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LEADING IN THOUGHT AND ACTION contents features

4 20 Questions with… 55 First Person A Ross student, faculty member, Ellen Ernst Kossek, MBA ’81, and alumnus answer 20 questions the co-author of CEO of Me, that offer insight into life beyond reflects on her 26-year the classroom, the research lab, and partnership in a dual-MBA the boardroom. household. Kossek is pictured here with Ross Professor Jim Walsh at an Ann Arbor book signing. 24 Kick out the Jams Doug McCracken, MBA ’04, makes work his play as Activision Inc.’s global brand manager for the record-breaking video game franchise Guitar Hero. (Cover photo by Leslie Barton.)

42 Men and the

Work-Life Balance intellectual Professor Lynn Perry Wooten capital presents a new study on the chal- lenges facing the male workforce. 12 Judgment Day Professor Noel Tichy talks about his new book, Judgment, and details how winning leaders make great calls. He also presents a model to identify that critical 44 Ross Students moment before a judgment in Action call, when swift and MBA students take on biodiesel, decisive con­sumer goods, and the com- action is puter industry with amazing essential, results. and how to execute the call.

dividend 1 spring 2008 contents departments

6 Across the Board 23 Quote Unquote Dean: Robert J. Dolan Director of Marketing Communications: Professor C.K. Pra- Ross School faculty members talk Paul Gediman halad named world’s on the record about breaking news Editorial Manager: Deborah Holdship top business guru… and business trends. Professor Richard Class Notes and Copy Editor: Fred P. Wessells Bagozzi honored for 30 Alumni at Large Editorial Consultant: Claudia Capos scientific contribu- Designer: Michigan Marketing & Design tions…Pro­fessor Jan The Mentor Svejnar runs for Czech Photographers: Leslie Barton, David Bernard, Sanford Robertson, Philip Dattilo, Steve Kuzma, Cary Liao, Dmitriy presidency…Ross ranks No. 2 world- BBA ’53, MBA ’54, Shapiro, Anne Stanton, Mathew Sumner, and wide in sustainability…Landmine has been building Bruno Tucci. survivor presents McInally Lecture… companies and Printer: University Lithoprinters Maya Angelou reveals poetic side “keeping company” of business…Late chairman of House in Sili­con Valley for Vol. 39, No. 1: ©2008 Foreign Affairs Committee warned Stephen M. Ross School of Business more than 40 years. at the University of Michigan. against isolation…Tiki Barber teams This publication is produced twice a year by in housing venture with Stephen M. The Adventurer the Office of Marketing Communications Ross, BBA ’62…Expert says global Aerospace executive Don McMon- and made possible through the generosity climate change should drive U.S. agle, EMBA ’03, finds his years of private donations. agenda with China…Women’s con- with NASA offer distinct advantages ISSN 0046-0400 ference pushes power of possibility… in industry. For more information, contact Dividend, First-ever Management of Innova- Stephen M. Ross School of Business tions in Global Operations Confer- The Athlete University of Michigan ence breaks ground…Student VCs 701 Tappan, Ann Arbor, MI 48109-1234. Former Wolverines captain Ron John­ invest in a U-M spin-out firm. son, BBA ’69, recounts his life-changing experience on and off the field. The University of Michigan Regents: 18 Faculty Research Julia Donovan Darlow, Laurence B. Deitch, The Entrepreneur Olivia P. Maynard, Rebecca McGowan, Repeat After Me Andrea Fischer Newman, Andrew C. Richner, Stephen Garcia warns that a single, Jeff Depew, MBA ’81, roars into the S. Martin Taylor, Katherine E. White; repetitive voice may be mistaken lithium-ion business with Lion Cells. Ex-Officio Member, Mary Sue Coleman, for group consensus. President, University of Michigan. The Trailblazer The University of Michigan, as an equal oppor- 20 Doctoral Studies Roger Frock, MBA ’59, recounts tunity/affirmative action employer, complies the early years at Federal Express with all applicable federal and state laws regard- PhD Program Scores in a book excerpt, Changing How ing nondiscrimination and affirmative action, including Title IX of the Education Amend- High Marks the World Does Business. ments of 1972 and Section 504 of the Rehabili- Research output enhances program’s tation Act of 1973. The University of Michigan reputation. 48 Alumni Activities is committed to a policy of nondiscrimination and equal opportunity for all persons regardless MBA chef goes of race, sex, color, religion, creed, national Engage or Estrange? gourmet for D.C. origin or ancestry, age, marital status, sexual Aleksandra Kacperczyk shows work grads; Tokyo alumni orientation, gender identity, gender expression, and pleasure don’t mix for Americans. pass the torch; disability, or Vietnam-era veteran status in Milwaukee and employment, educational programs and activi- Miami clubs come ties, and admissions. Inquiries or complaints Good to Be Bad? may be addressed to the Senior Director for together. Deniz Anginer reports stocks of Institutional Equity and Title IX/Section 504 despised companies outperform Coordinator, Office of Institutional Equity, 2072 Administrative Services Building, Ann Arbor, those of admired ones. 50 Class Notes Michigan 48109-1432, 734-763-0235, TTY The latest news from friends, 734-647-1388. For other University of Michigan 22 What Are You classmates, and colleagues information call 734-764-1817. Thinking About? Stephen M. Ross School of Business Robert Van Order delves into the 54 Obituaries Web site: www.bus.umich.edu sub­prime crisis, while Francisco Palomino analyzes monetary 56 Alumni Network Update policy and stock returns.

dividend 2 spring 2008 It’s about all of you.

2008 Recent Grad Reunion • September 26–28 2008 Reunion • October 3–5 Save the Date

Look for more details and registration information this summer. Go to www.bus.umich.edu/reunion2008 for a schedule of events, hotel information, and anniversary class news. 20 questions with... the school. Meanwhile, she was president of the Law School’s Student Senate, where race Lee, MBA/JD ’08, focused on she worked to establish the Law School Gmarketing and corporate strategy Mental Health Initiative. Throughout her during her time at the Ross School. A time at Michigan, Lee championed stu- graduate of Johns Hopkins, Lee pursued dent causes and raised funds for student graduate studies in business and law to organizations and campus programming. reach her ultimate target: She plans to Reflecting on her time at Ross, Lee says found and manage a nonprofit organiza- she was able to focus on such meaningful tion that will offer social and legal services projects, in part, as a result of two scholar- to immigrant victims of domestic ships: the David W. Belin Phi Beta Kappa violence. Merit Scholarship and the Gladys D. and Lee came to Ross as a Consortium Fel- Walter R. Stark Graduate Scholarship. low, and she acted as a student liaison to “I know I could never have accomplished the Consortium (which promotes diversi- half of these achievements or pursued ty) while she was here. In addition, she my ultimate goal without their kindness,” Grace Lee served on Dean Robert Dolan’s Diversity she says of the scholarship donors. Steering Committee and on the Student Lee’s first position post-Ross is as mba/jd ’08 Admissions Committee as a way to sus- assistant product director in Johnson & tain and grow a diverse student body at Johnson’s baby division.

miyatosh Purnanandam recently was bailout of Bear Stearns, visit the Ross Anamed the Bank One Corporation Web site at www.bus.umich.edu/pur- Assistant Professor of Business Adminis- nanandam. tration at Ross. This one-year appoint- Purnanandam joined the Ross faculty in ment, effective in September, recognizes 2004 after completing his PhD at Cornell promising junior faculty who are conduct- University. He’s already had a phenomenal ing high-potential scholarly research. start to his academic career with nine Purnanandam’s area of expertise focuses accepted/published papers in top journals, on risk management, how firms make as well as seven active working papers in financial decisions, and the implications development. He has presented at top of those decisions on value and stock conferences, and his output and visibility returns. Research interests cover security make him a top researcher in his cohort. issues (IPOs/SEOs), investments, credit In addition, Purnanandam contributes to Amiyatosh risk pricing, and banking. To hear an the intellectual vitality of the Ross finance audio podcast that details his perspective group in many ways — he’s even started a Purnanandam on the Federal Reserve’s April 2008 reading group for the faculty. Assistant Professor of Finance

reg Bolino, MBA ’92, is a partner at helped numerous clients identify and Gglobal technology and services firm pursue opportunities to enhance business Accenture. Based in Chicago, he leads the performance with new operating struc- company’s organization strategy practice tures, capabilities, and technologies. His in North America. clients have included General Motors, Prior to Accenture, Bolino served as vice Northwestern Mutual, Sears, Best Buy, president of sales and business development AOL, Verizon, Kraft Foods, Cinergy, at Telution, a start-up company that pro- SBC, and Sprint, to name a few. vides operational support software for the Bolino also is an active Ross School communications industry. In 1999, he alumnus who currently serves as chair- opened and led the Chicago office of Viant, man of the Alumni Board of Governors. a technology strategy and integration firm. He previously served as president of the Prior to that, Bolino was vice president at school’s Alumni Club of Chicago, which CSC Index, a management consulting group was named Alumni Club of the Year by Greg Bolino within Computer Sciences Corporation. Ross in 2007. He lives in the Chicago With more than 22 years of consulting suburb of Winnetka with his wife Debra mba ’92 management experience, Bolino has and their children, Nicholas and Olivia.

dividend 4 spring 2008 5. Nightmare job? Legal counsel for Philip FDR, Oprah, Will Ferrell, and Keanu Morris or quality control for Comcast. Reeves’ agent (s/he must be a genius). 6. Chicken or beef? Neither — I’m vegan. 13. What’s the most thrilling/adventurous UESTIONS No, it’s not as bad as it sounds. thing you’ve ever done? Quit my job to 7. Most important room in your home? become a refugee caseworker in Ghana 2Q My kitchen — I love to cook! during the Liberian War. 8. First Web site you access in the morning? 14. Pet peeve? People not wearing their 1. What keeps you up at night? The hippie New York Times Online. I am addicted to seatbelts. undergrads across the street who sit on the news. 15. Guilty pleasure? Sleeping in. their porch all night and bang on upside- 9. Favorite comfort food? Mashed potatoes. 16. Unfulfilled wish? Start a nonprofit to down buckets. (Sorry, had to vent.) (I think I might secretly be Irish.) provide social and legal services to 2. What gets you up in the morning? Fear of 10. If you had a theme song, what would it be? immigrant victims of domestic violence. not being able to finish the marathon I’m “Don’t Stop Believing” by Journey. 17. Favorite item of clothing? Jeans. I wish training for. I try to go running most mornings. 11. What’s your favorite thing to do by yourself? I could wear them to work every day... 3. What’s the last book you read? Clean my apartment. (I know…not the thank goodness for casual Fridays! Eat, Pray, Love. coolest thing, but I can’t function in a mess.) 18. Where would you retire? New York. 4. First album/CD you bought? Michael 12. Three people, living or dead, you’d have I can’t quit that place! Jackson’s Thriller at age five. He was my over to dinner? There’s no way I could pick 19. Favorite sport to watch? Basketball. first love! (Really relieved things didn’t work only three! I’m used to cooking for a lot of 20. What are you afraid of? Scary movies. out between us.) people, so I’d invite at least five: Ella Fitzgerald, And dehydration.

1. What keeps you up at night? 10. First Web site you access in the morning? 15. What’s the most thrilling/adventurous Overseas stock markets (and cricket http://finance.yahoo.com. thing you’ve ever done? matches). 11. Favorite thing to do by yourself? Bought and sold stocks. 2. What gets you up in the morning? Gardening. 16. What is your dream car? Lamborghini. U.S. stock markets. 12. Best trophy/award you ever won? 17. Where would you retire? 3. What’s the last book you read? Flyboys The Best Actor Award in a dramatics Too early to think about retirement! and Mahatma Gandhi’s autobiography, competition at Indian Institute of Technol- 18. Favorite sport to watch? Cricket. The Story of My Experiments with Truth. ogy (my alma mater). 19. What did you want to be when you 4. First album/CD you bought? 13. If you could read anyone’s mind, were a kid? An astronaut. Eagles (by the Eagles). who would it be? Alan Greenspan. 20. What are you afraid of? Global warming. 5. What’s on your iPod? Old Hindi songs. 14. Three people, living or dead, you’d have 6 Nightmare job? Keeping books. over to dinner? 7. Dogs or cats? Neither. Mathematician John Nash, Microsoft’s 8. Chicken or beef? Chicken. Bill Gates, and Nick Leeson, the infamous Listen to Purnanandam’s podcast on the 9. Most important room in your home? rogue trader who caused the collapse of the Bear Stearns bailout at www.bus.umich.edu/ The kitchen. U.K.’s oldest investment bank. purnanandam.

