VANDERBIL T BUSINESS

OWE N GRADUATE SCHOOL OF MANAGEMENT V Fall 2010 Bil l oƒ Health The financial impac t of B health care reform

MILITARY DISCIPLINE From battlefields to business fields

BEYOND NUMBERS The Master of Accountancy program takes a new approach

www.vanderbilt.edu/magazines/vanderbilt-business Mary Duvanich Ravi S. Chari, M.D. Vanderbilt MM Health Care 2009 Vanderbilt Executive MBA 2008 Vanderbilt Medical Center Centennial Medical Center

Josh Nickols, PhD Zahra MirAfzali, PhD Vanderbilt MBA 2006 Vanderbilt MBA 2005 Insight Genetics Encapsula NanoSciences

Liz Pavlic Markus Frank Grant Vanderbilt MBA 2008 Vanderbilt Executive MBA 1991 Johnson & Johnson Cisco Systems, Inc.

Health Care. Business. Vanderbilt. Like nowhere else, we combined a world-class business school, world-class medical center and world-class health care community to bring you programs in health care business that are a world apart.

Health Care MBA • Executive MBA • MD/MBA • PhD/MBA • MM Health Care Advanced Certificate in Health Care Management • Custom Programs

HealthCareAtOwen.com

© 2010 Vanderbilt Owen Graduate School of Management Vanderbilt is an equal opportunity, affirmative action university. Fall 2010 CONTENTS

2 PERSONAL ASSETS MISCELLANEOUS Tasha Ross, MBA’08, and Lindsay Beckner, 4 FROM THE DEAN BA’04, discover a winning recipe at FiddleCakes A message from Jim Bradford by S ETH R OBERTSON 5 EDITOR’S MEMO 9 IN THE NEWS Preserving a reminder of Nashville’s resolve Headlines from around the world 10 STUDENT EXPERIENCE 6 INSIDE OWEN Making lighting more affordable ‘Cracking the Code’ Conference Examines I in Bangladesh Consumer Psychology McNamara Named Executive Director of CMC I New Event by B RIAN W AINSTEIN Welcomes Students to Owen I Off the Press 14 CAMPUS VISIT 12 FACULTY IN FOCUS Q&A with Read McNamara, MA’76, Executive Director of the Career Promotions, appointments, awards and honors Management Center 34 16 INSIDE BUSINESS 26 CORPORATE SPOTLIGHT Trade Secrets I Raising the Red Flag I Karla Diehl, MBA’87, embraces a new The Elephant Inside challenge at Partners Tea Co. FEATURES by C INDY T HOMSEN 42 CLASS ACTS 40 BUSINESS AND SOCIETY 20 Jim and Margaret Brunstad, MBM’75 I Bryan Bringing better nutrition to Mozambique BILL OF HEALTH Deaner, MBA’93 I Todd Jackson, BA’96 , EMBA’08 by C LAIRE B ROWN The financial impact of health care reform 53 GLOBAL PERSPECTIVE by R OB S IMBECK The valuable lesson I learned in India by D ARREN G EST , MBA’10 34 56 BOTTOM LINE MILITARY DISCIPLINE Rebuilding Gaylord Entertainment From battlefields to business fields after the flood by David Kloeppel, BS’91, MBA’96 by R ANDY H ORICK

ON THE COVER 26 Illustration by George Schill

PHOTO ESSAY CH INA 28 BEYOND NUMBERS Vanderbilt’s Master of Accountancy program takes a new approach by Jeannie Naujeck 16

V ANDERBILT B USINESS 1 PERSONAL ASSETS

AKING IS ALL ABOUT CHEMISTRY ,” SAYS Lindsay Beckner, who co-owns FiddleCakes, a The Right Ingredients Nashville-based bakery, cafe and catering busi - ness that can accommodate box lunches for 30 Tasha Ross, MBA’08, and Lindsay Beckner, BA’04, or cupcakes for 500. “You have to be very discover a winning recipe at FiddleCakes ‘‘ exact. There’s little room for error.” Beckner may be referring to what deter- By SETH ROBERTSON mines a successful recipe for, say, a muffin or a Bscone, but she could just as well be talking about what determines a successful business, like the one she and fellow co-owner Tasha Ross have built during the past year. The idea of opening a bakery started with Ross, but the pieces did not fall into place until Professor of Accounting Germain Böer intro - duced her to Beckner, a fellow Vanderbilt alumna who was working in finance and cater - ing on the side. Ross and Beckner clicked, and their business plan came together quickly: They opened FiddleCakes just five months after their initial meeting. “Coming from an HOP [human and orga - nizational performance] background at Owen, I knew one of the toughest things would be building a team,” says Ross, who previously worked for a startup software company. “Fortu - nately we found that we share the same vision.” An important part of that vision is provid - ing customers with tasty vegan and gluten- free meals. Demand for the latter has grown in recent years as more doctors prescribe restricted diets for those suffering from condi - tions like autism and celiac disease, the autoimmune disorder caused by gluten pro - teins in certain grains. Forgoing eggs and traditional flour makes Ross and Beckner’s task of operating their bak - ery all the more challenging. “The recipes are much more temperamental than they would be otherwise,” Beckner explains. “Sometimes the mixes don’t rise, and you have to start over again.” The challenge, though, as they see it, is well worth the effort. “It makes all the difference when, for exam - Tasha Ross (left) and Lindsay ple, a parent whose child suffers from celiac Beckner offer a variety of disease thanks you personally,” Ross says. vegan and gluten-free baked J O

H goods at FiddleCakes.

“Running a successful business is rewarding, N

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even better.” L

2 F ALL 2010 V ANDERBILT B USINESS 3 FROM THE DEAN

Friends and colleagues,

nspiration comes in many forms and often from unexpected sources. As business leaders we plan, Ibudget and dream, yet we often don’t find the needed spark in the incremental day-to-day events of life. As Seth points out in his editor’s memo on the opposite page, sometimes it takes a calamity like the flood that devastated Nashville in early May to make us see things differently. Crisis can often be the driver of change, and in such change we frequently find inspiration. In the early days of my management career, a mentor of mine named R.D. Hubbard offered this advice: “Never waste a crisis.” What he meant was that a crisis can inspire us to go in new directions and to think of the world in what Charles Handy in The Age of Unreason calls an “upside-down way.” In many regards we’re witnessing today the dis - continuous change that Handy predicted. It is a J O H time of irrational markets, deflation, unsettling yield N

R U curves, overpriced tech deals and talk of the Hin - S S E L denburg Omen. Yet amid all of this uncertainty, L there is opportunity. At a recent gathering for an advisory group composed of faculty, Alumni Board members, Board of Visitors members, staff and friends, I found inspiration in their longer vision for how to propel the school forward. They suggested that we in the Owen community should “think longer, think bigger, think of the tipping point.” In the coming months I hope you will seek similar inspiration in a plan for the future— to act, to engage and to make a difference for Owen.

Respectfully yours,

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

4 F ALL 2010 Visit Owen online: owen.vanderbilt.edu EDITOR’S MEMO

FALL 2010 Flood of Memories

DEA N O L

L Preserving a reminder of

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R EDITO R Nashville’s resolve H C S ETH R OBERTSON By SETH ROBERTSON CONTRIBUTORS N IKHIL B IMBRAHW (MBA’03), C LAIRE B ROWN , N ELSON B RYAN (BA’73), D ANIEL D UBOIS , D ARREN G EST (MBA’10), HE FLOODWATERS THAT DEVASTATED S TEVE G REEN , R ANDY H ORICK , D AVID Middle Tennessee in early May left their K LOEPPEL (BS’91, MBA’96), J ENNY M AN - DEVILLE , J EANNIE N AUJECK , A LLEY P ICKREN , mark in more ways than one. The physical J AN R EAD , A NN R OBINSON , J OHN R USSELL , destruction was sudden and overwhelm- T ERRI S EALE , C INDY T HOMSEN , M ARSHALL ing: Lives were lost, and many homes and T URNBULL (ME D ’05), R YAN U NDERWOOD businesses were in ruins once the muddy (BA’96), B RIAN W AINSTEIN , A MY W OLF water subsided. The psychological impact, DESIGNER however, didn’t recede quite so easily. For M ICHAEL T. S MELTZER T weeks afterward the unseen effects of the ART DIRECTOR disaster—the shock, worry and fatigue— D ONNA P RITCHETT continued seeping into the lives of every- MBA’96, President and Chief Operating EXECUTIVE DIRECTOR OF one in this area. Officer at Gaylord Entertainment, writes MARKETING AND COMMUNICATIONS Fortunately my family and I were about on page 56. Gaylord has worked Y VONNE M ARTIN -K IDD spared during the flood, but I’m still doggedly to restore the Opry House to its ASSOCIATE DEAN OF DEVELOPMENT haunted by pictures from those days. One former glory, and remarkably it is now AND ALUMNI RELATIONS in particular that has stayed with me is open for business once again. P ATRICIA M. C ARSWELL that of the Grand Ole Opry stage door While I never really doubted that the EDITORIAL OFFICES: Vanderbilt University, half-submerged in murky water. The Opry would someday return, I did wonder Office of Development and Alumni Relations photo, which appeared in various media if it, and Nashville for that matter, would Communications, PMB 407703, 2301 Vander- ever be the same. Now that time has bilt Place, Nashville, TN 37240-7703, Tele- outlets, is what you’d expect from a snap- phone: (615) 322-0817, Fax: (615) 343-8547, shot taken in difficult conditions; the afforded some perspective, I realize how [email protected] lighting is poor, the image a little shaky. shortsighted that was of me. The question wasn’t so much if but rather how our com - PLEASE DIRECT ALUMNI INQUIRIES TO: Yet it resonates with me nonetheless Office of Development and Alumni Relations, because of a personal connection I feel munity would change, and I’m happy to Owen Graduate School of Management, PMB toward it. say that in many ways it has been for the 407754, 2301 Vanderbilt Place, Nashville, TN During the late ’70s and early ’80s, I better. A page of history may have been lost 37240-7754, Telephone: (615) 322-0815, had the privilege of spending many hours in the flood, but in its place a new one is [email protected] backstage at the Opry House just steps being written—one that reflects our com - Vanderbilt University is committed to principles of from that very door. At the time my father passion and resolve. equal opportunity and affirmative action. Opinions sold advertising for WSM, the AM radio There’s no better symbol of this than the expressed in Vanderbilt Business are those of the stage door itself. In salvaging the door, Gay - authors and do not necessarily reflect the views of the station that broadcasts the show, and I’d Owen School or Vanderbilt University. often tag along when he entertained lord decided to preserve the mark left by the clients. Some of my earliest memories are flood and display it for all to see. Aside from Vanderbilt Business magazine is published twice a year being a historic curiosity, I’d like to think by the Owen Graduate School of Management at of standing offstage watching Roy Acuff Vanderbilt University, 401 21st Avenue South, and other stars of that era perform. that the mark serves another purpose alto - Nashville, TN 37203-9932, in cooperation with the These memories are what first came to gether—to signal a high point of sorts. It Vanderbilt Office of Development and Alumni Rela - mind when I saw the photo of the door. commemorates not the depths to which we tions Communications. My heart sank as I thought of all the his- Nashvillians sank as a community but © 2010 Vanderbilt University. “Vanderbilt” and the tory washed away and of the monumental rather the heights to which we rose, buoyed Vanderbilt logo are registered trademarks and service rebuilding task that lay ahead—a task inci- by neighborly love, perseverance and the marks of Vanderbilt University. dentally that David Kloeppel, BS’91, promise of new beginnings. VB

Vanderbilt Business is online: www.vanderbilt.edu/magazines/vanderbilt-business/ V ANDERBILT B USINESS 5 Recent News INSID CONFERENCE ‘Cracking the Code’ Conference Examines Consumer Psychology I LEADERSHIP McNamara Named

CONFERENCE the-art managerial consumer advice and an illustration of the way most consumers reviews of up-to-the-minute research on go about buying products. He simply ‘Cracking the Code consumer behavior with the goal of ulti - called colleagues from Owen and got a mately improving managerial decision- recommendation for a t-shirt company Conference Examines making and organizational performance. without thoroughly researching his Consumer Psychology Presenters from Owen included con - options according to quality, cost or any ference organizer Steve Posavac, the E. other factors. Consumers, he explained, This past summer marketing professionals Bronson Ingram Professor of Marketing, always appreciate an easy decision, and and academics gathered at Owen for the and Steve Hoeffler and Jennifer Escalas, that is one reason end-cap displays in 2010 Advertising and Consumer Psychol - both Associate Professors of Marketing. supermarkets are so effective. ogy Conference, titled “Cracking the In his presentation called “Managing “Brands are judged more favorably Code: How Managers Can Drive Profits the Marketing Mix to Drive Brand Con - than warranted when judged in isolation,” by Leveraging Principles of Consumer sideration and Choice,” Posavac half-jok - he said. Psychology.” The conference attendees ingly referred to his selection of the Meanwhile Hoeffler focused on the heard presentations on state-of- conference t-shirt as area of radically new products, his market - ing research specialty. He said questions need to be asked about whether these products transform the market or create a new one before a strategy can be devised. “Does it allow customers to do some - thing they’ve never done before?” he asked. If a product meets that test, then there is more flexibility in advertising and more opportu - nity to break new ground, while communicating the basic needs met by the product. When bringing out a new product, a company can start with an abstract idea or concept, but Hoeffler said it is important to

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the point of adoption. I

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6 F ALL 2010 E OWEN Executive Director of CMC I STUDENTS New Event Welcomes Students to Owen I FACULTY Off the Press L L E S S U R

N H O J

New Event Welcomes Students to Owen The Owen School held its first-ever Welcome Owen Well (W.O.W.) event during new student orientation in August. The event, which was held in the lobby of Management Hall, welcomed members of the Class of 2012, who entered the building and From left, Steve Posavac, Jennifer Escalas and Steve Hoeffler made their way through a sea of cheering onlookers. More than 70 associated with a good cause and a good with such Fortune 500 companies as Owen alumni, representing a variety story. Escalas went on to talk about what Gillette, Pillsbury, ConAgra, Revlon and of ages, class years and industries, makes for a good story in advertising and Bausch & Lomb, has been appointed attended the gathering. Special thanks emphasized that research has shown sto - Executive Director of the Career Man - to Nelson Andrews, BA’89, ries can build meaning for brands. A sur - agement Center for the Owen School. EMBA’95, and J.P. Lowe, BA’83, prising finding was consumer data McNamara has lived and worked EMBA’95, for organizing a “welcom - showing fictional stories persuade con - extensively in Latin America and Asia, ing tunnel” for the new students. sumers just as much as factual narratives. speaks fluent Spanish and is conversant “You need creative ad execution to get in Portuguese. He earned his MBA at through the clutter,” she said. Wharton, a master’s degree in Latin American studies from Vanderbilt and a LEADERSHIP bachelor’s degree from Colgate, where he has worked closely with their career McNamara management center as an alumnus. Named Executive “We are pleased to hire Read in this critical role for Owen,” says Jim Brad - Director of CMC ford, Dean of the Owen School. “With a Read McNamara, MA’76, a seasoned wealth of connections, global experience executive who has held senior positions and unparalleled sales skills, he can V V

V ANDERBILT B USINESS 7 INSIDE OWEN

undoubtedly help us open doors and build our recruiter base in the U.S. and abroad. “We also look forward to his role as McNamara a mentor and adviser to our students as he helps them match their goals and talents with the needs of business.” McNamara succeeds Joyce Rothen - berg, who led the Career Management Center for the past three years. Rothen - berg left the Owen School to relocate to New York with her family. “Joyce has helped strengthen this department in many ways and is leaving a stable team and firm foundation on which her suc - cessor can build,” Bradford says.

