Jacqueline Parker, recently named Chief Strategy Officer at Covenant, has been with the company since it opened in 1986.

In 1986 Jacqueline Parker had to make one of the toughest decisions of her life: either complete her senior year in college and earn a bachelor’s in nursing, or join her husband, David, in an ambitious startup in the trucking business. Parker chose the latter, setting the wheels in motion for a career at Covenant Transportation Group that has lasted more than 26 years. She hasn’t looked back since.

“At the time I thought, ‘You know what? My efforts are better spent with Covenant. That’s where my future is,’” says Parker, who serves as the company’s Chief Strategy Officer. “With a startup, there’s so much work to be done. You need a lot of hands. So I signed up, and I just stayed.”

Covenant opened for business with just 25 tractors and 50 trailers. Since then, the Chattanooga, Tenn.-based company has grown considerably, acquiring other carriers along the way. Covenant now operates approximately 3,000 trucks, which transport a variety of goods across the United States.

Parker attributes much of Covenant’s success to her and her husband’s strong faith. “Some people call it chance; others call it luck. We call it God,” she says. This philosophy is reflected in the name of the company, which she explains is about not only a spiritual commitment but also “an agreement that we have with our customers, employees, vendors and shareholders.”

This sense of commitment is what spurred Parker to enroll in the Vanderbilt Executive MBA program in 2010. When Covenant encountered a rough stretch during the late 2000s, Parker remembers wishing that she could have done more to help the company. “You’re disappointing stakeholders on all fronts, and you feel responsible,” she says. “I had a lot of institutional knowledge, but I knew I was lacking some valuable skills.”

That’s when Parker made perhaps the second toughest decision of her life. “Going back to school was one of the hardest things I’ve done,” she says. “But I thought, ‘It’s going to be worth it in terms of time and money and effort.’

“And indeed it was.”

From left, Director of Corporate Relations Peter Veruki; JAMI SMITH, MBA’05, Global Marketplace Program Manager at Microsoft; MAYANK VERMA, MBA’08, Senior Partner and Channel Marketing Manager at Microsoft; Dean Jim Bradford; BOB GROHOVSKY, MBA’90, Worldwide Services Partner Director at Microsoft; and JUDSON RANDOLPH, MBA’91, Web Analytics and Online Customer Satisfaction Analysis and Improvement at Microsoft, gathered at the company’s headquarters in Redmond, Wash., on Aug. 3, 2012.

From left, Ziya Alemdar, MBA’98, Managing Director of ProAd Media Solutions; Judy Spinella, EMBA’93, Vice President and Project Leader at B.E. Smith; and Mehmet Baser, MBA’95, Managing Director of BT Global Services, enjoyed a mini reunion along the Bosporus in Istanbul this past June.

“I have partial symptoms of both, but the doctors can’t do anything for either one,” he says. “They’re progressive diseases, and unfortunately they’re doing just that—progressing.”

Steele

Steele, however, also knows that even the toughest of odds can lead to surprising outcomes. His work with Uganda Children’s Project, a nonprofit organization that he and his wife, Lisa, founded 11 years ago, is a testament to what can be accomplished in the face of adversity. Thanks to the group’s efforts, countless orphaned and desperately poor Ugandan children have enjoyed educational opportunities that otherwise would not have been possible.

“Something has to be done to help this disenfranchised class climb out of the ghetto,” he says. “Education gives them that chance.”

Uganda Children’s Project, which grew out of mission work at Steele’s church near Chattanooga, Tenn., currently has around 240 children and young adults paired with sponsors throughout the U.S., Europe and Australia. The group’s two full-time Ugandan employees are responsible for identifying potential children for the project, while Steele and his wife focus on the sponsorships.

“I draw upon my MBA experience for all of the finance, marketing and operations that go into this,” he says. “For example, we work in several foreign currencies right now, and trying to manage the exchange rate against a very unstable Ugandan shilling is difficult.”

An unstable currency is just one of the problems facing Uganda these days. Years of political turmoil, corruption and a devastating AIDS epidemic have all left their mark on the country. Yet Steele isn’t daunted by the challenges.

“We’ve never felt like we were called to deal with the big problems in Uganda,” he says. “We can only keep working our own way—child by child, sponsor by sponsor.”

Fittingly it’s the same philosophy that defines Steele’s own personal struggle against tough odds: Take things day by day, step by step, and relish the small victories.

For more information, visit ugandachildrensproject.org.

Bloomberg Businessweek

June 4: Every year around this time, a wave of anxiety ripples through most of the nation’s newly admitted business school students: How to depart a job without burning any bridges, and ideally, leaving a positive, lasting impression? Tami Fassinger, Chief Recruiting Officer, writes in this op-ed about how to resign gracefully.

July 13: The admissions interview is the business school’s opportunity to meet potential students face to face and go beyond the pages of their applications. For applicants, the interview is a chance to show their true colors. Consuela Knox, Senior Associate Director and Diversity Recruiting Manager of Admissions, offers tips to students about the interviewing process.

Sept. 25: The number of people taking the Graduate Management Admission Test (GMAT) is on the rise this year, bolstered by a surge of people trying to take the exam before the addition of a new section, as well as by growing interest in the business programs from students outside the United States. Dean Jim Bradford is quoted.

Christian Science Monitor

Aug. 13: Could “liking” something on Facebook get you fired? That’s what six sheriff’s deputies say happened to them after they liked the political opponent of their boss. A district judge ruled that Facebook likes aren’t protected speech, but the case is being appealed. Bruce Barry, the Brownlee O. Currey Jr. Professor of Management, is quoted.

CNBC

Aug. 29: Many of Paulson and Co.’s investors stayed with the company last year even though its flagship hedge fund lost 35 percent. But with returns continuing to sag amid a rising equities market, some of those investors are now jumping ship. Nick Bollen, the E. Bronson Ingram Professor of Finance, is quoted.

NBC.com

Aug. 13: As the Olympics wind down, experts are awarding a gold medal in ambush marketing to Nike, which scored with bold commercials, smart PR moves and its distinctive, ubiquitous neon-yellow Volt shoes. Jennifer Escalas, Associate Professor of Marketing, is quoted.

USA Today

May 21: Facebook raised about $16 billion through its IPO, which gave the company a market value of $104 billion. But its lackluster public debut deflated the pre-IPO hype that had floated in the business press and on Wall Street for weeks. Bill Christie, the Frances Hampton Currey Professor of Finance, is quoted.

The Wall Street Journal

May 21: When the economy tanked four years ago, corporations reduced their presence at business schools. So, universities started reaching out to smaller employers—something they had never really done before. Owen alumna Julie Brink, MBA’11, went to a small consultancy firm in Nashville and is quoted.

July 12: Consumer-products companies are turning to new technology to overcome the biggest obstacle to learning what shoppers really think: what the shoppers say. To find out what really draws their test shoppers’ attention, companies are combining three-dimensional computer simulations of product designs and store layouts with eye-tracking technology. Steve Posavac, the E. Bronson Ingram Professor of Marketing, is quoted.

Hans Stoll

Q. What was the world of finance like when you first began thinking about opening the Financial Markets Research Center?

A. It was the mid-1980s, and derivatives were pretty new. At the time, Bob Whaley, who is now the Valere Blair Potter Professor of Management in Finance, and I had developed a bit of a reputation for doing work in this area. But there were a lot of changes, questions and suspicions about derivatives and other newfangled instruments. In 1986 we had just completed a study of the triple witching hour—when three kinds of derivative securities expire at the same time—which we undertook for the major options and futures markets at the behest of the Securities and Exchange Commission. I then went to Chicago to answer questions being raised by those in the industry. That study helped establish Vanderbilt’s reputation in derivatives and provided a path to the FMRC, which I started in 1987.

Derivatives were pretty sleepy then—mostly related to agriculture—until the exchanges developed into financial derivatives, which caused a lot of controversy and discussion about how they work and how you set up a market for them. The other thing that was going on in the 1980s was in the market microstructures area. Stock commissions were under pressure since being deregulated in 1975. At the time, the New York Stock Exchange set fixed prices for commissions, and they had a lot of rules and regulations in place that protected them. All that was in flux.

So there was this sense that there were new instruments, new innovations like derivatives, the securitizing of mortgage-backed securities, and portfolio insurance, which played a big role in the ’87 crash. That was the atmosphere when the FMRC started.

