mendocino Brewing Co., Deschutes Brewery, Red Bull, AriZona Beverage Co., and Crystal Geyser.

David often tells people that he got into beverage distribution because “you can’t digitize beer,” but tough economic times do change beer drinkers’ habits as they tend to move toward cheaper brands. DBI’s diverse selection has helped solve this problem. While some of the cheaper brands that DBI distributes are admittedly less profitable, the company also offers an array of popular craft beers, which, David says, have good margins and sell surprisingly well in these recessionary times.

As for IEI, its business has historically been countercyclical, with people preferring to rent or buy movies and stay home rather than go out to the more expensive movie theaters in a recession. However, new pressures that leave out the wholesale distributor have made the industry much riskier.

“Whether it’s video or beer, there’s a distinct advantage to becoming larger and spreading your fixed costs over more sales. That was a big reason why we got into beer. We wanted to continue to grow and spread our costs between these two companies,” David says.

This arrangement allows DBI to buy services from IEI and share personnel, such as treasury, accounting and human resources staff—in essence making both companies better equipped to face future challenges. Many of the executives echo Justine Brody’s comment about David’s quest to “future-proof” the business, not only for his many loyal employees but also for his two sons, Henry, 14, and Bronson, 12.

“David is building a business that he can leave for his children if they want it,” says Bob Webb, Executive Vice President of Purchasing and Operations at IEI. Bob Geistman, IEI’s Senior Vice President of Sales and Marketing, adds, “I’ve been at Ingram for 24 years, more than 17 with David. He has followed his father’s philosophies well: Take care of your associates, and they’ll take care of your business.”

David’s approach to business has made others outside of his organization take notice as well. In working with DBI Beverage, Pete Coors, Chairman of Molson Coors Brewing Co. and MillerCoors, has become well-acquainted with him. “David is a very astute businessman,” he says. “He’s a creative and innovative thinker who is always in search of new ways to improve and grow his business. He’s the type of distributor who understands the importance of execution in the marketplace and provides the leadership and motivation that is required in the beer business.”

Back to School

The qualities that Pete Coors describes are precisely the reason why Jim Bradford looked to David to lead the school’s Board of Visitors. When Bradford became Dean in 2005, one of his first initiatives was to establish the board as a strategic partner to the school, which offers insights on curricular issues in relation to the needs of business and opens new doors for mentoring and career opportunities.

“The Board of Visitors is an essential component in ensuring that Owen is providing the most relevant, meaningful education for the next generation of business leaders,” Bradford says. “That means combining the real-world business perspective of these accomplished individuals with the cutting-edge research of our renowned faculty.”

In its current state the board comprises 36 members representing a range of industries, from health care to finance to manufacturing. While some, like David, are Owen alumni, a significant number are not. The idea is to bring together those individuals who are best equipped to advise the school, regardless of their personal ties to it.

Under David’s leadership the board has helped Bradford launch several innovative programs at Owen, including the Health Care MBA, the Master of Management in Health Care, the Master of Science in Finance, the Master of Accountancy, and Accelerator—a 30-day summer program for highly qualified undergraduates. A separate Health Care Advisory Board and Real Estate Advisory Board also have provided critical perspective for Bradford in these endeavors.

“David’s leadership is exceptional. He is perhaps best described as an enabler,” Bradford says. “He embodies the Owen experience by supporting, encouraging and questioning. He keeps us focused on what’s most important for the school’s success.”

David is just as quick to return the praise. “I think Jim is the best choice we could have possibly made” as Dean, he says. “He comes from a business background, so he can relate to people who’ve gone to business school and are out doing business. At the same time, Jim has a true respect for business-teaching professionals.”

As Chair of the Board of Visitors, David often finds himself looking ahead, trying to project where the Owen School will be several years from now. When he considers Bradford’s vision and leadership, the top-notch faculty and student body, and an ever-expanding alumni base, he is confident that the school is headed in the right direction. “I think the Owen School gets better every year,” he says.

Of course, the same could also be said about David himself and the companies he runs. Like the school, Ingram Entertainment and DBI Beverage continue to evolve and adapt, growing stronger in the process.

Special thanks to Harris Teeter management for their assistance in arranging the photography.

Although the Army team won, the B-schoolers from Vanderbilt played competitively. Afterwards they joined the victors in a universal rugby ritual of post-game beer. The 101st also introduced the Owen team to another ritual: singing songs with lyrics that all of the participants interviewed for this story declined to quote.

“It was with those [Airborne] guys that I think we crystallized our identity,” says Clock, Founder and President of the consulting firm Clockwork Inc. “Hanging out with them, we became a team.”

Only a few months before, he would not have imagined that he’d see his classmates banging heads and bodies on a rugby pitch, much less tackling the U.S. Army. But on that day in 1998, he recalls, “All of a sudden it became more than Accounting 101 for me. I realized that these are the guys I’m going to block and tackle for. I had been calling to set up matches all over the state just to get us experience, but it wasn’t until Fort Campbell that it felt bigger than the school.”

Clock wasn’t alone. Over the course of that year and beyond, other participants came to regard the rugby squad as something both transcendent of and yet quintessentially Owen. And as they became surprisingly successful, in the minds of many players the team also became something else: a symbol for the little school that could not only take on the big boys of the B-school world but take them down hard.

A Team Is Born

Like Clock, John Underwood, MBA’98, had played competitive rugby before arriving at Owen. To stay in shape and connected with the game, he and Clock began practicing with Vanderbilt’s undergraduate club team, which competed against other SEC schools and teams throughout the region. Underwood, Managing Director at Goldman Sachs, says soon after that, “Tom [Clock] came up with the idea of a business-school team to compete in this really cool tournament in North Carolina.”

The event was the MBA World Cup Rugby Championship, whose entire field involves graduate schools of business. The championship, held annually at Duke University, draws teams not only from across the United States but also from Europe, Canada and Australia. For Clock, the opportunity to compete in that event, against schools that at the time were better known and much larger than Owen, was irresistible.

“At the end of my first year,” Clock recalls, “I invited all the guys from the business school to come out and run around. We probably had about 20 who came. That made me think we could put together a team, and the guys were favorable to the idea of competing at Duke.”

Anyone who liked to run and hit was invited to join, including students from other Vanderbilt schools. No rugby experience was necessary. Size was a bonus. “They kind of shamed me into joining,” remembers Brent Turner, MBA’99, Executive Vice President of Call Products for Marchex, a performance marketing firm in Seattle. “If you had any kind of athletic ability and didn’t play, you were a wimp.” After his first practice Turner was hooked. “I enjoyed the roughhousing nature of it,” he says. “I liked the fact that rugby involves both brute force and finesse.”

Fortunately there was no shortage of players who could deliver brute force. Walton Smith, MBA’99, as recalled by several of his former teammates, was a small mountain who had played on the offensive line for Brown University’s football team. Sam Brown, MS’98, who played inside center, had also played college football. “He was 5-foot-10 and weighed around 230 and ran with passion,” Turner says. “It was observably unpleasant for opponents to tackle him. In one game at the Duke tournament, I could hear guys on the other team saying, ‘Oh no,’ when he got the ball.”

But whatever benefits the Old Boys may have gained from the size of some of their players were offset by the size of their squad. With a pool of barely 20 players, few substitutes were available to field the necessary 15 for a “side,” especially when players were injured or fatigued. And fatigue wasn’t hard to come by. “You do the equivalent of a squat and then run for 15 meters, and then you do it again and again for 40 minutes,” Turner says.

Tom Barr (left), Brent Turner and John Underwood reminisce about the Old Boys’ exploits.

Under Clock’s direction, the fledgling team practiced on Tuesday and Thursday evenings on fields across the street from Vanderbilt’s Student Recreation Center, and then played games on Saturdays. It was a significant commitment of 5–10 hours a week on top of the players’ academic work.
But for the new converts to the game, the effort was worth it, both as outlet and opportunity. “When you were stressed out from school and then got slammed to the ground 40 or 50 times, the stress didn’t matter so much after that,” Turner says.

Tom Barr, MBA’98, Vice President of Global Coffee at Starbucks Coffee Co., had never played rugby before trying out for the team. For him the experience was about relationships. “At the time it was our only sports team at Owen, and it brought together people from different friend groups,” he says.
The diversity, camaraderie and commitment of the players helped make a fan of Martin Geisel, Dean of the Owen School at the time. Geisel, who had come to Vanderbilt in 1987, was both a mentor and a friend to the students. For him, says his wife, Kathy, students were the most important part of the school.

“Marty was one of the guys,” says Peter Veruki, Owen’s Director of Corporate Relations. “He’d drink beer with students, take them to the old Bluegrass Inn or SATCO. He was accessible, and there was nothing pompous about him.” Geisel also cherished the diversity of the Owen community and readily supported new student initiatives, such as the Global Food Festival, which began during his tenure.

But at first, Clock remembers, “Dean Geisel wasn’t totally on board with the idea” of a rugby club—the first sports team at Owen that competed beyond the campus intramural leagues. At Clock’s request, Geisel came down to the pitch one Saturday and watched a game. Underwood recalls that the dean looked proud when he saw the team sporting Vanderbilt colors, with jerseys that read “Owen Old Boys Rugby Club.”