For an interview with Read McNamara, see page 14. Owen has a new website! Visit owen.vanderbilt.edu to see more.

OFF THE PRESS Recently published books authored by Owen faculty

Advanced Accounting , 4th ed., The Executive and the Elephant: Marketing Research: New York: Wiley & Sons, 2009. A Leader’s Guide to Building Inner Methodological Foundations , 10th ed., By Debra Jeter, Associate Professor Excellence , San Francisco: Mason, Ohio: South-Western, Cengage of Accounting, and Paul Chaney, Jossey-Bass, 2010. Learning, 2010. the E. Bronson Ingram Professor By Dick Daft, the Brownlee O. Currey By Dawn Iacobucci, the E. Bronson of Accounting Jr. Professor of Management Ingram Professor in Marketing, and (To learn more about The Executive Gilbert A. Churchill Jr. Managing Projects: A Team-Based and the Elephant , please visit Approach , Boston: McGraw-Hill MM: Marketing Management , page 19.) Irwin, 2010. Mason, Ohio: South-Western, By Nancy Lea Hyer, Associate Cengage Learning, 2010. Professor of Operations Management, By Dawn Iacobucci and Karen A. Brown

8 F ALL 2010 IN THE NEWS Headlines from Around the World Putting Investors in a Fix, Southern-fried Health Care, To Specialize or Not

EXECUTIVE MBA P ROGRAM more to disclose corporate cost) on specific business methods. If IN TOP 25 support. Hans Stoll , there isn’t enough work to go around, The Vanderbilt Owen the Anne Marie and consider switching up people’s duties, Graduate School of Man - Thomas B. Walker suggests Ray Friedman , the Brownlee agement ranks No. 25 Jr. Professor of O. Currey Professor of Management. “I O

T among executive MBA pro - Finance, says busi - have seen big companies make it through O H P

K grams in The Wall Street ness schools have downturns by having factory workers do C O T

S Journal ’s new survey of been accused of not maintenance work [such as] painting, I

, S

S national business schools. On being close enough to fixing tools” and the like, he says. S E S

S management skills and alumni the real world. “The con - Entrepreneur , July 20 A L G satisfaction—key components of nection to business is desir - the overall rankings—Owen is No. 17 able. I don’t think we want to sever BUYING HOUSEHOLD STAPLES ONLINE and No. 18, respectively. that on the altar of conflict of interest,” SmartMoney’ s “Deal of the Day” blog The Wall Street Journal, Sept. 30 he says. looks at online deals for everyday house - The Wall Street Journal, Aug. 16 hold items. The regularity with which PUTTING INVESTORS IN A FIX consumers buy household goods appeals In coming weeks the Securities and SOUTHERN -FRIED to Web retailers, says Dawn Iacobucci , Exchange Commission and Commod- HEALTH CARE the E. Bronson Ingram Professor in ity Futures Trading Commission are Health care now is by far the largest Marketing. Even Amazon offers gro - expected to release their report on the industry in Nashville, commanding a ceries and home products. “They’re all “flash crash” of May 6, 2010, when the fifth of its economy, with the picture hoping to hook you on the convenience stock market briefly plummeted. “The looking ever brighter as the industry of home delivery for a regular order,” market always tries to find its way stands to gain from constant, unre - she says. around the rules,” says Bill Christie , strained growth. But as the capital of SmartMoney , July 20 the Frances Hampton Currey Professor Tennessee, the second-most obese state of Finance, whose work first exposed in the nation, Nashville’s health care TO SPECIALIZE OR NOT the game-playing among Nasdaq dealers cluster suffers from a public relations Once accepted to business school, stu - in the 1990s. “It’s kind of like a bal - blemish. Jim Bradford , Dean of the dents must decide whether they need or loon—you squish one side and it pops Owen Graduate School of Management, want to specialize or pursue a more gen - out the other.” is quoted. eral business education. “Don’t stick to The Wall Street Journal , Aug. 24 MarketWatch , July 27 one goal or career choice if it’s just not going to bear fruit,” says Nick Bollen , BEWARE OF ‘I NDEPENDENT ’ TRIMMING PAYROLL the E. Bronson Ingram Professor of RESEARCH WITHOUT LAYOFFS Finance. Several of his students have In recent years financial-services firms While layoffs may be necessary at some looked to other industries for employ - have found a new tool to help them small businesses, employers should avoid ment and found roles in entirely differ - drum up customers: the academic study. sharpening the ax. Here’s why: Not only ent areas, such as health care. Universities conducting the research say do employees contribute to the com - Financial Times , June 22 they do not allow sponsors to interfere, pany’s productivity and bottom line, but critics say that schools should do they’re often well-schooled (at a great

V ANDERBILT B USINESS 9 STUDENT EXPERIENCE In a New Light Making lighting more affordable in Bangladesh

By BRIAN WAINSTEIN J O H N

R U S S E L L

Wainstein displays the foot pedal that he and a group of students from the Vanderbilt N 2009 A TEAM OF VANDERBILT grad - This problem is not just limited to a University School of Engineering devised. uate and undergraduate students visiting handful of villagers the team met. There rural Bangladesh made a startling obser - are, in fact, more than 100 million peo - vation. The villagers they met lacked ple in rural Bangladesh who are literally access not only to reliable electricity but in the dark. Once the sun sets, countless also to cheap, alternative fuel for lighting children can no longer study or do their homes. Though widely available, homework, families and friends cannot Ikerosene in Bangladesh typically costs interact, and all work ceases. And during $5 per month, or the equivalent of an the day the situation is not much better. Brian Wainstein is an MBA degree average week’s salary—far too expensive Bangladesh is both blessed and cursed candidate for 2011. to use for anything besides cooking. with a monsoon season, and for almost

10 F ALL 2010 STUDENT EXPERIENCE

two-thirds of the year, the sun is blotted we decided should be the $5 that was Rather than focusing on increasing the out by thick, dark storm clouds, denying already being paid monthly for output of the foot pedal, I thought we these people sufficient light to live by. kerosene, and (2) the power source had should instead figure out a way to har - The 2009 trip, which was organized to be sustainable and readily available to ness the energy it creates. In some sense by Project Pyramid, an interdisciplinary villagers and again, had to fall within we had the modular design backwards. student organization that aims to allevi - our price point. The potential for real innovation was ate world poverty, demonstrated the Initially we considered a number of not in a light that could be powered by need for a sustainable lighting and different ways to power our product, different sources; it was in a kinetic power solution in rural Bangladesh. To from using the nuclear decay of radioac - device that could power any number of tackle this issue, the organization pro - tive materials to more traditional sources rechargeable items, including lights. posed three different projects: building a like wind and solar energy. Our list Excited by this suggestion, the engi - biogas digester to convert animal waste eventually narrowed to two choices: neers on our team produced an updated into usable methane gas, creating an either solar or kinetic (human) power. prototype featuring a USB, instead of a apparatus to turn that gas into power, Since Bangladesh has heavy cloud cover proprietary, connector. At our next and devising a product to generate more for most of the year, we decided a meeting we tested a compatible LED affordable lighting. kinetic solution was best. (Although light, which worked fantastically. Next Project Pyramid presented these there are solar panels that can work on we plugged in an iPod and then a ideas to the School of Engineering, cloudy days, they are not affordable in BlackBerry to the USB connector and which, in turn, gave its fourth-year stu - The potential for real innovation was not in a light that could be dents the option of working on them as senior design projects. Each project powered by different sources; it was in a kinetic device that could would require a small team of engineer - power any number of rechargeable items, including lights. ing students led by a first-year MBA candidate. As a member of Project Pyra - this instance.) The engineers also pro - charged them both using the foot pedal. mid, I volunteered to lead the team posed using a light-emitting diode After more meetings and tests, our tasked with the affordable lighting solu - (LED), which is energy efficient and product was finally ready for the end-of- tion. Although I hadn’t traveled to reliable, and a modular design, which the-year Project Pyramid showcase, Bangladesh with the others in 2009, I would give the user the option of where it performed as well as we had was familiar with poverty in my native changing power sources. hoped and received a lot of attention South Africa and knew what a positive Our team had some clever ideas for from the other participants. impact a basic convenience like lighting using kinetic energy to power the lamp So, what is next for our product? could have on those affected. Joining but settled on a foot-pedal design simi - Even though my teammates and I are me on the project were engineering stu - lar to that of manual sewing machines. no longer collaborating on it, the idea dents Greg Larson, Jared Robertson, The initial prototype was promising: It awaits a future group of students eager Mason Hensley, Macy Skulman and created a flickering light that varied as to change the world for the better. The Carly Jackson, all in the Class of 2010. the pedal went through its arc. The next step will be to modify the design so At the launch of the project, Clinical catch, though, was that it needed to that it can be easily mass-produced. It Professor of Management David Owens produce a steadier current and higher will also need to be tested in real-world gave an insightful talk about innovation voltage to be a viable light source. conditions. And, if all goes as planned, I management, entreating us to consider In discussing this challenge with hope someday it will shed light, so to the constraints when looking to inno - others, including Stephen Songy, speak, on a problem that has plagued vate. This approach proved especially MBA’10, and Joseph Boulier, rural Bangladeshis for far too long. VB valuable for us as we highlighted two MBA’10—the two second-year MBA constraints that guided us throughout: students heading up all the Project (1) the product had to be affordable and Pyramid teams—I soon realized our meet a certain low price point, which group should take a different approach.

V ANDERBILT B USINESS 11 FACULTY IN FOCUS Promotions, Appointments, Awards and Honors

Barry Bollen Bradford Burcham Christie

Cooil DuBois Friedman Gardner Hyer

Iacobucci Jeter Lapré Lewis McCann

Posavac Ramanujam Scudder Shor Whaley

12 F ALL 2010 Bruce Barry , the Brownlee O. Currey Ray Friedman , the Brownlee O. Currey Craig Lewis , the Madison S. Wigginton Jr. Professor of Management, was named Professor of Management, joined the Professor of Management, is serving a Chair of the Advisory Board of the editorial board of Organizational visiting appointment at the U.S. International Association for Conflict Behavior and Human Decision Processes Securities and Exchange Commission. Management and Associate Editor of the and received a 2009 Visiting Scholar scholarly journal Negotiation and Conflict Grant from the National Science Brian McCann , Visiting Faculty of Management Research . Council of the Republic of China. He Strategic Management, won the 2010 also won Best Empirical Paper 2009, Executive MBA Outstanding Nick Bollen , the E. Bronson Ingram International Association for Conflict Teaching Award. Professor of Finance, was promoted to Management (with Wu Liu and Ying-yi full professor. Hong) and Best Practitioner Presentation Steve Posavac , the E. Bronson Ingram Award, 18th Frontiers in Services Professor of Marketing, was promoted Jim Bradford , Dean and Ralph Owen Conference, Honolulu, 2009 (with Bart to full professor and received the 2010 Professor of Management, was Larivière, Timothy Keiningham, Faculty Research Productivity Award. reappointed Dean of Vanderbilt Owen MBA’89, and Lerzan Aksoy). Graduate School of Management for a Ranga Ramanujam , Associate Professor five-year term, effective July 1. Tim Gardner , Associate Professor of of Management, joined the editorial Management, was appointed to a three- board of Organization Science and was Michael Burcham , Lecturer, was year term as a member of the editorial granted tenure. He also was a finalist for appointed President of the newly formed board of the journal Personnel Psychology . the Academy for Management Review Best Nashville Entrepreneur Center. Paper Award in 2009. Nancy Lea Hyer , Associate Professor Bill Christie , the Frances Hampton of Operations Management, won Best Gary Scudder , the Justin Potter Currey Professor of Finance, continues Paper 2009 from the Journal of Professor of Operations Management, his appointment as Editor of the journal Operations Management (with Dr. John was appointed Associate Editor of Financial Management through 2011. A. Morris Jr. from the Vanderbilt Operations Management Review . University Medical Center) . Bruce Cooil , the Dean Samuel B. and Mike Shor , Assistant Professor of Evelyn R. Richmond Professor of Dawn Iacobucci , the E. Bronson Management, was presented the 2010 Management, received the 2010 Faculty Ingram Professor in Marketing, won James A. Webb Excellence in Research Impact Award. the American Marketing Association Teaching Award. Excellence in Research Award. Tim DuBois , Clinical Professor of Bob Whaley , the Valere Blair Potter Management, was named Vice President Debra Jeter , Associate Professor of Professor of Management, won the 11th and Managing Executive of Nashville’s Accounting, was appointed Associate Annual Bernstein Fabozzi/Jacobs Levy newly expanded regional office of the Editor of Issues in Accounting Education Award for Best Article published in the American Society of Composers, Authors and was named to the editorial board of Journal of Portfolio Management in 2009. and Publishers. The Accounting Review.

Michael Lapré , the E. Bronson Ingram Professor of Operations Management, continues as Department Editor for Production and Operations Management (2006–present) and Associate Editor of Management Science (2009–present) and Manufacturing & Service Operations Management (2007–2010).