1. What gets you up in the morning? My 7. Favorite comfort food? Wine. Okay, that’s things to life” campaign had several kids — literally and figuratively. not food. How about cookies? touching segments. 2. What’s the last book you read? Bo’s 8. If you had a theme song, what would it be? 14. Pet peeve? People with negative outlooks. Lasting Lessons. It was a gift, and I loved “Somewhere Over the Rainbow.” Life’s too short for that. the clarity that Schembechler brought to 9. Favorite line from a movie? “Carpe 15. Desert island book, movie, or album? leadership. Diem!”— Dead Poets Society. A River Runs Through It. 3. First album/CD you bought? Can’t really 10. What’s your favorite thing to do by 16. Unfulfilled wish? I wish people trusted each remember, but I think it was Boston’s Don’t yourself? Play guitar (or piano). I’m not other more. Most problems in society (and Look Back. good…but it changes my mood. companies) boil down to a lack of trust. 4. What’s on your iPod? A lot of ’80s 11. If you could read anyone’s mind, whose 17. Favorite item of clothing? Shoes. alternative music. Most of us are stuck would it be? My children’s. Their thought 18. Favorite sport to watch? College football. in the music of our “younger” days. processes are raw and amazing. Go Blue! 5. Most important room in your home? The 12. What’s the most thrilling/adventurous 19. What did you want to be when you were kitchen. It’s where everything happens. thing you’ve ever done? Skydive from a kid? I wanted to invent things. 6. First Web site you access in the morning? 13,000 feet. Very scary. 20. What are you afraid of? Losing my memory Google. I answer all of my own questions 13. Have you ever cried at a commercial? when I get old (or sooner). with it. I won’t admit it, but GE’s “we bring good

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ACCOLADES Prahalad Ranked No. 1 Guru

ove over, Bill Gates. The Ross Pictured above, C.K. Prahalad MSchool’s C.K. Prahalad is now the world’s foremost management thinker. egy guru and Ann Arbor native Michael Prahalad, the Paul and Ruth McCracken Porter, and Strategos founder Gary Distinguished University Professor of Strat- Hamel, a Ross PhD graduate and long- egy, recently placed No. 1 on Suntop Media’s time collaborator of Prahalad. “Thinkers 50,” a biennial ranking of the top Prahalad’s collaboration with Hamel 50 management thought-leaders worldwide. produced the 1994 best-selling book Com- In addition, Professor David Ulrich, peting for the Future. In 2004, Prahalad who directs the school’s Human Resource wrote two more best-sellers: The Future Executive Program, made the list at No. of Competition: Co-Creating Unique Value 42 — just behind former Vice President with Customers (co-­authored with Ross and Nobel Peace Prize winner Al Gore. Professor Venkatram Ramaswamy) and Prahalad, ranked No. 3 in 2005, The Fortune at the Bottom of the Pyramid. bumped Microsoft Corp. founder Gates His new book, The New Age of Innovation: down to second place on the 2007 list. Driving Co-Created Value Through Global Rounding out the top five thinkers were Networks, co-authored with Ross Professor former U.S. Federal Reserve Chairman M.S. Krishnan, was released this spring. Alan Greenspan, Harvard University strat-

dividend 6 spring 2008 PRESTIGE BERNARD DAVID LEADERSHIP Bagozzi Honored Ross Ranks Highly for Scientific Roles he Ross School is one of the two Tbest business schools worldwide ichard Bagozzi, Ross professor and for integrating social, environmental, Rchair of marketing, has been elected and ethical issues into its MBA program, a Fellow of the Association for Psycho- according to the Aspen Institute’s 2007–2008 logical Science (APS). Recently, he also Beyond Grey Pinstripes survey, a biennial was appointed to the Board of Scientific ranking of business schools. Counselors for the National Center for “Michigan offers a truly extraordinary Health Marketing at the Centers for Dis- number of courses featuring relevant ease Control and Prevention (CDC). content, and does a truly extraordinary The APS is the most prestigious asso- job in explicitly addressing how main- ciation for psychologists worldwide. Fel- stream business improves the world,” said low status is awarded to members who Rich Leimsider, director of the Aspen have made outstanding contributions to Reporters descend on presidential hopeful Institute Center for Business Education. the science of psychology in research, teach- Jan Svejnar. In addition to its overall No. 2 ranking ing, service, and application. Candidates (behind Stanford University), the Ross are considered after a minimum of 10 to PRESIDENTIAL School also placed first in faculty research 15 years of post-doctoral contribution. and fourth in course content. Bagozzi was chosen to join the CDC’s Svejnar Runs Board of Scientific Counselors based on his outstanding research in marketing, in Czech Republic statistics, health behavior, and health systems. The nine-member board advises s U.S. presidential candidates battled the CDC’s director and the Secretary of Afor their party’s nomination earlier the Department of Health and Human this year, Ross Professor Jan Svejnar waged Services (HHS) on the strategies and his own race for president — in the Czech goals for the programs and research of Republic. Cast as the underdog in a the National Center for Health Market- race against incumbent Vaclav Klaus, ing. It also conducts peer reviews of Svejnar ultimately emerged as the people’s scientific programs and monitors the favorite candidate; a pre-election poll center’s overall strategic direction. showed 55 percent of citizens preferred Bagozzi, who also is a professor at Svejnar to Klaus. But the Czech president U-M’s College of Pharmacy, conducts is chosen by members of the country’s basic research on human emotions, deci- parliament, not through a public election. sion making, social identity, and action. In the end, Svejnar was defeated by Klaus “It’s gratifying to see our faculty cele­ He applies this work to the study of con- in a vote of 141 to 111. brated for integrating issues of social sumers, patients, doctors, salespeople, Svejnar told the Michigan Daily in responsibility and environmentally sus- managers, and organizations. February that one reason he ran was to tainable business into their teaching and combat rampant bribery in the Czech research,” said Ross School Dean Robert government. He is convinced parliament Dolan. “In our approach to leadership members received a “significant monetary education, we emphasize that our stu- payoff” to support the incumbent in the dents will need to address these issues in final election. their careers, whether they work in the “There was an incredible amount of pres- public, private, or nonprofit sector — sure tactics and corruption,” Svejnar told or in all three.” the Daily. “What we have done is contrib- Ross offers more than 50 courses in ute in a major way to the progress of the 10 different academic areas, along with young democracy here.” He said he may some 30 activities, including seminars, consider running for president again. internships, competitions, clubs, and Svenjar mounted his presidential cam- centers, which integrate social, environ- paign during his sabbatical from the Uni- mental, and/or ethical perspectives. versity, where he is the Everett E. Berg In related news, Ross received the 2007 Professor of Business Administration at Chapter of the Year Award from Net Im- Ross, professor of public policy and eco- pact, an international organization of nomics, and director of the International 10,000 students and professionals com- Policy Center. mitted to serving the social and environ- mental good through business. This was the second consecutive win for Ross’s Net Richard Bagozzi Impact chapter.

dividend 7 spring 2008 across the board

SURVIVORSHIP 2007 McInally Lecture hen landmine survivor Jerry White, WEMBA ’05, quit his job and cashed out his retirement fund to co-create Land- mine Survivors Network (LSN), he had a vision for a mine-free world. One decade, one mine ban treaty, and one Nobel Peace Prize later, White is expand- ing that vision to include a victim-free world. Ever the entrepreneur, he has taken what he’s learned as LSN’s executive director and extended his expertise to a wider audience. LSN is now Survivor Corps, which advo- cates on behalf of all victims of armed conflict, torture, genocide, and violence. “As LSN was working toward a global ban on landmines and spearheading the STEVE KUZMA 1997 Mine Ban Treaty, we met survivors who had struggled against tremendous odds, with just a few tools, to resume for Survivor Corps when he delivered Jerry White, EMBA ’05 some semblance of life, even in the most the 41st annual William K. McInally impoverished contexts,” says White, who Memorial Lecture at the Ross School designed to track the spread of weapons lost his own leg to a landmine blast in in November. White also promoted his of mass destruction. As a leading propo- 1983 during a college trip to Israel. Land- book, I Will Not Be Broken: Five Steps to nent of the 1997 Mine Ban Treaty, he was mines have killed or maimed more people, Overcoming a Life Crisis (St. Martin’s Press). a co-recipient of the 1997 Nobel Peace 80 percent of them civilians, than nuclear, Prior to co-founding LSN/Survivor Prize awarded to the International Cam- chemical, and biological weapons combined. Corps, White was assistant director of the paign to Ban Land Mines. To date, 150 “We learned something in all of these Wisconsin Project on Nuclear Arms Con- countries have signed the treaty, with the survivor visits: a recipe for resilience.” trol, where he co-founded and edited the notable exception of the United States. White shared that recipe and his vision Risk Report, an award-winning database

PHILIP DATTILO

REUNION and say, ‘Pythagoras: He was a human being. So am I.’ ” Angelou Brings Poetry That shared humanity connects all to Business World people across the vast elements of busi- ness and culture, Angelou said. “As a cclaimed American poet Maya An- poet, I agree with the mathematician that Agelou wove a lyrical thread through there is an order to all things. So, I say, if Reunion 2007 at the Ross School in Octo- you are a poet, welcome the scientist. And ber. The somewhat unorthodox engage- if you are a scientist, welcome the poet, ment — inviting a poet to speak to business the artist, and the ballet dancer.” professionals— illustrated an important By demonstrating the curiosity and point about melding the arts and sciences. courage to embrace that which initially is Angelou likened it to one hand washing perceived to be alien, human beings can the other. achieve anything, the poet continued. She “One hand trying to wash itself is a piti- cited the pyramids and the Hanging Gar- ful sight,” she told a packed house at Hill dens of Babylon. “We are the miraculous: Auditorium. “If you are a businessperson, the true wonder of this world,” said An- you have to remember how human you gelou, quoting a passage from her poem are. So are your clients, your customers, “A Brave and Startling Truth,” which she your students, and your loved ones. Even presented at the 50th anniversary of the a math student can walk into the classroom United Nations.

Maya Angelou

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ENGAGEMENT Lantos Warned Against Isolation he tangible price, in blood and money, Tof the war in Iraq may be staggering. But the intangible cost of the conflict — a penetrating sense of disappointment and an isolationist mood among the Ameri- can people — is what presents the utmost challenge for the next president of the United States, argued the late Congress- man Tom Lantos (D-Ca.) in an October 2007 lecture sponsored by the Ross School and the William Davidson Institute (WDI). Lantos, who was chairman of the House Foreign Affairs Committee, passed away in February 2008. “The greatest cost of this undertaking,” Lantos emphasized, “could be the turning inward of the American people and their intent not to become engaged in the world come 2009.” This desire to with- draw from the world stage could not

STEVE KUZMA

STEVE KUZMA VALUE CREATION Tiki Barber (right) meets fans after his MLK Day Barber Aligns presentation at Ross. with Ross Benefactor crime, and foreclosures. “At some point, the American Dream ormer National Football League star became synonymous with home owner- Tom Lantos (right) talks with students. FTiki Barber’s activities off the field ship,” Barber explains. “A lot of people and off camera exemplify what Martin bought into that idea, and subsequently come at a worse time, he said. Interna- Luther King Jr. meant when he asked that got burned by living outside their means. tional organizations such as the United people be judged not by the color of their As a result, foreclosures are going Nations and NATO have proven ineffec- skin, but by the content of their character. through the roof right now, and people tual of late, leaving the unenviable job of Barber, who set virtually every career don’t have anywhere to go. We’re refur- world disciplinarian to the United States. offensive record during his 10 years with bishing [existing rental housing] to give “This tumultuous world needs some the New York Giants, spoke at the Ross these families an affordable place to live.” structure, some order, and some sense of School’s 2008 celebration of Martin Luther Barber met Ross just days after he rule,” Lantos said. “Since the American King Jr. Day. Currently, he is an NBC retired from the NFL. “This venture gives people are very unhappy playing this role, correspondent and children’s author. He us a chance to highlight something the task of the next president will be, also serves as a board member for the [Stephen Ross] has been doing for 35 domestically, to persuade them that there is Children’s Miracle Network and the Fresh years,” Barber says. “And it’s a great chance literally no alternative but to continue the Air Fund, and belongs to the Leadership for me to give back to my community. global leadership role of the United States.” Council of the Robin Hood Foundation. “We’re creating value in something that’s Lantos was a founding board member In late 2007, Barber announced a been devalued,” he continues, noting the of WDI, a nonprofit research and educa- business partnership with Ross School venture will kick off in his hometown of tional institution dedicated to creating benefactor Stephen M. Ross, BBA ’62, to Roanoke, Virginia. “Not only are we hop- and disseminating expertise on business develop high-quality, affordable housing ing to give people something to be proud and policy issues in emerging economies. throughout the country. Their goal, Bar- about, but we’ll be empowering them. In 2007, the William Davidson Institute ber says, is to revitalize downtrodden And that’s what life is about: being em- endowed a chair in Lantos’ name. WDI communities and to create value in powered and feeling in control of your Executive Director Bob Kennedy is the neighborhoods hit hardest by violence, own destiny.” first to hold the title of Tom Lantos Pro- fessor of Business Administration.

dividend 9 spring 2008 across the board

COOPERATION Global Climate Change and China lobal climate change should lead the Gnext president’s agenda in shaping U.S.-China relations, urged Ross Professor Kenneth Lieberthal during a February lecture co-sponsored by the University’s Center for Chinese Studies (CCS) and the Osher Lifelong Learning Institute. “There is no issue globally that would capture more respect than taking a leader- ship role regarding climate change,” said Lieberthal, the William Davidson Profes- sor of Business Administration. “The U.S. and China are the two biggest emitters of greenhouse gases by far. We also are the STEVE KUZMA two most powerful industrialized nations on the planet. If we can forge ahead and partner on the significant issue of global TRAILBLAZING Ross MBA and BBA students packed the Michi- climate change, it would be tough to pic- gan League ballroom at the 2007 Women in ture any other country having an excuse Women Explore Leadership Conference, “Phenomenal Women: not to sign on.” Possibilities The Power of Possibility.” Lieberthal, a research associate at the CCS, served as special assistant to the mbracing the axiom “it’s the journey, “The speed of innovation is overwhelm- President for National Security Affairs and Enot the destination” can be challeng- ing today,” Krecke said. “Our problems senior director for Asia on the National ing for career women who follow trails are bigger. The world is smaller. The com- Security Council from August 1998 to that are not yet blazed to destinations that petition is fiercer than ever.” October 2000. He has written and edited often remain out of reach. In fact, a recent This competitive landscape can create numerous books and articles on policy, Ross study revealed that women, espe- a new set of issues for female executives politics, and decision making regarding cially those of color, are still a widely who take time off for family or other China. He also is the Arthur F. Thurnau untapped resource at the executive level matters, said Handan Sert, vice president Professor of Political Science and Distin- and in the board rooms at Michigan’s of the global consumer treasury group at guished Fellow of the William Davidson largest public companies. Citi. “Re-entering the workforce is more Institute. The September 2007 Women in Leader- challenging today. It’s not so easy just to Lieberthal conceded the Bush admini­ ship Conference, “Phenomenal Women: start where you left off when ‘where you stration has done an effective job in The Power of Possibility,” suggested new left off’ isn’t there anymore,” she said. managing the complex and maturing strategies for female executives. The 15th And it’s not just your job that may not relations between the U.S. and China on annual event, presented by Michigan be there anymore, added Ross Professor a traditional, bilateral, and day-to-day Business Women and the Women’s Busi- Christina Brown, lecturer in marketing. basis. But he said the next president has ness Initiative, was sponsored by General “Your whole career may not be there.” much work to do in demonstrating a Motors and hosted by the Ross School. Fortunately, the ever-changing work- credible commitment to long-term coop- Executives in the energy, automobile, and place opens new vistas that “phenomenal eration with China on economic, energy, banking industries, among others, shared women” can exploit, Brown said. Some and global-security issues. their experiences with women in the Ross executives return to the workforce as A near-term pact on global climate MBA and BBA programs. entrepreneurs; others redefine their roles change could set the stage for ongoing The modern workplace is not only fickle, via “intrapreneurship” within an organi- cooperation and trust between the two but ever-changing, noted Rebecca Krecke, zation. “The one good thing is that wom- countries in more complex and nuanced director of card-member acquisition, en have always had to be more flexible areas, Lieberthal said. “It could provide Costco Co-brand, at American Express. as a function of life,” Brown said. “So it’s the basis of a sufficiently wide-ranging, Establishing credibility among peers, a strength we already have. We can adapt deep, and sustained level of cooperation taking calculated risks, and reaching out to a changing world better than some of that would tilt the long term decisively in to a diverse set of seasoned mentors can our male counterparts.” the right direction.” help women navigate uncharted territory.