Q. What was the original goal of the FMRC?

A. The idea was that the academic world could help clarify and bring further understanding to new financial markets. We wanted to be a link to the real world. We wanted to have relationships with companies that would help us understand what was going on and we would help them understand what was going on with our research. Second, we wanted to be connected to the regulators because they were determining exactly what could be done with these new instruments and what constraints they had.

Q. How did the idea for the annual conference come about?

A. I didn’t state it publicly, but my commitment was to have a conference every year. And in fact, it proved to be more successful than I’d anticipated, at least in the sense that it gave the industry an opportunity to talk to academics and also to each other. It provided a kind of neutral territory for everyone.

After several years of the conferences, I was talking to one of the FMRC members and said, “I’m not sure I want to do this conference each year.” And he said, “The conference is the thing. That’s really what makes the FMRC. If you don’t have a conference, you’ll lose the members.” He was right. The conference is what members enjoy, and it’s where the FMRC makes a contribution. We bring together interesting people who are in the trenches when it comes to some of these issues.

Q. So the 1987 crash just happened to provide the perfect topic for the first conference?

A. It wasn’t a full-fledged conference like we have today, more like a panel. But yes, that was the first topic. We held the discussion—and I think a dinner—in April 1988. The title was “Stock Market Crash of ’87: What Have We Learned?” We hadn’t had much time to reflect. So 10 years later, we had the same title.

Paul Volcker, former Chairman of the U.S. Federal Reserve, discussed the Great Recession at the 2009 conference.

Q. And what were some of the key lessons about the ’87 crash that emerged at the discussion?

A. The issue came down to whether the crash was caused by new futures and options instruments or by something more fundamental. Was it Chicago, or was it New York? You had this big battle going on.

For the FMRC, the benefit of the industry panel discussion was that the participants conveyed a sense of the terror that people in the exchanges and the futures markets felt when prices were crashing. I mean it was phenomenal—this was a 20 percent drop in one day. There’s been nothing like that since. I was sitting down in the lobby, and the TV stations were interviewing me. It was remarkable.

So what did we learn? There were opinions. I’m not sure anybody learned anything. But I distill the lessons as follows:

• It wasn’t the futures markets. It was a fundamental misevaluation of the stock market. Interest rates had gone up, and when that happens, stock prices usually go down. They went up instead. I think the market realized this and said we’re overvalued, we’ve got to sell. But since the quickest way to get out of the market is to sell stock index futures, that made it look like the futures market was the cause. But it wasn’t. It was just an easier way to trade.
• The other instrument that was a problem was portfolio insurance. It was designed to give investors the right to switch from equity to debt when their portfolios started to fall. That caused a self-cumulative effect that caused stocks to fall some more. Portfolio insurance lost its charm after that.

Q. How did the conferences progress from there?

A. They didn’t get too much bigger. It was always about 50 people—industry people and others from Vanderbilt, professors, students and the like. We also began to have FMRC members like the Chicago Board Options Exchange and the New York Stock Exchange.

The topics have been reasonably narrow for the most part—things like securities markets transaction costs, world financial markets and global risk. In 1999 we had a conference on coping with global volatility. This was two years after the Asian and Russian currency crises and the Long Term Capital Management disaster. Peter Fisher of the Federal Reserve Bank of New York spoke. He was the person who had the meeting with the 10 biggest investors to settle the thing with LTCM before it spread to the markets.

The conferences honoring Dewey Daane, the Frank K. Houston Professor of Finance, Emeritus, always drew big names. We had one in 1989 that Paul Volcker, former Chairman of the Federal Reserve, attended. The Fed Chairman at the time, Alan Greenspan, was there as well, but he only stayed for cocktails. Dewey worked hard to put that conference together. I was impressed. Of course, we had a second Dewey conference in 2009, and Paul Volcker came to that one as well.

Edward DeMarco, Acting Director of the Federal Housing Finance Agency, addressed mortgage reform at the 2011 conference.

Q. One of the conferences lives in infamy as “financial wrestle-mania.” Explain what happened.

A. That was in 1995, on the topic of odd-eighths and what to do about spreads on the NASDAQ market. Bill Christie, now the Frances Hampton Currey Professor of Finance, had written a paper about the topic (which led to a $1 billion settlement against NASDAQ), and he presented it at the conference. We thought it would be just a normal academic conference. Oh, no. There were lawyers and regulators, and all these people came out of the woodwork that we never invited. I looked up and there were three lawyers sitting in the back—you could tell they were lawyers by the way they were dressed. I said, “Who are you?” They said, “We represent the defendant, NASDAQ. We just wanted to see what was going on here.” Nobel Prize-winner Merton Miller had been hired by NASDAQ to present their point of view, which he did at the conference. His line was, “You don’t buy three-eighths of a pound of bologna, you buy a quarter-pound or half-pound.” Things got pretty heated. The local paper called it “financial wrestle-mania.”

Q. Looking over 25 years of conferences, what are your big takeaways? How has the world of finance changed in that time?

A. It’s dramatic how the market microstructure work that we’ve done here and elsewhere has had an influence on the sweeping changes that have occurred in the business of trading securities. The automated exchanges, the decline in the bid-ask spread, the position of the New York Stock Exchange—the fact that some European company is ready to buy it is a phenomenal event when we think that here’s an exchange that was founded in 1792 under a buttonwood tree. And suddenly it’s gone as an institution that had so much power. Ultimately I think it’s a good thing that some of that power has declined. Look at commissions: You can trade for $8 what used to cost you $800. That’s a tremendous reduction in cost and increase in efficiency.

The other big change that we’ve been involved in is derivatives. I think they have helped make markets more resilient, deeper, better, cheaper. Have we protected ourselves against every accident or mistake? No. There will be future problems. Whenever you innovate, you don’t do it right the first time. So the crash of ’87 was an equity crash, and the crash of 2008–2009 was a fixed income and banking thing. They’re different. You don’t learn very much about one from the other. You just have to be ready to handle whatever comes, to have the mechanisms in place and have resilient markets that can withstand these shocks.

Q. What’s next for the FMRC?
Another 25 years?

A. I don’t know. The future of the FMRC is on good footing in terms of its endowment. It can do interesting things, and I think it will. I don’t want to do conferences just for the sake of doing conferences. They should be interesting, and if people find that they’re not interesting then we should stop and do something else. But my guess—my hope—is that they’ll continue. I don’t know who’s going to do them or how we’re going to do them, but I suspect we’ll try to continue the conferences. The FMRC will continue for sure. This school and this finance group are well-respected and well-connected in the real world of industry and regulators. We have this important link to what’s going on in the business world. The FMRC helps maintain that.

Peter Veruki thanks the attendees at the 2012 Owen Circle dinner as Eric Noll and wife, Georgiana, look on.

Peter Veruki didn’t attend Owen or any other school at Vanderbilt. He doesn’t teach or conduct research at the university either. But ask many alumni which person had a big impact on their lives while at Owen, and odds are Veruki’s name is near the top of the list.

Veruki came to Owen in 1988 at the behest of former Dean Marty Geisel. The two met when Veruki was working on Wall Street, recruiting and training MBAs. Geisel, then at the University of Rochester, was looking for Wall Street jobs for his MBA candidates.

“I was impressed with his style, and when he went to work at Owen he called and asked me to come down,” Veruki says. “He told me that Owen was too good to be just the best school in the Southeast. He wanted someone to help market the school on Wall Street and in California and Chicago.”

Initially Veruki wasn’t interested in leaving New York for Nashville, but eventually Geisel won him over. Veruki came on board to lead Owen’s career center, but running that office was only part of his job. He also was charged with working his Wall Street connections and strengthening relationships with alumni—relationships that could eventually mean internships and jobs for Owen students.

“I’d get out on the road and take students with me,” Veruki says. “Traditionally career centers just sit back and wait for the companies to come to them. We changed all that—we took our students, or at least their resumes, to the companies.”

During this time Owen’s reputation went from being a regional school to a national one. The rankings improved, and applications from other parts of the country increased. Students received one-on-one coaching and were encouraged to set their sights high. Veruki realized that Owen had turned the corner in 1990, despite a bleak job market. Several students landed noteworthy positions, including Eric Noll, MBA’90, who is now Executive Vice President of NASDAQ OMX Group’s Transaction Services.