V ANDERBILT B USINESS 13 CAMPUS VISIT Q&A with an Owen Staff Member Read McNamara, MA’76, Executive Director of the Career Management Center D A N

Hong Kong I grew to have a tremendous I E L

appreciation for what you and I would D U B O I

call consensus management. The Asian S way of attacking a problem is so much different from the way we do it in the West. In Latin America what I took away was an appreciation for a more emotional approach to business. In some ways it is the antithesis of what I found in Asia. I remember that my boss at Pillsbury told me, “You’ve spent enough time in Latin America. I’m going to send you some- place where you’re going to have to do things totally differently.” He was right. The two things I grew to appreciate are different approaches to solving the same problem. Also another key difference I noticed was the pace at which business Read McNamara and social life are done. In Latin America the pace is deliberate and methodical— Read McNamara recently joined the staff wanted to work internationally because I often with detours. However, in Hong at Owen after spending 35 years in the con - had that wanderlust that so many 22- Kong, the pace my wife, five children and sumer goods industry. His distinguished year-olds have, but I had no idea if I I experienced was breakneck. People had career included stints in both Latin Amer - would channel that interest into the busi - to prod me along because everything hap - ica and Asia. McNamara holds a bachelor ness world or into the public sector. The pened so fast. I’m glad, though, that I of arts from Colgate University, a master of perfect way for me to find that out, albeit spent time in both parts of the world, as arts from Vanderbilt and an MBA degree an expensive way, was to get myself into a different as they are. from The Wharton School. nonterminal degree at the graduate level, and Vanderbilt had a wonderful—and Q.You mentioned your wife and Q.Your master’s degree from Vander - still does—master’s program in Latin children. What did they think about bilt is in Latin American studies. How American studies. moving around to all of those places? did you become interested in that? Q.International opportunities have A.My long-suffering wife of 38 years has A.I was born and raised in a small town played a big role in your career. been through 15 moves. She is the real in rural Connecticut. I hadn’t seen much Where have you lived and worked, champion. The five children—four boys of the world by the time I got to college and what have you learned from and a girl—are appreciating what they but found that I had a facility for those experiences? experienced more and more as they age. I languages and actually became a modern just recently had a conversation about this languages major at Colgate. Like so many A.My family and I lived in Guatemala, with my eldest, who is 34. It was a very liberal arts graduates, I had absolutely no Ecuador, Panama and Venezuela, and different conversation from the ones I had idea what I wanted to do in life. I knew I later in Hong Kong for three years. In with my kids when they were teenagers

14 F ALL 2010 CAMPUS VISIT

being uprooted from one country to agement position. And here I am. This every year. And that’s not just at Owen; another. In fact, one of my kids is now didn’t happen by chance. I’m just fortu - that’s at all of our peer schools. We have involved in international work. nate enough that Vanderbilt came to me. to use technology and be creative in get - ting the mountain to the man and Q.Speaking of change, you’re in the Q.What was so appealing about this putting our great students in front of middle of making a big transition particular opportunity at Owen? these companies in different settings. from the corporate world to academia. Where did you work before Owen? A.Being part of a team that is absolutely Q.Would you say that’s the most committed to achieving top-tier status. In important part—getting one’s foot A.Before this, I started a general man - my conversations with Jim Bradford, I in the door and being face-to-face agement consulting practice in 2003 found that we are kindred spirits in that with employers? with four friends. I had always looked Jim is determined to make Owen a top upon owning my own business as some - 20 program. I love that challenge. I think A.Absolutely. And the key to that is thing to do in the “presunset” years. It we have all the tools in place. I did a great our alumni. I can’t stress that enough. was a wonderful experience. And before deal of research into where the school’s One of the things that attracted me to that I was in the consumer packaged been and where it wants to go, and I Owen is the loyalty of the alumni and goods industry at companies like wanted to be part of that. the great success of those individuals. Gillette, Revlon, Pillsbury and more We’re not that old as a school, relatively recently Bausch & Lomb in Rochester, Q.What are some of the challenges speaking, and we don’t have as many N.Y., where we just moved from. facing the Career Management Center alumni as some of the schools we’re this academic year? competing with. It’s a tremendous dif - Q.How did you become interested ferentiator when we can point to alumni in career management? A.A very difficult economic environment who are very active in helping our stu - has to be at the top of the list. It’s a chal - dents showcase their talents in person. A.I’m very fortunate to have been lenging market for MBAs right now. Also involved in a pro-bono capacity with things are changing very rapidly after a Q.If there’s one message you could career services at Colgate. When I was long period of relatively stable best prac - convey to Owen alumni, what would on the alumni board there, I headed the tices. When I graduated from Wharton it be? career services committee and found that with an MBA degree in 1973, they were I really enjoyed it. In fact, I spent three using essentially the same practices in A.Connectivity is the word of the day. To me, it’s a reality at Owen. I’ll give you It’s a tremendous differentiator when we can point a concrete example. In last year’s class, all to alumni who are very active in helping our students the members of the student government association sent me a welcoming email showcase their talents in person .–Read McNamara and offered to do anything they could to help. Whether they had started their jobs or four years after my term was up vol - career management that had been used 20 or not, they said, “I’m here for you. unteering one day every month in the or 30 years before. Today, though, Please let me be part of this connectiv - career services office. That’s how I got a employers have the luxury of doing what ity.” That’s very gratifying. Words like taste for it. we call “just-in-time” hiring, which means collegiality and collaboration take on our students sometimes sit on the edge of special meaning here. This place is differ - Q.Did you envision yourself doing their seats until May or June. Supply and ent, and that’s coming from someone this for a living at the time? demand factors allow employers to do who has been around a bit. VB that. It’s no longer so common for compa - A.Yes, my wife and I decided in 2004 nies to come to campus—for the man to over the dinner table that my last career go to the mountain, so to speak. Of move would be getting involved in a course, we have very loyal employers who top-tier MBA program in a career man - come here, but that number goes down

V ANDERBILT B USINESS 15 Vanderbilt and the Business World INSIDE Information Management Trade Secrets I Finance Raising the Red Flag

INFO MANAGEMENT is China, but setting up shop there is not share their information. The state-owned as straightforward as these companies Xinhua News Agency reports that the Trade Secrets might perceive. Recent legal developments amendment requires these companies to surrounding information management in “halt and report leaks of what the gov - The future of information China have the potential to dampen the ernment deems to be state secrets.” management in China enthusiasm of global investors. So what is the definition of a state A key to establishing business pres - secret? According to Xinhua, it is “infor - B Y N IKHIL B IMBRAHW , MBA’03 ence anywhere is building a local infra - mation that concerns state security and AMID GROWING UNCERTAINTY ABOUT structure, which includes data centers for interests and, if leaked, would damage the stability of the European Union, an hosting information. In April the Chi - state security and interests in the areas of increasing number of North American nese government made this practice politics, economy and national defense, companies are looking to capitalize on more difficult when it announced among others.” The official Chinese opportunities in emerging markets. One an amendment to its Protection government website posted a broad such market that is particularly attractive of State Secrets Law, forcing definition of what constitutes a Internet service provid- commercial secret, ers and telecommuni - defining it as cover - cations companies to ing information related to “strategic plans, management, mergers, equity trades, stock market listings, reserves, production, procure - ment and sales strategy, financing and finances, negotiations, joint venture investments and technology transfers.” Outside of China, media reaction to the legislation has been critical. For example, The New York Times called it an obvious CH INA attempt to impose control over cell phone and Internet commu - nications. The Wall Street Journal has opined that this amendment is simply a reaction to the criticism of the Chinese The Chinese government recently government’s handling of the recent Rio announced an amendment to its Tinto scandal, which led to the arrests of Protection of State Secrets Law, forcing Internet service providers and several of the mining corporation’s telecommunications companies to share employees for espionage and bribery. their information. This discussion brings to mind the early 2010 decision by Google to move its servers out of mainland China and

16 F ALL 2010 BUSINESS I Leadership The Elephant Inside S I

O into Hong Kong because of heavy inter - business in China. But one thing is cer - B U D

ference by the authorities. Although tain: For all those North American com - L E I

N technically still part of China, Hong panies looking to take advantage of sales A D Kong has retained considerable auton - in the Chinese market without compro - omy under its designation as a special mising on sharing their information, administrative region. The principle of Hong Kong is a good option. “one country, two systems” has enabled Hong Kong to follow economic and Nikhil Bimbrahw , who earned his MBA political policies different from those of degree from Vanderbilt in 2003, has mainland China. worked in the United States, Canada, The Hong Kong Basic Law, which India and China. He is currently employed serves as the constitutional document of as a Manager in Information Management the region, went into effect in 1997 and for one of the global Big Four consultancies Nick Bollen will stay in place until 2047. Under this law Hong Kong’s diplomatic relations and defense are the responsibility of the FINANCE similar to the performance flags analyzed Chinese government. At the same time, in the study—are part of a series of articles 27–38 of the Basic Law stipulate Raising the Red Flag reforms aimed at detecting hedge fund fraud early, thereby reducing the chances that “Hong Kong residents shall have, Prescreening process detects among other things, freedom of speech, that such frauds will occur or go unde - freedom of the press and of publication; hedge fund fraud tected and lead to the type of financial freedom of association, freedom of damage seen recently. A RECENT STUDY CO -AUTHORED BY assembly, freedom of procession, of According to the study’s findings, the Nick Bollen, the E. Bronson Ingram demonstration, of communication, of performance flags—low-cost, statistical Professor in Finance, and Indiana Uni - movement, of conscience, of religious tools—allow regulators to successfully versity’s Veronika Pool demonstrates belief, and of marriage; and the right and identify high-risk hedge funds that can that risk-based performance flags can freedom to form and join trade unions, then be subjected to more intensive accurately prescreen hedge funds for and to strike.” investigation. The alternative to the pre - fraud. The study supports strategies cur - Whether other companies will follow screening approach is to examine all rently in use at the Securities and Google’s lead is not clear. Hosting com - hedge funds using the same in-depth Exchange Commission (SEC), thereby panies like Rackspace that have data cen - regimen. Given the large number of contesting arguments often posed by ters in Hong Kong have not experienced hedge funds and the very rapid pace of opponents of additional regulation that a noticeable surge in business due to this change in financial markets, this is at government agencies do not have ade - amendment so far. It is likely that com - best a challenging task for regulatory quate resources to avert financial market panies are not making their intentions agencies with limited professional and scandals. public for fear of antagonizing the Chi - financial resources. The SEC added risk-based “examina - nese government. “The approach we’re validating for tions” to its regulatory procedures The April amendment does little to hedge fund monitoring is in some ways shortly after Bernard Madoff was change the fact that there is a lack of similar to the one used by the IRS to charged with perpetrating a massive transparency in the rules that organiza - determine which tax returns to audit,” Ponzi scheme. These examinations— tions are expected to follow while doing Bollen says. “By statistically parsing V V

V ANDERBILT B USINESS 17 INSIDE BUSINESS

through funds and identifying ‘red fraud can be applied efficiently to deter can be a very effective way to protect flags,’ we demonstrate financial regula - fraud in a wide range of investments. client portfolios. They will have addi - tion can work without being prohibi - The flags might be different but the tional means to identify potential tively expensive.” basic strategy is the same,” he says. investments that should require espe - Bollen also notes that the perfor - “And the information we are providing cially careful due diligence.” mance flag approach has application can also benefit investment advisers by To unearth the findings, the beyond hedge funds. “Prescreening for making them aware that prescreening researchers reviewed 8,770 existing and defunct hedge funds in the Lipper B U

TASS and Center for International D R O Securities and Derivatives Markets data - V I C ,

G

bases between 1994 and 2008. A sample E T T Y

of 195 problem funds that had been the I M A G

subject of SEC enforcement actions or E S . C

investor lawsuits was identified. The O M researchers then compared the problem and nonproblem funds using perfor - mance flags that had been developed previously by Bollen. These flags focused on suspicious patterns in hedge fund returns, including random returns, too few negative returns and too many repeat returns. The team found that funds charged with reporting violations triggered the performance flags at a sub - stantially higher rate than other funds. For example, 51 percent of these funds had random returns compared to just 23 percent for nonproblem funds. Bollen notes that the critical role of databases in identifying potential fraud underscores the importance of requiring hedge funds to disclose key information to designated databases, such as those highlighted above. This is currently a voluntary procedure. “Mandatory reporting can only serve to aid regulatory agencies working to root out fraud,” Bollen says. “The increased data would also promote addi - tional research that could protect investors from future schemes.”

Performance flags—low-cost, statistical tools—allow regulators to successfully identify high-risk hedge funds that can then be subjected to more intensive investigation.

18 F ALL 2010 INSIDE BUSINESS

LEADERSHIP grounded in practical application to help leaders control their elephant and The Elephant Inside change bad behaviors. He then gives examples of leaders who tried each indi - Finding inner excellence as a leader vidual approach and how it impacted them. A few exercises include engaging WHETHER YOU ARE THE CEO OF A and writing down your intentions, Fortune 500 company or just trying to slowing down your reaction time to manage yourself, Dick Daft, the Brown - think, and repeating a mantra. lee O. Currey Jr. Professor of Manage - “I’ve worked with a lot of executives ment, says you must learn to control who know what they should be doing,” your “inner elephant.” he says. “They’ve gotten feedback that In his recently published book, The they should do something differently Executive and the Elephant: A Leader’s or act differently with their employees, Guide to Building Inner Excellence, Daft but they’re unable to execute the new combines research in management, psy - behavior. I wrote this book not so chology, neuroscience and Eastern spiri - much to tell them what to do, but tuality to argue that S

S rather how to change the behavior.” A

B everyone has two sides -

Y Daft has published 12 books and E

S to his or her personality. S

O dozens of articles and has presented at J The “executive” is objec - more than 45 universities around the tive, rational and Daft combines research in management, psychology, neuroscience and Eastern world. He also developed and managed responsible, while the spirituality in his latest book. the Center for Change Leadership, is a “elephant” is emotion- former associate dean at Owen, and is a driven, impulsive and cations. All of these are tied to a fellow of the Academy of Management. habitual. Daft believes person’s emotional and impulsive Daft is currently studying high-per - that truly successful side, or their elephant. formance mental models, which include leaders must recognize “The whole idea of the execu - cognitive models of high-performing both sides and follow practical exercises tive is to be objective and not to inter - managers, and is examining high-perfor - to learn to control their inner elephant pret things just based on your own likes mance management systems. He is also and ultimately change a weakness in and dislikes, your own hang-ups, your studying transactional versus transfor - their behavior. own issues,” he says. “You have to be mational communication to engage “I find that virtually every leader has a able to detach from that and be able to people in organizational change. bottleneck within them. If they could see the other point of view, the big pic - “I know it sounds touchy-feely, this remove it—if they could be just a little ture, with some level of objectivity. idea of introspection and looking less critical-minded toward other people When people can be in that place, they within, but it is so powerful,” Daft or if they could be more focused and make wonderful decisions. It’s when says. “Know thyself—that has real attentive—they could be a much better they get anchored in their own needi - power because once you know your - leader overall,” Daft says. “What this ness, their own greed, that they get self, you can manage yourself. As long book does is help them identify that into trouble.” as you’re blind to your own bad weak link and remove it.” Daft says that people can remove a lot habits, you’ve got no chance to be a Daft says that almost every leader of inner struggle by being in the moment strong leader.” VB makes six mental mistakes: (1) reacting and accepting their “elephant” but not too quickly, (2) inflexible thinking, (3) letting the elephant control them or their wanting control, (4) emotional avoid - behavior. Real change, he believes, can ance and attraction, (5) exaggerating the only come from practice. He describes future, and (6) chasing the wrong gratifi - more than a dozen exercises that are

V ANDERBILT B USINESS 19

Bill of HEALTH The financial impact of health care reform

By ROB SIMBECK

our years ago Christopher Parks found himself facing an all- too-common dilemma. He and his mother, who was in the Fmidst of cancer treatments, were sitting in her living room going through a stack of her medical bills and those of his father, who had died recently. It is a telling indictment of the daunting complexity of health care billing that Parks, despite 17 years in the industry, felt as overwhelmed by the paperwork as did his mother. It was she who put the situation into words.