When he realized the commitment that the students had made, financing the club’s gear and travels themselves, Geisel became not only a supporter but a champion. The team made him their honorary coach and gave him a silver whistle. Geisel enlisted local businesses to provide modest financial backing and found money to help pay for the trip to Duke.

What meant even more than monetary support, though, was his physical presence, remembers Mike Vermilion, BS’95, MBA’99, Finance Director at Victoria’s Secret. Though a weakened heart kept him from working a full schedule in 1998, Geisel, who had played football at Case Western University, was more than an occasional attendee at the club’s Saturday matches. Veruki remembers standing alongside him, cheering on the team, whistle around his neck, on one cold, nasty day. “I’d like to think that if Marty had been 10 years younger and in good health, he’d have been out there with them,” he says.

Initially for most of the players, the games were learning experiences as much as competitions. “Tom [Clock] and John [Underwood] would coach us while we were playing: ‘Run and do this. Get in the scrum,’” Barr explains. “We had a lot of spunk and energy that allowed us to overcome the deficiencies in experience.”

Still, wins remained only an aspiration as the Old Boys took on teams from across the region, like the 101st Airborne, in preparation for the big MBA tournament at Duke. “In most games we were reasonably well-matched, and in a few we did a lot better than we thought we would,” Turner says. Then there were games that all the players still remember, like the 76–0 thrashing they received at the hands of Nashville’s semipro club team.

“You’d wake up the next morning, and your whole body would be stiff as a board,” Barr says. “I was 29 or 30. After games I’d start thinking, ‘This is why rugby is a young man’s sport.’”

The Tournament

The Old Boys almost weren’t allowed to compete in the Duke tournament, which was limited to 24 teams. “We had to convince them we were for real,” Clock recalls, and the organizers weren’t easily convinced. Renting a couple of vans and rooms in a seedy hotel, the 18 players from Owen arrived on Duke’s campus “looking like the Bad News Bears,” Barr says.

The night before the competition began, there was a huge banquet for all the players. “Some of the teams wore crazy, coordinated costumes, especially the ones from Europe, and they sang rowdy songs,” Vermilion says.

Playing one game on a Saturday was rugged enough. The Duke tournament’s first-day format involved three games. For a team with only three substitutes, it was a formula for disaster.

Before the 8 a.m. match against Cornell, Benji Ribault, an MBA exchange student from France who played one of the forward positions, led the team down to the pitch. “He got us going on a kind of ritual dance, elbowing and bumping each other, sort of like a mosh pit,” Clock remembers. “The players from Cornell were looking at us like, ‘Who are these guys?’ ”

The Old Boys surprised the Ivy Leaguers. “We devastated them,” Clock says. “Blew them away.”

Perhaps because Owen had been relegated to a small field at the tournament’s periphery, their next opponents, from Wharton, hadn’t noticed how well the upstarts from Nashville had performed. With more than 35 men available, Wharton opted to rest their first-line players, presuming they would not be needed against Vanderbilt. They repented of their choice in the second half, but it didn’t matter. The Old Boys won again.

The Haitians have a proverb: “Beyond the mountains, more mountains.” For Owen, beyond Cornell and Wharton came Harvard at 4 p.m. By then the Old Boys had been promoted to the equivalent of center court at Wimbledon, a field of beautiful Bermuda grass that was Duke’s best. Vanderbilt had suddenly become the buzz of the tournament.

Clock recalls that Harvard had “about 60 guys—three full sides and a set of backups,” compared to Vanderbilt’s 18. Harvard won.

“I really think we could have beaten Harvard were we not so beaten up,” Underwood says. “We had some guys who couldn’t even play.”

The Old Boys’ run came to an end the next day against the London Business School. At least that’s how Turner remembers it. Clock believes the loss came against a different opponent. No written records are available, and no one remembers for sure. Even after just 10 years, the details become blurred.

Enduring Memories

Perhaps the most enduring record is a photo of the Old Boys that sits in a spare bedroom that Kathy Geisel uses as an office. Of all the items that decorate the suburban Dallas room, mostly related to hunting and to Nashville, the photo was Marty Geisel’s favorite. It was a gift from the team, and they all signed it. The photo occupied a prominent spot in Geisel’s office at Owen until the day he died. The whistle hangs by itself in a closet. “Every time I open the door, I see it,” Kathy says.

Clock has a few old pictures, too, from the Old Boys days. But mostly what the players have carried with them are memories. Vermilion remembers a game trip to Memphis, Tenn., when they camped out in a cotton field near the Mississippi River. Barr vividly recalls a nose-breaking, blood-gushing hit that William deButts, MBA’98, laid on a Wharton player. Clock remembers Mike Butler, MBA’98, who played wing. “Soaking wet he probably weighed 135 pounds,” Clock says. “Against Harvard he went up against this guy who easily weighed 100 pounds more, but he fearlessly locked heads, wrapped his arms around the guy and took him down.”

Most of the founding players graduated after that first season, in the spring of 1998. Owen fielded a team for three more years. As an alumnus, Clock continued to play—once flying back from a consulting assignment in Jakarta, Indonesia, so he could join the team for the Duke tournament.

By the 1999 tournament, the Old Boys had lost their champion. Geisel died of a massive coronary in February of that year, after conducting a town hall meeting at Owen. He took questions while seated because he didn’t have the strength to stand for the duration. “He looked terrible,” Veruki recalls. “Brent Turner asked him, ‘Marty, how are you? We’re worried about you.’ Marty’s response was, ‘Not good. But this is my job, and I’m here for Owen.’ I’ll always remember that.” Veruki doesn’t have to add that Geisel’s persevering attitude was just what you’d expect from a rugby coach.

In a number of ways the rugby experience has stayed with the Old Boys. To a man, they remember the camaraderie and the euphoria of accomplishing together something improbable. And as they progressed from Owen to an array of distinguished careers, the lessons they learned helped shape their outlooks on life.

Barr has never forgotten losing games to local club teams whose players were older and slower than the 20-somethings from business school. “Their experience and knowledge made them formidable opponents,” he says. “Nothing is better than pure experience.”

Clock, who spent five years with Accenture and another five in health care before starting his own consulting business in 2008, says the rugby experience was formative. Getting 20 diverse, mostly inexperienced guys into a committed team, organizing practices, scheduling games and handling logistics was “a leadership experience no one can teach you,” he says. “But the most important thing for those of us who played on that side is that we developed a friendship that went beyond the walls of Owen. Those are guys I still keep in touch with. I don’t think you can replace that.”

Underwood, who has spent the last 11 years at the Goldman Sachs office in San Francisco, was in the top of his class at the firm. When he showed up for his first day of work, he says, “almost everyone else was from a top-ranked B-school. It was a little intimidating, but soon I realized I could compete with these guys.”

It was a lesson he’d already learned, in a different context, on a rugby pitch.

Where Are They Now?

1. Scott Smith, BE’92, MBA’98, Operations Manager, International Paper
2. Michael Butler, MBA’98, Director of Supply Chain, Hewlett-Packard
3. Mike Vermilion, BS’95, MBA’99, Finance Director, Victoria’s Secret
4. William deButts, MBA’98, Managing Director, Convergent Wealth Advisors
5. Dave Horst, MBA’98, Director of Finance, American Express
6. John Underwood, MBA’98, Managing Director, Goldman Sachs
7. Brian Heil, MBA’98, President, SR Wood Inc.
8. Rob Weddle, MBA’99, Vice President, The Cleaning Authority
9. David Frame, BA’93, MBA’98, Vice President of Finance, Allconnect
10. Eben Ostergaard, MBA’98, Entrepreneur, Ebenflow.com
11. Matthew Harper, MBA’98, Partner, Childress Klein Properties
12. Brent Turner, MBA’99, Executive Vice President of Call Products, Marchex
13. Walton Smith, MBA’99, Project Manager, Advanced Performance Consulting Group
14. Stephen Years, MBA’99, Market Development Manager, Sun Microsystems
15. Tom Clock, MBA’98, Founder and President, Clockwork Inc.
16. Alex Lunsford, MBA’98, Executive, SAS Institute

We need your help identifying the other members of the team. If you have more information, email us at owenmagazine@vanderbilt.edu

Kaseff

Twenty years can create some distance between a university and one of its graduates. Not so for Kevin Kaseff. A member of the Class of 1989, Kaseff fondly recalls both the friends he made at Owen and his academic experience. “I loved the school and the experience,” he says. “I’ve maintained those friendships the past 20 years.”

Even though Owen offered no real estate courses at the time, Kaseff credits the school with putting him on the fast track in his real estate career. Today he is the Co-founder and Managing Partner of Titan Real Estate Investment Group Inc., a national commercial real estate investment firm with offices both in Southern California and on the East Coast.

“My career success can be directly attributed to my time at Owen,” he says. “I chose to pursue an MBA because I had reached a point where I felt I was stagnating in my career, and I wanted new challenges.”

The contrast between his studies at Owen and his work in Los Angeles—one of the nation’s most dynamic real estate markets—provides the businessman with an interesting perspective.

“My view of the financial world was a 45-degree angle, and I wanted the full 180-degree perspective,” he recalls of his academic career. “And clearly, Owen did that for me. Investing in real estate is about making long-term bets. These are not liquid assets, so having an MBA and knowledge of the financial markets, operations, accounting and human resources is critical.”