“When I left Owen, I had an offer from the Chicago Board Options Exchange,” Noll says. “Before I started at Owen, I didn’t realize that such jobs existed. But Peter and Hans Stoll really opened my eyes. They educated us on what kinds of jobs were out there and how to get them.”

Unfortunately Geisel died in 1999, just as the school was starting to make its mark. Veruki left soon thereafter to take a position at Rice University. Several years later, just as he was ready to retire, Veruki got another call from Owen. Jim Bradford, who was Acting Dean at the time, wanted Veruki back.

“Jim told me that I didn’t necessarily need to return to Nashville. He said, ‘I need you in Seattle and New York, getting alumni reconnected,’” says Veruki, who currently lives in Houston. “He and I both realized that every alum out there is a potential employer, and they’re the ones hiring MBAs.”

Over the course of his career at Owen, Veruki has made a real difference to the school’s alumni. Owen graduates can be found in boardrooms around the world, and many credit Veruki for their success. In fact, a group of them, led by Eric Noll and his wife, Georgiana, established a scholarship in Veruki’s honor—a rare recognition for a staff member. The scholarship was announced at the 2012 Owen Circle dinner.

“I was the last to know. Even when I was seated at the dinner with five of my favorite alumni, I still didn’t suspect anything,” says Veruki, who now serves as the school’s Director of Corporate Relations. “But then they started calling them up to the podium, and I finally realized what was going on. I was so humbled.”

For now, the scholarship is designated as the Wall Street Scholarship. When Veruki retires, it will be given his name.

Paul Jacobson, MBA’97, Chief Financial Officer at Delta Airlines, was one of the first to contribute to the scholarship fund. “When I got the call about the scholarship, I just felt that it was the right time to make a sizeable gift,” he says. “Peter was an inspiration to me and he always gave me good advice, even if it wasn’t what I wanted to hear. I owe a lot of my career to the start that he gave me, and I will always remember that.”

Veruki hopes that the type of student to receive the scholarship will be someone “who could go to Wharton or Harvard to study finance,” he says, “but instead chooses Owen because our finance faculty is second to none. We’re looking for a person who appreciates the culture we have here—the camaraderie and teamwork.”

That Owen culture is something appreciated by today’s employers. “What we’ve found at Delta is that Owen alumni really fit our group dynamic,” Jacobson says. “There’s a level of humility that really helps them blend in with our culture. We’ve had a lot of success hiring Vanderbilt MBAs.”

Noll further explains the reasoning behind honoring Veruki. “His longevity, his concern for students and their future and their careers, have been extremely influential,” he says. “There’s always lots of recognition for strong faculty—like endowed chairs—but it’s not always so easy to recognize staff members. That’s why I’m so happy to be a part of this scholarship.”

If you would like more information about the Wall Street Scholarship, please contact the Owen Development and Alumni Relations office at (615) 322-0815.

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.”

A personal touch

Fassinger

In 2011 Tami Fassinger, BA’85, was named Owen’s Chief Recruiting Officer, a role that closely aligns the Admissions office with the CMC. The appointment reflects the school’s initiative to take a more personalized, career-centric approach to finding the right B-school candidates and then giving them the resources to land their dream jobs. “Rather than just blindly pursue candidates with the highest GMAT scores and slot them into one of our programs,” Fassinger says, “our team strives to understand the career goals of each person who comes through our doors, and then do what we can to support each one through the enrollment decision, graduation and far beyond.”

By the numbers

No. 19

Vanderbilt’s placement on Bloomberg Businessweek’s rankings of MBA pay by career totals (2012)

$96,500

The median base salary for the MBA Class of 2012 at graduation

2.5

The average number of job offers received by each student in the Class
of 2012 with a Human and Organizational Performance concentration

25

The number of companies extending multiple full-time job offers to the Class of 2012, including Amazon, Credit Suisse, Goldman Sachs, Hanesbrands, McKesson, Johnson & Johnson and Nissan

40

The number of companies extending multiple internship offers to the Class of 2013, including Deloitte and Goldman Sachs

Anderson

Gore

Kinnett

Fend

Coaches’ Corner

The CMC has four coaches on staff, each with their own expertise. All first-year Vanderbilt MBA students select a coach to assist them with their job search strategies and have access to Read McNamara and Tami Fassinger—both with deep industry experience and connections. The four student coaches are:

• Emily Anderson, Senior Associate Director, Director of Internal Operations
  Expertise: consulting, finance and health care
• Blake Gore, Senior Associate Director
  Expertise: finance and international
• Sandy Kinnett, Associate Director, Employer Relations and Events
  Expertise: HOP, real estate and operations
• Amanda Fend, Associate Director
  Expertise: marketing

On the road

Cities where the CMC has arranged interview events in recent years

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.

Mark Cohen, Professor of Management and Law, is a University Fellow with Washington, D.C.-based Resources for the Future (RFF), an independent, nonpartisan research institute focusing on environmental and natural resource economics policy issues. In 2010 he led an RFF research group that consulted with and wrote key position papers for the National Commission on the Deepwater Horizon Oil Spill and Offshore Drilling. He also serves as one of five members of Exxon Mobil’s External Citizenship Advisory Panel, providing strategic and objective advice on the company’s corporate citizenship activities.

What are some of your current research interests in energy?

Most of my recent research in the energy sector is related to deep-water drilling. Right after the BP spill, President Obama put a moratorium on drilling for six months and established a commission to advise him on several things—causes, how to prevent future spills and recommendations on opening up again. One task was looking at the role of risk and insurance. We looked at questions such as, “How do you determine the incentives for firms to prevent a small risk of a highly catastrophic spill?” Those types of spills are infrequent, but they can have disastrous consequences. One of our recommendations was the elimination of liability caps, but Congress did not act on that.

Another area of research is the role of inspections, monitoring and enforcement of spills. One of the questions we looked at was whether deep-water drilling is riskier than the shallow-water kind. Industry was saying it is no more dangerous and that there is no empirical evidence of higher risk. However, from our analysis of the data we concluded that it is riskier. It sounds like a simple question, but just establishing empirically that the risk is higher was important. Continuing research focuses on the role of inspections and monitoring on accidents, spills and noncompliance. RFF also has a big project about hydraulic fracturing—looking at public perceptions, risks and how they match up.

What kinds of issues are at the forefront of the energy business today?

Natural gas has really changed the landscape of the energy markets and in some sense slowed down the push toward alternatives. It has hurt solar and wind because natural gas prices have gone down so much. These new kinds of technologies to extract oil and gas bring with them new issues that are much more localized. Perceptions and fears become important.

How should the energy business address those perceptions and fears?

There’s got to be a much more informed discussion about what the risks are and what’s appropriate for companies to do. In the case of fracking, there’s been a call for disclosure of fracking fluids. Companies initially didn’t want to fully divulge what was in the fluids because they considered it proprietary. But they’ve got to be transparent, or it creates a perception that they’re hiding something. They have to figure out how to address societal concerns and navigate through them in an informed way.

On the teaching side of your academic work, what do you think business students need to understand about the energy sector?

The world is changing. We’re not doing away with traditional energy sources, and yet we’re expanding dramatically in different areas. In my class, we take a look at the entire energy sector both from the point of view of students interested in going into the field and also for students who are going to be consumers of energy in their businesses.

How should tomorrow’s leaders prepare themselves to meet future market demands in the energy sector?

It used to be that energy markets were more insulated. It was very much technology- and engineering-based. MBAs would come in on the finance side, with business plans, contracts, pricing market predictions, those sorts of things. Those kinds of standard finance and accounting tools are still needed, but what I think is changing is that, more and more, the energy sector needs to understand the external environment. Climate is just one issue.

What’s currently happening with renewable energy sources?

It’s going to be a long time before most energy sources are coming from renewables. It may be hundreds of years—or just 10, 20 or 30. A lot has to do with technological development and other factors we can’t predict, such as war. And if climate change gets really bad, really fast, societies may decide to tax carbon very aggressively. Or they might not. Those kinds of things can speed up technological change. Right now renewables are a very small portion of today’s portfolio. A big portion of growth will continue to be from oil and gas because of recent technological innovations. Nobody predicted that was going to happen. With these technological breakthroughs, gas prices plummeted, and alternatives now don’t look so good. But one of the interesting things I learned while serving on the Exxon Mobil citizenship panel is that, as they do their world energy outlook every year, they assume a price on carbon. They’re planning as if carbon will be taxed, and some people don’t realize that is a possible factor.