Parks “She looked at me with tears in her eyes and said, ‘Honey, I want to know who I owe, what I owe, and if it’s fair, ’” he says. “To hear some - one who was in chemotherapy and heading toward hospice say that as G E O R G

E she wrote out a check for $20,000—well, that was the moment I

S C H I L L

, knew I had to do something.” S I S J O H

Billing represents one small N

R U corner of an American health S S E L care system known for flaws L that seem inextricably bound to its undeniable strengths. In technology and drug develop - ment, quality of hospitals and physicians, availability and speed of delivery, it is the world’s gold standard. But it is staggeringly expensive, need - lessly redundant, and too often out of reach for tens of millions who have little or no coverage. For Parks, his mother’s plea was the starting point for a new business venture that has slowly and sometimes painfully refined its mission to bring light to the billing process for employers and Larry Van Horn (left) and Luke Froeb are collaborating on a study examining how much the price of health care has employees. to vary before consumers will change their purchasing behavior. For the rest of the health care world—often-competing con - ment were simply loathe to share infor - “Luke Froeb and Larry Van Horn sur - stituencies including physicians, hospi - mation. Ultimately the company he faced as two really bright, insightful guys tals, insurers, pharmaceutical companies, formed, change:healthcare, evolved to who know how to look at problems from device manufacturers and the investment offer self-insured companies and their different angles and who could help us community—the future is a complex and employees easily understood information evolve what we’re developing,” Parks uncertain foray into a new health care on medical provider cost, quality, access says. Froeb, the William C. and Margaret universe. All of them must sort through and performance to help them make edu - W. Oehmig Associate Professor in Entre - the thousand pages of legislation, the cated decisions. preneurship and Free Enterprise, and politically charged implementation Parks, the company’s President and Van Horn, Associate Professor of Man - process and the legal wrangling that are CEO, sees the approach as vital in the agement, have been studying pricing and all part of the Patient Protection and face of legislation that greatly increases behavior. They welcome the increased Affordable Care Act, the 2010 bill that the pool of covered individuals, making pool of information for examining a piv - will no doubt change American health their decisions an important part of any otal portion of the health care equation. care forever. Parks admits that his journey, begun My simple problem with the health care legislation is that it well before Congress took up the trillion- wasn’t focused on cost, and we will have to address cost next year, dollar health care bill, involved any num - the year after and every year going forward . — Larry Van Horn ber of blind alleys. “We spent two years getting it totally wrong,” he says. “We hope for fiscal responsibility. “With the “My simple problem with the health started off trying to give everyone tons of increase in access to coverage, there will care legislation is that it wasn’t focused data points, information about cost, qual - be increased demand and desire for both on cost,” Van Horn says, “and we will ity, utilization, what other people thought, information and transparency, for more have to address cost next year, the year and so on, and we created this wealth of insight both to control cost and make after and every year going forward. The broad decision-making information. The choices,” he says. reality is people will have to pay more feedback we got from both users and A key element is the point at which and make difficult decisions as part of a employees was, ‘Oh, my gosh. That’s too potential savings prompt behavior long-range solution.” much. I just need one thing answered. ’” change, and for that Parks turned to two The change:healthcare approach, Van The process was also hampered by the friends at Vanderbilt Owen Graduate Horn adds, involves “trying to figure out fact that large insurers and the govern - School of Management. the simplest, most concise way of solving

22 F ALL 2010 the consumer’s problem by massaging the data behind the scenes and doing Owen’s Health Care Advisory Board analysis. They’re trying to simplify the patients’ process, walking them through While health care reform continues to stir debate and divide opinion, there is one a thought process that is meaningful and thing that all sides can agree on: Health care is a fast-growing, complex industry important to them.” that needs talented leaders who can meet the challenges head-on. Thanks to the That patient is the hub about which efforts of faculty, staff and alumni, the Owen School is filling this need though all else in the legislation and in the health innovative programs like the Health Care MBA and MM Health Care. Yet much care world revolves, and every con - credit also belongs to Owen’s Health Care Advisory Board, a group of industry stituency faces dramatic changes. The experts who provide invaluable guidance in shaping the health care strategy of the one with the most to gain, at least in the school. The current members of the board are: short term, is hospitals. “We provide a fair amount of under - CHAIR Paul Keckley , Executive Director, funded and unfunded care,” says Larry Dr. William Frist , Partner, Deloitte Center for Health Solutions Goldberg, CEO of Vanderbilt University Cressey & Company Ben Leedle , President and CEO, Hospital and an at-large board member Dr. Bill Bates , President and CEO, Healthways of the Tennessee Hospital Association digiChart Holly Meidl , Managing Director, (THA). “The idea that there will be more Jack Bovender Jr. , Chairman, HCA Marsh USA coverage—with 32 or 36 million more Ron Calhoun , President, Ken Melkus , Consultant, Welsh, Americans now having insurance—is The Remi Group Carson, Anderson & Stowe very appealing.” Rock Morphis , Managing Director, He and others are very aware, however, Rep. Jim Cooper , 5th District, U.S. House of Representatives Heritage Group that those gains may well be short-term. “Obviously payment reductions and ques - Richard Cowart , Partner, Baker, Donel - Dr. Wright Pinson , MD’80, Deputy son, Bearman, Caldwell & Berkowitz Vice Chancellor for Health Affairs, tions about how all this is going to be Vanderbilt University Medical Center financed concern us a great deal,” he adds. Deke Ellwanger , Former President, Members of the Hospital Alliance of HealthSpring Linda Rebrovick , CEO, Consensus Point Tennessee, an organization of the state’s Catherine Gemmato-Smith , Managing nonprofit hospitals, are hoping the roll - Director, Jefferies & Co. Thomas Sherrard , Partner, out of health care reform draws on the Sherrard & Roe Roberta Goodman , Health Care Analyst, lessons of the TennCare program, which Health Care Analytics Brian Shipp , CEO, Southeastern saw the state tackle managed care begin - Region, Amerigroup Joel Gordon , Chairman, The Gordon ning in 1994. Group Michael Shmerling , Managing Partner, “If you know the XMi High Growth Development Fund history of TennCare,” Jay Grinney , President and CEO, HealthSouth Tom Singleton, BA’70, President and says Paige Kisber, the CEO, FTI Cambio Alliance’s President Dr. Lawrence Hanrahan , Global Lead, and CEO (Goldberg is Health Facility Development, Accenture Wayne Smith , Chairman and CEO, Community Health Systems its Board Chair), “you Kathy Harris , MBA’85, Partner, know that it was the Noro-Moseley Partners Dr. Mitch Steiner , BA’82, Vice Chairman and CEO, GTx right idea in terms of Kisber Douglas Hudson , MBA’94, Chairman attempting to bring and CEO, Simplex Healthcare Chris Sullivan , National Director, insurance coverage to more people, but U.S. Healthcare Provider Solutions, Joey Jacobs , Chairman, President and Microsoft Corp. that it just didn’t quite work the way the CEO, Psychiatric Solutions state hoped. My understanding is that as Jack Tyrrell , Managing Partner, this federal legislation was being crafted, Dr. Harry Jacobson , Vice Chancellor Richland Ventures for Health Affairs, Emeritus, Vanderbilt they looked at what has happened in University Medical Center David Vandewater , President and CEO, Tennessee and what is happening in Ardent Health Services Massachusetts.” A.J. Kazimi , MBA’84, Founder and CEO, Cumberland Pharmaceuticals Caroline Young , President, Nashville Health Care Council Continued on page 24

V ANDERBILT B USINESS 23 Early hopes for TennCare faded amid you have to prioritize, and you cannot The economic environment for health reports of fraud and sloppy management. deliver all services to all people.” care reform is clearly rocky for the federal Costs soared, and a 2003 study declared That makes it especially important, government, which is adding trillions to a the program was not financially viable. according to Kisber, that the state’s deficit many fear it can never repay. Add TennCare has since considerably scaled health care history remain part of the that to the fact that half a trillion dollars’ back enrollees and coverage. For the equation. “As the federal government worth of planned Medicare cuts are part state’s hospitals, even the best of times writes these regulations, they will seek of the new federal approach, and investors were problematic. public input, and we feel like that will have at least one clear starting point. “With TennCare we saw more people give us the opportunity to bring our “I would be extremely careful about insured, but it did not take away under- experience and expertise to bear on things investing in any health care services sec - reimbursements, and charity care did not like eligibility criteria,” she says. “That tor or company that has significant go away,” Kisber says. “The state had the input will be vital at a time when there Medicare exposure,” says Debbie best intentions, but there are so many will be increasing pressure on nonprofits, Guthrie, MBA’79, Founder and CEO of other economic pressures. Given educa - and Congress and state legislatures will be Capitol Health Management Corp. in tion, prisons and many other programs, looking to cut every penny they can.” New York City. “It’s my view that Medicare reimbursement will continue to be reduced substantially over time—the economics simply do not work.” BY THE NUMBERS The industry, she explains, has under - lying structural problems that must be Nine figures that shed light on health care reform addressed. “We should provide access to basic $940 billion $211 billion health care for every citizen,” she says, The amount the Congressional Budget How much consumers will save in “and ultimately we may already have the Office (CBO) estimates the health health care administrative costs ingredients to do that, but our delivery care reform bill will cost during the between 2014 and 2020 after insur - system has structural problems, with next decade ance exchanges are established, fragmented points of entry and reim - according to Center for American bursement, which makes it impossible to $2.5 trillion Progress know which Americans are getting The amount that conservative think excluded from the system and why.” tank The Heritage Foundation pre - 32 million While she does support “comprehen - dicts the bill will cost during the next The current number of uninsured sive universal access and incremental decade Americans whom the bill will eventu - insurance reform,” this legislation is, she ally cover, according to the CBO $143 billion says, “a mess,” adding that jealous guard - How much the bill would reduce the $2.3 trillion ing of turf by many other constituencies federal deficit in 10 years, according The total amount spent on health care will make implementation, let alone cost to the CBO in the U.S. in 2008, according to the savings, that much more difficult. Kaiser Family Foundation Guthrie is, not surprisingly, supportive $400 billion of free market solutions in dealing with How much the bill would reduce the 16.2 many of these problems. “I am very much federal deficit in 10 years, according The percentage of the U.S. gross a capitalist,” she says. “I believe the pri - to the progressive think tank Center domestic product represented by vate sector will continue to take the lead, for American Progress (assuming the health care spending in 2008, accord - driving efficiency through innovation, full savings potential of modernizing ing to the Kaiser Family Foundation which the government is incapable of the health care system) doing. But nobody is taking a step back Sources: Congressional Budget Office, to understand and evaluate where the $562 billion The Heritage Foundation, Center for incentives should be aligned and which How much the bill would add to the American Progress, The New York participants are truly delivering cost-effec - federal deficit in 10 years, according Times and Kaiser Family Foundation tive health care. Everyone is protecting to economist Douglas Holtz-Eakin their turf just as everyone was looking for special deals. I don’t think anyone under -

24 F ALL 2010 stands the full implications and the unin - a quantum leap forward with the new the same level as Medicare. Apparently tended consequences as the reform moves exchanges, which will tend to have rules Congress recognizes the deterioration of into the implementation phase.” that come from Washington about what primary care. There’s no question that if Guthrie is particularly troubled by the they can include and not include. Those you’ve got a belly pain, costs to the fact that the legislation “penalizes rather physicians who say, ‘I’m just going to health care system are a lot less if you than supports specialists, which is coun - take commercial insurance and not start with a primary care doctor who terproductive. If you have a cold and just Medicare,’ are going to find the two are knows you as opposed to going to the need an antibiotic, you don’t really care, converging.” emergency room at 10 p.m. Building up but if you have cancer or need heart Ruffner says physicians are also wary the primary care infrastructure is a signif - surgery, you want to make sure you have of the legislation’s provisions for an Inde - icant step in the right direction.” the best physician you can get. Of course pendent Payment Advisory Board (IPAB) Once that bottom-line relationship is we want these specialists to keep working appointed by the president. “Physicians nurtured, change:healthcare’s Parks and have the financial incentives to do are concerned that the group will be arbi - hopes to contribute to an effort to tackle so. What’s happening now is that many trary in its efforts to control costs and the problems of paying for care typified of the top doctors are looking at the chal - that the health care industry—and this is by his mother’s experience. lenges on the horizon and are refusing to as true of hospitals and device makers as “What we do doesn’t fix the system, treat Medicare patients and are accelerat - physicians—will be affected negatively in but at least it turns on a flashlight in a ing their retirement plans.” due course,” he says. dark kitchen,” he says. “At least people Guthrie gets no Should IPAB feel costs are out of will be able to see the table and that bro - argument from Dr. B. hand, it could arbitrarily institute cuts, ken glass over there. It’s something to help W. Ruffner, a Chat - which could only be overridden by a you get your bearings. There are tons and tanooga oncologist majority in the House and a 60 percent tons of data out there. There are websites who is President of the vote in the Senate. Those votes would and booklets and pamphlets being gener - Tennessee Medical have to be accompanied by equivalent ated all the time, but people are wonder - Association (TMA). Congressional cost-cutting. ing, ‘How do I turn that into something “Certainly we wouldn’t Decisions on care, Ruffner maintains, relevant and easy to understand for one come up with a public Ruffner need to remain with those who have person?’ That’s the issue du jour.” policy saying, ‘Pull out of Medicare,’ but expertise. The Owen School’s Van Horn agrees there’s no question that some physicians “There’s no question in my mind,” he that one part of the solution is going to are doing just that,” he says. “Concierge says, “that the best person to make those come from the place where policy under - medicine is one option. Another is limit - decisions about what’s appropriate and stands and intersects with personal choice. “I think that this is one small Our delivery system has structural problems, with piece of generating insight into how indi - fragmented points of entry and reimbursement, which makes viduals, when faced with different prices, it impossible to know which Americans are getting excluded will change their health care consump - tion decisions,” he says, “and that is the from the system and why . — Debbie Guthrie future of health care. ing your practice to commercial insurance, what’s not is a physician, but if the physi - “We can’t afford to do what we’re and yet another is retiring, and I’ve heard cians don’t get together and work together, doing now, and the reality is we’re all all three discussed.” Uncle Sam will make that decision, and going to start paying more and have to Ruffner cites the cuts scheduled for that’s what we’re seeing right now.” make decisions based on how much things Medicare, which is “not self-sustaining as If there is a positive, at least in the cost. From a policy perspective, under - it is,” but says commercial insurance may short term, it is directed toward one seg - standing how consumers make those have its own long-term pitfalls. ment of physicians. trade-offs and decisions is important.” “A lot of these processes will start with “The thing I agree with 100 percent is Any expansion of such ideas into sav - Medicare, but the commercial side will putting some incentives into primary ings across the industry will require more quickly follow suit,” he says. “I think it care,” Ruffner says. “In Medicare, pri - cooperation among parties sometimes already occurs when I’m negotiating con - mary care payments are going to go up known for their insularity. Ruffner tracts with Blue Cross. A lot of the met - significantly. In Medicaid, one of the describes one attempt: rics for those negotiations are based on requirements is that regular office visits Medicare, and that trend is going to take for Medicaid payments will be paid at Continued on page 52