A native of the San Francisco area, Kaseff says he is moderately familiar with the Middle Tennessee commercial real estate market. “We recently sold several apartment complexes in the Nashville area,” he says. “Nashville is a strong warehouse distribution market but a relatively small office market.”

The broader issues and trends facing the commercial real estate industry, Kaseff says, are those most businesses must address: re-duced demand and a lack of credit. As to Titan specifically, the company is stable. “We are fortunate during this capital markets meltdown that our properties are well-leased,” Kaseff says. “We have avoided using high leverage and have been fairly conservative in our underwriting.”

Kaseff foresees a redefining of an industry that has taken a bruising with the country’s economic slump. “As we come out of this recession,” he says, “there will be more of an emphasis on knowing real estate operations from leasing and management and less on pure financial engineering.”

As for Owen and its own long-term bet in a real estate program, Kaseff is optimistic. “There are only a few graduate business programs around the country that have a real estate focus,” he says. “I believe that Owen can compete to attract students with this emphasis. We need more Owen alums in our industry.”

Not only have his efforts created careers for Owen students, their startups have created hundreds of jobs for others. Many Owen students and alumni have benefited from the education and experience Germain has provided for the past 30 years. I continue to benefit from Germain’s expertise, and I hear firsthand from students about the impact he continues to have, especially from the students he refers to me for advice on being an entrepreneur.

Hall

For all that Germain has given to Owen, it is time for the Owen community to give something back. I am leading fundraising efforts to endow the Germain Böer Seed Scholarship in Entrepreneurship. The inclusion of the word “seed” in the name is important. Most entrepreneurs receive seed funding to launch their ventures. It is up to them to take that seed funding and create enough value to raise the next round of funding. This scholarship, I hope, will provide the seed funding to launch the career of the next Owen entrepreneur. Please join me in making a contribution.

Our goal is to raise enough funds to generate an annual scholarship grant of $5,000 to an Owen student interested in entrepreneurship. While a $100,000 bequest has already been committed, the scholarship requires a minimum of $100,000 in outright gifts to become active. To date, we have more than $33,000 in outright gifts pledged. Ideally we would like the scholarship fund to grow through continued contributions and earnings so we can increase the scholarship grant or provide more seed scholarships to Owen students.

The giving levels listed below are already in existence through the Owen Circle, but gifts of all sizes are welcome. Your gift can be in many forms, including cash, securities and planned gifts. There are also ways to honor the legacy of your name within the named scholarship for Germain Böer. If you’d like to make a larger named gift, please contact Marshall Turnbull, Director of Alumni Relations, at (615) 322-9997 or marshall.turnbull@vanderbilt.edu.

The Owen Circle Levels of Giving
$25,000 + — Cornelius Vanderbilt Level
$10,000–$24,999 — Chancellor’s Council
$5,000–$9,999 — Dean’s List
$1,000–$4,999 — Owen Associates

I hope that you will choose to unite with me so that the legacy of Germain’s impact may continue. Thank you for considering this opportunity.

Rob Louv

After Montgomery & Co. successfully sold 70 percent of the equity in Long’s company, Louv and Long sealed a second deal soon thereafter—one that was arguably more significant than the one they had just finished. Together with Long’s wife (and fellow Owen graduate) Carolyn, MBA’83, they established the Long and Louv Summer Enterprise Entrepreneurial Fund, which aims to help aspiring entrepreneurs at the Owen School. The fund provides a $15,000 stipend to students who want to pursue an entrepreneurial idea rather than a traditional corporate internship during the summer between first and second year.

With the help of the fund, Thomas Bernstein and Miguel Coles, BS’02, both MBA candidates for 2010, have established their own marketing company, Great Glass Media LLC (www.greatglassmedia.com), to launch an iPhone application aimed at young people looking for the perfect nightspot. A third student, Andrew Bouldin, also an MBA candidate for 2010, used the fund over the summer to continue work on his own company, My College Road Trip (www.mycollegeroadtrip.com), a travel Web site designed for students.

Jack and Carolyn Long

These are just the sort of big ideas that Jack and Carolyn hoped to encourage by establishing the fund. Giving a leg up to budding Vanderbilt entrepreneurs made perfect sense to the couple, since they themselves had used the skills they learned at Owen to launch two successful companies. Their decision to honor Louv in naming the fund was an easy one as well. After all, he brokered the deal to sell their company. He also was the one who encouraged the Longs to give back to Vanderbilt in the first place.

Lone Star Overnight success

Vanderbilt holds a special place in the Longs’ hearts. Both of them come from a long Commodore tradition. Carolyn’s father, grandfather and great-grandfather all graduated from Vanderbilt, as did Jack’s mother and uncles. Jack and Carolyn also owe their marriage to the Owen School. They met as first-year MBA students in 1981 and married four years later.

After graduating from Owen, Jack and Carolyn went to work for Texas Commerce Bank (now part of J.P. Morgan Chase) in Houston, but Jack knew all along that he wanted to own his own company someday. In 1989 First American Bank recruited Carolyn, and the couple returned to Nashville, living off one salary until Jack came up with a business idea.

“Jack got a little office, his own desk and a nameplate and he sat there like Pooh Bear so he could think, think, think,” Carolyn says. “He thought about carpet fiber. He thought about rural post office development. He thought about cattle futures trading. Those were just some of the ideas that didn’t work.”

In the process of searching for undervalued businesses to acquire, Jack looked at an air-freight company that was for sale in Houston. He realized, though, it was more of a freight courier, hiring independent contractors to pick up and deliver. “It was a big business, but it wasn’t attractive to us because it was basically a brokerage,” he says.

That experience started the wheels turning for Long and his business partner Gary Gunter. They were fans of the Southwest Airlines concept of keeping things smaller and cheaper. Long and Gunter decided to start their own business, a package express company serving only the state of Texas. They set up headquarters in Austin, and Lone Star Overnight was launched in 1990. That same year, the Longs’ first child, Adam, was born. Within a span of five months, Jack and Carolyn had started a family, started a business, moved to Austin and purchased their first house.

The years that followed were equally busy and exciting for the Longs. Their daughter, Carlen, was born in 1993, and three years later Lone Star Overnight made the Inc. 500 list of the fastest-growing privately held companies at No. 331. Carolyn, meanwhile, began fundraising and serving in leadership roles for various Austin nonprofits.

In 1997 the Longs and Gunter sold Lone Star Overnight for a nice sum. Jack, ever the entrepreneur, began looking for ways to invest that money in the next big opportunity. In 2000 he settled on the idea of starting a new company once again. Partnering with Jeff Carpenter, he launched PeopleAdmin, a software technology company aimed at creating tools for human resources at colleges and universities. The company grew quickly. In 2007, with total revenues of $10 million, it made the Inc. 500 list at No. 419.

PeopleAdmin had tapped into a very hot area: software as a service. Long began to field dozens of phone calls a week from companies interested in investing or buying. That’s when the decision was made to hire a small- to mid-size investment bank focused on emerging-growth technology. After vetting numerous candidates, the Longs went with Rob Louv and Montgomery & Co.

The entrepreneurial side of banking

Like the Longs, Louv’s connection to Vanderbilt began before he was born. His father, Art Louv, JD’72, graduated from Vanderbilt Law School, and his mother, Barbara, had Rob while she was a student at Peabody College. Although Rob grew up in Florida and attended the University of Florida, his Vanderbilt roots drew him back to Nashville for graduate school.

“When I went to Vanderbilt, my career objective was to go into investment banking. I thought I would end up in the South, but through the alumni network I was able to set up some interviews in New York,” Louv says. Director of Corporate Relations Peter Veruki, then working in the career center, encouraged him to get some internship experience in New York, even though his original plan was to live elsewhere.

“My Citicorp internship was directly linked to an Owen alum going to bat for me,” says Louv, who before that summer had never been farther north than Washington, D.C. The internship opened doors for him and led to a career opportunity in investment banking with Chase Securities, later J.P. Morgan. But Louv, with no signing bonus and no paycheck until he passed the company training course, was cash-strapped.

That was when a favorite professor from Owen, Ron Masulis, stepped in. Masulis, Frank K. Houston Professor of Finance, was starting a mergers and acquisitions course and needed background material—case studies, detailed articles and trend pieces. “It was perfect for me,” Louv says. “I got paid a fair hourly wage to do interesting work and used what I learned to better prepare myself for my M&A career.”

Masulis says Louv was among his best students at Owen. “I was very pleased to have him help me research potential topics and cases for the new course I was developing,” he says. “His research was very solid and led me to use several very interesting cases in the course.”

Louv bootstrapped himself through the J.P. Morgan system and became Vice President of Global Mergers and Acquisitions in New York before moving to San Francisco to lead the firm’s West Coast merger and acquisition efforts for the information technology services and Internet sectors. With significant M&A deal experience representing $150 billion in transaction value, he then joined Montgomery & Co. in 2004 as the Co-head of the Technology Banking Group and a member of the firm’s Executive Committee.

Recently Louv and several senior partners at Montgomery & Co. split off from the firm to establish a new investment bank called ArchPoint Partners, also based in San Francisco. The separation was amicable, as ArchPoint continues to execute deals that were engaged under the Montgomery platform. Louv and fellow Managing Partner John Cooper are the owners of the new bank. “I am now like my clients—running a startup,” Louv says.