dividend 10 spring 2008 across the board Tauber’s Team Velocity was featured at the 2007 Global Operations Confer- INNOVATION ence. They won the Integrated Product Design Challenge to create a hip cart Experts Challenge for city dwellers who don’t use a car. Convention lenge of moving 70 million vehi- xperts at the first-ever Man- cles to consumers around the Eagement of Innovations in world each year. From railways Global Operations Conference to seaways, simply adding capac- embraced, and even celebrated, ity involves daunting issues of failure as an inherent element size and scope. Despite lagging of innovation when growing a sales figures in Michigan and the company, going international, United States, GM’s sales for the coping with energy concerns, third quarter of 2007 were up and leveraging the Internet. The four percent, McMillen said, due Operations Management Club at to the firm’s innovative outreach Ross presented the debut confer- in emerging markets, such as ence, which was sponsored by India, China, Russia, and Latin the Tauber Institute for Global America. Operations. The most innovative ideas Google’s Mark Matossian, the come from collaborative effort, platforms build manager at the as evidenced by the successful world’s largest search engine/ Integrated Product Design advertising firm, provided a course led by Ross Professor glimpse at the hardware compa- William Lovejoy. The IPD course ny hidden within the software took a well-deserved bow at the company. The corporate culture conference when results of the at Google nurtures those with 2007 IPD challenge were re- “disruptive” thinking, he said. “Our man- tion, leadership, execution, and disruption. vealed. The challenge teamed up students agement doesn’t mind if we fail. They just If someone has the guts to put something from Ross, the College of Engineering, encourage us to fail quickly and move on.” on the table, and it fails but we learn from and the School of Art and Design to re- Failure is not something to fear at it — yes, we celebrate that.” search, design, manufacture, and market an computer-networking giant Cisco Systems, As executive director of logistics, pur- urban shopping cart. Team Velocity took top said Kevin Harrington, vice president chasing, and supply chain for one of the honors. of global business operations. “We have world’s largest companies, Thomas Mc- created a safe environment for collabora- Millen of General Motors faces the chal-

INVESTING student teams that function as indepen- ment capital in the future,” says Thomas dently financed venture-capital compa- Porter, director of the fund. He is execu- Student VCs nies. One team specializes in healthcare tive-in-residence at the Samuel Zell and Enter Market opportunities and the other in technology. Robert H. Lurie Institute for Entrepre- Each student team reports to a board of neurial Studies at Ross and an adjunct n late 2007, the student managers of the directors comprising venture capitalists, lecturer at the school. He also is a general IFrankel Commercialization Fund an- entrepreneurs, industry experts, and partner of Trillium Ventures. nounced their first investment of $85,000 CEOs. The teams also collaborate with The investment in Arbor Photonics in Arbor Photonics. The Ann Arbor-based the U-M’s Office of Technology Transfer demonstrates the Frankel Fund’s commit- optical fiber technology firm is commer- to identify and assess University research ment to coupling business students inter- cializing technology that originated in discoveries and inventions with commer- ested in company creation and product the U-M’s Department of Electrical Engi- cialization potential. commercialization with other talented neering and Computer Science (EECS). “Ross students work closely with in- U-M students, faculty, and researchers Established in 2005, the Frankel Fund ventors to help them identify the key who may lack the business experience or provides pre-seed money to scientists and milestones necessary to demonstrate an knowledge to bring their innovative ideas inventors and seed capital to early-stage idea’s utility and market potential, and to the marketplace. ventures. The fund is organized into two then position the idea to receive invest-

dividend 11 spring 2008 intellectual capital JUDGMENT With good judgment, little else matters. Without it, nothing else matters.

hether one is talking about U. S. presidents, chief execu­ Wtives, major league coaches, or wartime generals, leaders of all kinds are remembered for their best and worst judgment calls. In the face of ambiguity, uncertainty, and conflicting demands, the Noel M. Tichy quality of a leader’s judgment determines the fate of the entire organization. “With good judgment, little else matters. Dividend: Why did you decide to tackle Without it, nothing else matters,” state judgment as the essence of good leadership? co-authors Noel M. Tichy and Warren Tichy: The more Bennis and I looked at G. Bennis in their new book, Judgment: existing decision-making literature, the How Winning Leaders Make Great Calls more we realized there was not much that (Portfolio). Tichy is professor of manage­ helped you understand the process of ment and organizations and director making consistently good judgment calls. of the Ross School’s Global Leadership And you aren’t going to find it in some Pro­gram. Bennis is professor of business Harvard Business Review article listing administration at the University of South­ “seven easy steps for making a decision.” ern California. We’re trying to frame an area that has These two experts and widely published not been framed before in order to gain authors have spent decades studying and a better understanding of judgment. We teaching leadership, and advising top CEOs. decided to focus our research on leaders Here, they present a powerful framework who make big judgments: A.G. Lafley, the for making tough calls when the stakes CEO of Procter & Gamble; Jeff Immelt, are high and the right path is far from the CEO of General Electric; and the obvious. They show how to recognize the late U.S. Army General and Special Oper­ critical moment before a judgment call, ations Commander Wayne Downing, when swift and decisive action is essential, among others. and how to execute a decision after a call. There are only three judgment domains In the following Q&A, Tichy explains that really matter: 1) people (who’s on why this topic interests him, and how his your team, who’s off); 2) strategy (what research with Bennis can help today’s mountain do we climb?); and 3) crisis leaders transform the corporate landscape. (every so often a storm comes along). If

dividend 12 spring 2008 you don’t get the people part right, the Carly Fiorina, the former chairman/ is to have a successor in place. However, other parts can’t function well. If you CEO/president of Hewlett-Packard, was Corporate America should get a grade of don’t have an aligned, trustworthy team, a sales and marketing person who never D- or F on the way that leadership pipe- there will be all kinds of game playing really ran anything before she ran HP. lines are handled. When you think about and political machinations when you sit She grew up in AT&T, a kind of quasi- HP having to go out twice; 3M having to down to set strategy. And you certainly monopolistic company, then joined Lu­ go out twice; and about events at Boeing, can’t survive a crisis. cent Technologies, which was selling Merck, IBM, Kodak, and Motorola — switchgear to the telecommunications these are brand names that historically Dividend: CEO selection by a board is one industry. To sell switchgear, you basically my colleagues would describe as really area in which good judgment makes all have seven or eight customers who you great companies with great leadership. the difference. But as your book details, wine and dine, and then you get these Wrong. These companies illustrate that boards too often fail in this critical respect. multimillion-dollar deals. So she looked the majority of U.S. corporations have Tichy: There are a few recent instances good — everybody was buying switchgear. broken leadership pipelines. Of course, where it appears board members did But if you haven’t run a true profit-and- there are exceptions — a few companies not do a good job of asking themselves, loss organization, it’s pretty hard to groom are doing it right. For example, GE not “Does this person have the fully scoped yourself to run a company. Contrast that only had one candidate, Jeff Immelt, but capability for handling the complexity of to current HP chairman/CEO/president three who could have taken Jack Welch’s the position we’re putting him/her into?” Mark Hurd, who ran real businesses and place, including Jim McNerney, who is “The number-one role of a CEO, besides delivering value to the shareholders, is to have a successor in place. However, Corporate America should get a grade of D- or F on the way that leadership pipelines are handled.” —Noel M. Tichy

One such example is former Citigroup made real trade-offs during his 25 years Tichy says too many corporate boards lack CEO Chuck Prince. Chuck is a lawyer with- at NCR Corp. Granted, the businesses viable CEO succession plans, leaving firms out a lot of financial acumen or experience he ran were smaller than HP, but he still temporarily rudderless. in a complex organization like Citigroup, came in and turned the company around. which at the time was the largest financial Prince, O’Neal, and Fiorina all fall into now the CEO of Boeing. organization on the planet. Ultimately, the same category of “bad people judg­- Let’s look at Procter & Gamble, an he was pushed out of the company in ments” made by corporate boards. The interesting case in which CEO Durk Jager November 2007. facts show these decisions weren’t very failed in 17 months and resigned from Then there’s former Merrill Lynch CEO good because the boards had to get rid of the company in 2000. A.G. Lafley, an Stan O’Neal, who also was fired in 2007. their CEOs. And with Merrill Lynch and internal candidate, was waiting in the Stan came from General Motors, and all HP, board members had to go outside the wings. Since taking charge, Lafley has of a sudden he was playing on Wall Street. company to replace their chief executives. more than doubled the market cap of the Those are very different games to play. More company and done a terrific job. Look important, by all accounts he was a prickly, Dividend: That speaks to a very significant at PepsiCo Chairman/CEO Indra Nooyi. defensive kind of leader, so people below issue you address in the book, which is I think she is going to be the bellwether him didn’t want to bring him bad news. developing leaders within the company female CEO we’d hoped would emerge. His own handpicked board actually fired to ensure the board can make “good peo­ Nooyi is the real thing in my book. Again, him. In Merrill Lynch’s case, the board ple judgments” when the time comes. she was an internal candidate, who was had to go outside the company to find a Tichy: The number-one role of a CEO, identified more than a decade ago in a new CEO. besides delivering value to the shareholders, corporate leadership development program.

dividend 13 spring 2008 intellectual capital he saw Procter & Gamble’s baby-care business going south. He framed and Companies such as Yum! Brands and a process that starts with preparation. named that issue not as “I have to coach Caterpillar have “bench strength” in terms First, you must sense and identify the that team,” but as “I don’t have the right of a leadership pipeline. But all too often, need for a judgment call. Dell Chairman/ leader for that team.” companies do not focus on this critical CEO Michael Dell stumbled on this very In the next step of the process, the component of leadership development. first step when the market cap of Dell leader has to mobilize and align the went from twice that of HP to half that key stakeholders around his or her call. Dividend: Much like leadership, judg­ of HP in less than two years. He missed At P&G, Lafley made a big mistake by ment is a murky concept, difficult to the signals, and then he blamed Kevin neglecting to consult senior staff before quantify and teach. But in your book, Rollins, his former CEO. Rollins was a he appointed Deb Henretta to run his you create a process people can follow to sacrificial lamb, in my opinion. Dell was baby-care business. She knew the market­ hone their judgment and become better there every day in a connected office run­ ing and consumer side, but she was not at making good calls. ning the company with Rollins. an engineer like the leaders who had Tichy: Everyone’s ability to make judg­ The second step of the judgment pro­ always dominated and led the business. ment calls can be improved, and there’s a cess is framing the issue and naming it. They typically focused on manufacturing straightforward way to do it. Judgment is P&G CEO Lafley did this very well when and the cost side of the business. Lafley Crisis Challenge Tests Judgment, Leadership

ense rain from a late-night tempest sales, and environmental health and safety “The exercise grew from a need to Dpelts the windows of an office over­ officer are camped around a table strewn explore the role of the firm in society,” looking Hyderabad, India. A bleary-eyed with the detritus of a half-eaten meal. At says Sue Ashford, associate dean for lead­ team of executives, employed by the U.S. 8 a.m. the following day, this team will ership programming and the Executive pharmaceutical firm Pharmeck, ignores field questions from a hostile press in search MBA Program. January’s RLI Crisis the downpour outside and focuses instead of a scapegoat, a consortium of nongovern­ Challenge, the first of its kind for Ross, on the perfect storm raging within. A public mental organizations demanding more is just one touchstone for leadership that relations debacle threatens the very future Maladone than can be supplied, and a Ashford’s team has built into the MBA of Pharmeck, and the team has less than host of twitchy shareholders prepared to program. “Judgment and leadership 12 hours to avert a corporate meltdown. offload free-falling Pharmeck stock. are qualities best learned by experience,” Earlier that day, Indian news reports Just another day in big-time pharma? she notes. “But experience can be costly cited high levels of mercury in the water Not exactly. Pharmeck doesn’t really exist. and quite painful. The RLI Crisis Chal­ supply near Hyderabad, home to Gentab, Gentab is a firm that lives only on paper. one of Pharmeck’s key Indian subcontrac­ And the crisis at hand is actually a role- Shally Madan, MBA ’09, acting as a crisis tors. Mercury contamination was blamed playing exercise presented by the Ross communications expert, fields questions from for three deaths and countless ailments in Leadership Initiative (RLI). a faux TV reporter during the RLI challenge. the region; and despite any hard evidence, Gentab was blamed for the mercury. The short-term eco-crisis notwith­ standing, Pharmeck stood to face an even greater calamity. Bowing to local pressure, the Indian government had shuttered Gentab pending an investigation. Pro­ duction had ceased on Maladone, an anti-malaria wonder drug manufactured exclusively for sale by Pharmeck. Millions of malaria victims in the Third World would go untreated if Gentab did not resume Maladone production immediately. It’s now 10 p.m. at Pharmeck’s Hydera­ bad offices, and the firm’s general counsel, regional VP of operations, regional VP of STEVE KUZMA