V ANDERBILT B USINESS 25 CORPORATE SPOTLIGHT Her Cup of Tea Karla Diehl, MBA’87, embraces a new challenge at Partners Tea Co.

By CINDY THOMSEN J O H

FEW YEARS AGO KARLA DIEHL N

R U

STARTED a nightly ritual of serving S S E L

tea to her family. At the time it L never would have crossed her mind that the drink would someday play an important role in her future. AYet today tea is more than just a beverage she enjoys; it is her liveli - hood. In January she became Chief Operating Officer and Financial Manager at Partners Tea Co., a Nashville-based company specializ - ing in fair trade and organic arti - sanal teas. For Diehl, whose background was in an altogether different field, it was an opportu - nity steeped in possibilities. Prior to Partners, Diehl was President of Edison Automation, an industrial automation firm Diehl pictured at home, where she often hosts tea-packing parties with fellow Partners Tea investors that she and her husband, Matthew, MBA’87, had co-founded in Then last fall Diehl took a call from a Nashville native Sarah Scarborough, who 1991. When Edison merged with friend, Lisa Froeb, whose husband, Luke, incidentally, is engaged to Owen alumnus another company in 2007, she decided is the William C. and Margaret W. Jeff Gowdy, MBA’06. During her exten - to start a new chapter in her career and Oehmig Associate Professor in Entrepre - sive travels after college, Scarborough apply her business skills elsewhere. She neurship and Free Enterprise . Lisa sug - became aware of fair trade principles and had spent the better part of two decades gested that she look into a local tea started developing her own tea business at Edison, making a move to someplace company called Partners Tea. adhering to those guidelines. She relocated other than an industrial, technology- “I told Lisa that tea sounds lovely and to New Zealand to study for a master’s driven company unlikely. Diehl, how - it was all organic and fair trade—things I degree and became Co-developer of Scar - ever, was open-minded about her search. believe in—but that it was a real stretch borough Fair, Australia’s and New “I spent a lot of time talking to startup to go from selling industrial components Zealand’s largest fair trade tea, coffee and companies and small entrepreneurs who to tea,” Diehl says. “But she was persis - chocolate company. She launched Part - were trying to write business plans, some - tent and told me more about the com - ners Tea when she returned. thing that I seem to do more of than the pany and that a group of women were “After that initial meeting I agreed to average bear,” she says. “You get a good meeting to learn more. I begrudgingly write a business plan for Sarah,” Diehl insight into companies when you work went to that meeting and almost every - says. “People were ready to invest, but they with the founder. I met a lot of folks, and I one there ended up investing in the com - needed to see the plan on paper. We put it liked a lot of them, but nothing seemed to pany, including me.” together in eight or nine days. All I really be a good spot for me.” Partners Tea was founded in 2006 by did was take Sarah’s extensive knowledge

26 F ALL 2010 CORPORATE SPOTLIGHT

and put it in a format that was acceptable nerstea.com, at select Whole Foods stores “There’s been research into what’s to the business community.” in the Southeast, at the Williams- called ‘the girl effect, ’” Diehl says. “This When Diehl and Scarborough went Sonoma–owned chain West Elm during study shows that when women are edu - back to the women investors with the the holidays, and in cafes across the coun - cated and given opportunities, it raises the plan, another issue was raised: Who was try. They recently added a sales represen - whole economic and social level of their actually going to run the back office of tative in California and also picked up community. When women earn income, the company? The investors noted that several new accounts thanks to their par - they reinvest 90 percent of it back into while Scarborough knew all about the ticipation in industry trade shows earlier their families.” growing, blending and marketing of this year. If women helping women is a primary tea, she was missing some essential “We’re kind of a gift- and gourmet- theme, the Owen connection is certainly a business expertise. type product because our price point is close second. Of the 11 women involved It was only natural then that Diehl around $10–$12. It’s a great, lovely little in Partners Tea, six either are alumni or would step in and fill that void. At Sarah’s package that’s perfect for a wide range of have close family members who are. Aside invitation, she became COO and Finan - people—almost everyone drinks tea,” from Diehl, Luke Froeb and Jeff Gowdy, cial Manager, assuming responsibility for Diehl says. Owen connections to Partners Tea accounting, shipping, receiving and Diehl is also very excited about the include Fleming Wilt, BS’91, EMBA’00; inventory management. company’s membership in 1% for the Cathy Brown, BA’86, MBA’90; and “Sarah’s not at all enamored with Planet, a global movement of nearly Michael Lindley, MBA’88. operations, and I love it,” Diehl says. “I 1,400 companies that donate 1 percent of Diehl credits her own business savvy to live for spreadsheets. I can’t plan a vaca - their total sales to worthy causes. Partners her Owen education. “Owen taught me tion without one. I can’t think without Tea gives in support of increasing oppor - to look at a business’ macroeconomics, one. Excel is how I get through life, tunities for women. and tea is a hot growth market right now,” she says. “Social entrepreneurism, fair Social entrepreneurism, fair trade, organic—all of these are growing trade, organic—all of these are growing trends and that means our company has great macroeconomics. trends and that means our company has It’s like having a great bone structure for your business .— Karla Diehl great macroeconomics. It’s like having a great bone structure for your business.” which frightens most of my friends.” Making the transition from engineer - Partners Tea offers six blends and ing and electronics to organic tea has two pure teas—a Ceylon grown in Sri been an interesting switch for Diehl. Lanka and an Assam, which is a malty “What I’m most satisfied with at the end black tea grown in northeastern India. of the day is building something,” she The teas are shipped to a tea blender in says. “It’s satisfying to watch the market California, who sends them to a co- acceptance and the growth. The sales are packer in Pennsylvania, who then sends showing me that it’s a good, fundamen - the finished product to Nashville where tal business.” the custom-designed canisters are “Ours goes back to the tea estate in Diehl also jokes that tea is certainly packed for delivery. Sri Lanka where our Ceylon tea is easier for people to relate to than her pre - “The packing of teas for shipping is grown,” she says. “Picking tea is primar - vious business. “I used to say that my hus - done by our group of investors at tea- ily a woman’s job, and they’re pretty band and I had the No. 1 cocktail party packing parties at my house,” Diehl says. much on the lowest end of the totem buzz killer,” she says. “People would ask “It makes your investment ‘more real’ pole in their society. We’re helping to what I did, and I’d tell them I ran an when you’re physically working with the improve their standard of living with industrial automation firm that works product. We’ll pack hundreds and hun - our donation.” with communications in the utilities mar - dreds of canisters into cases and master Women helping women is an ongo - ket. You could see their eyes glaze over. cases several times during the year.” ing theme surrounding Partners Tea and “Tea is a lot easier to talk about.” VB Teas are available online at www.part - its investors.

V ANDERBILT B USINESS 27 Beyond Numbers

Vanderbilt’s Master of Accountancy program takes a new approach

By JEANNIE NAUJECK

Recession or not, there is a constant need for public accountants. Likewise there is a need for graduate-level accounting programs to fill this demand. Yet, while many of these programs only seek applicants with undergraduate accounting degrees, Vanderbilt’s yearlong Master of Accountancy (MAcc) program takes a decidedly different approach. The high-performing individ - uals who enroll in the MAcc program come from a variety of academic backgrounds. Many, in fact, have liberal arts degrees. What’s more, the program goes a step further than most by providing not only the technical knowledge to practice accounting—around 90 percent of MAcc graduates pass the certified public accountant (CPA) exam within eight months of graduation—but also the crucial business skills, like teamwork and commu - nication, to succeed professionally.

28 F ALL 2010

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e e r n o b t a S r s - - e f e d i - r - - 2 9 From left , WILLIAM HENDERSON, GARY SCUDDER and NICOLE JENKINS THE FACULTY MEMBERS OF THE MA CC program have expertise in a variety of areas and provide their students with a well-rounded business education. Students have the opportunity to learn the technical side of accounting, auditing and taxation from seasoned instructors, several of whom have years of experience at public account - ing firms. Yet students also receive a man - agerial perspective by taking coursework with MBA students—from managerial eco - nomics and business law to information systems and ethics. Associate Professor of Management Nicole Thorne Jenkins, a CPA and former Big Four auditor who teaches financial reporting, says her MAcc students, most of whom have liberal arts degrees, are as well or better prepared than many undergradu - ates with accounting or business degrees. “People think accountants are in an office working by themselves—kind of lon - ers—but when you’re in public accounting you’re consulting as a business professional and interacting with clients,” she says. “The liberal arts exposure that our students have makes them well-suited for the profession.” William Henderson, Professor of the Practice of Tax Accounting, who spent 37 years with KPMG, is impressed with the MAcc students’ classroom performance. He notes that they are outpacing his MBA students on grades despite generally having no business experience. “We don’t have a lot of time, and there’s so much to cover,” he says. “The students put a lot into one year’s time. It’s a tremendously intense program.” Gary Scudder, the Justin Potter Profes - sor of Operations Management, teaches a broad-based class on business fundamen - tals, such as supply chain management, which is demonstrated through simu- lations. Such exercises give the students a context for the accounting and auditing work they will be doing for a variety of business clients. “We get really motivated, smart stu - dents,” Scudder says. “They’re taking hard courses and lots of them. If they can handle J that pace, they can succeed in a public O H N

accounting firm.” R U S S E L L

30 F ALL 2010 THE ADVISERS

THE MA CC PROGRAM BENEFITS FROM AN ADVISORY board Board member Sam DeVane, who is Managing Partner with that includes executives from all of the major public accounting Ernst & Young in Nashville, adds, “People have the impression of firms. Their guidance in shaping the program has resulted in accountants as backroom types, but you can’t operate behind the exceptionally high placement rates for the program’s graduates. scenes and enjoy success in our profession. You’ve got to be on the The advisers say it is not the technical skills, but rather the front line every day interacting with clients. Focused client interac - interpersonal ones, that make a successful accountant. They have tion is the only way we’re successful.” specifically requested that program administrators attract and In just three years the program has far exceeded the advisers’ develop students with the potential for leadership in the profession. expectations, says Greg Anglum, BA’92, MBA’93, Partner at “The technical side is important—you’ve got to have the Grant Thornton in Raleigh, N.C. The only board member who is an basics—but we’ll build on that with new employees,” says board Owen alumnus, Anglum has a unique stake in seeing the MAcc pro - member Randy Laszewski, Managing Partner at KPMG in gram succeed. Nashville. He describes his input as “a buyer’s perspective.” “We’re all big fans of the program,” he says, “and we all say “What we really need are good, mature people who are analyti - the same thing: Don’t change what you’re doing in terms of devel - cal, business-minded thinkers and who have good communication oping these students because they’re really top-notch.” skills. That’s more important than just being able to cite account - ing rules,” he says. S I O B U D

L E I

N From left, GREG ANGLUM, DION SHEIDY, THOMAS AARON A D and RANDY LASZEWSKI (not pictured: SAM DEVANE)

V ANDERBILT B USINESS 31 N E D P M A H

N O S I D A M d n a

R E N H S U K

Y E L H D A S N A I E L

D U B O I S THE INTERNSHIP

AS PART OF THE MA CC PROGRAM , EACH STUDENT SPENDS “It was really telling how important this part of the company is 10 weeks interning for a major public accounting firm. Last year and how important it’s going to become,” Kushner says. Ashley Kushner, BA’09, MAcc’10, and Madison Hampden, The students worked long hours but fit in sightseeing at the Taj MAcc’10, took part in an internship at Deloitte’s office in Hyder - Mahal and in the Golden Triangle region of Agra, Delhi and Jaipur. abad, India, where they got not only a taste of the auditing work “They worked really hard and did good work, and I think both they will be doing as accounting professionals but also a firsthand were changed by the experience of living abroad in an emerging look at the globalization of business. market—one of the fastest growing economies in the world,” Brady “I’ve always wanted to travel abroad and do business,” Hampden says of Hampden and Kushner. “It’s life-changing. You realize it’s a says. “India and China are where the big growth is going to happen global world, not a U.S.-centered world.” in the next 20 to 30 years, and it was great to see that myself.” Both Hampden and Kushner accepted full-time jobs with Deloitte’s 1,000-person India office supports American opera - Deloitte. And both plan to work abroad as part of their long-term tions by taking up unfinished work after the U.S. workday is done. career plans. This 24-hour work cycle increases efficiency and provides a com - “I’m so glad I went to India because now I know I want to go petitive advantage, says MAcc advisory board member Jim Brady, back,” Kushner says. “Wherever the need is around the globe, if I CEO of Deloitte’s Assurance & Enterprise Risk Services operation have the skills, I’ll seek out that opportunity.” in India.