Corporate social responsibility has been a major research interest for you. What is its role in the energy sector?

Recent evidence is that firms that perform well also do well on the social metrics. It doesn’t hurt you, and it may help you. It’s at the very least a sign of good management. It could also be, in some cases, consumer- or public-driven. People vote with their feet. That whole issue has been around a long time. It’s not how or why you should be good. It’s how firms use corporate social responsibility in positive, strategic ways—whether it’s workers’ rights, safety, the environment or diversity. Voluntary social and environmental disclosures are starting to become more mainstream and almost a cost of doing business. You’ve got to do that if you want to be a leading firm. We are starting to move in the direction of disclosing more of these nonfinancial performance metrics. That is becoming more and more material to investors.

When it comes to the energy sector, companies who are looked upon as leaders take these kinds of issues really seriously because they know that they have to more and more. They put out sustainability reports, measure and manage against a lot of these social performance metrics. All the major oil companies know there are human rights issues in countries where they drill. There are issues about social welfare, issues about governance, even bribery. They have to make sure that they don’t get involved in those kinds of things, and they must maintain strong standards. They are making sure that there’s money and infrastructure built into the communities they go into. There are so many issues in the energy sector that have to deal with social responsibility.

What can the energy sector do to stay ahead of the curve on issues of social responsibility?

What big companies do nowadays is they try to be on top of the current issues, but even more than that, what leading companies are trying to do is figure out the emerging issue. It’s sometimes hard to know what those are, but there are signs. When you start to see some of the fringe nonprofit groups sort of raising questions in any form, you have to ask yourself, “Is that something I’m really going to have to worry about? I would have to really change some of my business operations, and how do I plan for that?” Government is just a reflection of people’s desires, so society’s norms become government regulation in the future.

Do you think it’s possible, given the recent technological breakthroughs and the push for less government regulation, for the United States to achieve energy independence?

It is important to understand that “energy independence” is somewhat of an elusive goal that isn’t even desirable. What we really want is “energy security,” which means that we are not beholden to threats from foreign sources of oil that might dry up due to war, boycotts, etc. Perhaps even more important, we don’t want to be in a position where our foreign policy is dictated by our need for foreign oil. Would we care if much of our oil came from Canada and Mexico—two good friends? So it is more about energy security.

On regulation itself, it is important to ask: What are the benefits and cost of every regulation that is currently in force (or being proposed)? Some regulations are clearly burdensome to industry but good for society. Burning high sulfur coal is just one example—the health risks to the public alone justified reducing pollution from coal-burning power plants. Similarly, high levels of carbon emissions from coal-burning power plants are not in the public interest. Of course, some regulations might impose social costs that outweigh their benefits. But the question should not be what is good for any one industry or, for that matter, what will increase jobs. Regulation of the coal industry not only has improved health but has also created jobs in the pollution control sector, as well as in the renewable energy sector. Thus, the question should be on balance, over the entire population: Do the winners from regulation outweigh the losers?

That’s the question undertaken in a new study co-authored by Bruce Barry, the Brownlee O. Currey Jr. Professor of Management.

“Why and how do people stay motivated in their work when goal accomplishment is at best many years off and may never occur at all?” Barry and co-author Thomas Bateman, of the University of Virginia’s McIntire School of Commerce, ask in a paper for the Journal of Organizational Behavior.

Professionals who are able to sustain the long-term pursuit of their work goals start like anyone setting out to accomplish a set of tasks. They start by focusing on a specific goal, expending some initial effort and show some perseverance over the short term.

But then, these professionals enter “a complex set of cognitive and affective phenomena that implicate perceptions of self, the future, task activities, and a variety of other gratifications,” Barry and Bateman write.

To understand the psychological forces at play when pursuing long-term goals, the co-authors identified and conducted in-depth interviews with 25 professionals whose work goals included the following traits: Eventual success could take years, or perhaps generations; real progress comes very slowly; there is a significant chance of failure. While these conditions may define the most extreme cases of pursuing long-term goals, Barry and Bateman say the insights generated from the interviews have wide-reaching implications for both professionals and managers.

The researchers then distilled the key elements of the interviews into eight sources of motivation that provide “psychological sustenance” in the pursuit of long-term goals:

1. Allegory: figurative representations or abstractions that offer significant, consequential meaning (e.g., comparisons to the Wright Brothers or the moon landing)
2. Futurity: allusions to the long-term impact and possibilities associated with the ultimate outcomes that may result from the realization of a long-term goal (e.g., setting the stage for children and grandchildren)
3. Self: statements that invoke personal identity, reputation or personal belief systems (e.g., expressing personal creativity)
4. Singularity: references to the perceived uniqueness of the endeavor (e.g., the big exploration that nobody could have done before)
5. Knowledge: statements that refer to skill development, new understanding, acquiring truth and finding ways to control events (e.g., any knowledge that’s created is good)
6. The Work: allusions to the nature of the work, including challenges, methods, risks and uncertainties, as well as elements that are fun or surprising (e.g., like a puzzle that needs solving)
7. Embeddedness: ways in which individuals see their work situated within social contexts, as well as ways in which their work garners social legitimacy within their professions and in society (e.g., an enjoyment from disproving the skeptics)
8. Progress: statements that emphasize the notion of forward movement, often short-term, in the direction of long-term goal pursuit (e.g., advancements in tools and techniques that facilitate the work)

These motivational themes incorporate near-term (proximal) and long-term (distal) features that weave together immediate payoffs with a perception of doing important and lasting work. In addition, all the subjects interviewed by Barry and Bateman for this study mentioned the important role self-regulation plays.

Bruce Barry

“We saw [self-regulation] as an overarching process and set of strategies implicated in many of the motivating themes identified in our analysis,” they write. The co-authors highlight six forms of self-regulation that include maintaining focus on goal-directed actions, controlling emotions, and coping with failure—using it as a basis for improvement rather than an injurious setback.

While the sample size may have been limited, with no means to compare similar data sets, Barry and Bateman write that the study is meant to offer meaningful conceptual extensions to well-established theoretical areas, setting the stage for future investigations.

“Long-term goals arguably are at least as important as short-term goals in their ultimate consequences for individuals, organizations, and societies,” Barry and Bateman write. “Now, we believe, is the time to expand our field’s search for theories and strategies that can help people and organizations pursue and achieve important long-term goals.”

A version of this article originally appeared in VB Intelligence on July 25, 2012.

“You’ve gotta move here, Wardo. This is where it’s all happening,” the Zuckerberg character pleads.

Whether this piece of dialogue is true or not, the sentiment behind the statement is perhaps more accurate than Zuckerberg—or the movie’s writers—could have known.

In a recent paper examining performance differences within geographic business clusters, Assistant Professor of Strategic Management Brian McCann, MBA’04, finds that younger firms, as well as those with a “deeper knowledge stock” (i.e., more patents), gain the biggest boosts from geographic clusters.

By locating in a geographic cluster, “entrepreneurs may accrue particular benefits to agglomeration during the early phases of a firm,” McCann writes with co-author Timothy B. Folta of Purdue University’s Krannert School of Management. The paper was published recently in the Journal of Business Venturing.

While scholars such as Paul Krugman and Michael Porter have long written about the positive business effects of geographic clusters, this research is among the first to investigate which firms benefit the most from agglomeration.

Brian McCann

McCann and Folta examined 806 biotechnology firms founded in the United States between 1973 and 1998. Although the firms were spread across 85 Metropolitan Statistical Areas, the co-authors found that the top 10 clusters in 1994 (the peak of the industry in terms of the number of companies operating during the study’s time frame) provided locations for nearly 75 percent of the firms in the industry.

McCann and Folta also measured the “knowledge richness” of each cluster by totaling the number of patents held by all the biotech firms in each cluster. Statistical analysis of these data sets yielded several findings of note:

• Locating in a cluster is beneficial for firms: Firms in larger and more knowledge-rich clusters have a higher probability of patenting in any given year.

• For each firm that’s added to a cluster, companies within that location have a 1 percent higher increase in the odds of patenting. While that figure may seem small, the effects add up quickly. Increasing a cluster size by 10 firms raises a firm’s patenting probability by nearly 10 percent.

• Within clusters, the increased patenting probability is even higher for firms that already have a richer knowledge base—that is, a higher number of patents. “Our conjecture is that such firms are better able to benefit from knowledge spillovers,” McCann and Folta write.