dividend 14 spring 2008 missed the opportunity to get his team In Lafley’s case, he had to realize, made it.” She turned that business aligned behind Henretta. Although he “Whoops, I didn’t involve people. I need around, and is now P&G’s group presi­ was confident in his choice, he quickly to go back.” So he gathered his vice chair­ dent-Asia. realized his mistake in the way he executed men and presidents, and allowed them to The other piece of the book that’s the decision. submit their own candidates for the baby- very important is our intent to get leaders care division. He still made the call for thinking about how they can help the Dividend: You use this P&G example in Henretta, but it was now within a context upcoming generation develop their the book to illustrate the “re-do loop,” everyone understood. And then he did capacity for judgment. What judgment which you and Bennis identify as critical something that was critical to her success stretches need to be built into people’s to making good judgments. in the position: He stayed with her after he leadership-development journey? There Tichy: Good leaders make mistakes made his judgment call on her leadership. are going to be plenty of bad judgments along the way, but they self-correct before If he’d just said, “Good luck, Deb, I hope along the way — no one’s perfect — but it’s too late. In some ways, that’s an intui­ you can make it happen,” the good old everyone needs opportunities to learn. tive skill. But it’s also a learned skill, boys who dominated the business proba­ The only way you can develop good as indicated in the “re-do loop,” which bly would have destroyed her chance to judgment is to exercise judgment, and Bennis and I view as an explicit part of lead. I have seen Lafley on video, knock­ that means putting people at some risk. the judgment process. ing on wood and saying, “Thank God, she Running a small profit-and-loss center

author of Judgment: How Winning Leaders “Judgment and leader­ Make Great Calls, and Jim Walsh, who Crisis Challenge Tests Judgment, Leadership ship are qualities best warned against “simplistic cognitive structures that won’t serve you well.” learned by experience. With a midnight deadline looming, the students waded through a plethora of details designed both to inform and distract. lenge is a chance for our MBAs to exer­ But experience can be Priorities emerged as the teams struggled cise both judgment and leadership in a to decide which issues to engage or deflect. safe environment.” costly and quite painful. Meanwhile, RLI staff delivered time- That’s easy for Ashford to say. Though The RLI Crisis Challenge released curveballs in the form of faux no lives, ecosystems, or corporate futures memos, news updates, and financial alerts. were really at stake, students did have to is a chance for our MBAs The next morning, the teams faced sacrifice some short-term comfort for what could only be described as a verbal their long-term development. With just to exercise both judg­ firing squad of multiple stakeholders. a few hours to prepare, 12 teams of four Journalists, business executives, and Ross students each sought to frame a strategic ment and leadership professors simulated the roles of report­ response to the crisis, align themselves ers, NGOs, and stockholders. Dressed around it, mobilize, and stick with their in a safe environment.” in formal business attire and wearing game plan — taking into account such — Sue Ashford nametags that denoted their “jobs” at functions as operations, finance, legal, Pharmeck, the students stepped in front and marketing. They relied on guidance of cameras and experienced a visceral, from Ross professors Noel Tichy, co- and sometimes excruciating, lesson in the delicate art of crisis communications. Questions pelted them. “Do you take responsibility for the mercury spill?” “What are you doing to help the citizens who’ve been poisoned?” “How much are you prepared to spend?” “How often did you review Gentab’s operations?” “When can we get more Maladone?” “What will the millions of malaria sufferers do in the meantime?” “When will Gentab re-open?” “How can you reassure stockholders that Pharmeck’s bottom line will not be im­ pacted by this crisis?” At the close of each session, shell-shocked

A role-playing Brent Morgan, MBA ’09, keeps his corporate cool under intense media scrutiny.

dividend 15 spring 2008 intellectual capital

Dividend: The subtitle of your book is offers great training experience. When Tichy: I’ve been a business school professor How Winning Leaders Make Great Calls. I worked with Jack Welch at GE, the com­ since 1972. If you look back at what we teach Why no chapter on corrupt leaders who’ve pany had more profit-and-loss centers our MBAs, it appears we’ve been overselling destroyed companies with criminal calls? than any other company. Welch would the analytics. That said, we’re not throwing Tichy: This book is not for leaders who say, “I can send someone to run some out the analytics in our model. Believe me, are dishonest, such as those at Enron, small business, and if they blow it up and when GE CEO Immelt spends $10 billion Tyco, and ImClone. Once you’ve crossed it fails, it doesn’t even show up on the on an acquisition, it’s not a “blink” type of that line, we’re not interested in helping annual balance sheet.” So you must have intuitive decision. There’s a lot of number you make good judgments. You’ve already the minor leagues where leaders can be crunching and analysis going on. There’s made the judgment call to undermine the tested and enabled to grow and develop. a lot of preparation, and then there’s the free-enterprise system. In the book, we A lot of companies don’t have that. readiness point at which you make the talk about the need for “unyielding integ­ call: We’re going to make the offer. And rity” in our leaders. Without that, I don’t Dividend: Where do you see the inter­ then on the execution, winning leaders want to teach you about judgment. section of analysis and intuition when are able to stay with the call. It’s all about it comes to making good judgments? owning that whole process of blending Deborah Holdship the intuitive and analytical parts together. STEVE KUZMA

In a staged press conference, Ralph Bahna, “The greatest shortage in business “The greatest short­ BBA ’64, (left) posed tough questions to Ross today is thinkers,” Bahna says. “And you first-year MBAs (right) who were acting as need thinkers in a crisis.” age in business pharmaceutical executives under fire. First-year MBAs David Cieminis, Anurag Gupta, Shally Madan, and Brent today is thinkers. teams sat down with a communications Morgan took the team prize for a presen­ expert who evaluated their behavior, speech tation that hit the highest marks. Gupta, And you need patterns, and body language. “The commu­ a dual-degree student pursuing an MBA nications feedback was extremely valuable,” and an M.D., says Tichy’s advice at the thinkers in a crisis.” says Steve Perakis, a first-year MBA stu­ onset of the competition resonated dent who had a job interview the following — Ralph Bahna, BBA ’64 throughout the brainstorming session. day. “I’ll continue to use it in the future.” “It’s important to think about why you’re Three of the 12 teams advanced to the taking a stance and what that stance is last round of competition toward a $2,000 going to mean for you, your company, team prize. Finalists assimilated the morn­ and the community at large,” he says. ing feedback, refined their presentations, “And taking that stance will carry you and went before a fresh panel of afternoon throughout your action plan.” experts, including Ralph Bahna, BBA ’64, Working every possible advantage doesn’t chairman and founder of Club Quarters, hurt either. His team repeatedly referred and chairman of priceline.com. He relished to him as Doctor Gupta on stage. the role of inquisitor, pounding the students Deborah Holdship with relentless queries.

dividend 16 spring 2008 The Book Wall New releases by Ross faculty

The Satisfied Customer: Carbon Strategies: Global E-Commerce Winners and Losers in the Battle How Leading Companies Are Reducing Edited by Nigel P. Melville, Assistant Professor for Buyer Preference Their Climate Change Footprint of Business Information Technology, Kenneth L. By Claes Fornell, Donald C. Cook Professor By Andrew J. Hoffman, Holcim Professor of Sus- Kramer (University of Southern California), Jason of Business Administration, Professor of tainable Enterprise and Associate Director of the Dedrick (University of California-Irvine), and Marketing, and Director of the National Frederick A. and Barbara M. Erb Institute for Kevin Zhu (University of California-San Diego) Quality Research Center Global Sustainable Enterprise. (Forward by Eileen Claussen, Pew Center on Global Climate Change) he editors separate hype from reality id you know that gaining market share Tin this analysis of the impact of the Dmay be bad for profits? Or that more ndrew Hoffman describes steps any Internet and e-commerce across firms, customer complaints can be good for busi­ Abusiness can take to implement prac­ industries, and economies. Case studies ness? It’s true. Claes Fornell turns much tical climate-related policies. He stresses of eight economies — the United States, of conventional business practice on its the importance of encouraging beneficial Mexico, Brazil, France, Germany, China, head as he explores the shifting balance of policy development, establishing appro­ Japan, and Taiwan — show that rather power between buyers and sellers — and priate levels of internal and external com­ than creating a borderless global economy, illustrates ways in which businesses and mitment, timing policy implementation, e-commerce reflects local patterns of busi­ investors can benefit from better manag­ and creating new business opportunities ness and consumer preference. Its impact, ing their newly empowered customers. based on climate policy. Case studies drawn therefore, varies greatly by country. And from experiences at DuPont, Alcoa, and while e-commerce may improve the effi­

Shell Group, among other companies, ciency and competitiveness of firms, it also Supply Chain Science demonstrate these principles in action. increases the complexity of organizational environments as companies deal with more By Wallace J. Hopp, Herrick Professor of Manufacturing and Professor of Operations business partners and face greater chal­ and Management Science Factory Physics lenges from competitors. By Wallace J. Hopp, Herrick Professor of Manu­ s its name implies, this book focuses facturing and Professor of Operations and Aon the science of supply chains. It ex­ Management Science, and Mark L. Spearman For more information on Ross faculty amines the assemblage of people, resources, (Factory Physics Inc.) and activities involved in bringing mate­ books and research, visit the Faculty & rials and information together to produce his award-winning book outlines the Research page of the Ross School Web site: and deliver goods and services to customers, Tkey principles that drive the operat­ www.bus.umich.edu/FacultyResearch/. and offers a framework for understanding ing relationships within a factory. The how these complex systems work. authors assert that understanding these underlying tenets of manufacturing-systems

behavior can help improve management practices.

dividend 17 spring 2008 faculty research Repeat After Me Lone Repetitive Voice Can Sound Like a Chorus

New research shows that an unpopular opinion can seem

uch like the “squeaky wheel perceptions of reality, our studies can his or her support for preserving open that gets the grease,” a single help inform us about the effect of repeti­ space three times, it is nearly as effective M individual’s opinion, repeated tion and its consequences.” in creating the impression that the group often enough, has nearly as much In their research, which was published as a whole is supportive. influence as one expressed by several in the Journal of Personality and Social people, say researchers at the Ross Psychology, the two Ross School profes­ Dividend: How does this differ from School of Business. sors and their co-authors, Kimberlee the concept of the “squeaky wheel gets “What we think others think greatly Weaver of Virginia Tech and Dale Miller the grease?” influences our own personal thoughts, of Stanford University, conducted six Garcia: The “squeaky wheel” model is at feelings, and behavior,” says Stephen separate studies with more than 1,000 the conscious level. We can understand Garcia, adjunct assistant professor of students at six different universities to that if someone is spouting off, we want management and organizations. “Obvi­ measure individuals’ accuracy in identify­ to placate that individual and move on. ously, an opinion appears more widely ing group norms and opinions. The repetition effect is actually more shared when a number of different people In the following Q&A, Garcia reflects subtle than that, which makes it particu­ express it. But, surprisingly, hearing one on some of their findings. larly pernicious. person express the same opinion repeat- In one experiment, we asked partici­ edly also leads to the conclusion that it is Dividend: We know it’s more effective to pants to estimate the collective stance more widespread.” hear the same message repetitively, but of an online community using printouts In fact, one person expressing the were you surprised to find that one voice of Web postings. In one condition, we same belief three times is, on average, 90 repeating the same message several times gave them a single posting and asked percent as effective as three individuals is nearly as effective as three different them to extrapolate the collective group stating the same sentiment only once, voices repeating it only once? stance from it. In another condition, we according to Garcia and Ross School Garcia: Yes, that’s quite intriguing. We took that same posting, duplicated it colleague Norbert Schwarz, professor of found that if we ask three members of three times, and presented it as a “print­ marketing and psychology. a group how supportive they are of, say, ing error.” The participants who read “Our research has important implica­ preserving open space, and each one the triplicate-version “printing error” tions for how people estimate collective replies, “I’m very supportive,” we might thought the online community was more sentiment in everyday settings,” Schwarz think the overall group is likewise very in favor of this particular stance than says. “To the degree that our impressions supportive. However, we found that when those who read the single posting without of what others think influence our own just one individual from a group repeats any replication.

dividend 18 spring 2008 popular, even though it is held by only one person.