32 F ALL 2010 WHEN KATIE APPEL , BA’08, MA CC ’09, CHOSE TO enter the MAcc program, no one was more surprised than her father, Steve Appel, Partner in Charge of KPMG’s Southern Coastal Business Unit and a member of the MAcc advisory board. “I was very happy, but pretty shocked, honestly,” says Steve, who thought she would choose law school. “She’s always been far more verbal, so I thought the law thing made sense.” After comparing the two career paths, Katie, who majored in communications and Spanish at Vanderbilt, decided the MAcc program was a better fit. She now works at PricewaterhouseCoopers in Nashville. “I’m just starting to see the takeaways from this career,” Katie says. “With my CPA and work experience at a Big Four, I can set myself up for the same type of job in business I would have wanted with a law degree—and in less time.” Plus, she says, she will have opportuni - ties to fulfill another dream: working in South America, where she can use her lan - guage skills. “The markets are really ramping up in Brazil. It’s nice to know I could work abroad through my own company,” she says. Steve says he is thrilled with Katie’s choice—and with Vanderbilt’s MAcc pro - gram. His own company hired half a dozen graduates from the Class of 2010. “You’ve got all these kids with different backgrounds, and in a year they become CPA-eligible, well-rounded professionals who have already done internships with a Big Four accounting firm,” he says. “It puts them in position for all these opportu - nities. It doesn’t get better than that.” L L E S S

U STEVE and KATIE APPEL R

N H O J

V ANDERBILT B USINESS 33 From battlefields to business fields Military Discipline

By RANDY HORICK

ay Sumner, MBA’10, woke up in a bed with white sheets. He recognized his mother, who was holding his right hand. She had traveled from their family farm on Staten Island to keep vigil at his bedside in Bethesda Naval Hospital. RSumner did not know she would be there. Until someone told him, he did not even know where “there” was. The last thing he remembered was being with his unit, the 25th Marine Division, on the debris-strewn streets of Haditha, M O C Iraq. It was the 11th week of his second tour in the country, . S E G A M I

and his battalion was engaged in house-to-house operations Y T T E G

, N

in the heart of the Sunni Triangle—one reason the 25th sus - O S D I V A tained the highest casualty rate of any outfit during the war. D

Sumner remembers clearly how an drawn to the health care field after his Among Clay’s responsibilities was insurgent ran out of a house and fired military commitment ended. leading convoys—an innocuous-sound - off a few quick rounds as the Marines In between his graduation from the ing job that was a very dangerous assign - were clearing a block. One bullet struck U.S. Military Academy and Owen, parts ment in Iraq. The supply convoys Sumner in the right hip, severing an of his service experience were a reminder traveled under constant threat of attack artery. He was in a coma for 10 days. why the old Chinese saying “may you from improvised explosive devices And then, suddenly, he found himself in live in interesting times” was originally (IEDs). His convoy was hit only once Bethesda, Md. intended as a curse. during his first six months, but tension The Marines never leave one of their In June 2003 Clay arrived at an aban - soared every time they ventured onto own behind. For Sumner, who spent 18 doned water purification plant near the roads. years as an officer, the reverse is also true. Baghdad. The soldiers called it Dog - Clay’s second deployment to Iraq Despite the injuries and rehabilitation, he wood, but it might have been more accu - made the first tour look civilized. Sta - would sign up again tomorrow if the rately named Hell. There was no running tioned in Ramadi and Fallujah, scenes of Marines called him. Sumner still misses water. No air conditioning. Tempera - the war’s most intense fighting, Clay was it. In some sense that is a big part of what tures routinely surpassed 110 degrees. assigned to “route clearance”—an Army attracted him to the Owen School. “You’d get to midday and just want to euphemism for bomb removal. How is Owen like a military enter - prise? The question may seem odd to You can create your own path at Owen. After nine years of a very someone who has never worn the uni - strict environment, it was a great place for me to try a smattering of form. But to veterans who earned MBAs academic and extracurricular activities .— Kyle Clay at Vanderbilt after earning their stripes, the connections seem obvious. For four Clay soon realized how of them—among the surprisingly large increasingly sophisticated the number who gravitate to this relatively insurgents’ techniques had small business school—seeing those con - become during the year he nections made all the difference in their was back on base in Germany. choice to enroll and in the directions “Some IEDs were buried deep their careers have taken. enough that our equipment For Ray Sumner it was the cama - couldn’t detect them,” he raderie—“the biggest thing I missed says. One, he remembers, was about the military,” he says. “I looked at planted in a manhole. It deto -

other big-name schools. Vanderbilt is nated as a vehicle in his battal - D A N I extremely competitive but friendly. The ion passed over it. The E L

D U

others were hostile-competitive.” manhole cover rocketed B O I Sumner particularly remembers his through the underside of the S first campus visit in 2008. “I immediately Kyle Clay helped clear IEDs in Iraq while serving in the U.S. Army. vehicle, killing and wounding felt like I was part of the Owen family,” several soldiers. In all, he lost he says. “That’s how the Marine Corps take a nap because you couldn’t get any - seven men in 12 months. All told, his is. It’s the smallest branch of the service. thing done,” remembers Clay, who was a engineer battalion removed 1,000 IEDs. Very close-knit. You get to know a lot of lieutenant in the 54th Engineer Battal - Even before he came home from the other officers.” ion. “Nothing could have prepared me Iraq, Clay knew he wanted to go to for Iraq.” business school. He had become inter - Life Mission Clay and his men lived off prepack - ested in health care—something that, to Kyle Clay, MBA’09, by contrast, was not aged rations, or MREs. Sometimes, when him, was more than just business. That looking for something small. Ever since they had to pick up arriving soldiers and led him to Owen, where he found the he was a football star and three-sport ath - supplies, they would navigate the dead - change he sought and the continuity he lete in Lima, Ohio, Clay sought opportu - liest stretch of highway in Iraq—dubbed needed. nities to be involved with something “RPG Alley” for the prevalence of rocket- Like the Army, he says, Owen is larger than himself. That is one reason propelled grenades—and grab some hot extremely collegial, and there is a sense why he accepted a scholarship to play food at the airport, where, almost surre - of purpose even among students with football at West Point, and why he was ally, there was a Burger King. different career aims and areas of focus.

36 F ALL 2010 For example, with colleagues involved in Project Pyramid, the student-led initia - tive to alleviate global poverty, Clay had BASIC TRAINING the opportunity to travel to Bangladesh. Military veterans and B-school “Even in Iraq, I’d never been face-to-face with such poverty,” he says. “It was life- changing.” Kelly Christie, Assistant Dean of Academic Programs and Student Life, In contrast to the Army, Owen’s knows a military veteran when she sees one. Each fall, as a new Owen class Health Care MBA program is extremely arrives on campus, she can always pick out the students who have served in entrepreneurial, Clay says: “You can create the armed forces. “In the first five minutes of talking with them, I can just your own path. After nine years of a very tell,” she says. “They’re extremely respectful toward us [the administration] strict environment, Owen was a great and their classmates. And as I get to know them, I observe their self-disci - place for me to try a smattering of acade - pline—it’s really palpable.” mic and extracurricular activities.” These qualities are among the many reasons why Owen considers military It is a far cry from Dogwood, but Clay veterans to be highly desirable students. As Director of MBA Admissions John is today, once again, in the desert— Roeder notes, what makes the veterans stand out in a B-school setting is pre - Phoenix, to be exact—where summer tem - cisely what makes them so attractive to potential employers. peratures can reach a Baghdad-like 114 “The students who come out of the military are highly coveted by corporate degrees. As a Regional Operations Direc - recruiters,” he says. “Veterans have strong initiative, team skills, leadership tor for DaVita, North America’s largest and the ability to work in high-pressure situations. And often they have interna - operator of kidney dialysis centers, Clay tional exposure as well, which is extremely beneficial.” oversees 11 in-center dialysis clinics and During the last three years, Owen has more than tripled the number of incom - two home programs. ing students from the military. This increase is due in part to certain incentives “The position demands a very different offered by the school. For instance, Owen waives the application fee for veterans type of management from the Army,” he who have been on active duty within three years of applying and provides a one- says. And yet, he adds, “I entered into an year deferment if their academic plans are delayed by service obligations. environment not unlike the military. We The school also participates in the Yellow Ribbon GI Education Enhance - are all focused on one mission.” ment Program, which went into effect last year. Under the program, eligible That mission is life. Without dialysis or veterans can receive a $10,000 discount on tuition from Vanderbilt that is a kidney transplant, every patient with matched by another $10,000 from the Department of Veterans Affairs. This end-stage renal disease will die. With dial - past spring Owen had nine students participating in the Yellow Ribbon Pro - ysis, they can live, work and stay with their gram—more than any other school at Vanderbilt. families. “That’s what gets me excited about this company,” Clay says. “We are a community first and a company second.” The name DaVita comes from an Ital - Getting to school involved an hour’s power go to his head. Even in the rela - ian phrase that roughly translates as “he or trip by boat. The boat’s captain had a tively small pond of Crisfield High, he she gives life.” Clay likes the sound of it. policy for rough weather: If even one kid looked up to others as role models— For someone who has traveled so closely wanted to make the trip, the school boat especially one older boy whom he with death, it feels good to be surrounded would run. remembers as “all the things I tried to by givers of life. “My parents were very focused on be.” When that student pursued a spot education,” Guy explains. “It didn’t in one of the service academies, Guy’s Anchors Aweigh matter if there was a hurricane out interest was piqued. As a boy, Henry Guy, MBA’98, had the there, it was, ‘Get up and get on the Guy eventually enrolled at the U.S. power to determine whether kids in his boat.’ So on days when it was extremely Naval Academy, where he was struck community would have to attend windy, the neighborhood kids would immediately by how accomplished so school. Guy grew up on Smith Island, congregate in our yard to see if I was many of his fellow students already were. off Maryland’s Eastern Shore. He was going to go, and when I walked out, His first-year roommate, an Iowan, was the son of a son of a son of a fisherman they’d all moan, ‘Aww, man.’ A couple fluent in Russian and spent his summer who caught blue crabs and oysters in the of times they even booed.” as an interpreter overseas. “There were Chesapeake Bay. But Guy did not let this singular guys who went on to Rhodes Scholar -

V ANDERBILT B USINESS 37 ships or com - In other ways, too, the Owen experi - More than anything, Guy’s approach pleted their grad - ence built on what Guy liked most has its roots on Smith Island. Modern uate education about the Navy. He liked the way that Holdings typically buys closely held while at the much of the work at Owen was team- family enterprises. Because he grew up academy,” says oriented, just as it was aboard a ship. around such a business, he holds a spe - Guy, who was a He also liked the way that Owen’s cial appreciation for them. Fishermen, teammate of “approach is focused on how we get he reflects, are not merely people who future NBA star people to go out and be contributors ply a trade. “They’re entrepreneurs,” he David Robinson right away. It’s not a stamp. Everything says. “They’re huge risk takers who are on Navy’s bas - is structured so that it wraps itself up against a formidable competitor— Henry Guy served on a des- ketball team. “A around the individual rather than being Mother Nature.” troyer in the U.S. Navy. number of expe - a one-size-fits-all factory.” It was the riences like that made me think, ‘Wow, right way to do things, Guy believes, Leaping at an Opportunity if you work hard and take advantage of and that, too, created continuity. “At For Lindsey White, MBA’10, jumping the opportunities put in front of you, the Naval Academy,” he explains, out of airplanes turned out to be espe - that opens the door to a host of new “there’s a huge focus on doing things cially relevant preparation for Owen. A opportunities. ’” the right way, honoring the legacy of self-described “Army brat” who split He brought that mindset to his first the past.” her childhood between Germany, Okla - posting as a division officer aboard the The mindset from the academy and homa, North Carolina and Tennessee, USS Comte de Grasse , a destroyer named from Owen carried over into Modern she grew up literally wanting to follow for the French admiral whose blockade Holdings, the New York investment in the footsteps of her father, a para - of Yorktown helped win the Revolu - firm he founded. As President and CEO, trooper in the 101st Airborne. As a tionary War. The Comte de Grasse Guy believes the right way to run a busi - young girl, she would practice by slid - focused on maritime interdiction: look - ness is to work as a team and to think ing her feet into his big boots and ing for Caribbean drug smugglers, long term. “We’re not a traditional pri - hurtling off the living room sofa. patrolling the Red Sea to intercept vate equity firm,” he explains. “We So, after White enrolled at the U.S. materials headed for Iraq, or boarding invest our own money, and that makes Air Force Academy, it was not surpris - ships in the Adriatic to stop weapons for a different decision-making process. ing that she volunteered for jump from reaching combatants during the We don’t look to flip companies. To me, school. “The first time I jumped,” she Balkan wars. the value is how we can help grow the recalls, “was a frightening experience. Meanwhile, remembering his lesson business over time.” You don’t know up or down. You’re from the academy, Guy soaked up all the knowledge he could from rotations involving various systems and areas of the ship’s operations. Every duty was an opportunity. It helped him move up to become an aide to an admiral, a coveted position for a junior officer. That mentality also helped him choose Vanderbilt when his five-year commitment ended. “I very much con - sidered myself to be raw material,” he says. “I knew nothing about the busi - ness world I’d soon be entering. The mod system allows you to take many more classes than a traditional semester

system. That was very appealing to me D A N I because I felt like I had so much to E L

D learn. Every mod, I got permission to U B O I take extra classes. I wanted to sample S everything out there.” Lindsey White oversaw airfield operations at bases across the U.S. while in the Air Force.