• Younger firms enjoy a similarly higher patenting probability within clusters, according to the analysis. “This result is consistent with prior scholars who have speculated that young firms might more effectively draw benefits from their clustered regions,” the co-authors write. This is because younger firms tend to have more flexible organizations and a greater need to rely on outside knowledge sources because of their limited resources.

McCann and Folta write that these findings hold relevance for researchers, business practitioners and policymakers.

The evidence regarding what types of firms benefit most from clustering “should be of principal importance to scholars of entrepreneurship or strategic management wondering about the relationship between location and competitive advantage,” they write. “For those deciding whether to locate in an agglomeration or for those attempting to recruit firms to an agglomeration, it provides advice on those firms that are most likely to benefit.”

A version of this article originally appeared in VB Intelligence on July 25, 2012.

As consumers, we want the same services and products as the good-looking, glamorous set—or if nothing else, we tend to remember the famous associations these figures bring to whatever they’re endorsing.

And while these celebrities may be among the most commonly familiar and well-liked people, the vast majority of the population knows very little about their political and religious attitudes and values.

In fact, the less that is known about a famous figure, the more the public views them in a favorable light, according to new research co-authored by Steve Posavac, the E. Bronson Ingram Professor of Marketing.

“As perceivers learn more, there is an increased likelihood that the evidence will indicate that celebrities have middling attributes” that show just as many flaws as other people, Posavac and his co-authors write in a paper for Basic and Applied Social Psychology. “Perhaps more significantly, evidence may reveal to perceivers that celebrities’ political views, religious practices and social attitudes are different from their own, leading to less liking.”

So carefully controlled are the images of most celebrities that the researchers in this study found it difficult to compile reliable information on possible test subjects in preparation for their experiments. For one of the main experiments, however, they did find two famous figures whose personal viewpoints are well-known and diametrically opposed: Tom Hanks and Mel Gibson.

With 131 undergraduates participating in the study for extra credit, the students were randomly given descriptions about Hanks and Gibson—one innocuously detailing each actor’s film career, the other discussing specific political and religious points of view.

Steve Posavac

When asked about the likability of each, “liberals and conservatives did not differ in their evaluations of Hanks and Gibson when information was not presented,” according to the study. “However, when descriptions of the practices and attitudes of the celebrities were provided, liberals and conservatives diverged in their evaluations of the actors, particularly Gibson.” (It should be noted that the study was conducted prior to widespread news coverage of Gibson’s domestic conflicts.)

In another experiment, student participants were chosen based on the results of a pretest in which they favorably rated six celebrities: Will Smith, Jennifer Aniston, George Clooney, Natalie Portman, Johnny Depp and Scarlett Johansson. They were then asked a series of questions about the celebrities’ political and religious views.

For the researchers, this served as a mental prompt that allowed them to compare attitudes for celebrities prior to thinking about how much participants knew of them personally, versus after completing the questionnaire. What Posavac and his colleagues found is that, “participants perceived the celebrities to have significantly less credibility” when they were made aware of how little they knew about them.

This dynamic can be seen in many real-world contexts. Tom Cruise, Lindsey Lohan and Tiger Woods, to name but a few, all experienced sharp declines in popularity (and celebrity endorsement deals) after personal shortcomings were revealed. Posavac and his colleagues also point to the case of Rashard Mendenhall, an NFL running back who posted unpopular views about the killing of Osama Bin Laden on Twitter. The backlash led the apparel manufacturer Champion to end its endorsement deal with him and endangered his spot on the Pittsburgh Steelers.

“People appear to be taken by celebrities, in part, because they are highly familiar while being simultaneously unknown,” the researchers write. That is, in the absence of information, people fill in the personality blanks of celebrities with their own views and values.

What’s more, distinct groups differ in how they perceive celebrities once they have more information about their views. In the experiment with Hanks and Gibson, liberals and women tended to rate Gibson less favorably with more information. Similarly, likability ratings among conservatives and men dropped as they learned more about Hanks’ views.

“The findings reveal one of the important foundations underlying the adoration of celebrities: ignorance,” Posavac and his co-authors write. “Unless celebrities harbor mainstream attitudes that have widespread appeal, they are probably better off financially keeping their opinions and practices private.”

A version of this article originally appeared in VB Intelligence on July 25, 2012.

No. 22

in North America among full-time MBA programs (up one slot from last ranking)

No. 32

globally among full-time MBA programs (up two slots)

Other highlights:

No. 1

globally in diversity of recruiters

No. 8

globally in alumni effectiveness

No. 10

globally in education experience

No. 10

globally in faculty quality

No. 16

globally in student assessment of career services

David Owens

David Owens, Professor of the Practice of Management and Innovation, is participating in Vanderbilt’s first institution-wide foray into offering free online courses worldwide via the digital learning consortium Coursera. Owens’ course—Innovation Strategy: Managing Innovation and Creativity in Individuals, Groups, and Organizations—is one of five being offered in spring 2013.

For more information, visit vu.edu/digitallearning.

In the cover story, we attempt to shed some light on the broad and complex topic of energy. The story isn’t intended to be a comprehensive survey of the business or an endorsement of one fuel source over another. Rather our aim is to capture the energy sector through the prism of the Owen community—alumni working in the industry and the growing connections between their employers and the school.

In some sense, a university is as good a backdrop as any for understanding energy. At the heart of each is the idea of harnessing untapped potential. Take, for example, the rivers and lakes that feed hydroelectric plants across the U.S. In their natural state, these waterways may serve many purposes, but only when properly channeled do they generate power for the greater benefit of society. Likewise, students arrive on campus brimming with promise and ambition, but what helps them live to the fullest of their abilities is the direction they receive from faculty and others.

I’ve had the good fortune to report on this transformative process at Owen for the past five years. If there’s one thing I’ve learned, it’s that the process helps spark a strong current that connects everyone in this community. Call it what you will—enthusiasm, camaraderie—it’s an energy unto itself, albeit a different sort than what’s mentioned above. Yet it burns just as brightly in its own mysterious way.

Among the rewards of editing Vanderbilt Business is the privilege of being a part of this very energy. I may not fully understand where it comes from or how it connects one person to the next, but I do know that its pull makes it harder to say goodbye.

I’m sad to say this issue is my last: I’m joining the staff of Vanderbilt Magazine, and my talented colleague Nancy Wise will be the new editor. As excited as I am about this next step in my career, I’ll miss working with Owen’s faculty and staff on a regular basis. I’ll also miss not being able to bring to light more of the stories that make this school so extraordinary.

The inventor Buckminster Fuller once said, “Real wealth is ideas plus energy.” If that’s so, then there are few places as prosperous as Owen. This community has both energy and ideas in spades, and I’m the richer for having been a part of it. Thank you for making these past five years so illuminating in the fullest sense of the word.

Editor
Seth Robertson

Contributors
Nelson Bryan (BA’73), Sherie Edwards (EMBA’12), Jennifer Johnston, Sandy Smith, Cindy Thomsen, Ryan Underwood (BA’96), Brett Wade (EMBA’12), Amy Wolf

Photography
Daniel Dubois, Lauren Owens, Anne Rayner, John Russell

Designer
Michael T. Smeltzer

Art Director
Donna Pritchett

Chief Marketing Officer
Yvonne Martin-Kidd

Associate Dean of Development and Alumni Relations
Cheryl Chunn

Editorial Offices: Vanderbilt University News and Communications, PMB 407703, 2301 Vanderbilt Place, Nashville, TN 37240-7703, Telephone: (615) 322-0817, Fax: (615) 343-8547, owenmagazine@vanderbilt.edu

Please direct alumni inquiries to: Office of Development and Alumni Relations, Owen Graduate School of Management, PMB 407754, 2301 Vanderbilt Place, Nashville, TN 37240-7754, Telephone: (615) 322-0815, alum@owen.vanderbilt.edu

Vanderbilt University is committed to principles of equal opportunity and affirmative action. Opinions expressed in Vanderbilt Business are those of the authors and do not necessarily reflect the views of the Owen School or Vanderbilt University.

Vanderbilt Business magazine is published twice a year by the Owen Graduate School of Management at Vanderbilt University, 401 21st Avenue South, Nashville, TN 37203-9932, in cooperation with the Vanderbilt News and Communications.

© 2012 Vanderbilt University. “Vanderbilt” and the Vanderbilt logo are registered trademarks and service marks of Vanderbilt University.