Louv sees M&A as the entrepreneurial side of banking—one that doesn’t depend on anyone else’s balance sheet. “When I went into finance, I was always thinking about building a practice. I never thought of myself as a kind of large cap banker on a large platform. I saw myself on the entrepreneurial side,” he says.

Culture of giving

The sale of PeopleAdmin “was a long, tedious process,” remembers Carolyn Long. Several deals got close and fell apart before an agreement was signed with Summit Partners of Boston in summer 2008. “Rob stuck with them and kept working on all the details,” she says. “Throughout this process, Jack and Jeff never got to the point of throwing their hands up because Rob never did either. He kept working on it.”

A member of the Owen Alumni Board, Louv saw an opportunity to leverage his hard work in a positive way. Prior to the close of the deal, while hashing out some final fee matters, he approached Jack with a proposition. Louv told him, “Since we know that neither one of us would be here if it weren’t for Owen, what if, in addition to compensating Montgomery & Co., you also compensate Owen for the value it added to our lives?”

Long was intrigued by the idea. Between the sale of Lone Star Overnight and the launch of PeopleAdmin, he had been involved in establishing an entrepreneurship program at the University of Texas, but the bureaucracy of the large state school had cramped his style. In 2002 he and a group of professors left the university and formed the Acton School of Business in Austin to teach an entrepreneurship-only program.

The thought of doing something to encourage entrepreneurship at his alma mater was an enticing prospect. He called Carolyn to get her opinion. “Carolyn and I had not been active alumni up to this point,” he explains. “But one of our motivations for selling the business was to pursue some philanthropic objectives while we were still young enough. After I talked to Carolyn, I called Rob back 10 minutes later and said, ‘Deal.’ ”

Louv was grateful but surprised when the Longs decided to share credit with him in naming the fund. “That was not expected or requested. I was taken aback,” he says. “I give Jack all the credit. It was his generosity as much as mine that really drove the gift to the school.”

Jack, though, is just as quick to compliment Louv. “Even though the donation is coming from us, we want it to be more about Rob,” he says. Carolyn agrees, adding, “Rob and his team did so much work. He had the idea (to create the fund). He asked for it. It makes perfect sense for us to view it as a joint gift.”

Tricia Carswell, Associate Dean of Development and Alumni Relations, acknowledges that the credit should go to all three. “It’s been such a pleasure working with three alumni whose culture of giving is obvious, who know how blessed they are and want to give back,” she says. “These are people whose personal successes and whose value systems are aligned. They are true philanthropists, and it was a privilege to be at the table with them.”

From left, Thomas Bernstein, Miguel Coles, Andrew Bouldin and Professor Germain Böer

Confidence boost

Louv and the Longs hope other alumni will be inspired to give to the new fund. They also hope the fund will help spark an entrepreneurial focus at Vanderbilt without eschewing the traditional business curriculum.

“Most important is it adds value for the students,” Louv says. “Over time an entrepreneurial bent could differentiate the Owen brand and improve the experience for all of the students.”

Most MBA programs are designed to train students going to work for a large Fortune 500 company, says Germain Böer, Professor of Accounting and Director of the Owen Entrepreneurship Center. “It’s not that the content of the courses doesn’t fit the needs of an entrepreneur,” he says. “You still need to know the same stuff. It’s just that the examples all tend to be from big companies. If I could dictate how we’d do it, I’d say every course would have to have a case or two about how to operate a startup company.”

The classroom learning experience is bound to be greatly enhanced for students able to kick-start a business with a boost from the Long and Louv Fund, Böer says.

“When you start a business, you have to learn about every piece of the business. It’s a really good educational experience to try to put a company together and learn how to motivate people,” Böer says. “It’s excellent training even if they work on a business idea and they get all the way to the point of launching and find some critical factor that keeps it from working.”

Andrew Bouldin, one of the beneficiaries of the summer stipend, has always seen himself as “an entrepreneur-type guy.” He grew up in Nashville, running a lawn-care business through high school and college. He also participated in the Accelerator program at Owen and spent another summer working for Silicon Valley-based Uloop.com, a craigslist-type site aimed solely at college students.

While planning a trip with friends a few years ago, he realized “sites like Travelocity or Trip Advisor are oriented toward businesspeople or moms,” he says. “I couldn’t find anything that would tell me the best restaurant and things to do in an area for a college student.”

Recognizing this market need, he developed a travel site that would appeal to college students and launched it in January 2009 using Vanderbilt as a test school. Immediately 2,000 students signed up. The Long and Louv Fund allowed him to spend the summer focused on the company, building relationships with others in the Web-based travel industry, doing some traveling himself and meeting other students to find out what their specific needs are.

Meanwhile Thomas Bernstein and Miguel Coles, the other recipients of the stipend, spent the summer launching a marketing platform to kick-off their mobile phone application, Nashville Pulse. Their original idea was to install low-cost digital media screens in residential elevators, but they ultimately redirected their energies toward consumer mobile phones.

Bernstein and Coles hired three Vanderbilt undergraduates—Will Green, Mike Slade and Riley Strong—to help shape an application that delivers event information, including descriptions and coupons, to smart phones using GPS-tagging capabilities. “A student down at Broadway and Fourth leaving a restaurant and looking for a music venue would find out there are 15 bars around playing great music. They could access our tool to see which three have deals. It’s a powerful tool because you’re delivering the message at the moment and location of the sales decision,” Bernstein explains.

Bernstein says more important than the grant money is the confidence boost they received from their idea being selected for the stipend. “When you’re sitting there with what you feel is a great idea and plan, but with no money to fund it, you can’t help but doubt your ability to make your vision a reality,” he says. Coles adds, “This experience has been much better than any internship I could imagine.”

Testaments like these remind the Longs and Louv why they decided to create the fund in the first place. Just as Owen has left a lasting impact on their own lives, their gift is now doing the same for others. Although it is only in its second year of existence, the stipend program is already putting students on a bridge to entrepreneurial success.

Or as Coles puts it: “It moves us into a different dimension of creating jobs rather than seeking them.”

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.”

From left, Professors Jacob Sagi and Thomas McDaniel

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.”

From left, Ryan Seibels and Matthew Treble

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.”

Christie discovered artificially high profits at NASDAQ during the early ’90s.

Bill Christie, Frances Hampton Currey Professor of Management, was just a junior faculty member at the Owen School in the early ’90s when he and Paul Schultz, a colleague at Ohio State University, stumbled across some data that pointed toward collusion among market makers at NASDAQ.

Christie and Schultz discovered that the majority of the largest and most active NASDAQ stocks were quoted almost exclusively in even eighths, implying a spread of at least a quarter dollar. Unable to find an economic rationale for the exclusive use of even eighths, Christie and Schultz concluded that the use of even eighths was not a function of economic factors but “tacit collusion” among market makers. The artificially high profits, they surmised, disadvantaged investors to the benefit of market makers.

News of the findings was made public in May 1994 and published in the December 1994 Journal of Finance. The amiable relationship between NASDAQ and Owen, nurtured by Financial Markets Research Center Director Hans Stoll, “came to a crashing halt,” Christie remembers. 

Stoll, returning from an overseas trip, found an angry telephone message from former NASDAQ CEO Joe Hardiman. “He called me and said, ‘Hans, what do you mean, collusion?’ I explained to him, ‘It’s implicit collusion. It’s an economist’s term.’ He was angry and concerned.” And for a period of time NASDAQ’s participation in the FMRC was severed.

Christie’s theories, however, did prevail, creating lasting change at the company. NASDAQ has since rejoined the FMRC, and Christie was even invited to serve on the company’s economic advisory board. He still marvels that no one else had systematically looked at the raw data before a couple of upstart, untenured faculty members.

“I continue to think that in the end, their market benefited. If we didn’t find it, someone was going to find it. Once they came out the back end of it, they came out a lot more agile, a lot more competitive. They had flexibility to do things they wouldn’t have been able to do under the old structure,” Christie says.

The SEC subsequently has introduced new order handling rules, increasing the level of competition in the system. Investors are now able to compete directly with the dealer when placing buy or sell orders.

“My take on this is that NASDAQ really needed some kind of external intervention. In the end they had the power to go through and restructure and do things to help them be more competitive. That’s part of what allowed them to succeed,” Christie says.

In his file cabinet Christie still keeps a Forbes cover story from 1993 portraying NASDAQ as greedy fat cats taking investors to the cleaners. That article mentioned previous work by Christie showing that sharp reductions in a stock’s spread resulted from a firm moving from NASDAQ to another exchange. A study by Stoll also was cited in the article.

Fast forward to January 2009, and the same magazine was recognizing NASDAQ OMX Group as its “Company of the Year” for its flexibility in managing through the current economic turbulence. An accompanying story, which refers to Christie’s research, suggests the possibility that shrinking spreads may have led Bernie Madoff and others to explore other ways to make money. Madoff has been charged in an elaborate Ponzi scheme. 

With the latest Forbes article tucked away in his file cabinet, Christie has returned once again to the quiet academia he claims to prefer, although his life at Owen is anything but staid. He served as Dean of the Owen School from 2000 to 2004. He also has continued his teaching and research, receiving numerous awards for both.