38 F ALL 2010 just falling and counting and remem - bering when you are supposed to pull this cord. By the third time, it’s a little more automatic. On my fourth jump, the chute got twisted, but by then I knew what to do.” White earned her jump wings but never had to leap from a plane again. After graduating from the academy, she oversaw airfield operations—a duty that also required certification as an air traf - fic controller—at bases from Florida to California. When her five-year commitment ended, “I decided to try something new,” she says. “I felt like I’d been in the military my whole life.” Eventually she put her operations expertise to work as a project manager for a California company that designs and builds large- Ray Sumner, pictured here in Iraq, served two stints in the U.S. Marines. scale water features, including the land - mark fountains at the Bellagio casino in After a summer internship in the cor - Brothers in Arms Las Vegas. porate world, White realized she missed Jumping remains part of Ray Sumner’s There, she realized she needed to some of the structure military life pro - life. He loves the adrenaline rush that learn more. “Much of what I knew cen - vided. She won a two-year Presidential comes from hurling himself off a cliff, tered on the military and people man - Fellowship with Voice of America his survival depending on a strand of agement,” White says. To reach higher (VOA), the U.S. government’s official bungee cord. He has jumped from three levels in the business world, she needed radio and television broadcasting service, of the world’s highest bungee-accessible to broaden her skills. That realization in Washington, D.C. The new job offers sites: Bloukrans, South Africa; Victoria led her to Vanderbilt. her the best of both worlds. Within the Falls, Zimbabwe; and Interlaken, “Everyone on staff seemed concerned security of her position, she has opportu - Switzerland. about the fit of the students,” she says. “It made me feel that if I was selected to When I got out of the Marine Corps, I thought I’d join Owen, it had something to do with never have this again. The camaraderie at Vanderbilt is unique. who I was and how I could contribute That’s why I’ll always appreciate it ’— Ray Sumner and learn from the other students.” That first mod, White recalls, was nities to complete rotations in other areas Somehow jumping fills a longtime like her first jump. Learning to be a stu - besides her specialty, operations, as train - need. The love of flying, with or with - dent again after eight years was challeng - ing that may prepare her ultimately to out a vehicle, is what led Sumner to the ing. “It’s not like a work assignment,” take over a division of VOA. It is like Marines in the first place. While he was she says. “You can’t just shut it out being able to jump from a plane, with still in ROTC at St. John’s University, when you get home like you can after a none of the uncertainty. the Corps guaranteed him a seat in day at the office.” Of course, White’s new position is not flight school if he passed a test. He But after the first month, as with the without stress, but her Air Force experi - passed and went on to train on T-34 jets first few parachute drops, something ence taught her a valuable lesson in deal - and pilot helicopters. clicked. “I found I had made great ing with it. “In air traffic control your life Sumner left the Marines after 13 years friends and was sharing a unique experi - is about stress,” she says. “Nowadays but rejoined in 2003, after a General ence,” she says. “I fell into the day-to- when somebody comes into your office Officer phoned one morning and told day (and evening) routine and never and says this is a life-or-death situation, I looked back.” can say, ‘No, it’s not. Let’s talk about it. ’” Continued on page 54

V ANDERBILT B USINESS 39 BUSINESS AND SOCIETY Flour Power Bringing better nutrition to Mozambique

By CLAIRE BROWN J O OME OF THE GRANDMOTHERS —ONLY H in a microfinance organization. At N

R U

their 50s, but aged by the hardships of Vanderbilt Joe and I became S S E L

living in one of the world’s poorest friends and found common ide - L places—liked the porridge so much that ological ground through Project they started dancing, hopping on one foot Pyramid, the Owen-based inter - and then the other, grinning toothless disciplinary initiative focused on Ssmiles and kicking dust onto their colorful applying business models to skirts. It was mid-morning in rural Alto address sustainable development Molocue in the Zambezia province of and poverty alleviation. Mozambique, and villagers were sampling We had many conversations several new flour mixes, each made of and even a few heated argu- different combinations of ground corn, ments about the right ways and cashew, soy, moringa and cassava. wrong ways to approach inter - The gathering was the joint effort of national development. While New Path Nutrition, the nonprofit that we did not always agree, we Joe Boulier, MBA’10, and I had co- shared a fundamental desire to founded; World Vision Mozambique, a see foreign aid interventions humanitarian organization dedicated to accomplished sustainably, dri - helping children; and CETA Industries, a ven by local market demands, Mozambican company that exports resources and preferences. The cashews and builds local infrastructure Claire Brown concept of “social enterprise,” projects. Our successful taste test repre - using business models and mar - sented an important step in developing a answered questions about the flours they ket-based approaches to address social and nutrient-dense flour— farinha forca in were testing: Did they like the taste? The environmental issues, became especially Portuguese, the country’s official color? Which of the five blends, includ - compelling for us both. language—to provide rural Mozambicans ing a control of pure maize flour, did they In October 2009 Joe and I received with an alternative to traditional maize like the most and why? As the day wore the William N. Pearson Scholarship flour. We all shared the goal of improving on, we compiled our surveys and notes Award from the Vanderbilt Institute for the health and nutritional profile of peo - while the villagers sang and danced and Global Health (VIGH). The funding ple in the region. the children scraped the remaining por - allowed us to develop our plans to pursue Joe had recently graduated from ridge out of the bowls. international development in an innova - Owen, sold his possessions, liquidated his Joe and I both had been interested in tive way. Fortunately for us, World 401(k) and moved to Mozambique to sub-Saharan Africa prior to graduate Vision, which had been working on develop New Path’s concept for a more school. He had spent several years work - development issues in Mozambique since sustainable model for food intervention. I ing with Catholic Relief Services as an the end of the country’s civil war in 1992, was there on a visit accompanied by Clin - auditor on Title II food distribution and contacted the VIGH seeking support on ical Professor of Management Jim AIDS relief projects funded by the U.S. a public-private venture. CETA Indus - Schorr. Together Jim and I snapped pic - President’s Emergency Plan for AIDS tries was offering factory space, local tures and entertained the kids who Relief program. I had lived and worked in managerial expertise and equipment— crowded around while the villagers Tanzania as a researcher for Africa Bridge, enough to run a small-scale flour produc -

40 F ALL 2010 BUSINESS AND SOCIETY

tion facility—to support their workers’ wider rural community. White maize flour, notoriously nutri - ent-poor, is an inexpensive and filling food source. In much of sub-Saharan Africa, including Zambezia, it is a staple food, often consumed with every meal. Knowing this, we initially explored the idea of producing nutritionally fortified maize flour for distribution to hospitals and people living with HIV and AIDS. Eventually our idea expanded to include not only these niche areas but also the broader population of Mozambique, specifically there in Zambezia. Rather than immediately making and distributing food-as-medicine for the poorest of the poor, we convinced the Village children lining up to taste the porridge parties involved to try producing instead a maize-cashew flour mix with a taste, ended, we invited Jim to stay on as an were to make this new venture a success. color and consistency comparable to advisor to New Path Nutrition and to An enthusiastic local response to the ini - traditional maize flour. Our plan would accompany us on a trip to Mozambique. A tial product was just the beginning. be to employ local labor, use local inputs visit to the area was essential if we were to Pending New Path’s ability to secure and sell to a local market at a price equal determine how receptive consumers would additional funds, Joe plans to remain in to that of existing maize flour alterna - be to a new product, test the validity of our Mozambique for a year, refining the tives, while maintaining a financially many assumptions and projections, and product, building relationships and viable factory operation. The new mix, begin establishing our venture. proving the overall concept. By the end we hoped, would be a substitute product We flew to Maputo, Mozambique’s of his stay, we hope to have a working that aligned with existing cooking habits capital city, and spent several days model for building an economically and unlocked latent regional demand for conducting meetings with VIGH staff, viable social enterprise that is replicable healthy flour alternatives. In all, we con - NGO (nongovernmental organization) in other rural sub-Saharan areas. sidered it a promising opportunity to partners and local business leaders. Further New Path Nutrition is a registered improve nutrition more sustainably in into the trip, in Quelimane and Alto nonprofit working towards 501(c)(3) the region. Molocue, we visited the CETA cashew tax-exempt status. Any donations will During the spring Joe and I refined processing plant and the proposed factory be used to allow Joe to remain in our idea in Jim Schorr’s Social Enterprise space, met with members of the local Mozambique until the completion and Entrepreneurship course. After it farmer’s federation, and conducted taste of the project. You can reach us at tests with local villagers. Jim and I then [email protected] or via returned to the United States, while Joe our mailing address: 3000 Hillsboro stayed on to continue working in the area. Pike #104, Nashville, TN 37215. We Our taste tests demonstrated a strong appreciate your interest and support. preference for a particular blend of the fortified flour, outperforming even the traditional, widely consumed maize vari - Claire Brown is the Co-founder of ety. Joe and I, however, knew from our New Path Nutrition and a J.D. and days at Owen that we would have to MBA degree candidate. She is scheduled Cashews waiting to be processed address many other business issues if we to graduate in 2012. VB

V ANDERBILT B USINESS 41 Alumni Updates ‘‘ CLAS Crossing Paths Margaret and Jim Brunstad, MBM’75 I Bright Future Bryan Deaner, MBA’93

CROSSING PATHS ’75

HEN MARGARET AND JIM BRUN - STAD , both MBM’75, arrived at Owen in fall W1973, little did they know that their paths would soon

merge, sending them in a direction that has been unpredictable at times but enjoyable all the same. “We met on the first day of orientation when I borrowed money for a soft drink,” Margaret recalls. “We were very good classroom buddies for about the first day or so, then

we were a couple.” Graduating from Owen during a reces - sion, they had to look hard for job oppor - tunities. Jim landed a post in banking “by default,” he says, and they moved to Winston-Salem, N.C. Margaret found a position there as the Assistant Budget Margaret (second from left) and Jim (far right) with daughter, Elizabeth, and son-in-law, Thomas Director for the city. “It was a time in Bernstein, MBA’10 our lives when we still thought we could Meanwhile Margaret took time off to other from Owen just this spring. And do anything,” Margaret says. “My raise the couple’s two daughters and the Brunstads are now leading CityOwen advice to graduates in today’s economy is then led Youth Leadership Birmingham, efforts in Birmingham, putting them at to be creative and meet the challenge a community leadership program for the center of alumni activity in their head on.” high school students. Soon after, she city. Both express excitement about Jim’s career led them to Birmingham, became President of Portrait Brokers of being involved with the school all these Ala., with AmSouth (now Regions). America, now Portraits Inc., a national years later. Using what he learned at Owen, he then portrait-consulting firm. “While we were on campus this year, helped start First Commercial Bank, now The Brunstads, both now retired, find it was just so neat to feel all the energy part of Synovus Financial Corp. “Owen that their path keeps leading back to at Owen,” Margaret says. “To see it talked a lot about entrepreneurism back Vanderbilt. Their sons-in-law recently where it is today is very exciting and when it wasn’t fashionable. That stayed graduated from the university: one from gratifying.” with me,” he says. the School of Medicine in 2007, the —Jan Read

42 F ALL 2010 S AC TS’’ I Phase 2.0 Todd Jackson, BA’96, EMBA’08

BRIGHT FUTURE ’93

HEN ASKED ABOUT Even though HIS ROLE AS Intel currently Global Brand enjoys an 80 per - Strategist at Intel cent market share Corporation, the in the microchip Wworld’s leading business, Deaner’s manufacturer of microprocessors, job is not without Bryan Deaner, MBA’93, cannot help its challenges. He but talk about the future. His job, after notes that brand all, is to look ahead from 18 months to management is Bryan Deaner 2018 and decide, in conjunction with sometimes more Intel’s other strategists and planners, about the shifting mood of the consumer how best to manage its $35 billion landscape than the competition. brand portfolio. “A major challenge right now is apa - This farsightedness, however, is not thy. In many cases the conversation has unique to Deaner and those he works moved beyond the chip—how fast it is or with. If anything, the company as a how small we can make it. It’s now about whole has its sights set squarely on the the user experience,” he explains. “Fig - horizon, as evidenced by its latest mar - uring out how to remain part of that con - keting and branding campaign, which versation is difficult, especially when Deaner had a hand in crafting. Known as you’re not a product for the end-user, “Sponsors of Tomorrow,” it illustrates like a laptop or phone, but rather some - in a humorous, “geek-chic” way how thing inside one of those products.” Intel’s technological breakthroughs will Deaner, who majored in electrical impact everyone’s future. engineering as an undergrad, credits the “One of the things I enjoy most about Owen School with giving him the market - working here is that we’re creating tech - ing tools to make sure Intel’s voice is nology that moves society forward. We’re heard in spite of these challenges. “I changing the course of human discovery often hearken back to my experience at and endeavor,” he says. “I know that Owen,” he says. “My engineering degree sounds really high-minded, but when you helps me understand the products we sell, consider the fields that depend on our but my marketing background is what technology to advance—health care, translates that information for the wider applied sciences, communications— audience.” we’re enabling fascinating leaps ahead.” —Seth Robertson

V ANDERBILT B USINESS 43 “CLASS ACTS”

44 F ALL 2010 “CLASS ACTS”

PHASE 2.0 ’08

HEN TODD JACK - One of Jackson’s challenges is SON , BA’96, ensuring that Cumberland’s unique EMBA’08 , culture is not lost in the rapid expan - joined Cumber - sion. When the firm was younger and land Consulting smaller, it was easier for the partners Group as Director to pick the right people, he explains, Wof Operations this past spring, it sig - in part because they had worked naled a new chapter in the company’s directly with those individuals in pre - growth. The Brentwood, Tenn.-based vious jobs. Now, though, it is more firm, which assists health care provid- complicated. ers in choosing and implementing elec - “We’re in phase 2.0. We’re turning Todd Jackson tronic medical record systems, has to circles of circles of contacts to find “how to work well with others—espe - more than doubled in size in the last employees,” he says. “Once onboard, cially those you don’t agree with.” year. The partners recognized a signifi - they have to be trained according to Together, the experiences at the Med - cant strategic opportunity thanks to a the ‘Cumberland way,’ and that’s not ical Center and at Owen provided Jack - key component of the U.S. govern - something we can do ad hoc.” son with a building block for the ment’s stimulus plan that encourages In some sense phase 2.0 could also logical next step in his career—an health care providers to adopt elec - be an apt description for this stage of opportunity to grow alongside a tronic medical record systems. Jackson’s own health care career. dynamic firm in a dynamic field. “Cumberland started with five peo - Prior to Cumberland he served as “My career is evolving,” he says. ple in 2004, and we’re now closing in Senior Director of Annual Giving at “I’m someone who likes to create and on 100 employees,” Jackson says. Vanderbilt University Medical Center build, and Cumberland has presented “My role is to put processes and sys - for nine years. While at Vanderbilt, he me with an amazing opportunity to do tems in place so that we can continue earned an Executive MBA, which he just that.” scaling up.” says taught him, among other things, —Seth Robertson

V ANDERBILT B USINESS 45 “CLASS ACTS”

The newly graduated MBA, MAcc and MSF classes continued an Owen tradition of giving by establishing the Class of 2010 Scholarship Fund.