Gigi Lazenby, MBA'73

This July, I took a bike trip with my oldest son through Glacier National Park and the Canadian Rockies. Having been to Glacier on photographic journeys before, I had a good appreciation for what I was about to experience. Or so I thought.

Glacier and its Canadian counterpart, Waterton, make up the Peace Parks—more than 2 million acres of pristine wilderness, towering mountains, glacier lakes and abundant wildlife. The aptly named Going-to-the-Sun road forms a backbone across the top of Glacier National Park. The Going-to-the-Sun road begins with 14 miles of rolling countryside. Then it climbs for the next 11 miles, ultimately rising to 6,646 feet.

As my son and I began the ride, it started to rain and the temperature dropped. I’d trained the previous four months to make this climb, and I was determined to reach the top. The road is winding and narrow under normal conditions, but the weather made it that much more treacherous. The normally expansive views were now obscured by rain and fog. The path forward kept twisting and turning, never flattening to provide a pause for rest. I had but one choice and that was to keep grinding.

Nevertheless, the experience was incredible—everything I’d bargained for. The fog occasionally opened just long enough to catch a glimpse of the valley below. By this point the rain had turned to snow. I neared the top with less than a half-mile to go and was wet from head to toe, despite the rain gear. Park rangers briefly stopped me to clear a slippery trail somewhere above the mountain pass I was about to top. Once I stopped, I realized how cold I really was. But the final half-mile passed quickly, and before I knew it, I reached the top. And wow! I will never forget that experience.

We went on to have days ahead of beautiful sunny climbs and speedy descents. But it was this climb, this difficult ascent, that I remember most.

Why? First, I was prepared. I trained hard and it paid off. Second, the changing weather added a degree of adversity I hadn’t expected—exactly as things happen in life. Third, while topping the mountain pass was fantastic, it was the journey that I valued most. This was especially true since I cherished the time with my son, who has been my riding partner for many years.

A good friend once gave me a phrase to live by: “It’s all uphill from here.” His comment preceded a debate about how we might solve a difficult challenge. Yes, it would be hard. Yes, we would face adversity, but by working together, we would gain the high ground. There was a mountaintop experience ahead.

I hope that your educational journey at Owen offered you a similar perspective. I trust it was hard and that you faced occasional adversity, but that you gained the higher ground by working with others, many of whom are now your lifelong friends. In a way, the journey that you began at Owen has never really ended. You may be years, or even decades, removed from having received your diploma, but you’re still part of a larger community that is on the move together. We’re making steady progress in our upward climb to where we want this school to be. If we each continue doing our part, I can assure you that a mountaintop experience lies ahead.

It’s all uphill from here.

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

Alan

Blocher

Park

Yasin Alan, Assistant Professor of Management, comes to Owen from Cornell University’s Johnson School of Management, where he recently completed his doctorate. His research interests lie in the interface of operations management and corporate finance. He conducts theoretical research to study the relationship between operational decisions and financial considerations such as capital structure, growth and bankruptcy risk. He also performs empirical research to link operations to stock performance and financial distress.

Jesse Blocher, Assistant Professor of Management, joined Owen’s finance group this fall after completing his doctorate at the University of North Carolina’s Kenan-Flagler Business School. His study “Contagious Collateral: A Network Analysis of Interconnected Intermediaries” (2011) won the Financial Research Association’s Michael J. Barclay Award for best solo-authored paper by a young scholar. Another paper, “The Long and the Short of It: Evidence of Year-End Price Manipulation by Short Sellers” (2011), won the BNP Paribas Hedge Fund Center at Singapore Management University Research Award.

Assistant Professor of Management Tae-Youn Park, who earned his doctorate at the University of Minnesota’s Carlson School of Management, joined the organization studies group at Owen this fall. His research interests include the individual and organizational consequences of compensation, and voluntary and involuntary turnover. His work has been accepted for publication in Academy of Management Journal, Journal of Applied Psychology and Strategic Management Journal. ]]> http://www.vanderbilt.edu/magazines/vanderbilt-business/2012/12/three-new-hires/feed/ 0 http://www.vanderbilt.edu/magazines/vanderbilt-business/2012/12/new-admissions-director/ http://www.vanderbilt.edu/magazines/vanderbilt-business/2012/12/new-admissions-director/#comments Fri, 14 Dec 2012 16:20:34 +0000 craigc1 http://www.vanderbilt.edu/magazines/vanderbilt-business/?p=3977

St-John

The Owen School has named Christie St-John, MA’94, PhD’99, as its new Director of Admissions, effective Oct. 1, 2012.

St-John returns to Vanderbilt from the Tuck School of Business at Dartmouth College, where she served as Senior Associate Director of Admissions and Recruiting since 2004. St-John began her MBA admissions career at Vanderbilt in 1997, overseeing international recruitment.

Previously St-John held roles in marketing, as well as in oil and gas trading. A Nashville native, she holds a master’s degree and doctorate from Vanderbilt. St-John has lived abroad and traveled to 70 countries for both work and pleasure.

“We are excited to welcome Christie back to Vanderbilt,” says Dean Jim Bradford. “She combines a vast global experience with a keen understanding and appreciation of what makes a top graduate management program.”

Tami Fassinger, Chief Recruiting Officer for Owen, adds that St-John will also play a key role in the school’s larger strategy of aligning incoming student career objectives with placement results on a broad geographic scale.

“Christie’s ability to relate to our global talent pool is invaluable to where we’re going as a school. We’re glad to have her back on our team,” Fassinger says. “I hired Christie in her first tenure at Vanderbilt. We’ve missed her talent, as well as her international mindset and far-reaching network.”

St-John will handle recruiting and admissions for the full-time MBA program and one-year MS Finance program.

“Vanderbilt has seen a great deal of positive momentum in recent years,” St-John says. “I am pleased to have the opportunity to increase the school’s reach, both in the U.S. and globally.”

Health Care Immersion

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Wall Street Week

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“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

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Global Business Association Trip to Turkey

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Whether you tend to agree with rankings or not, they are an important driver of applications, our hiring ability, and frankly, alumni engagement. That said, they’re far from perfect.

Beyond the well-documented cases of schools in various disciplines gaming the system—or in some cases, simply providing false data—rankings will never be able to tell the full story of a school. As I’ve discovered, GMATs and GPAs tell you very little about the individuals who ultimately emerge as strong, ethical leaders.

As a business school dean, it’s easy to get wrapped up in the rankings race. While I fully intend to continue to compete vigorously, as we move forward you should know this: 1) The greater good of Owen will always come before rankings; and 2) No matter how high we climb, there will never be a quantitative measure that can capture leadership, determination and a commitment to purposes beyond ourselves—all qualities that, to me, mark Owen students and alumni.

In that spirit, allow me to highlight several pieces in this issue of Vanderbilt Business, starting with the cover story about Brent Turner, MBA’99. As you’ll see, Brent is often humorously self-effacing. But working alongside him, one soon discovers that he’s a masterful relationship builder, putting the right people and the smart strategies in place to get a job done. He’s also a doer who is unafraid to set lofty goals and then follow through on them with great dignity and determination. We’re lucky to have him as such an active alumnus and productive partner.

Elsewhere in the magazine, Alex Nicholson, EMBA’01, tells the story of how and why he decided to pursue a business degree in his 50s after years spent running his family’s business. And Linus Hall, EMBA’00, will make you thirsty for more after reading about his experience starting and growing Yazoo Brewing Co.

There’s also a report on innovative work happening at Owen, including the  groundbreaking new rule for measuring and capturing customer loyalty created by Professor Bruce Cooil and alumnus Tim Keiningham, MBA’89. In addition, you’ll read about an exciting new Silicon Valley endeavor that’s being started by two soon-to-be Owen grads, Mahni Ghorashi and Ilya Tokhner.

These stories help showcase the incredible vibrancy of the entire Owen community, from current students to our world-class faculty and administration to our invaluable alumni. For me, this is the soul of Owen—something no ranking could ever measure.

Sincerely yours,

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

Of all the monuments to Renaissance ingenuity, one in particular has held my interest ever since I saw it in person years ago. The Basilica di Santa Maria del Fiore in Florence, Italy, otherwise known as the Duomo, is a towering achievement in architecture. Its octagonal dome, which is 140 feet wide and more than twice as high, remains the largest one ever built with bricks and mortar—no small feat considering it was completed nearly 600 years ago.