“I don’t mind being kind of quiet in the background and thinking that maybe what we did triggered a change in the end,” Christie says.

Böer has helped many students launch their own businesses.

Are entrepreneurs born or made? Professor of Management Germain Böer believes it’s a bit of both. On the one hand, he says, “You have to know how to reach your customers, how to build an operation that works smoothly. These are things that many people who start companies don’t really know. That’s why, for entrepreneurs, we have to have a very strong program in general business. My thesis is that entrepreneurs who get a good MBA degree have a much lower business failure rate than those who don’t.”

On the other hand, he says, “A lot of entrepreneurship is an attitude more than a set of skills you pick up. The non-entrepreneur will look at the problems with starting a business, while the entrepreneur looks at the opportunities.”

Right now, Böer insists, is actually a great time to start a business. “I know a guy who is buying mortgages on the cheap, culling the bad and reselling the rest. That’s the way entrepreneurs think. I don’t so much teach these qualities as observe them in successful entrepreneurs.”

What he does provide, along with the business skills that entrepreneurs need, is abundant opportunities for students at Owen to network with successful entrepreneurs. Along with pairing students with local entrepreneurs for projects—like the one that connected Tom Ryan to the slot-machine maker—Böer regularly invites entrepreneurs to his classroom.

“You bring in people who have been successful in businesses that the students may not have heard of, or who take an unusual approach to the way they look at business and solve problems creatively, and it stretches students’ minds. It helps them see that they can go out and do something, too.”

Three times a year, Böer invites area entrepreneurs from a variety of industries to networking breakfasts at Owen, where they can connect with each other (and with students). “That’s how you get entrepreneurial activity started,” he says. Among the companies that have attended are Video Gaming Technologies, Avenue Bank, CareHere LLC, Edison Automation and Pharm MD, just to name a few. 

Böer also helped launch and sustain the Nashville Capital Network, which connects investors to people with promising ideas for startup businesses. Each semester two Owen students serve the organization, meeting with investors and helping entrepreneurs sharpen their business plans. The experience, Böer says, is invaluable: “When they graduate, these students can go to work in private equity firms without much trouble.”

He also helps students launch their own businesses. He can tick off a list of business ventures in which current MBA students are involved—from doggie daycare to insurance products for pro sports figures to tire recycling in Dubai. 

Operating a business, Böer says, helps students think about how everything fits together. “They learn a lot about self-reliance and how to solve problems. It builds their confidence.”

In all these ways Böer has worked to build a culture at Owen that literally encourages entrepreneurism. “In our society,” he says, “the only way you can become wealthy is to make lots of people better off than they were before.” (Think of the personal computing industry.) You’re not just making money; you’re making a contribution to society. So I’m always telling people, ‘Go out and get rich.’”

Such stories of humble beginnings are thick on the ground among successful entrepreneurs. Michael Dell originally sold computers from the trunk of his car. Microsoft launched from someone’s garage. The list goes on.

What makes the story of Hunter’s company distinctive involves the company he kept at Owen. From his MBA Class of 1991, three students who had not envisioned themselves as entrepreneurs all eventually launched entrepreneurial enterprises that now rank on the Inc. 5000 list.

Since outgrowing the trailer, Alliance has become a $15 million operation with an impressive client list and offices (real ones) in Birmingham and Mobile, Ala., and Nashville. Hunter’s best friend from his Owen days, Tom Ryan, MBA’91, started a financial communications consulting company, Integrated Corporate Relations, that today serves approximately 225 public companies around the world through offices in Boston, New York, Los Angeles and Shanghai. John Roberson, MBA’91, launched Advent Results, a pioneer in the field of “experiential marketing” that serves clients through such services as designing custom exhibit displays, planning and executing marketing events, and creating “brand spaces” that use office design to strengthen an organization’s messages to both external and internal audiences.  

Rob Hunter

That Vanderbilt MBAs launch successful businesses is hardly a story of man bites dog. Owen, after all, over the years has earned a reputation for cultivating entrepreneurs. Still, it’s unusual to find three Inc. 5000 business starters from one relatively small class. Perhaps, someone wondered aloud, something was in the water at Owen in 1991. 

Though Hunter, Roberson and Ryan took widely divergent paths to the C-suite, all shared one key thing in common besides an Owen degree: None had planned to start businesses, but all felt sufficiently empowered by their Vanderbilt training to attempt to fill what they recognized as unmet needs in the marketplace.

“I was marching down the corporate path and loving it,” Hunter says. “But when I saw an opportunity, I was not satisfied to walk away from it. That was the Owen influence. I had gained the diverse experience and analytical abilities that gave me the confidence that I could run with the opportunity.”

On that score, Hunter could be speaking for his two fellow CEOs from the Class of ’91, who say that the business tool kit they assembled at Owen made their entrepreneurial ventures more of a leap of confidence instead of purely a leap of faith. “I wouldn’t be where I am today without Owen,” Ryan says succinctly. Roberson puts it even more starkly: “As sappy as it sounds, Owen changed my life.”

Tom Ryan

A Clear Message

Tom Ryan hadn’t even imagined himself leading a company, much less founding one. But in his second year at Owen, classmate Bob Davis, MBA’91, offered an offhand comment that planted a seed. “We were at SATCO (San Antonio Taco Co.) one afternoon, and Bob said, ‘You’d be a really good CEO,’” Ryan recalls. “I thought,‘Wow, Bob is one of the smartest guys in our class. He must see something in me I don’t.’”

As a project for one of his second-year MBA classes, Ryan worked with a local entrepreneur who was starting a slot-machine company. “I thought, ‘That’s interesting,’” he says. “‘Maybe I’ll get a free trip to Vegas.’”

He got much more. Upon graduation, as the economy was in recession but the gaming industry was exploding, Ryan went to work for the slot-machine maker. The experience was invaluable. Two years later, yearning to be closer to his native Connecticut, he took his Rolodex and began calling on Wall Street investment banks, where his detailed knowledge of the casino business was in short supply and high demand. 

But after six years as an analyst, Ryan knew he didn’t want to spend his entire career in Lower Manhattan. He longed to be like his father, who operated his own accounting firm, set his own hours and had time to coach Little League. 

And through his close interactions with top executives of public companies around the country, he came to recognize what proved to be a lucrative opportunity. “Many CEOs and CFOs were good at building their businesses,” he explains, “but they didn’t know how to communicate their story to Wall Street. More often than not, they didn’t know what I was looking for as an analyst and how to position themselves to maximize their value to the capital markets. 

“So I decided to start my own company to teach executives of public companies how to interact with Wall Street.”

Along with two longtime friends, Ryan launched Integrated Corporate Relations. The new company did just what its name promised. Many companies that handle investor relations, Ryan explains, are staffed heavily with PR professionals. “But CEOs are better off hiring someone who knows both the capital markets and the media, so that the message is integrated and consistent. That’s the advantage we provide. One thing I learned in a strategy class at Owen: If you’re going to get into a business, make sure you have a competitive advantage.”

Ryan’s company assists client companies with everything from communication by the CEO to media strategy, shareholder relations, crisis management and digital media. And though Ryan says he was motivated more by the opportunity to dictate his own lifestyle rather than by financial success, he has enjoyed both. Today Integrated Corporate Relations ranks as the ninth-largest financial communications firm in the nation, with household-name clients that include J. Crew, Ticketmaster, Six Flags, Outback Steakhouse and Western Union.

Fitting the Bill

Like his friend Ryan, Rob Hunter took his brand-new MBA to an unglamorous position that proved extremely valuable—in a corrugated container plant operated by the Mead Corp. in Lewisburg, Tenn. Over time he worked in every area of the plant, from accounting to scheduling, manufacturing, marketing and sales. He learned how all the pieces fit. 

After he was promoted to Mead’s office in Atlanta, Hunter focused on reshaping the business strategically around customers’ needs. That work led to an offer from a large management consulting firm, where he advised Fortune 500 corporations on their strategic direction. Among his clients were Sprint, Verizon and other companies in the fast-growing telecommunications field. Through his involvement in that industry, he perceived an opportunity.

“There was a gap between what companies were saying they needed from telecom service providers and what providers were able to offer,” Hunter says. In particular, companies with multiple locations wanted unbiased recommendations that met their needs, instead of simply what the service provider had to offer, and they wanted a single point of contact. Coincidentally a group of investors in the Mobile area had put together a business plan for a telecom company that would serve small companies. They wanted Hunter to run the business. 

“I convinced them to adopt my idea instead,” he recalls. “I was confident the niche existed for outsourced management of a company’s telecommunications. But in 1997, when local phone service was just being deregulated, 60 percent of most companies’ telecom costs were long-distance charges, and a lot of them didn’t even have an Internet circuit. When I explained our idea, they would look at me like I had three heads.” Now, Hunter’s clients may wonder how they managed without his firm. Some clients have more than 500 geographically dispersed locations and 1,000 phone bills each month. “Our clients have multiple carriers and technologies. We manage it all for them. When they need to place a circuit or order a new cell phone, we do it for them. Their bills come to me. We audit and pay them. We negotiate rates. We manage all the pieces and parts. We give them the tools so they can even drill down to the individual cell phone and see how many text messages were sent. In many ways our approach goes back to what I learned from Professor Germain Böer, who taught me to see how each function in the business is dependent on the others.”