Dividend: You also studied ways in which pants succumbed to the influence of the Individuals shouldn’t necessarily use this individuals’ prior familiarity with the col­ repetition, which had now become more type of tactic in the workplace to achieve lective stance of a group can be eroded by familiar to them, and changed their beliefs their objectives. Imagine you’re on a corpo­ an unpopular repetitive voice. about the collective stance of the group. rate board seeking to hire a CEO. If you Garcia: In one study, we examined what repeatedly hear, “We like this candidate, we happened when participants knew the norm Dividend: We are in an election year, which like this candidate, we like this candidate,” of a group beforehand compared to when seems tailor-made for this kind of repetitive from only one individual, that candidate they did not. We found that participants messaging and manipulation. I’m reminded will probably have a higher likelihood of of how the “Swift Boat” incident affected being considered by the board. John Kerry’s presidential campaign. “Campaign strate- Garcia: Campaign strategists are definitely Dividend: That would be fine, if the opin­ gists are definitely attuned to this sort of political tactic. Over ion was, in fact, representative of the en­ time, the power of repetition can chip tire board. How can we protect ourselves attuned to this sort away at what people actually believe. from this pernicious effect you describe? of political tactic. However, a news agency that uses repeti­ Garcia: One way to guard against misper­ tion to convey a certain perspective may ception of the group stance is to survey as Over time, the actually see a decline in its audience if many people in that group as possible. Do people suspect the agency is disingenuous not rely on just one individual’s input. If you power of repetition in its constant reiteration or amplification do have this sense of familiarity, or a sense can chip away at of certain news stories. of how the group feels, you should ask yourself: What is the source of this senti­ what people actually Dividend: Let’s switch stance from victim ment? Is it expressed by only one person believe.” to perpetrator. Can this knowledge be or many individuals across the entire group? used to influence or manipulate others — You definitely don’t want this repetitive — Stephen Garcia a boss, employees, the board of directors effect to taint your group decision making — by creating the impression that a single about an important policy or decision, or who had prior knowledge of a specific view, voiced repetitively, actually repre­ anything else that relies on collective group’s norm were able to discount the sents the opinions of a collective whole? sentiment for moving forward. effect of an unpopular repetitive voice at Garcia: Yes. It’s a sword that cuts both ways, first. However, after a delay, those partici­ which raises a question of business ethics. Listen to podcast at www.bus.umich.edu/garcia.

dividend 19 spring 2008 doctoral studies Ross PhD Program Receives High Ranking

he Ross School’s Doctoral Studies highest caliber. We train them well, and of applicants admitted over the past five Program scored top marks on when they complete the program, they take years. Another strong point is the diver­ T many fronts among graduate tenure-track positions at institutions where sity of Ross PhD candidates, half of programs at the University of Michigan, they can shape the course of business edu­ whom are international students and according to a review by the Horace H. cation in the U.S. and around the world.” one-third are women; among domestic Rackham School of Graduate Studies. The Rackham Graduate School review, students, nine percent come from under­ In particular, Ross had the highest rate released in February, examined various represented minority groups. of academic placement for new PhDs com­ aspects of the Ross Doctoral Studies The Rackham report also recognizes the pared to other doctoral programs. In the Program, including student diversity, Ross program’s strong engagement of PhD past five years, the school placed 92 percent completion rate, and graduate placement. students in research activities (see related of its graduates in tenure-track faculty Current and past PhD students were stories on doctoral output). More than positions at top universities in America, surveyed during the review process. half of the students surveyed in the past including Harvard University, University “The Rackham report sends a very 10 years had at least one paper accepted of Chicago, and Georgetown University, strong signal about the quality of the for publication while they were enrolled and at prominent universities abroad. Ross PhD program to potential students, in the program. Many also reported mak­ “Rackham’s report on the Ross PhD pro­ who may not be very well-equipped to ing conference presentations based on gram is overwhelmingly positive, and con­ assess a doctoral program’s strengths,” research done at the Ross School. firms what those of us working with the says Kathleen Sutcliffe, associate dean In addition to developing intellectual program already know,” says Chris Gale, for faculty development and research. capital at the PhD level, Ross offers an assistant director of the Doctoral Studies Results show the Ross program is “outstanding teacher development pro­ Program. “We admit students of the highly selective, with only seven percent gram,” according to the Rackham review,

greater — about 2.5 percentage points. Is it Good to be Bad? “We admire or despise a stock when we hear a company name, whether it’s Google Doctoral Candidate Finds Stocks of or General Motors, before we think about “Bad” Companies Often Outperform price-to-earnings ratio or sales growth,” Those of “Good” Ones Anginer says. “Stocks, like houses, cars, watches, and other products, exude affect— eputable companies aren’t always the good or bad, beautiful or ugly, admired or Rbest places to invest, warns Deniz despised. Investors who were attracted by Anginer, a doctoral candidate in finance affect to the stocks of admired companies at the Ross School. His recent research paid for it with lower returns.” reveals that the stocks of “admired” compa­ The researchers analyzed the stock per­ nies have yielded lower returns, on aver­ formance of 611 firms listed in Fortune age, than those of “despised” companies magazine’s Most Admired Companies from by four percentage points. over the past 25 years. 1983 to 2006. Firms in the upper half of Anginer says investors too often asso­ Anginer and his co-researchers, Meir the list comprised the admired portfolio ciate an admired company’s perceived, Statman of Santa Clara University and (General Electric, Procter & Gamble, or actual, quality with the investment Kenneth Fisher of Fisher Investments McDonald’s), while those in the lower value of its stock. Therefore, they may Inc., found that the mean annualized half made up the despised portfolio be willing to pay higher stock prices, return of portfolios containing despised (Amtrak, Sears, Delphi). resulting in higher valuations. Further­ companies’ stocks was 17.5 percent — Not only did the despised portfolio more, admired firms tend to have larger nearly two percentage points higher produce higher stock returns than the market capitalizations. than portfolios with admired companies’ admired portfolio, but the returns of In the long run, putting investment money stocks. When adjustments were made the lowest 10 percent (“most despised” into the stocks of smaller despised firms for differences favoring firms in higher- companies) beat those of the highest with lower valuations is often better than scoring industries, the margin was slightly 10 percent (“most admired” companies) investing in big, highly valued companies.

dividend 20 spring 2008 which notes that future instructors re­ ceive excellent training, form a strong sense of community, and experience an intellectually stimulating environment. The Ross doctoral program also has an above-average completion rate, placing in the top 25 percent of the 120 Rackham- affiliated PhD-granting programs at the University. The report places special sig­ nificance on the fact that men and wom­ en, domestic and international students, and majority and minority candidates all completed at the same rate. “There are many things to applaud about [the Ross] doctoral program,” “multiplexity,” which occurs when em­ stated Rackham Dean Janet Weiss and To Engage or Estrange: ployees have both a work and personal Associate Dean Toni Antonucci in a letter relationship with each other. They also to Ross School Dean Robert Dolan and That Is the Question conducted a cross-national survey among Associate Dean Sutcliffe. “The PhD pro­ PhD Candidate Says Work and Play workers in the U.S., Poland, and India to gram in business administration is very Don’t Mix for Most Americans explore cultural differences and similarities strong and reflects the diversity of intel­ in work/non-work relationships. lectual areas within the Ross School,” Specifically, the researchers looked at four t’s true what they say: Business and noted Weiss, who also is dean and vice ways that co-worker ties extend beyond pleasure really don’t mix — at least not provost for academic affairs. I the workplace: 1) socializing with a co- for most Americans, according to a study The Rackham review validates the Ross worker after hours, excluding company by researchers at the Ross School of Busi­ PhD program’s impressive contribution events; 2) inviting a co-worker to a home; ness. But even though Americans don’t to the school’s intellectual life, according 3) spending vacations with a co-worker; and socialize a great deal with colleagues after to Sutcliffe. “It builds excitement among 4) borrowing money from a co-worker. work, they do enjoy it. faculty members because students come They found that, on average, U.S. workers “Compared to their counterparts in with new ideas and take us in new direc­ spend non-work time with fewer than half other countries, U.S. workers are less tions,” she says. “This is critical for keeping of their regular co-workers, compared to likely to extend professional ties into a us on the cutting edge.” 74 percent for Polish workers and 78 per­ variety of settings beyond the workplace, Leah Sipher-Mann cent for Indian workers. even though factors — such as marriage, Furthermore, American workers invite 32 kids, and amount of time spent working percent of their “close” colleagues to their — that typically constrain after-hours homes, whereas Polish and Indian workers “Our results are puzzling,” Anginer social interaction with co-workers have invite 66 percent and 71 percent of “close” says. “The stocks rated highly on invest­ remained constant or diminished,” says colleagues home, respectively. Findings also ment value are those of large-cap growth Aleksandra Kacperczyk, a PhD candi­ showed that Americans go on vacation with companies. Why are such stocks rated date in the Doctoral Studies Program. six percent of their immediate co-workers highly when the evidence on long-term Kacperczyk and her Ross faculty col­ compared to 25 percent and 45 percent, stock returns indicates they lag small-cap leagues, Jeffrey Sanchez-Burks and Wayne respectively, for Poles and Indians. Finally, value stocks?” Baker, studied data from as early as 1985 U.S. employees would borrow money, if Although prior research has shown on American workers’ habits of interact­ needed, from 18 percent of their co-workers, that typical Fortune respondents know ing with colleagues. The researchers found as opposed to 46 percent for Polish employees how to select winning stocks by obtaining that only 30 percent of employees have a and 58 percent for Indian employees. private information from industry insid­ close confidant at work, down from nearly The study also revealed that despite ers, Anginer and his co-researchers posed 50 percent in 1985. Americans’ reluctance to socialize with co- another explanation. “On the one hand, theories about in­ workers after hours, they derive positive “Our results are inconsistent with the creasing social isolation in the United emotional energy from the experience when private-information hypothesis,” Anginer States suggest a decline in co-worker they do get together. “In other words, indi­ says. “Rather, we think that typical For- interaction and socialization; but, on the viduals will choose to interact beyond the tune respondents are ‘noise’ traders who other hand, studies documenting the workplace only with those who energize believe, incorrectly, that good stocks are increasing importance of organizational them,” says Baker, professor of manage­ the stocks of good companies.” life in American society predict other­ ment and organizations at the Ross School However, the researchers caution wise,” says Sanchez-Burks, assistant pro­ and professor of sociology at the College that, over certain time periods, admired fessor of management and organizations. of Literature, Science, and the Arts. companies have performed better than “Our analyses reveal a pattern consistent despised firms, and that their relative with the line of research on increasing Bernie DeGroat returns may vary considerably from year social isolation.” to year, or even decade to decade. The researchers examined the connection Listen to the podcast at Bernie DeGroat between emotional energy and co-worker www.bus.umich.edu/socialize.

dividend 21 spring 2008 what are you thinking about? has become problematic because many people are having second thoughts and Robert Van Order Deconstructs asking, “Do I really understand what’s going on?” Home mortgages are not the only products that are structured and The Subprime Crisis securitized. Car loans, commercial real estate, and credit cards are, as well. A obert Van Order, adjunct professor a large share of the defaults occurred before number of investors now are worried of finance, is an expert on real estate those adjustments. In light of this, and now about structured deals and will start to R markets and mortgage securitiza­ with the recent declines in interest rates, pro­ insist that loan originators keep a greater tion. He has served as chief economist at posals to freeze rate increases are not likely share of the losses. What they’re going to Freddie Mac, the government-sponsored to be helpful, and will probably do more want are credible financial companies enterprise chartered by Congress in 1970 harm than good, if enacted. The loans that that are going to be around and able to to provide liquidity, stability, and afford­ have performed the poorest were originated take a significant amount of the credit hit. ability to the housing market. Dividend by lenders to get fees, sometimes fraudu­ I’m trying to obtain data on individual recently queried him about pressing ques­ lently, and loan quality suffered greatly. home loans so we can model this infor­ tions that will inform his future research. Although it’s true that subprime adjustable- mation. Where were the aberrations? rate mortgages seem to have attracted peo­ How much of this crisis could have been Dividend: What are you thinking about? ple who default frequently, something more predicted? How big a factor were rate Van Order: I am looking at the subprime was happening in terms of the way these adjustments? We already have data on crisis and, more broadly, the securitization loans were originated and pushed onto mortgage delinquencies and defaults by of the mortgage markets. There’s actually securities investors. Those investors didn’t state, month, and product, so we can tell much less data than opinions about what’s seem to understand the increased risk they if the loans were subprime. But if we can been happening in the markets since 2006. were taking. The interesting question is why. procure data on individual loans, we can find out who the lender was and how much Dividend: Why is this interesting to you? Dividend: What implications do you see the lender mattered. Did this happen Van Order: Well, on the surface, it appears for the financial industry? systematically by lenders? My conjecture the crisis was caused by loans originated in Van Order: Fallout from the subprime is that it did. the last few years and, specifically, by adjust­ crisis could affect the structure of finan­ able-rate loans. But the upward rate adjust­ cial markets. The ability to go straight to Listen to podcast at ments are not the main problem, because the capital market through securitization www.bus.umich.edu/vanorder.

Francisco Palomino Tracks changes. The question is why stock returns react to these indicators in the way they Stock Returns and the Fed do and, most important, why stocks of different industries react in different ways. rancisco Palomino, assistant profes­ able to inflation. This compensation has I feel uncomfortable about the fact that such sor of finance, develops economic to be reflected in differences in expected a fundamental question, with important F theories to study the interaction stock returns across industries. implications for the economy and finan­ between macroeconomic conditions and Different industries may have different cial markets, does not have a clear answer. It really motivates me to find one. the valuation of financial assets. At Divi- exposure to inflation due to different dend’s request, he described the ways in pricing practices. Industries may decide to Dividend: What implications do you see which he is framing new research with Erica make more or less frequent adjustments for industry? Li, assistant professor of finance at Ross. to prices depending on factors such as Palomino: Understanding the link between market competition or product demand. monetary policy and stock returns will allow Dividend: What are you thinking about? Therefore, the combination of a particular policymakers to implement welfare- Palomino: Erica Li and I are working on a price-setting policy and inflation gener­ improving initiatives based on information theoretical framework to understand how ates changes in production, profits, and collected from the stock market. The analysis­ the Federal Reserve’s monetary policy affects stock values. Since inflation depends on would allow investors to create portfolio the stock market. How does monetary policy monetary policy, the stock value can be strategies that reflect their expectations generate differences in stock returns affected by the policy. about future monetary policy. For instance, across industries? if an investor is expecting a weaker policy Differences in industry characteristics Dividend: Why is this interesting to you? against inflation, he/she can implement a make profits of different industries more Palomino: Now more than ever we observe strategy to sell stocks that are more vulner­ or less sensitive to inflation. As a result, financial markets paying close attention to able to inflation and buy stocks that are less and depending on how effective the Fed announcements by the Fed. Ben Bernanke vulnerable. Finally, firms could modify is in controlling inflation, investors will is as popular as any Hollywood star. We their price-setting policy to increase or require extra compensation for holding know stock prices react to policy changes decrease the sensitivity of their returns to stocks of industries that are more vulner­ and to indicators suggesting future policy monetary policy and maximize profits.

dividend 22 spring 2008 quote unquote

eing a president is sort of the Companies are saying, ‘We “Butmost public policy one could “ have. It kind of naturally dovetails the knew this was a bad system, but kind of professional work I do.”