As awe-inspiring as the cathedral is to behold, the story behind its construction is just as remarkable. Legend has it that architect Filippo Brunelleschi received the commission to build the dome by winning a competition to see who could successfully stand an egg upright. While others tried to balance their eggs in vain, Brunelleschi smashed his on end. This act of bravado foreshadowed the daring design to come.

Whether the story’s apocryphal or not, there’s no doubt Brunelleschi was a man of rare talent. Yet often overlooked is the fact that he already had a foundation to build upon. Brunelleschi’s breakthrough was the culmination of a process that had begun more than a century earlier with architect Arnolfo di Cambio, who called for a dome of similar scope in his drawings. No one at that time knew how to construct such a dome, but that did not deter di Cambio or the builders who followed him. For decades they continued laying the groundwork, confident that someone would eventually finish what they had started.

That to me is the most inspirational part of the story. For all the originality of Brunelleschi’s dome, it could not have happened without the vision of those who came before him. As di Cambio showed, innovation is as much about planning as it is flashes of brilliance.

All these centuries later, the same is true at Owen, where innovative ideas, such as the ones highlighted here, are founded upon a farsighted commitment that stretches back to Vanderbilt’s beginnings. The education and research of today are made possible by the forethought, guidance and generosity of previous generations. As Chancellor James Kirkland once said, “In building a university there is never an occasion for finishing touches. The task is always one of laying foundations.”

Vanderbilt’s success lies in those very foundations Kirkland described. Much like the Duomo, the university can rise only as high as its base allows. The stronger the support, the more opportunities there’ll be to upend conventional thinking and push knowledge further and further—until someone comes along one day and spans the distances that once seemed impossible.

The Owen School improved to No. 25 in the nation, up from No. 28 last year, in the latest U.S. News & World Report rankings. It marks the school’s second-highest placement ever on the list.

“As our rankings continue to move up in a highly competitive field, it’s becoming clear that others are recognizing the business school’s remarkable momentum,” says Dean Jim Bradford. “We continue to work hard to attract top-caliber talent throughout all of our management programs and look forward to many more bright days ahead.”

Editor
Seth Robertson

Contributors
Lubaina Balasinorwala, Nelson Bryan (BA’73), Meg Hale, Abigail Humphrey, Jennifer Johnston, Alex Nicholson (EMBA’01), Shana Passman (MBA’09), Rob Simbeck, Cindy Thomsen, Ryan Underwood (BA’96), Amy Wolf

Photography
Kerry Dahlen, Daniel Dubois, Steve Green, Joe Howell, Lauren Owens, Anne Rayner, John Russell, Susan Urmy

Designer
Michael T. Smeltzer

Art Director
Donna Pritchett

Chief Marketing Officer
Yvonne Martin-Kidd

Associate Dean of Development and Alumni Relations
Cheryl Chunn

Editorial Offices: Vanderbilt University, Office of Development and Alumni Relations Communications, PMB 407703, 2301 Vanderbilt Place, Nashville, TN 37240-7703, Telephone: (615) 322-0817, Fax: (615) 343-8547, owenmagazine@vanderbilt.edu

Please direct alumni inquiries to: Office of Development and Alumni Relations, Owen Graduate School of Management, PMB 407754, 2301 Vanderbilt Place, Nashville, TN 37240-7754, Telephone: (615) 322-0815, alum@owen.vanderbilt.edu

Vanderbilt University is committed to principles of equal opportunity and affirmative action. Opinions expressed in Vanderbilt Business are those of the authors and do not necessarily reflect the views of the Owen School or Vanderbilt University.

Vanderbilt Business magazine is published twice a year by the Owen Graduate School of Management at Vanderbilt University, 401 21st Avenue South, Nashville, TN 37203-9932, in cooperation with the Vanderbilt Office of Development and Alumni Relations Communications.

© 2012 Vanderbilt University. “Vanderbilt” and the Vanderbilt logo are registered trademarks and service marks of Vanderbilt University.

Sohr Grant winners Mario Avila and Megan Allen

Microfinance lending and ecologically friendly false eyelashes may not seem to have much in common. But they’re both new business ideas that caught the attention of the prize committee awarding this year’s $25,000 Sohr Grants, created to promote student entrepreneurship at the Owen School.

Jim Sohr, BE’86, MBA’90, and his wife, Leah, endowed the new grants. Sohr is the past President and Co-founder of AIM Healthcare Services, which provides claims cost-management services for government and commercial payers of health care benefits. A division of UnitedHealth Group purchased AIM in 2009.

“We would love to create many companies that become as successful as AIM Healthcare,” says Germain Böer, Professor of Accounting and Director of the Owen Entrepreneurship Center. “With this kind of support, the Owen School can attract more students who already have a business idea that they want to develop. This funding, combined with the mentor support provided by the school’s alumni, will drive the success of these new ventures.”

Georgie Beauty

One of the grants went to Megan Allen, an MBA candidate for 2012, for her startup Georgie Beauty. Co-founded in 2009 by Allen and her sister, Abbey Allen Watt, the company makes “eco-luxe” false eyelashes sold under the brand name Winks by Georgie. The company has established partnerships with luxury retailers Neiman Marcus and Cos Bar. It also has been featured in Martha Stewart Weddings, InStyle.com, and numerous beauty and style blogs. About the target audience, Allen writes in her business plan, “These women are looking for the latest cosmetic products that help them achieve the celebrity look, but that’s not all. They are also increasingly concerned with consumer and environmental health.”

Contigo Financial

Contigo Financial is developing a microfinance model to provide payday loans to the 60 million consumers in the United States who don’t have access to traditional bank loans or credit card products. Currently these types of small loans are provided by pawnshops and payday lenders, where borrowing costs can exceed an APR of 400 percent. Co-founder Mario Avila, a 2012 MBA candidate and President of the Owen Student Government Association, is leading a startup team that has experience in consulting, banking and microfinance. He and his team are taking a novel approach by partnering with employers to help their employees meet short-term financial needs.

“Energy is a huge sector. In some ways it’s even bigger and more complex than the health care industry as far as job opportunities,” says the Houston-based Veruki, who hosted a wine-tasting mixer at his home for the students and local alumni. “Energy’s not just about finance or operations or engineering. It’s also about marketing and HR and many other areas. And all of those opportunities are spread around the globe.”

The first stop on the Energy Trek was Macquarie Group, an international financial services company where Vikas Dwivedi, MBA’00, Global Oil and Gas Economist, and Charles Fenner, MBA’01, Senior Vice President of Power and Gas Fundamentals, gave a presentation. The student group next visited Baker Hughes, a leading oil field services company, whose President and CEO is Martin Craighead, IEMBA’98. Then it was on to global financial services firm JPMorgan Chase, where Robert Traband, MBA’93, Managing Director of Credit Risk Management, spoke.

The following morning, the group toured the world’s largest publicly traded oil and gas company, Exxon Mobil, which included a visit to its 3-D visualization room used for training employees in drilling operations. The group then toured the trading floor of Chevron, another of the world’s leading oil and gas companies. The final stop was international financial services firm Credit Suisse, where Managing Director Tim Perry, MBA’81, gave a presentation.

Houston-native Gilliland, who previously worked for Macquarie before enrolling at Owen, anticipates that the Energy Club will continue to grow and broaden its appeal. She sees potential in networking with more utility and energy companies in the Southeast, as well as renewable energy businesses.

“Our goal is to bring more value to club members and expand our offerings, whether it’s new networking opportunities, guest speakers or internships,” she says. “That means we have to get the word out to alumni that there’s an interest in energy at the school. We want them to know that we’re building something here and that they can play a hand in it.”

To find out how you can help the Owen Energy Club, please email owenenergy@owen.vanderbilt.edu.

Cheryl Chunn

Cheryl Chunn joined Owen this past November as the school’s Associate Dean of Development and Alumni Relations. She has worked at Vanderbilt for 10 years, six of which have been in development. Her previous roles include Director of Development and Director of Corporate Relations for Vanderbilt University Medical Center, as well as Senior Associate Director of Corporate and Foundation Relations Development. Chunn has a bachelor’s from Valparaiso University, a master’s from the University of Wisconsin-Milwaukee and an MBA from Keller Graduate School of Management in Chicago.

Q: What drew you to this opportunity at Owen?

A: First, it’s Vanderbilt and my 10 years working in both the Medical Center and the university that drew me to Owen. It’s an incredible place to work. I’m amazed every day at all that’s going on here to help transform business, medicine, education and the community we live in.