Special Delivery

Of the three, only Roberson resembles the old stereotype of an enterprising do-it-yourselfer. As an undergraduate studying political science and English at Lipscomb University, he started a T-shirt business that he resurrected during his Owen days. Before starting Advent he co-founded Dalmatian Press, which became one of the country’s largest publishers of children’s books. 

Even when he was working for someone else, he gravitated toward companies not long removed from their own startup days. Especially, as a liberal arts major who applied to business school “thinking I’d use philosophy and communication to change the world,” Roberson was drawn to opportunities to convey the essence of a company’s brand and the benefits to its target audiences. For a self-described “marketing geek,” direct selling was an oxygen-rich environment.

A decade ago he had arrived at a career crossroads. “My wife said, ‘It’s time to buy or start your own business,’” he says. He read business plans involving everything from armored cars to trade show booths. The latter intrigued him enough to write a plan for his own exhibits company—one that would go beyond creating traditional trade show displays toward a form of business communication that was deeper, “more emotional, more connected.”

Roberson began approaching banks in Brentwood, Tenn. “I walked into every bank on Maryland Way (the main business thoroughfare),” he says. One banker led him to a trade show exhibit company that was for sale, and after two intensive weeks of due diligence, Roberson was in business. 

John Roberson

Since he bought Advent, then a struggling small company, in 2000, the firm has increased its sales sevenfold. In the process it has evolved into a pioneer in the field of experiential marketing. Through events from product launches and sales meetings, Roberson says, “We help clients connect audiences to their brand in memorable and measurable ways.” 

Roberson cites a health care client that had achieved outstanding results in helping businesses lower health care costs through management of employees with chronic conditions, such as diabetes. “For example, they had call centers staffed with R.N.s,” Roberson explains, “and they’d call people with diabetes to make sure they were exercising and eating a proper diet.” It was an old-fashioned approach, but, perhaps because it was so unglamorous, the company was finding it difficult to communicate the value of its services effectively. 

How, the company asked Advent, could it differentiate itself at a major trade show in Washington, D.C.? The solution, Roberson’s team suggested, was to create its own separate event. The theme would be “Hope Delivered.” When Harry Winston donated the Hope Diamond to the Smithsonian, he sent it by U.S. mail. It was a simple, reliable solution, he explained, like the health care client’s approach.

Advent orchestrated a special event at the Harry Winston Gallery of the Smithsonian in collaboration with Corporate Design Inc., a Nashville-based design firm. The client’s prospects, all C-level executives, received invitations from the Smithsonian’s curator that replicated Winston’s original mail parcel and explained the story. As part of the event, attendees would receive an after-hours, private tour led by the curator.

Response was “phenomenal,” Roberson says. “We were able to deliver our message in a relevant way” that reinforced the client’s brand position of simple, reliable solutions. Not only did the event create a buzz among the target audience (who told their C-suite peers), it delivered a measurable impact in the form of new business. It’s easy to see why Roberson explains the difference between experiential marketing and traditional marketing as the difference between receiving a kiss and merely watching one. 

Determination

The examples of Roberson, Hunter and Ryan are unlikely to settle the old debate about whether entrepreneurs are born or made. But all three might use a different phrasing: Entrepreneurs are determined. 

Even armed with good ideas and business skills, success does not come overnight. Reaching the “takeoff point,” Ryan says, took five years for his firm. “When you’re getting off the ground, you’re in the one-step-forward, two-steps-back mode. You’re doing everything—taking out the garbage, signing the lease. But it’s easier to do all that if you believe in what you’re doing. Even though it’s kind of cliché, persevering through setbacks is the most important thing.”

Hunter remembers one week when he was hit with a double blow. When a service provider upon whom Alliance had relied suddenly went bankrupt, he had to scramble to find an immediate replacement. On top of that Hunter had slipped on the stairs of his deck at home and broken three ribs; each breath sent pain shooting through his body. Instead of staying home that week, he worked harder than ever. “About 30 percent of my clients used this provider,” Hunter says. “Our credibility would have been shot had we not been able to guide them out of that. It could literally have cost us the entire business.

“You’ll always face obstacles, and some make you wonder whether you should throw in the towel. But when you overcome those obstacles, that’s what makes the journey great.”

In 1995 Friedman was still a relatively new employee at NASDAQ, the nation’s largest electronic stock market. Meanwhile Miller had been hired as a consultant by NASDAQ to refute Christie’s theories about collusion among market makers at the company.  (See sidebar.) While Friedman felt for her former professor, she quietly hoped that Miller—and NASDAQ—would prevail. 

“I was rooting for the other guy,” she says, laughing. “But I thought at the same time that it must be so exciting and pretty intimidating for him to be facing this Nobel Prize winner. In the end Bill Christie was proven to be right. He literally fell across something important, and what he found ended up creating lasting change.”

While the history of the Owen School and the history of NASDAQ are forever linked because of Christie’s findings and the regulatory changes that followed, this is a story about Friedman, the company’s Executive Vice President for Corporate Strategy and Global Data Products—and soon-to-be Chief Financial Officer. When she assumes her new role in July, she will have been with NASDAQ for 16 years. Over that time she has taken the lead on a myriad of initiatives, including acquisitions and mergers that have positioned the company to compete in a changing global economy. 

A Critical Thinker

Friedman started her NASDAQ career as a business analyst immediately after receiving her MBA from Owen. “I graduated saying I wanted to be a product manager, but not with commercial products. I wanted to manage complex products. I was lucky because that’s exactly what NASDAQ offered me,” Friedman says. One of her first tasks was to write the first product plan for the PORTAL system, which facilitates the quoting and trading of restricted securities eligible to be bought and sold by qualified buyers and sellers.

“When I came to NASDAQ, they didn’t understand that they had products. I came in on the ground level, building business plans for trading products. We had launched the initiative for PORTAL three years before but hadn’t succeeded in generating any revenue. We had to ask ourselves how to turn it around and make money off of it,” she says. That product plan, which involved instituting a fee, is still in place today. 

Friedman initially didn’t see herself pursuing a career in finance, although her father was a managing director of T. Rowe Price Associates in Baltimore. Her mother was an attorney with a Baltimore firm. Friedman majored in political science at Williams College with a minor in Soviet studies.

During a monthlong stint at a language studies program in Russia, she was appalled to discover not only the dismal living standards of ordinary Russians but that she, a foreigner with U.S. dollars to spend, had access to superior goods and services.

A summer internship on Capitol Hill during her junior year was interesting, but she learned that life on the Hill was not for her. The year she graduated from Williams, 1991, was not a great one from the job market perspective, so she decided to go the direct route to graduate school.

NASDAQ OMX Group headquarters in New York

“I wanted a more practical education, and I knew I wanted to go to business school,” she explains. While her future husband, Michael Friedman, JD’93, worked toward a law degree at Vanderbilt, she enrolled at the Owen School and immediately knew the teaching style was “perfect for my brain.”

“I only applied to Vanderbilt. I loved the fact that it was a small school with a small class size. And I absolutely loved the campus. I knew that straight out of college a great up-and-coming school was the better environment for me. 

“I found that every class fitted with how I learned, how I understood things. I liked the teaching style,” she says. A marketing major with a secondary concentration in finance, she threw herself into her marketing case studies but found she also thrived in her finance classes.

After completing her first year at Owen, she was named a Dewey Daane Scholar. “I always remember the very brightest ones, and she was one of those, right at the top of her class,” says Daane, the Frank K. Houston Professor of Finance, Emeritus, who has taught monetary and fiscal policy at Owen for 34 years. Her papers are some of the very few he has sent to the Vanderbilt Archives.

Classmate Michelle DiPauli Kelly, MBA’93, remembers Friedman as “outgoing, gregarious, a joy to work with” and “a critical thinker but not a critical person.”

“When she had a point to make, she could make the point, even with lots of opposition, and do it well, and do it in the least offensive manner,” Kelly says. “She is very intelligent and also open to new ideas. In class she was always willing to listen and consider what others thought or what their views were. She was always good about asking the questions, ‘Why are we doing it? How can we do it better?’”

Managing and marketing complex products for NASDAQ perfectly melded the academic interests Friedman honed at Owen. “What I do falls under the marketing discipline. But what it really is, is being your own CEO of a product,” Friedman says.

Surpassing Expectations

After the successful relaunch of PORTAL in the mid-’90s, Friedman became involved in several dot-com initiatives for NASDAQ as well as sophisticated technological advances and acquisitions to handle the growing number of trades.

“By the time I got there, we were a very, very active market,” she says. “I remember we were building Workstation 2 and marketing that. We were trading around 100 million shares a day. We built the new workstation to handle 300 million trades, and within three days of the launch we were trading at that level. We just kept surpassing all expectations throughout the ’90s.”

The retooling that followed revelations of collusion among market makers in the early ’90s better positioned the company to thrive in a global economy, Friedman says. The company further reorganized in 2000, creating new business units and becoming a shareholder-owned, for-profit company.

“We looked at how we made our money and who our customers were,” Friedman explains. NASDAQ Data Products was formed, and Friedman ran that business unit as a senior vice president. As the company became more global, Friedman was primarily responsible for leading all mergers and acquisitions.