we couldn’t stop ourselves from Jan Svejnar, the Everett E. Berg Professor of taking advantage of it. You have Business Administration, professor of public policy, professor of economics, and director to make a rule to stop us from of the International Policy Center, on his 2008 bid for presidency of the Czech Republic. rigging the game — otherwise —The Associated Press, February 3, 2008 we just can’t stop ourselves.’ ” o business plan has ever survived Thomas Lyon, director of the Frederick A. and Barbara M. Erb Institute for Global Sustainable “Ncontact with the marketplace.” Enterprise and Dow Professor of Sustainable Science, Technology, and Commerce, on findings Thomas Kinnear, the Eugene Applebaum Pro- of his study on the Department of Energy’s Voluntary Reporting of Greenhouse Gases Program. fessor of Entrepreneurial Studies; professor of —Forbes, November 13, 2007 marketing; and executive director of the Samuel Zell and Robert H. Lurie Institute for Entrepre- neurial Studies, on entrepreneurs obsessed with f you ask employees who is respon­ here is a huge difference between perfecting their written business plans. “Isible for a goal and no one can answer “TAsia and the U.S. when it comes to —The Wall Street Journal, February 17, 2008 you in 10 seconds, there’s not enough top-executive compensation. Rarely in Asia, accountability.” especially Japan and Korea, do the CEOs get paid more than a million dollars.” David Ulrich, professor of business administration here is a subtle line between hav­ and director of the Human Resource Executive E. Han Kim, the Fred M. Taylor Professor of “Ting enough money to do what you Program, as quoted from his book Leadership Business Administration; director of the Mitsui have to do versus having enough money Brand: Developing Customer-Focused Leaders Life Financial Research Center and the East to do anything you want to do.” to Drive Performance and Build Lasting Value. Asia Management Development Center; and Amy Dittmar, assistant professor of finance, —The New York Times, September 4, 2007 professor of finance and international business, on corporations’ growing savings accounts and on the United Auto Workers’ disapproval of auto the potential lack of scrutiny on how they spend executives’ salaries. their money. —USA Today, October 10, 2007 he percentage of companies with —The New York Times, March 4, 2008 “Tno women directors has been the same for four years now. It’s discouraging to us in the Ross School because we’ve been hief information officers are going t could have been a massive crisis producing good female talent for years, “Cto step up or they’re going to step “Iif [the Fed] didn’t do anything. and you’d think they should start showing down. They cannot be where they are.” Now, investors know the Fed is alert to up on boards.” M.S. Krishnan, a Michael R. and Mary Kay the situation.” Sue Ashford, associate dean of leadership pro­ Hallman Fellow and chair of business informa- Paolo Pasquariello, assistant professor of finance, gram­ming and the Executive MBA Program, and tion technology, on the waning influence of CIOs on the Federal Reserve’s March 2008 intervention the Michael and Susan Jandernoa Professor of in business. into Bear Stearns’ financial meltdown. Management and Organizations, on results of the —Information Week, November 19, 2007 —BusinessWeek.com, March 18, 2008 2007 Michigan Women’s Leadership Index exam- ining the presence of women executives in the largest 100 publicly held companies in Michigan. he clock is ticking very loudly. —Crain’s Detroit Business, October 8, 2007 ixing China’s image is over­ “TWe have to be careful that [Mich­ “Fwhelming damage control. You igan’s venture-capital initiative] is not too are not going to turn around the image of little, too late.” China in any fundamental way before the he Ford family is like a wounded Olympics.” animal. The company is in their Thomas Porter, executive-in-residence at the “T Samuel Zell and Robert H. Lurie Institute for blood. Some of them would tell you that Kenneth Lieberthal, William Davidson Professor Entrepreneurial Studies and adjunct lecturer of their blood is Ford-blue.” of Business Administration; Arthur F. Thurnau entrepreneurial studies, on Michigan’s imminent Professor of Political Science; Distinguished David Lewis, professor emeritus of business need to attract venture capital. Fellow of the William Davidson Institute, on history, on the complex Ford family dynasty —Grand Rapids Press, November 19, 2007 protests surrounding the 2008 Olympics. and its links to the auto giant’s future. —Forbes, April 9, 2008 —FinancialTimes.com, October 29, 2007

dividend 23 spring 2008 LESLIE BARTON dividend 24 spring 2008 Kick Out the

Fun and Games with Guitar Hero’s Global Brand Manager

D oug McCracken, MBA ’04, isn’t a rock star. He just gets paid to make you feel like one. As Activision Inc.’s global brand manager for the billion-dollar video game franchise Guitar Hero, McCracken is driving a marketing juggernaut fueled by one primal premise: Everyone wants to be a rock star. And it’s a premise that is shredding the competition in the fastest-expanding industry in home entertainment today.

dividend 25 spring 2008 “I’ve been a ‘gamer’ my whole life, and fiscal third-quarter sales jump 80 percent I’m with the Band it’s great to be working on products that to $1.48 billion from a year earlier. For the uninitiated, the various games in I’m really passionate about,” says McCracken, There are any number of reasons why the Guitar Hero franchise cast the player who joined Santa Monica, California- Guitar Hero took center stage with the latest in the role of lead guitarist in a rock band. based Activision in August 2004. “The vid- title in its already respectable franchise. Holding a Gibson-shaped controller with eo game market is pretty attractive right Is it the culture’s obsession with fame and color-coded buttons, players simulate now, and I don’t see the growth slowing celebrity? How about the genre-bending riffing through classic rock tunes as a anytime soon.” marriage of hardware and software? It dizzying array of visuals zooms across Pretty attractive, indeed: Annual video could be GHIII’s social appeal. Or the the screen. GHIII presents tracks by such game sales rose 34 percent in the U.S. to ease of handling the controller, which is artists as Guns N’ Roses, Rage Against $8.64 billion in 2007, according to the shaped like a guitar. One can’t deny the the Machine, the Sex Pistols, the Rolling market research company NDP Group quality of the extensive “playlist,” which Stones, and the rising star DragonForce, Inc. (The Wall Street Journal, February presents a surprisingly tasteful blend of among others. 2008). Over the same period, box office classic hard rock that spans generations. While traditional “shooter” games award revenue inched up a mere 4.0 percent And then there’s the online component points based on death tolls and damage while home video sales actually declined of bonus downloads and peer-to-peer wrought, with rewards in the form of new by 3.2 percent.

online play, tournaments, and contests. weapons and ammunition, the GH series And if video games are the place to The avenues for global marketing seem is more benign. The battlefield is a concert be in home entertainment, Activision is infinite, pending the limits of one’s imagi- stage and one can earn groupies based on the place to be in video games. The com- nation, access to partners, and capacity to quality of performance. Songs range in pany recently unseated top rival Electron- execute. complexity, and levels run from “easy” ic Arts to peak at number one in sales for “There are so many different elements to “hard” and ultimately peak at “expert.” North America in 2007. In a corporate re- that make each release unique — and that Pose with the guitar in a classic rock star lease touting the latest stats, Activision makes my job really interesting,” says stance to activate a “special attack.” One’s Chairman/CEO Bobby Kotick (who also McCracken. Not the least of which is reward for reaching the top in GHIII? attended Michigan) pointed to Guitar getting a free pass to play video games at A battle royale against ex-Guns N’ Roses Hero III: Legends of Rock as one of two work, all in the name of market research. guitar legend Slash, who actually appears Activision titles that helped the company’s It’s a pretty sweet deal and he knows it. as an animated character. If you beat him,

dividend 26 spring 2008 you “join him” on stage to play his former 2005 debut. outscored the supply in some outlets. band’s breakthrough hit “Welcome to “Activision typically releases products In addition, some discs were produced the Jungle.” on multiple platforms depending on our in mono vs. stereo and had to be recalled. consumer target,” says McCracken. “This “You have to manage consumers’ expecta- Power Chord allows us to maximize our reach, but is tions too,” McCracken says. “And they are Whether appealing to fans of rock also a challenge from a game develop- very passionate about the game.” music, role playing, or just plain competi- ment perspective because the game has tion, the GH series definitely has struck a to be built on each platform separately.” Off The Charts power chord in the millennial zeitgeist. Navigating the supply chain adds a That passion is evident nearly every- “Our fans are incredibly passionate,” twist too, he says. With all hardware man- where you look. Search for the game McCracken says, “and they include about ufactured in China, production has to on the popular Web site YouTube, and 30 percent women, which is pretty ex- ramp up several months ahead of launch. you’ll find video clips of GHIII aficiona- traordinary in the game business.” The “Predicting unit sales some six to nine dos that have been viewed more than 6.5 franchise also spans generations, captivat- months down the line is a real test for million times. Click through your TV ing kids via novel gameplay and attracting us,” McCracken says. “It requires rigorous

“It’s great because kids are into it for the gaming experience and may not know all the music. The older generation knows the music and then becomes interested in the game.” — Doug McCracken, MBA ’04

lineup and you’ll catch the franchise adults with a hard rock set list that harks forecasting, which is tough to do that far on The Today Show, Ellen DeGeneres, back some three decades. Releasing the out, given ever-evolving market dynamics. My Name Is Earl, Gossip Girl, and The title across four gaming platforms — We first need an understanding of how Simpsons. South Park devoted an entire PlayStation 2 and 3 (PS2 and PS3), Xbox each platform will perform, and then we episode to the game. And the most telling 360, and Wii consoles — also ensures forecast sales of the game on each console.” evidence of total market penetration? that virtually anybody can plug in and On top of all that: capacity constraints. In March 2008, The Wall Street Journal start jamming. “You have the lag in shipping from China columnist Scott Patterson actually cited Casting such a wide consumer net to the U.S. or Europe, and you don’t have the ubiquitous title in the lead sentence of helped Guitar Hero set an industry record the luxury of just-in-time inventory that a piece on Fed Chairman Ben Bernanke. at North American retail stores last year you’d like to have,” McCracken says. The “One of our key strategies was to reach when its franchise surpassed $1 billion in 2007 holiday season tested fans’ patience out across different genres of entertain- sales and 14 million units sold since its and loyalty as Wii-compatible GHIII ment to integrate and cross-promote the

dividend 27 spring 2008 franchise through product placement “As this proposition has taken off, the music really strong partnership with him,” Mc- in TV and film,” says McCracken. “As a industry has really embraced Guitar Hero. Cracken says. “He promoted the game result, we’ve been able to penetrate mass We’re always working on new and innova- on talk shows; he came to our launch entertainment further than any other tive ways to integrate music into the game event; he was in our TV commercial; and game to date.” and align with the artists and labels.” he appears on our packaging. He really That’s good news for record labels, He cites deals with Web partners like joined forces with us because of his passion looking to energize their own lagging iTunes to offer online downloads to one for the game and what it stands for.” sales by hooking up with such a coveted demographic, while simultaneously part- Perhaps McCracken’s greatest thrill to partner. Nielsen Soundscan data, which nering with Interscope Records to release date was being part of a movement that measures airplay and music sales, reports a Guitar Hero soundtrack to another. brought ’70s icons the Sex Pistols back digital sales on Cheap Trick’s “Surrender” Combination in-store/online promotions into the recording studio to remake their nearly tripled from 2006 to 2007; Kiss’ tied to the Super Bowl encouraged sports classic tune “Anarchy in the U.K.” The “Strutter” went from 11,000 to 63,000 fans to forego the highly touted halftime original master (circa 1977) had gone sold; and the Pretenders’ “Tattooed Love show to enter an Internet tournament. missing (par for the course, if you know Boys” rose from 5,000 to 16,000 (USA Such opportunities are a good time to the band’s history), so Activision execu- Today, February 2008). All three songs promote after-market sales of new guitar tives proposed a new session. Intrigued, were featured on the second GH release.

the band agreed. Activision got them in Perhaps the most significant act to models, customized faceplates, straps, the studio, shot some video interviews, really pop at the online checkout: the and other Guitar Hero accessories. and hooked up with an alternative rock heretofore little-known DragonForce, “We’ve also been working with bands station to book and cross-promote the an underground (and some would say and record companies to time promotions Pistols’ first-ever club date in L.A. The “non-commercial”) speed metal outfit that tie in with tours, downloads, and band then went on to play several Guitar whose song “Through the Fire and the album releases,” McCracken says. “When Hero-sponsored shows in the U.K. Flames” is arguably the most challenging a band like My Chemical Romance has “I used to have a punk rock radio show track to master in GHIII. Digital sales content in our game, they go on stage and in college, so working with the ground- on the download rose from fewer than talk to their fans about it.” breaking band of the punk era was amaz- 2,000 weekly to a high of 37,825 the week ing for me,” McCracken says. And now, a after Christmas 2007. Overall sales of the Rock ‘n’ Rolling Out whole new generation of gamers has been band’s album have passed 230,000, which Leveraging participating talent like the exposed to the iconic group. most industry insiders credit directly to Sex Pistols, Slash, and Tom Morello (of Rage “It’s great because kids are into it for the GHIII consumers. Against the Machine) has been a jackpot gaming experience and may not know all “There are certainly some interesting strategy for McCracken and his team. the music. The older generation knows correlations between music sales and the “Slash was so excited to be a character the music and then becomes interested in tracks in Guitar Hero,” says McCracken. in the game that we were able to build a the game,” says McCracken. “The range of