Also what drew me was my previous work with Owen and Jim Bradford as a development officer with Corporate and Foundation Relations. I had the opportunity to visit with Owen alumni all over who were so passionate about their experiences here. The word they used was “family.” I heard that over and over again.

Q: How has your MBA shaped your approach to development and alumni relations?

A: My MBA has helped me understand that all philanthropists want to know their gifts are doing something meaningful. What I learned in my schooling was the question: “What’s the return on my investment?” I approach my development activity with that in mind. I want our alumni donors to know what Owen needs, why we need it and how they can help. Being able to steward them with the answer to that ROI question is my next step.

Also I know how hard I worked to get my degree and realize that I wouldn’t have the same perspective and experience without it. Likewise for our alumni, Owen has helped them not only in their professional lives but in their personal lives as well, and I believe they want to give back because of that fact.

Q: What are some of the short-and long-term goals for Owen’s development and alumni relations team?

A: One of the short-term goals is to learn how to work as a team. With many new team members, we’ll be forging ahead to build on the existing base of support from Owen to develop goals and structures that help our students, faculty and alumni.

Our more ambitious goals for the immediate future are to be able to accomplish the development and alumni relations goals of the strategic plan and to make Owen more successful. We will focus on increasing the number of endowed scholarships for students, strengthening alumni engagement and working with the dean on potential space and program needs.

Art Laffer speaking at Averbuch Auditorium

Arthur B. Laffer, a renowned economist and longtime champion of conservative causes, proposed a novel approach to taxation at a forum held in Owen’s Averbuch Auditorium Feb. 23. Laffer said he sees a fundamentally backward system in the United States, which imposes taxes on things people want more of—income and jobs—while allowing something we want less of—carbon dioxide pollution—to be emitted without penalty.

The situation should be reversed, Laffer argued. Instead of tax increases that are “veiled as ‘cap and trade’ schemes,” he said, Congress should offset a simple carbon tax with a reduction in income or payroll taxes.

Joining Laffer in the discussion was former U.S. Rep. Bob Inglis of South Carolina. “Art Laffer is a conservative who’s agnostic on climate change. I’m a conservative who believes it’s real,” Inglis said. “Both of us see opportunity in changing what we tax. For Art, it’s about his lifelong quest to reduce marginal tax rates. For me, it’s that—plus the opportunity to fix a market distortion that prevents the free enterprise system from delivering the fuels of the future.”

A member of President Reagan’s Economic Policy Advisory Board between 1981 and 1989, Laffer is the Founder and Chairman of Nashville-based Laffer Associates, an economic research firm that provides global investment research services to institutional asset managers, pension funds, financial institutions and corporations.

Owen Insights is a student-run series that encourages collaborative learning through regular presentations, discussions and workshops.

Owen has long been known for its strong sense of community, and that reputation stands to grow thanks to the efforts of the latest classes to pass through Management Hall. Students have started a first-of-its-kind forum at the school for sharing their areas of expertise with one another. Called Owen Insights, the series aims to foster a collaborative learning environment through regular presentations, discussions and workshops.

Founded by Aaron Fung, an MBA candidate for 2012, Owen Insights draws upon the wide variety of backgrounds, nationalities and professional experiences represented across the student body. “While the classroom has contributed a lot to my learning experience here at Owen, the majority of my learning has taken place outside the classroom through my interactions with classmates,” Fung says. “This is what inspired me to create a common platform for students to enhance their learning experience at Owen.”

Prior to business school, Fung worked as Director of Strategy for Ascend, a nonprofit association that focuses on professional networking and leadership opportunities for Asian Americans. His experiences at Ascend have helped him steer the Owen Insights venture. He views the series as an opportunity for students to not only network with each other but also hone critical presentation and public speaking skills.

Students are encouraged to suggest ideas for workshops, and topics in the past have included the business of education and American slang, which was of particular interest to international students. More recent topics have ranged from Foundations of American Politics, taught by Steven Smith, former presidential appointee, White House staffer and MBA candidate for 2013; to Tips and Tricks of Excel led by former financial analyst and 2012 MBA candidate Doug Midkiff; to European Economics led by Sergi Tejero Cano, former Chairman of the Andorran Economist Association and MBA candidate for 2012. Fung himself, who is a chartered retirement plan counselor, taught The Basics of Personal Finance along with Kate Yoho and Carlton Fitch, both CFP practitioners and MBA candidates for 2013.

Thus far the series has seen an enthusiastic response from students, and Fung hopes it will continue even after he graduates. “I’d like Owen Insights to become a self-sustaining program that draws all students into it,” Fung says. “I think people really want to learn from each other, and the great thing is that people are willing to teach. They just need a mechanism through which their knowledge can come out. Owen Insights gives students that mechanism and makes it easier for classmates to learn something that they might not get in a typical academic setting.”

Headlining the October event was Nancy-Ann DeParle, Deputy Chief of Staff to President Barack Obama. Drawing on her experience as Director of the White House Office of Health Reform, DeParle outlined the contrast in the national health care system prior to passage of the 2009 Patient Protection and Affordable Care Act and what it will look like once the plan is fully implemented.

Where We Were

• Health insurance premiums doubled: Family premiums for employer coverage rose from nearly $6,000 to more than $13,000 between 1999 and 2000.
• Insured Americans and businesses paid a hidden tax: Up to $1,000 of uncompensated care was shifted from the uninsured to already-insured families. In 2008 we spent $43 billion on uncompensated care.
• Millions lacked quality, affordable health care: 50 million Americans were uninsured in 2009, and millions more lacked access to quality care, preventive services and catastrophic protection when ill or injured.
• People with pre-existing conditions were locked out: As many as 129 million Americans have a pre-existing condition that could limit access to insurance.

A career fair held at the Nashville Convention Center was one of the highlights of the Vanderbilt Health Care Conference.

“Even after spending almost twice as much per capita on health care as every other industrialized country in the world, we continue to rank near the bottom when it comes to health care outcomes,” DeParle said. “Those of you working in health care understand that this is bad for business. Imagine you’re selling cars. If cars become more expensive, but the quality stays the same, or even gets worse, you don’t need an MBA … to realize that you’re in trouble.

“Health care isn’t like most other industries. If people can’t afford insurance, they don’t stop coming to the hospital. They just stop paying for the care they receive. So to tweak the analogy that I just used, not only are customers not buying cars, but you have to hand them out for free. That’s not sustainable.”

What the Law Does

• Allows young adults to stay on their parents’ policies: More than 1 million 18- to 26-year-olds have benefited.
• Gives uninsured with pre-existing conditions affordable insurance: The Pre-existing Condition Insurance Plan has covered more than 30,000 people and is a bridge to 2014 when discriminating against anyone with a pre-existing condition will be illegal.
• Protects retiree coverage: $5 billion is provided to keep coverage affordable for early retirees in more than 6,600 plans.
• Expands community health centers and workforce: Clinics can serve nearly 20 million more Americans, adding 16,000 primary-care providers during the next five years.
• Holds health insurers accountable: The law implements a patient’s bill of rights, eliminates double-digit rate hikes without review, guarantees that overhead expenses are held in check, and promotes pricing transparency among health plans on healthcare.gov.
• Creates a competitive and affordable insurance marketplace: Starting in 2014, consumers will be offered the same health plan choices as members of Congress. Tax credits and Medicare coverage will be made available to ensure that coverage is affordable for families and small businesses. The law also protects existing employer-based coverage while ensuring that all Americans who can afford it get health insurance, increasing the insurance purchasing pool, ending pre-existing condition exclusions, and eliminating the “hidden tax” of cost shifting.
• Lowers cost and improves quality: Health care fraud persecutions are up 85 percent, and billions have already been saved. The law promotes prevention and offers incentives to reduce hospital readmissions and conditions acquired in health care facilities. It also provides tax credits to small businesses and relief for seniors. There was record low growth in national health spending in 2009 and 2010.

“I’m not saying it’s going to be easy for us to make all of these changes,” DeParle said. “But what I’m saying is the framework is there and the incentives are there in this new law.

“Do we embrace this new law, this new world of health reform, as a first step and work together to make it better? Or do we fight to restore an unsustainable status quo that left millions of our neighbors on their own in their time of need?”

A version of this article originally appeared in VB Intelligence on Nov. 17, 2011.