“We started by buying small electronic trading systems called Brut and INET. These acquisitions were critical to our survival,” she says, noting that the superior technology available through those electronic trading platforms vastly improved order routing and connectivity. 

“It solidified our position in the U.S. market and allowed us to become a more profitable organization.” After those acquisitions the company began to look overseas.

A merger attempt with the London Stock Exchange in 2005 was unsuccessful, but Friedman believes that apparent failure turned out for the best: “They’re in a very different competitive situation now. We felt strongly we wouldn’t overpay, and we didn’t.”

Soon enough another international opportunity presented itself. In 2007 NASDAQ agreed to buy OMX, a Nordic and Baltic financial services company, which operated the Copenhagen, Stockholm and Helsinki stock exchanges, among others. The complicated transaction also involved the Borse Dubai, a stock exchange in the United Arab Emirates. The resulting merger, named NASDAQ OMX Group, is the world’s largest exchange company. 

“The OMX/Dubai deal really showed Adena’s talent and mettle. The merger required a creative, complex solution,” says Anna Ewing, Executive Vice President and Chief Information Officer at NASDAQ OMX Group. “It required a marathon of 2 a.m. calls and all-night sessions during which I never saw Adena’s energy waiver nor her strong grasp and attention to detail fail.” 

Since the merger NASDAQ OMX Group has acquired both the Philadelphia and Boston stock exchanges. Its growing global presence is astounding considering its humble origins. The National Association of Securities Dealers created NASDAQ in 1971 simply as a way to automate its quotation system. (NASDAQ was originally an acronym that stood for National Association of Securities Dealers Automated Quotations.) 

“NASDAQ began as nothing more than a bulletin board on the computer for posting dealer quotes. The question that NASDAQ had to face was: How do you go from a quotation system to a real market? They made that transition fairly well and still provide services for independent dealers,” says Hans Stoll, Director of Owen’s Financial Markets Research Center and Anne Marie and Thomas B. Walker Professor of Finance. “Adena was very much involved in transforming a trade association into a business organization. Not only did Adena survive those changes, she was very much a part of them and she thrived.”

Riding Out the Downturn

In spite of the recent market meltdowns, NASDAQ OMX Group is faring remarkably well. In fact Forbes magazine recognized it as its “Company of the Year” in January 2009. The article cited the company’s ability to capitalize on opportunities in a tumultuous economic environment and mentioned the successful completion of recent acquisitions.

One benefit of the economic downturn has been the opportunity to focus on integration, or “having a moment to look at the landscape and look at new asset classes,” as Friedman says.

A recent initiative is a partnership with International Derivatives Clearing Group, a small company using NASDAQ technology to build a clearinghouse system for interest rate swaps. Combining the technology and the product in an organized fashion allows for more transparency, says Friedman, who oversaw the launch of that project as well.

With another project off the platform, Friedman continues to look toward the future: “We will continue to identify different opportunities to leverage our core strengths to find synergies and get into new businesses. That’s what I spend my time doing in addition to running the core products business.”

Colleagues say the atmosphere on Friedman’s team is “exhilarating.”

“Adena expects a ton from herself and her teams and, as a result, she brings the best out in everyone around her,” says Randall Hopkins, a senior vice president who works with Friedman in data products management. “She always stops to ask the second question about how you are,” Hopkins says. “Then, of course, she rightly launches into the challenge at hand. And she doesn’t miss a beat in doing so.”

Friedman believes transparency and flexibility are keys to riding out both upturns and downturns.

“One of the things that the strategy group does not do is write a three-year business plan. You always have to take into consideration the environment you’re in. That’s what’s great about it. Out of every crisis comes opportunity. We are well-positioned to capture some of those, particularly in organizing some OTC markets. We will continue to analyze what we think the role of markets are as we come out of these crises.”

Certainly transparency has become a key talking point at NASDAQ since the controversy surrounding embattled financier Bernie Madoff and his alleged Ponzi scheme has come to light. Madoff’s past history as non-executive Chairman of NASDAQ has been noted in the media, but Friedman points to the fact that his affiliation with the company ended years ago and he was never involved with daily operations. During the early ’90s the NASDAQ board operated in an advisory capacity to the NASD, before the NASD affiliation was dissolved.

The transparency that Bob Greifeld, CEO of NASDAQ OMX Group, and others have publicly called for would make the kind of “back office” deals that Madoff apparently engaged in more difficult to pull off. “When there’s no data, you don’t have a central way for the public to see what is going on. It makes it impossible for someone like Bill Christie to study those markets. Our view is that those need to be more organized,” says Friedman, who thinks a change in regulatory priorities should focus on “systemic risk.”

NASDAQ is banking on the fact that market innovations will continue to be not only profitable but also part of the solution. The company recently introduced a new government relief index tracking companies participating in programs such as TARP, the Troubled Assets Relief Program.

Meanwhile Friedman believes that the current economic situation has provided many valuable lessons for those joining the world of finance during difficult times.

“If you’re going into finance, don’t allow yourself to be swept away by the moment,” she says when asked how she would advise MBA graduates today. “Put all your actions in perspective. Look at the long-term health of your industry. A lot of the banks got swept away with the short-term returns. They were caught up in a level of competition that drove them to short-term thinking around whatever they were doing.”

Friedman says keeping the long-term health of the institution at the forefront is critical. “If you get swept away by a short-term current, you’re going to find yourself getting caught up in a bubble,” she says. “You always have to maintain your moral focus.”

In Friedman’s case, her moral focus begins at home. Married since 1993, she has two sons, Luke, 13, and Logan, 11, both of whom she credits with keeping her grounded. “The best thing is to go home at the end of the day and look at my kids and say, ‘That’s what’s important.’ Everything you’re doing is critical, but the real critical part is raising kids.”

Srivatsaa

Sharran Srivatsaa, MBA’08, remembers arriving in Tupelo, Miss., well after dark and encountering what most people would expect to see on a small-town Thursday night: very little. “There wasn’t much going on.”

In the morning he saw the place, physically and figuratively, in an entirely different light, as through an arrival-in-Oz transformation when suddenly the picture turns from black and white into spectacular color. “When we woke up, suddenly it was a hub of activity—an amazing difference. We were told that, on weekdays, Tupelo swells from about 40,000 to more than 100,000. It really pulls workers in from the neighboring counties.”

Put another way, more people come into Tupelo each day to work than come in an entire year to see the city’s most famous attraction, the two-room house where Elvis Presley was born. 

Well before Toyota chose Tupelo over many rival suitors as the site of a huge new manufacturing plant (set to open in 2010), the town would have been an economic wonder in any place, by any standard. But especially given this town’s location, visitors could be forgiven for saying, “I don’t think we’re in Northeast Mississippi anymore.”

A Fateful Phone Call

Before his graduation in May, Srivatsaa was one of the leaders of Project Pyramid—a two-year-old, student-driven initiative aimed at alleviating global poverty. The interdisciplinary project includes students from Owen, Vanderbilt Law School, Divinity School, Peabody College, School of Medicine, the Graduate Program in Economic Development (GPED), and College of Arts and Science. As part of their work, participants have traveled to such distant locales as India and Bangladesh, where they met with Nobel Peace Prize winner and GPED alumnus Muhammad Yunus, PhD’71. But it was only through a chance conversation that they managed to visit the economic miracle barely four hours away from Nashville.

Actually, says Srivatsaa, the group had wanted to put together a trip to a spot within manageable driving distance from Vanderbilt. “We had international trips, and we had a lot of international students who had seen poverty in other countries. We had a lot of domestic students who wanted to do something closer to home.”

So he approached Bart Victor, the Cal Turner Professor of Moral Leadership and faculty adviser to Project Pyramid. Knowing the town had a history of remarkable economic development, Victor recommended Tupelo.

There the process halted. “I didn’t know anyone in Tupelo who could help us put a trip together,” says Srivatsaa, who now works in private wealth management for the Atlanta office of Goldman Sachs. Then, by chance, as he was making thank-you calls on Owen’s behalf to a list of donors, he saw the name of Scott Reed, BA’80, and a Tupelo address beside it.

Reed is part of what is surely the family with the deepest Vanderbilt ties in Tupelo, maybe even in all Mississippi. His father, Jack Reed Sr., BA’47, and two uncles graduated from Vanderbilt after World War II. Scott’s brother, Jack Jr., BA’73, and sister, Camille, BA’75, were there in the ’70s. Jack Jr. met his wife, Lisa, BA’74, at Vanderbilt. Lisa’s parents had met there, too. Enough Reed nephews and cousins have matriculated to Nashville that Scott has to think before naming a number.

Scott never actually attended Owen. Just after he was accepted in 1985, he says, he jumped at a chance to start the first full-service brokerage firm in northern Mississippi. But he contributes financially. “One of the things I like about Vanderbilt,” he says, “is that, when they call about giving, they have students call. You can keep up with what’s going on at the school.” 

During their conversation Srivatsaa made a point of bringing up Project Pyramid and its goal of eradicating global poverty (“You’d think they’d get a bigger goal,” Scott chuckles) and asking whether Scott could facilitate a contact for them. And, as it happened, Scott knew just the person: his brother Jack, who was chairman of Tupelo’s renowned Community Development Foundation. (Lesson: There is always a Vanderbilt connection.)