dividend 28 spring 2008 music creates a cross-generation connec- ate fans” McCracken talks about either music into the games by region,” says tion between kids and their families, which love the idea or hate it. And they are not McCracken. “We work directly with the is part of its appeal. It’s important for us shy about sharing their opinions. territories to learn what would sell really to communicate that in our marketing, well locally, and we’re looking to add because it’s a very interactive and social The Flip Side more localized content in the future.” experience that joins people together.” Clearly, a few sour notes are to be expected in the extended sales jam that Work-Life Balance In the Beginning Activision has been cranking for more So far, that future is looking pretty McCracken and his co-workers know than two years. The company has been bright for Activision, and for McCracken, that first hand. the subject of more than one legal battle an amateur guitarist who landed his “I was a fan of Guitar Hero when since sales took off. In March, a dispute dream job after embarking on a very it was first released by Red Octane,” over a patent claim with guitar partner specific and self-directed career search. says McCracken of the Northern Gibson grabbed headlines at the same He’d done some consulting prior to California-based publisher, which b-school and had gotten a taste of in- was acquired by Activision in 2006. teractive strategy on the corporate “A few of us in the office boughtGui - side during a first-year internship at tar Hero very early on, which created a major financial institution. While at a lot of buzz around it at work.” Ross, he did an independent study Once Activision acquired Red Oc- on games, which helped to crystal- tane and rights to the franchise, they lize his long-term goals. set about getting it into more than “I had already been thinking just their employees’ hands. An early about getting into interactive enter- partnership with Microsoft to get the tainment, but after my internship, product on its Xbox 360 demo kiosks I decided to focus all my efforts on at retail outlets proved fortuitous. the gaming industry,” he says. “I “In addition to traditional TV, on- talked about it to everyone I knew. line, and print advertising, we have I found that once I knew what I found that ‘trial play’ is extremely im- wanted to do, it opened up countless portant to convincing consumers to doors and I met a lot of people.” buy Guitar Hero,” McCracken says. At graduation McCracken had “Putting the guitars into the hands of yet to land an offer in interactive consumers, particularly in stores entertainment, but he was still in when they’re ready to make a pur- the game. “I had several opportuni- chase, was a win-win for us, retail, ties in the works,” he says. “Over the and Microsoft. And from a consumer summer, I got the job at Activision perspective, it let them sample before and started in August when every- buying, so they knew exactly what they one else in my class began working.” were getting.” As marketing positions go, Now, the challenge is to keep those McCracken has had a chance to consumers engaged for the long haul. expand his skills, transcend con- “We’re always looking at where the ventional strategies, and explore industry is going and what consumers partnerships that may not have are interested in, understanding now emerged in other industries. Plus, that our consumer base is much he’s now a formidable threat at broader than it has been in the past,” time Guitar Hero’s original developer GHIII and has no problems bringing McCracken says. “Obviously, we need to Harmonix filed a suit alleging unpaid work home from the office. stay relevant on the music front. The con- royalties. There are vocal consumers who “I play on ‘hard’ pretty consistently, sumer has asked for more and more mu- lament the high price at retail and others and I can even play some of the lower- sic, and we want to make sure that we’re who bemoan incompatible hardware. tiered songs on ‘expert,’ ” he says. And, providing them with the content they’re As the legal team copes with those like a true gamer, he pushes it one step really excited about.” issues, McCracken and his cohorts focus further and makes sure to share the fol- To that end, Activision released Guitar on marketing the best possible consumer lowing: “I’ve even beaten Slash.” Hero Encore: Rocks the 80s in 2007. Its first experience. Hoping to replicate its record- Deborah Holdship release in 2008 is an all-Aerosmith title, breaking success in North America, Acti­ featuring an overview of the legendary vision is looking to build on its growing act’s 30-year history, along with avatars of European base, strongest in the U.K., lead singer Steven Tyler and guitarist Joe Spain, Italy, Germany, France, and Sweden. Perry. Guitar Hero: Aerosmith is expected Asia Pacific is a growing market as well. to ship to retail in June. Online forums are “To grow the business worldwide, we buzzing like mad already. Those “passion- made an active choice to add international

dividend 29 spring 2008 alumni at large

The mentor Keeping Company with Sandy Robertson

or Sanford “Sandy” Robertson, BBA ’53, MBA ’54, investing in industry is not Fso much about the companies he builds. It’s more about the company he keeps. Since landing in Silicon Valley in 1965, this investment banker and high-tech entrepreneur has helped create an entire sector of the American economy. Growth technology companies like Cypress Semiconductor, Sun Microsystems, Seagate, America Online, Lotus, Pixar, Dell Computer, E*Trade, Applied Materials, and Siebel Systems represent a mere fraction of the 500-plus enterprises that Robertson has helped finance over the years. But ask him what is most appealing about the flash-forward nature of Silicon Valley start-ups, and you get a surprisingly old-fashioned answer. “Often it’s looking at the right people,” says Robertson, pictured here in his San Francisco office. “The right person has already picked the right industry, and is a leader who’s picked the right people to be surrounded by. In the early days, the smaller companies were really interesting, and the entrepreneurs running them were so phenomenal. They are absolutely fascinating people to be around. Some of them are very unusual. Some are challenging to do deals with. They’re driven and smart and intense, but they’re also a lot of fun.”

dividend 30 spring 2008 Keeping Company with Sandy Robertson

And they share a lot of common a handful of boutiques, dubbed “the four own enterprise, it was right people, as well. ground with this savvy and seemingly horsemen,” to dominate technology banking “What I loved about Robertson Stephens tireless financier. At an age when most before Wall Street finally caught on. (The was the entrepreneurial spirit of both the of his contemporaries have long since other three “horsemen” included Alex. employees and our customers,” says John retired, Robertson is as driven today as Brown & Sons of Baltimore; L.F. Rothchild, Conlin, MBA ’83, former COO and CEO he was on arriving in the Bay Area with Unterberg, Towbin of New York; and at Robertson Stephens. He currently is COO Smith Barney more than 40 years ago. Hambrecht & Quist of San Francisco.) and co-president at NWQ Investment When his Wall Street colleagues failed to “At the time, the major investment Management LLC in Los Angeles. Though embrace his early vision of a high-tech banks were giving good advice, but they Robertson had exited the bank by the time gold rush, he set out on his own. In 1969, wouldn’t look at a company that didn’t Conlin came on board, the example its he partnered in the small investment have a certain net income,” Robertson says. founder had set was intact and palpable. banking firm Robertson, Colman, Siebel “These smaller companies were just as “Sandy is not threatened by being around & Weisel (later renamed Montgomery good, and I was sure they’d grow into big phenomenally talented and driven people; Securities) to help fund fledgling ventures. companies so fast that they needed a good he has a knack for creating an environment Then, in 1978, he teamed with Paul Ste- investment bank. That gave us a niche.” that encourages a no-limits kind of thinking phens to create the specialty investment But it wasn’t just “right place, right in terms of your own career. I thought I bank Robertson Stephens. Nicknamed time” for Robertson, the investment knew what excellence was, and then I

h e w Su mner M at “Robbie Stephens,” the firm was one of banker. As an entrepreneur building his worked for the company that Sandy built.”

dividend 31 spring 2008 alumni at large or abused. “They had me on Oxycontin for about a week, and I was thinking, Robertson takes comments like this in the same technology for completely differ- ‘Aha, we’re going to improve this product.’ stride. Being a mentor comes naturally to ent purposes,” he says. “He had the kind of It’s a very nice feeling to see the impact him. “I love these young guys,” he says. historical input, context, and perspective we’ve had on the economy and healthcare.” “I’ve always liked bringing young people that I couldn’t find anywhere else. He was The economic cause and effect Robert- along, putting them ahead of where they able to provide insight on the track record son has brought to bear on Silicon Valley would be and giving them a jump start. I of a company like this—where it had fallen (and the American economy) notwith- just made a list the other day of at least 20 down previously. Sandy was more current standing, it is the personal cause and effect [Robertson Stephens] alumni who are all on the technology based on what was hap- that resonates most in the Ross community. thriving or running different companies.” pening in 1973 than 90 percent of the peo- In addition to furthering the professional Pat Kratus, MBA ’01, director of technol- ple who actually invested in the IPO.” output of Ross alumni, Robertson also ogy investment banking at UBS Investment The capacity to analyze a deal from mul- contributes to the scholarly output of the Bank in San Francisco, is one of those people. tiple angles has served Robertson well over school’s faculty. He endowed the Sanford As a favor to a family friend, Robertson had the years. When the technology sector ex- R. Robertson Assistant Professor in Busi- a meeting with the Michigan undergrad— ploded in the ’90s and Wall Street came ness Administration, a one-year named and set him on a life-changing course. to Silicon Valley, boutique banks like professorship that went to Robert Dittmar “Meeting Sandy was the driving factor Robertson Stephens started to disappear. in 2008. Dittmar is an assistant professor of my decision to go to business school “We no longer had the market to our- of finance and a leading expert in econo- and be a banker,” says Kratus, who was a selves,” Robertson says. The firm was metric methodology. partner in two investment banking start- bought and sold by a series of large com- For practitioners like Conlin, trading on ups before joining UBS. “Whether you’re mercial banks before being shut down in Robertson’s legacy has proved essential in a college student or the CEO of Genen- 2002. But Robertson had already moved coping with the recent meltdown in finan- tech, he has the ability to make each per- on—and reinvented himself—by that point. cial markets. “People who can lead their son feel equally important. You can see In 1998, he founded Francisco Partners, a companies through these tough times are how that helped him drive this incredible private equity, leveraged buyout firm with very much in demand,” he says. “I’d say my network of relationships—and helped com- $5 billion under management. training at Robertson Stephens is invaluable panies just getting started to raise capital to what I do now at NWQ. I owe a lot of and grow. That personal touch is definitely who I am as a businessman and how I do a reason why clients and customers were “I thought I knew what things to Sandy: what he built, what he so loyal to him.” excellence was, and then exposed me to, and all the super-talented The key, adds NWQ’s Conlin, is sincer- people I got to work with. To me, Sandy is ity. “Passion is a word that is so overused, I worked for the com- an example of someone who’s found the but you can tell the frauds from the authen- passion in his life and pursued it.” tic guys. When you’re starting a business, pany that Sandy built.” Robertson says, “I’ve been very blessed it’s you. You are it. It’s your ideas. People — John Conlin, MBA ’83 that avocation and vocation have coincided rely on you for the success or failure of for me. This business has been so exciting the operation.” Robertson knows what “I like to say we’re buying back the that it really makes you want to get up in that means, and that’s why he’s accepted, companies we took public, but I think the morning.” Conlin says. we’ve only done that once,” Robertson says. But what of the tough times, the stresses “I use it to win business all the time,” “Private equity is a lot more interesting that keep him up at night? “I’ve always been says Robertson. “If someone from Mor- today, and the universe of opportunities able to sleep,” he says, recalling a devastat- gan Stanley is sitting there pitching a at the moment is enormous.” ing fraud that nearly crippled his early foray piece of business to an entrepreneur to The benefit of maximizing those oppor- into investment banking. “I immediately take him public, I can say, ‘Listen, I under- tunities hit close to home recently when went to sleep that evening. I wanted to be stand you. I’m an entrepreneur as well as Robertson underwent double knee surgery. up and fresh to fight the battle the next an investment banker.’ ” While in the hospital, he took note of morning.” He’s also an information addict, says several familiar logos surrounding him. He cites the adage that the harder you Kratus. “There is incredible substance be- “We invested in quite a bit of medical work, the luckier you get; and if that’s the hind everything he does. He’s not only the technology over the years,” he says, “and I case, Sandy Robertson is one lucky man. nicest and warmest guy in the room, but saw all sorts of machines from companies Speaking from his Bay Area home in the probably the smartest.” One couldn’t ask for we’d financed. I actually got some crutches last days of his post-operative recovery, it better qualities in a mentor, especially in the delivered by a company that was our first is clear he is ready to get back in the game competitive technology sector. Kratus cites leveraged buyout.” and push that luck even further. a recent company UBS took public, which In fact, on checking into the hospital, “It’s not work if you love what you’re produces sapphire substrates used in LEDs Robertson says he was wearing a jacket with doing,” he says, pulling his Blackberry and wireless devices. When he had trouble the logo of biotech firm Pain Therapeutics, away from the phone to diffuse the feed- locating historical data on the technology, in which he is a private investor and board back. “I’m so frustrated here, trading Kratus turned to Robertson for leads. member. The company has developed a e-mails with my partner all morning. I “It turned out that in the ’70s, Sandy helped mechanism to deliver the painkiller Oxy- can’t wait to get back to work.” raise funds for a company that was using contin in a form that can’t be concentrated Deborah Holdship

dividend 32 spring 2008 Gifts in Action

Professors Bill Lovejoy and Wally Hopp know as much about operations as anyone in the world. Now they are applying their expertise close to home at the University of Michigan Hospital.

Collaborating with colleagues at the University of Michigan Health System and the College of Engineering, they are looking for innovative ways to reduce the cost and improve the quality of healthcare. Their work helps the University of Michigan be among the leaders and best in healthcare technology and management.