46 F ALL 2010 “CLASS ACTS”

CityOwen Recap The CityOwen program is led by alumni around the country and provides value through networking opportunities, updates on the school and featured faculty or staff presentations. The program also helps strengthen the relationship between Owen and local communities in areas such as recruitment.

CityOwen Washington, D.C.

Atlanta Charlotte March 30 Sept. 16 CityOwen Atlanta welcomed Nick Bollen, Libba and Brett Rule, both MBA’88, the E. Bronson Ingram Professor of hosted the inaugural CityOwen Charlotte Finance, who spoke to the group about event at their home. hedge funds. The casual kegs and hors Dallas/Fort Worth d’oeuvres event was held at the Capital May 26 City Club in Brookhaven. CityOwen Dallas/Fort Worth held their California third event at Trece Restaurant. June 8 Denver CityOwen California, in conjunction with Aug. 24 the Vanderbilt Alumni Association, wel - CityOwen Denver held a casual summer - comed T.J. Stiles, Pulitzer Prize-winning time social at George Schock Photography author of The First Tycoon: The Epic Life of Gallery. Cornelius Vanderbilt. The event was hosted by Kimberly Jackson, MBA’01, at JAX Washington, D.C. Vineyards in San Francisco. June 5 CityOwen Washington, D.C. was launched at a kickoff barbecue.

If you’re interested in launching a CityOwen group where you live, please contact Alumni Relations at (615) 322-7409.

V ANDERBILT B USINESS 47 “CLASS ACTS”

Congratulations to the Executive MBA Class of 2010 The EMBA Class of 2010 made his - tory by raising more than $140,000 toward its class gift. Not only is it the largest amount ever raised by an EMBA class, but it is also the first time in Owen history that a class— EMBA or otherwise—has reached 100 percent participation. The gift established the EMBA 2010 Strategy Department Fund, which will be used to enhance offerings within the strat - egy department at Owen. EMBA Class of 2010

48 F ALL 2010 “CLASS ACTS”

V ANDERBILT B USINESS 49 50 F ALL 2010 With OwenConnect—our online directory for alumni— it’s easier than ever to remain an active part of this vibrant place.

• Update and maintain your online directory profile • Easily find classmates and alumni with the robust search functionality • Submit and view class notes (promotions, family news and educational updates) • Access career resources (resume and job postings, career counseling and assessments) • Discover articles, podcasts, faculty research and current Owen news

© 2010 Vanderbilt Owen Graduate School of Management Vanderbilt is an equal opportunity, affirmative action university. BOTTOM LINE all these problems seemed never-end - BILL OF HEALTH continued from page 56 ing, but we continued making progress continued from page 25 out? What do we tell our customers? day by day. “I would say the THA and the TMA What do we tell our STARS who cannot Now that it has been several months are working very hard to cooperate with come to work? Where will the displaced since the flood, I can attest to just how each other and to try to have a con - leaders find office space? How did our far we have come. The rebuilding structive dialogue about how to move country music archives and memorabilia process is almost complete: The Opry forward with these things,” he says. fare? We needed to plan updates for the House has recently reopened, and our “It certainly doesn’t mean we agree on board of directors and our shareholders, hotel will soon follow in mid-Novem - everything, but we recognize the impor - but what would we tell them? ber. I also now have some perspective tance of working together. We’re just Although a difficult road lay ahead of and can look on the bright side of those two of several constituencies. There are us, we were extremely fortunate in one dark days. As tragic as they were, the the insurance companies, there’s big respect: During the crisis we were able events of early May gave us an opportu - pharma, then there are the device mak - to fall back on our emergency prepared - nity for a fresh start. The flood spurred ers, and each one of these is a very pow - ness, business continuity and crisis com - us to make the hotel and Grand Ole erful group with a lot to lose.” munication plans. These three inter- Opry even better than they were before, For investors, companies in any seg - connected plans provided a template as and we now can take great pride in rein - ment of the industry are going to have we reacted to the increasing threat of troducing these cherished businesses to to prove themselves. “The companies the flood and evacuated a large number our customers, our city and the world. that are going to succeed,” says Capitol’s of guests to safety in a reasonably Guthrie, “are those that have the ability orderly fashion. The plans also served us to bring efficiency to the health care sys - well as we set about answering the ques - David Kloeppel , who earned his MBA tem, to deliver quality and free up tions facing us, making some tremen - degree from Vanderbilt in 1996, is the enough money for solid patient care.” dously difficult decisions in the process. President and Chief Operating Officer at This may be easier said than done At times the task of finding solutions to Gaylord Entertainment Co. VB for most, but as America’s health care

system has proven time and again, G

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those with ingenuity and determination O

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are capable of rising to the occasion. E

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Physicians, hospitals, pharmaceutical R

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companies and others in the medical N

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community have worked together N T before to solve some of the most chal - lenging problems known the world over. The question now, though, is whether or not they can do the same for the very system they are a part of. VB

The lobby of the Opryland Hotel before the flood

52 F ALL 2010 GLOBAL PERSPECTIVE Someway, Somehow The valuable lesson I learned in India

By DARREN GEST, MBA’10

O YOU THINK IT ’S POSSIBLE THAT HE put diesel in the tank instead of petrol?” ‘‘ I asked Girish this question while we sat in our broken-down car facing three cows and a street vendor selling Dcoconuts. Girish, whom I had met at the Hong Kong University of Science and Technology during my Owen semester abroad, was taking me on a tour of his hometown of Delhi, India, by way of a two-hour gas station visit. Minutes later the guilty station atten - dant put one end of a hose in our gas tank and the other end in his mouth. Before I could say, “Please, whatever you do, do not do that,” he inhaled to create a suction that pumped the Gest with Goonj Founder Anshu Gupta (standing) and Goonj Project Coordinator Ruchika Gandhi gasoline into a waste bucket. Mean - while Girish looked at me, shrugged especially during these lean economic items as compensation for development his shoulders and said, “ Jugaar .” times. Perhaps your company has work, like digging wells, building Jugaar is a Hindi term that loosely slashed its budget and work force, and schools and constructing bridges in vil - translates as “things will work out, you are now saddled with extra burdens? lage communities. In this way Goonj somehow.” Is a man attempting to fix Jugaar . Or maybe you are among those enhances the efforts of other social entre - your car by sucking gas out of a hose? who were laid off and are now trying preneurs by providing a way to compen - Jugaar . Or perhaps a shopkeeper does your hand at entrepreneurism? Jugaar . sate village laborers without using cash. not have 7 rupees in change, so he We are all making do with fewer The key to Goonj’s success is a lean offers you 5 rupees and a piece of resources and relying now more than business model fueled by innovation and chocolate instead? Jugaar . Or maybe ever on creativity and innovation to keep resourcefulness. The clothing and other it is too hot to sleep at night so you moving forward. donated goods are gathered from afflu - pull the mattress onto your balcony While in India, I dedicated my time ent families at collection points in urban and wrap a mosquito net around the to working with Goonj, an NGO (non - areas and then filtered through a com - railing? Jugaar . I had to remind governmental organization) with offices plex supply chain that eventually reaches myself to be resourceful and remain in seven cities, a network that spans 21 rural villages. Any donated item that optimistic during my visit to India— states, and partnerships with 150 groups, arrives at the Goonj warehouse in poor even when the clear path to success including other NGOs and the Indian condition is broken down into raw was either blocked or unavailable. army. The idea behind the organization, material, which is then used in making Those of us who are business pro - which was founded by Anshu Gupta in items such as quilts, bags and children’s fessionals in the U.S. could certainly 1999, is “clothes for development”— toys. Even small threads that fall on the benefit from this line of thinking, utilizing donated clothing and other Continued on page 54

V ANDERBILT B USINESS 53 GLOBAL PERSPECTIVE and has kept its fixed costs low enough MILITARY DISCIPLINE continued from page 53 to ensure that profit centers keep the continued from page 39 production-line floor are collected and organization afloat. Its technology may him, “Your country needs you.” In sent to the seamstress team for product be outdated, the office space cluttered between he operated a fledgling import development. and the sorting center dilapidated, but business in handmade goods from some To raise funds Goonj sometimes sells Goonj has effectively optimized its pro - of the exotic locales he had visited with the items it receives. For example, if a duction and supply chains. Its ware- the Corps, like Yemen. The business donated book will not be used in a vil - housing model can compete with any barely broke even. But, as an entrepre - lage, the team will sell it to a bookstore corporate Six Sigma project. neur, Sumner had found a civilian avoca - in the city to generate income. The Success comes down to whether we tion that could satisfy his need for NGO also sells the products it makes to are willing to look at and work with flowing adrenaline. clientele in the cities. These items what is in front of us. Rigid perceptions Now he is returning for another include folders, purses, wallets, cell of how things should or used to be jolt—this time as a beer maker with an phone holders and greeting cards. I eventually give way to the certainty of MBA. He learned the brewer’s art from even witnessed a donated Michael Jack - how things are. Organizations that stay his younger brother. After taking a new son cassette tape repurposed into other lean and remain creative with resources product development class, he realized items, including stripping the tape out are the ones that will be standing when he might have a new product of his own. of the cassette and using it to weave the smoke of the recession clears. It may He began testing its viability at Owen handbags and mats. The Goonj team not be easy, but things will work out, get-togethers. “At one party,” he recalls, consistently finds a way to promote and somehow. Jugaar . “I brought 26 different types of beer. advance its efforts by working with People were saying, ‘Where can I buy what it has and within its means. this stuff? ’” In many ways Goonj provides a Darren Gest , who earned his MBA With help from Owen’s entrepreneur - model not just for other organizations degree from Vanderbilt in 2010, is cur - ship program, Sumner test-marketed his in India but for those elsewhere, includ - rently a Human Capital Senior Consultant quaffs in the wider community. This ing the U.S. The NGO is small enough at Deloitte Consulting in Chicago. VB summer he was busily researching prop - to respond to fluctuations in donations erties around Nashville and as far afield as Austin, Texas, and Portland, Ore. To Sumner, it feels like an exhilarating jump, and his MBA colleagues are his bungee. They are continually providing support and advice, offering to serve on the board of his company for free, help - ing him assess logo designs, and serving as sounding boards for ideas. That is the thing, Sumner says, about Owen. “When I got out of the Marine Corps, I thought I’d never have this again. The camaraderie at Vanderbilt is unique. That’s why I’ll always appreciate it. There were a lot of students who per - haps were smarter than me and whom Owen could have accepted into the pro - gram, but they chose me to be part of the family. When somebody gives you a chance like that, you don’t forget it. And VB Seamstresses in the Goonj sorting center that’s the Marine Corps way.”

54 F ALL 2010 Ted and Gigi Lazenby’s relationship with Vanderbilt runs deeper than most. They both earned bachelor’s degrees here, and Gigi graduated from one of the Owen Graduate School of Management’s first classes. To celebrate their Vanderbilt connection, the Lazenbys established a charitable remainder trust and plan to create an Owen scholarship.

Ted Lazenby, former president of National Life & Accident Insurance Co. and founder of Southlife Holding Co., sees the trust as a sound investment that also sup - ports students. “We’re interested in invest - ing in human capital,” says Ted.

“Owen has so much to offer,” says Gigi Lazenby, chairman and chief executive offi - cer of Bretagne, an oil and gas exploration and production company. “We’d like to help more students take advantage of Owen by making tuition more affordable.”

Please join the Lazenbys in including Owen in your estate plans. Tax-effective options include:

• a bequest, • a life income gift (support Owen and receive income in return) such as a charitable remainder trust, • naming Owen as beneficiary of your IRA or life insurance policy, and What will • a gift of real estate. If you’d like to support Owen through a planned gift, please contact Katie Robinson in Vanderbilt’s Office of Planned Giving at legacy be? (615) 343-3858 or (888) 758-1999 or you r [email protected]. www.vanderbilt.edu/alumni/plannedgiving BOTTOM LINE Hell or High Water Rebuilding Gaylord Entertainment after the flood

By DAVID KLOEPPEL, BS’91, MBA’96 G A

T’S HEARTBREAKING . Y OU WALK Y L O R

THROUGH D

these buildings and feel like E N T

the soul has been taken out of them. E R T A

There are no customers. … There’s no I N M E

‘‘ joy. There’s no music playing in the N Grand Ole Opry.” T These were among the only words II could summon standing in front of TV cameras and newspaper reporters the morning of Monday, May 3. I had just landed at the Nashville airport, rushed to the Gaylord Opryland Hotel and toured the property with the media. The day before I had been stranded in the Miami airport as a record-setting rain fell in Nashville—a rain so great it swept away cars, homes, buildings and lives. It also left up to 9 feet of water in 800,000 square feet of our hotel and 4 feet of water on the stage of the Grand Ole Opry. The May flood left nearly 9 feet of water in different parts of the Opryland Hotel. The enormity of it all was difficult to grasp and certainly difficult to put into through Nashville and surrounds our would be better to inconvenience our words. All day Sunday, May 2, those of properties in an oxbow known as Pen - guests and STARS rather than risk harm us on the leadership team were in con - nington Bend. The reports we were to anyone. A few hours later, with every - stant contact with one another, monitor - receiving from government agencies con - one safe at the high school, water began ing and reporting on water levels in the tinued to indicate our levee would be seeping into the lobby of the hotel. Cumberland River, which snakes its way high enough to hold back the rising Back to Monday morning. The inter - river. However, visual inspections by our views and media tour were complete. team told us the information we were Guests who had an uncomfortable night receiving simply wasn’t accurate. The in the shelter were off to the airport, river was rising higher and faster than which was open again. The leadership agencies had earlier projected. team at the property had customer tran - Eventually we decided to evacuate the sition well in hand. It was time to begin hote l—1,500 guests and our employees, answering the questions we’d posed dur - or STARS as we call the m— to a nearby ing our hourly conference calls Sunday high school. There was no debate among night: How long will our businesses be the team on the phone that evening. Life closed? How extensive is the damage? safety was our first priority. Even if the How quickly can we pump the water river didn’t top the levee, we thought it Continued on page 52

56 F ALL 2010 Donna Wilkinson Tom Barr Vanderbilt MBA 1993 Vanderbilt MBA 1998 VP, Human Resources VP, Global Coffee Pacers Sports & Entertainment Starbucks

Heiki Miki Gealita Greenhill Vanderbilt MBA 1996 Vanderbilt MBA 2008 General Manager, Line Pipe Export Organizational Development Manager JFE Steel Corporation Mars, Inc.

Jackie Shrago Henry Guy Vanderbilt MBA 1975 Vanderbilt MBA 1998 Assessment Founder President & CEO Discovery Education Modern Holdings

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