Scott Reed, left, and Jack Reed Sr. at the entrance to Tupelo’s historic Fairpark district

In April Professor Victor and eight Project Pyramid students—three from Owen, three from GPED, and two from the Divinity School—rented a large van and drove to Mississippi to learn “the Tupelo Story” firsthand. During their visit the group first met with representatives of the Community Development Foundation. They toured the plant of a Tier 1 automotive supplier and visited two of the nine industrial parks that the city had farsightedly developed on land it had purchased. Over lunch with the local Vanderbilt Liaison Group—the Reed brothers; their father, Jack Sr.; local businessman Henry Dodge; and city attorney Guy Mitchell—they talked about what they had learned.

“This one-day trip,” wrote GPED student Sait Mboob “was arguably the best lesson I’ve had in six years of studying economic development.” 

It was such a good lesson, in fact, that later in the spring, all 60 students in Vanderbilt’s GPED program went to Tupelo. Another Project Pyramid team will return next year. And the students are busily analyzing how to apply the lessons of Tupelo to other settings in the United States and around the world.

Rethinking Stereotypes

To learn the Tupelo Story, you must be prepared to unlearn what you thought you knew about Mississippi: all the stereotypes; all the “lasts” in education and health; the intractable poverty; the antebellum attitudes that led William Faulkner to write that, here, “the past isn’t over; it isn’t even past.”

In Tupelo everything has long been about building for the future. From practically nothing they built the capacity for bringing new businesses to the area, in ways that created both jobs and sustainable revenues for further public investments. The result is a diverse local economy that has remained remarkably stable.

Toyota’s manufacturing plant is scheduled to open in Tupelo in 2010.

Through planning and cooperation they established one of the best public school systems anywhere. Half the elementary schools have earned national blue-ribbon status. Twice, Tupelo High has received the U.S. Department of Education’s Excellence in Education Award. Public investment—highest, per pupil, in the state—has given Tupelo schools a student-teacher ratio of 13 to 1. Graduation rates not only are among the highest in Mississippi; they’re 18 percentage points better than the national average. There is virtually no “white flight”; 98 percent of the town’s school-aged children attend public schools. 

North Mississippi Medical Center, which serves a 22-county area and ranks as the largest nonmetropolitan hospital in the nation, won the prestigious Baldrige Award for quality this year. (Many of its 430 doctors are Vanderbilt-trained, brags Jack Reed Jr.) 

For years the town has drawn workers from across northern Mississippi and industries from around the country. And that was before Toyota announced that it had chosen Tupelo over a number of rival suitors for a huge new North American manufacturing plant. 

The joke, told not so jokingly by locals, is that if Presley were growing up in Tupelo today, he wouldn’t leave. Indeed, one striking fact about Tupelo is the number of its sons and daughters who go away to college, like the Reeds and their children, and return to continue building the community.

A Resurgence Rooted in Tragedy

Things weren’t always so rosy. “In the 1930s,” says Scott Reed, “we were one of the poorest counties in the poorest state in the Union. I think Project Pyramid’s interest was in how we overcame that legacy. It’s like the way my dad was teasing an old friend of his: ‘Junior, are you ever going to amount to anything?’ And he replied, ‘Well, if you saw where I came from, you’d be more impressed.’”

The Reed brothers will tell you that Tupelo’s resurgence was rooted in tragedy. In 1936 a monster tornado killed more than 200 people and left the place in ruins. But the tornado also marked a turning point of sorts. “We had to start over and work together to make things happen,” Scott says. “It was the beginning of what we came to call the Tupelo Spirit.”

Jack Reed Jr. also points to the fortuitous presence of “some enlightened business leadership”—particularly a newspaper editor named George McLean. Starting the Community Development Foundation was his idea, and he won the support of other leaders in the business community, including the Reeds’ father, Jack Sr.

“McLean was trained as a Presbyterian minister and had a really strong sense of social justice—that we’re all in this together and have to help each other,” Jack says. “Tupelo has an egalitarian ethic and a reputation for inclusiveness.” McLean, believes Jack, helped cultivate that civic sensibility.

Early on, civic leaders agreed that a key to development—one that ultimately proved crucial in Toyota’s decision—was a strong system of public education. The leaders pledged to send their children to public schools. And they formed one of the nation’s first private foundations to raise money for those schools—one of many public-private partnerships. 

Community leaders were just as deliberate about laying the groundwork for success in other areas, too. Years ago, for example, they put together a “thoroughfare committee” to ensure that Tupelo would have the transportation corridors it needed. As a reflection of the town’s egalitarianism, Scott says, it wasn’t unusual to see millworkers and the chair of the CDF on committees together.

In the 1960s the Community Development Foundation bought up big tracts of land outside the town limits that would eventually serve as industrial parks. Now the city leases the properties to companies that relocate to Tupelo, then plows the proceeds back into the community. 

Tupelo’s North Mississippi Medical Center is the largest non-metropolitan hospital in the country.

What seemed to impress the Vanderbilt visitors most was the all-for-one spirit for which the Reeds themselves served as exemplars. The family, notes Victor, owns a century-old clothing business, the largest in town. But they actively solicited big-box competitors like Wal-Mart to enter the local market—a strategy that runs counter to what students traditionally learn in business school. 

“I was surprised by how intrigued the students seemed to be with that,” says Scott Reed. “It didn’t seem like rocket science. There was an understanding that, if the community thrives, we’re going to thrive with it.”

If the strategy hindered the Reeds’ business, it doesn’t show. Along with two locations in Tupelo, the family also operates stores in Starkville and Columbus, Miss. “We’re a ring, not a chain,” laughs Jack Jr.

Partnering for the Future

The business lessons from Tupelo have not been lost on the newer generation of Vanderbilt students intent on changing not just their corner of the world but the whole global village. “Tupelo can be a story of inspiration,” says Sharran. “They have an amazing interaction between public and private enterprise. The CDF straddles that line. Private organizations just cannot do it all.

“They have a lot to teach us: Take a long-term view, and lay a foundation for our children and their children so the community can develop and grow. They had projects lined up 30 or 40 years out. Yet a vision is not enough. Selflessness is what guided that community.”

Says Scott Reed: “I think the students’ biggest takeaway is that there’s nothing we’re doing that others can’t do. If you figure out how to replicate this model, you can make strides for eliminating poverty.”

One day was more than enough to energize the group into thinking about opportunities Tupelo might offer. One possibility, suggests Srivatsaa, is a cross-disciplinary academic case study of Tupelo’s development. “Project Pyramid is perfect for that because no other organization encompasses so many disciplines across the university. Peabody students could study the educational system. Medical students could study the health care system. There’s a strong tie between every area of Tupelo and every area within our group.

“We have something spectacular in our own backyard with a strong Vanderbilt connection that needs to be nurtured.”

“I’m really excited about creating a more formal partnership with Vanderbilt so we can have the input of these really bright young people coming in here every year,” says Jack Reed Jr. “It certainly is a win/win.”

Igleheart

Meanwhile, Tupelo is becoming more integral to the work of Project Pyramid. Vanderbilt Professor of Economics James Foster—who, says MBA student Ryan Igleheart, “knows more about Tupelo than anyone at Vanderbilt”—has discussed teaching a Project Pyramid-related course at Owen in the future. For the first time, there will be short courses about Project Pyramid at the Divinity and Law schools. Igleheart, who serves as President of Project Pyramid, will lead a second group from Vanderbilt to observe and learn in Tupelo. “Our next step,” he says, “is to adapt their model to other places.” 

Those places may include Bangladesh, where, building on previous Project Pyramid efforts, Vanderbilt students will return in December and again next spring to work on a model village concept. They also could include Mozambique, where Project Pyramid participants may explore economic development strategies with Vanderbilt’s Institute for Global Health, which operates 10 AIDS clinics in the country. 

The lessons of Tupelo also may reach to other business schools. Last fall Owen hosted a first-of-its-kind case competition on poverty alleviation. Teams from 35 schools, including Wharton, Chicago and Yale, participated. It’s part of an effort to plant seeds that could grow into Project Pyramid groups elsewhere. “The teams really started to embrace the excitement and energy of this project,” says Igleheart. Every week he receives e-mail messages from people around the world interested in getting involved. Which reminds him: Among growing numbers of tasks on Project Pyramid’s to-do list is a white paper on how to help others get started. 

It’s the ripple effect, says Igleheart, that Project Pyramid has always intended to create. Ask students who have been part of it, and they’ll tell you those ripples have become strong currents in their own lives. Even after graduation Srivatsaa remains involved in building an advisory board of community leaders. 

Igleheart, who is pursuing a Health Care MBA, says, “A big part of me wants to make this the focal point of my business career.” It’s a commonly heard sentiment—a reflection, perhaps, of a generational change and, perhaps also, of how Tupelo is a generation ahead of the curve. “There’s a point at which we’re all connected,” says Igleheart. “As a global community we have to succeed together. The world is waking up to that.”

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.

From left, Dr. Ravi Chari, Ted Klee, Drew Bordas and Fernando Sanchez are the team behind Organ Transplant Technology.

“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.

Clayton Knox, a medical student at Vanderbilt, helped Dr. Chari develop the technology for OTT.

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.”