Bill and Wally integrate this vital effort into their research and teaching. That’s what we call leading in thought and action. That’s the kind of groundbreaking and meaningful activity that gifts to the Ross School support.

www.bus.umich.edu/AlumniCommunity/Give/ alumni at large

the adventurer From Astronaut to Executive: Making the Case for Space

Dividend: How has your Ross MBA degree McMonagle: That’s a continuous challenge. “I wouldn’t characterize helped you transition from aerospace- It affects everything from human resources myself as a thrill seeker.” industry customer to supplier? to supply chain. It also extends to build- McMonagle: I feel privileged to perform in ing project-management skills and devel- —Don McMonagle, EMBA ’03 the business community at this level. Now oping the experience to be able to direct that I have NASA stamped on my forehead these kinds of programs over the long once again, my objective is to bring the haul. To NASA’s credit, they’re encourag- magine the fun a self-assessment value of Raytheon to the nation’s explora- ing industry to shorten those cycle times. expert could have analyzing these tion programs. I believe that is a very Raytheon is absolutely committed to I words from former astronaut and noble challenge. At Raytheon, we are accomplishing that, and there are many retired U.S. Air Force Colonel Don constantly striving to bring diversity to the examples of where we’ve already done it. McMonagle, EMBA ’03. He’s taken to table and to take innovative technologies the skies in 26 different kinds of planes, off the shelf and integrate them in new Dividend: As an Air Force colonel, you performed air-combat exercises at Mach ways to satisfy customers. I’m also looking logged more than 5,000 hours in flight. 1, and flown low altitudes at supersonic at NASA solicitations and building pro- Do you have a favorite plane? speed. And please note the three space posals, assessing the competitive environ- McMonagle: I’d have to say that air combat flights, 605 hours in orbit, and space ment, and finding out what the price is in an F15 or F16 is certainly amazing. Both shuttle mission during which he piloted to win (contracts). All these activities — airplanes are absolutely magnificent. Each the STS-54 aboard the Endeavour. negotiating, approaching partners, and has its strengths. One is a Maserati and When you put it that way, he says, teaming in supply chain — are directly the other a Porsche. Doing air combat at “I certainly do like to explore and chal- applicable to courses I had at Ross. Mach 1 and flying supersonic at low alti- lenge myself.” tudes are things you don’t forget. McMonagle’s current challenge keeps Dividend: Specifically, what value do him planted firmly on the ground, but you think Raytheon can bring to NASA? Dividend: I know you’ve been asked this with a focus ever-trained on space explo- McMonagle: We build several network- question before, but what is it like to be ration. As Raytheon’s vice president for centric systems that allow missiles and space launched into outer space? NASA programs, he brings unparalleled sensors to “talk” through communication McMonagle: The launch is an amazing tran- expertise to the job of pitching to his networks and to deliver information to sition from being earthbound in a rocket former employer. facilitate guidance, navigation, and control. vehicle sitting on a launch pad to being 80 “As a former customer of the aerospace The missiles we build in Raytheon Missile miles above the Earth going 25 times the industry, I had a limited understanding of Systems have to be able to find, and then speed of sound, just eight minutes and 42 what drove decision making in the business guide themselves to, a target with tremen- seconds later. Without being flip, the tran- that provided support to me,” McMonagle dous precision. That precision is similar sition to weightlessness is miserable, fasci- says. “Now that I’m on the industry side, I to the kind a lunar lander requires to set nating, and magnificent all at once. There see that providing value to the customer is down exactly at the edge of a crater on the are some fluid shifts in your body, and very much a business-related computation. moon. Creating networks of communica- there’s the potential for some “adaptation It’s a multifaceted equation that covers the tion, building mission systems, and inte- syndrome,” which effectively is motion full spectrum of resources, value streams, grating these within larger platforms to sickness. Not everybody feels ill, but ini- supply chains, comparable advantages, and make the entire system work as one inte- tially everyone feels somewhat uncoordi- competitive assessments. And knowing grated unit — that’s a core competence nated in an alien environment. Eventually, what NASA wants is value I can bring to within Raytheon. And these are the kinds you get used to the fact that it’s almost my colleagues who are helping me make of things NASA will need for their lunar effortless to move around. You can tap on these decisions.” architecture as they continue to explore. a wall, do a flip, and float to the other side In the following Q&A, McMonagle of the vehicle. And it doesn’t matter if discusses how his experiences have Dividend: How do you deal with the you’re right side up or upside down. The impacted his strategy at Raytheon. long lead time required for the products only thing that defines which way is up Raytheon develops? is the direction of the letters on the wall.

dividend 34 spring 2008 Dividend: It must be challenging to back to fourth grade when I saw pictures “The Earth’s horizon really does look curved undergo such a life-altering experience taken by John Glenn. The Earth’s horizon from space. That was a remarkable revelation,” while having to perform incredibly really does look curved from space. That says McMonagle. complex work. was a remarkable revelation. At the end of McMonagle: Most astronauts feel a very the day, you look out the window and see Moves U, and we are constantly visiting strong sense of responsibility to execute that you’re rotating around the Earth schools and public forums to offer mate- the mission they’ve been put in space to once every 88 minutes. You’re passing rials and do coaching. We bring students do, at significant expense to the American over a new continent every 15 minutes. into the factory to give them an interac- people. The way to be successful is through You’re seeing an entire seaboard at once. tive experience. About once a month, I training and education. By the time I got You pinch yourself and say, “Wow, how talk to some group about how important into space, I had spent 500 hours in simu- did I ever get here?” What a fantastic it is to study math and science, not only lation practicing exactly what I was going feeling. After seeing the edge of the atmo- for the future health of our nation but for to do. And my crews prepared anywhere sphere and how thin it is around the their own benefit and fulfilling careers. from nine to 18 months to execute each planet, I began to perceive Earth not as specific mission. If you have a passion this massive body in space, but rather as a Dividend: Speaking of school, you and receive excellent training related to small space craft that just happens to have recently returned to your high school that passion, you have enough wisdom six billion people on it. And we have lim- for a special honor. not to overextend your capabilities. But ited air, limited energy, limited water, and McMonagle: In September I had the it’s also important to push the extent of limited fuel. The space shuttle has all the pleasure of going to Flint where they your capabilities. In this way, you learn same constraints; it just happens to be named my high school after me. It’s now rapidly and develop the judgment to stay staffed by fewer people. an elementary school. The entire school out of trouble and make the right choices district, from kindergarten through 12th at the right time. Dividend: What can be done to motivate grade, attended this assembly. I was ex- kids to pursue careers in the sciences? pected to keep them enthralled for 45 Dividend: How about those moments McMonagle: There’s a commitment at minutes with what I had to say. Although when you had a chance to think about Raytheon, from the CEO down, to the they turned out to be a great audience, being in space? knowledge that this nation needs to pro- this was one of the most challenging McMonagle: My first impression of see- duce the next generation of scientists and speeches of my life. It terrified me. ing the Earth from space brought me engineers. We have a program called Math Deborah Holdship

dividend 35 spring 2008 alumni at large the athlete Flashback with a Halfback: Scoring Big On and Off the Field

n the history of Michigan football, from truck driver to one extraordinary call by the 1968 trucking-company own- I team still evokes passion in the player er in Detroit. “At that who wore No. 40 at the time. Four de- time, franchises were cades have passed since offensive halfback the path to becoming Ron Johnson, BBA ’69, was voted the an entrepreneur,” he Wolverines’ first African-American foot- says. “And that was the ball team captain. But no amount of time way for me to get into can diminish the rush he feels when my own business.” flashing back to that pivotal event. His later career path “It’s the greatest honor I’ve ever had in might have taken a com- my life,” says Johnson, a successful entre- pletely different turn, preneur and All-American, who still holds had Johnson listened the Wolverines’ record for most yards to the advice of college rushed in a single game (347 yards against recruiters in the mid- Wisconsin). “As team captain, I was always 1960s. At the time, they were more interest- Wolverines captain Ron Johnson, BBA ’69, the first player on the field. You can imagine ed in his athletic prowess than his academic rushed a record-breaking 347 yards in this running out of the tunnel with 100,000 record in high school. Few seemed to care 1968 game against Wisconsin. Photo courtesy people standing up and cheering. There is that he’d already conquered calculus and of U-M Athletics nothing in my life that has competed with had dreams beyond the gridiron. It was that experience. Unbelievable.” the Wolverines who made the life-changing At board meetings, annual galas, and For Johnson, camaraderie and exuber- offer that set him on his current course. outreach events, Johnson often crosses ance on the football field created a stark “I was recruited by 63 schools, and paths with former teammates — and, yes, contrast to the social and political turmoil many told me I needed to go into physical rivals, including one-time nemesis Leroy of the late-1960s. Anti-war protests erupted education,” Johnson says. “[Wolverines Keyes, formerly of the Philadelphia Eagles on campus, and the 1967 Detroit riots football coach] Bump Elliott smiled when and Kansas City Chiefs. In 1987, Keyes dominated local headlines, but the Wol- I told him I wanted to go to business was voted Purdue’s all-time greatest player. verines experienced a unique brother- school and said, ‘That’s wonderful. Why “Leroy was the best athlete of our class,” hood that contrasted with the discord don’t we go over there, and I’ll introduce Johnson says. “He could do anything. The all around them. you to the dean right now.’ That’s why I only time we ever saw each other was as “I started feeling a change of spirit, where chose Michigan.” opponents on the football field, and we the color of your skin didn’t matter as Johnson’s Michigan ties remain strong, were probably calling each other bad names. much anymore,” says Johnson. “We were and he and wife Karen have endowed a And now, many years later, I have the teammates, and we were all together. I tell scholarship fund at the Ross School of opportunity to spend time with him. you, it was the best four years of my life.” Business. College football also continues There’s also Willie Lanier [formerly with Johnson graduated to a seven-year to play a major role in this executive’s life. the Kansas City Chiefs], a linebacker who career in the National Football League, He is a board member of the College Foot- used to kill me all the time. He’s on our where he was a first-round draft pick for ball Hall of Fame and the National Football board now, and I always tease him about the Cleveland Browns, and later joined Foundation, where he also is former chair- the way he beat up on me.” the New York Giants, for which he was man. Taking a cue from his college coach, One rivalry is tough to laugh off, named the team’s most valuable player. Johnson encourages scholastic excellence though, even 40 years after the fact. In He enjoyed a successful Wall Street career, in student athletes through the founda- talking about the Wolverines’ devastating launched while he was still playing for the tion’s Play it Smart program, which teams loss to Ohio State (50 to 14) in 1968, Giants, and then founded Rackson Corp., youths with academic coaches at nearly Johnson shifts seamlessly into present a Totowa, New Jersey, firm that owns 24 150 high schools nationwide. In addition, tense. “There’s no way they should be able Kentucky Fried Chicken franchises in Johnson and other former Giants players to score 50 points against us,” he says. three states, including Michigan. work as volunteers with Minority Athletes “We’re a better team than that.” Johnson decided to be his own boss after Networking, which mentors young athletes Deborah Holdship watching his enterprising father transition in New York and New Jersey.

dividend 36 spring 2008 alumni at large

The Entrepreneur Taking Charge: MBA Gets a Jolt from Battery Business

iming is everything. That’s what competition enables significant serial entrepreneur Jeff Depew, performance advantages across the T MBA ’81, keeps telling himself. primary market drivers, Depew Actually, it’s what he keeps telling his wife. says. This includes power delivery, “I tend to be an idea generator, and it’s energy density, cycle life, charge always been, ‘Where are the big chal- times, and safety. lenges, and what can I tackle next?’ ” says Early this year, Lion Cells com- Depew, a 12-year veteran of General Elec- pleted its series B round of financ- tric Company’s management team under ing, signed a pact with an assembly former CEO Jack Welch. Today Depew partner in China, and ramped up calls his own shots in a start-up battery production with the goal of initiating business. “It’s addictive,” he says of the sales in 2009. In late January, the rush associated with chasing a new ven- firm moved from a 6,000-square- ture. “I guess I’m an adrenaline junkie.” foot space to a 36,000-square-foot As addictions go, adrenaline is a good pilot facility in Menlo Park, Cali- one to have. An insatiable curiosity for the fornia, and Depew says he expects new and different has led Depew to take to double the current 19-person chances on everything from knowledge- staff by year’s end. This year, Lion management software to global-positioning Cells also will host a team of Ross Jeff Depew, MBA ’81, checks in with a Lion systems and motion-sensing devices. MBAs who will further assess strategic Cells technician. He’s explored such diverse ventures as entries into the market as part of a Multi- an e-destination site for baby boomers, disciplinary Action Project assignment. a platform for interactive video, and a The current business plan focuses on cell phone technology designed to pro- the power-tools market where Lion Cells vide real-time traffic reports. “I guess I’m an hopes to enable such new applications “The trick is to get the timing right,” as lightweight cordless tools that perform he points out. “My wife keeps telling me, adrenaline junkie.” as well as their corded counterparts. In ‘You’re always five years ahead. Would addition, the new cell is an eco-friendly you please get one that’s spot on?’ ” — Jeff Depew, MBA ’81 alternative to the existing nickel cadmium Depew’s latest venture into advanced (NiCd) variety used in most power tools. lithium-ion technology could be that The odds on this latest foray seem to Though powerful, the NiCd battery con- one. Lion Cells, a Silicon Valley start-up, have been in Depew’s favor ever since he tains a known carcinogen, which limits promises a cell combination that delivers discovered the advanced lithium-ion tech- its future payoff in a game increasingly more power — and more energy at power nology on the shelf at Stanford Research focused on global environmental sustain- — than any other cell on the market. Institute (SRI). He’d been brought into ability. “Typically, in a [lithium-ion cell] you SRI by a consultant who needed assistance “In Europe and Japan, there are now get a trade-off between energy and power,” in evaluating the commercial potential regulations basically to ban NiCd batteries says Depew, Lion Cells’ founder and chief of various ventures in different stages of once a replacement is available,” says executive. “In a laptop, for instance, it’s all development. Depew, noting that Lion Cells is poised to about energy and run time. In a power “This was the one that made the most hedge its bets on that near-term market tool, it’s all about the power, and run time sense to me,” Depew says. potential. “Our expectation is that we can is not as important. So you trade off one He wasn’t alone. As Depew assembled a do our bit for energy independence, help for the other. What we’re able to do is team to perform due diligence on the con- to clean up the environment a bit, and shift the proverbial curve ‘up and to the cept, he drew a former Energizer chief deliver a nice return to our employees and right’ to get both more power and more scientist out of retirement to join the group shareholders.” energy — at a given level of power — for full-time. “He’s like the dean of lithium Few can argue with that goal. And a longer period of time.” ion,” Depew says. “He’s 76 years old, has there’s no better time than the present. 19 patents, and commutes [to Silicon Valley] The proprietary “secret sauce” that Deborah Holdship differentiates Lion’s cell from its from Cleveland each week.”

dividend 37 spring 2008 alumni at large

CARY LIAO the trailblazer Federal Express: Overnight Success Didn’t Come Easy

By Roger Frock, MBA ’59

It seems FedEx has always been there, poised and ready to respond to our most urgent needs. But few people know of its tumultuous, and nearly disastrous, launch in 1973. In Changing How the World Does Business: FedEx’s Incredible Journey to Success, Roger Frock, MBA ’59, chronicles the dramatic last-minute saves and turnarounds engineered at the company from its inception to the present. From his unique vantage point as the overnight shipper’s first general manager and chief operating officer, Frock reveals the remarkable details of how FedEx founder Fred Smith and his team endured legal, financial, and opera- tional crises that threatened the company’s survival — and, in the end, created an entirely new business enterprise. Today, FedEx generates annual revenues of $30 billion and ships nearly six million packages daily to 200 countries. The following excerpt recounts the company’s tenuous launch 35 years ago and its subsequent, and truly amazing, comeback.

dividend 38 spring 2008 ur major concern on launch day — Express, after all, was a new, unknown General George S. Patton had equally March 12, 1973 — was the limited entity to the shippers. Perhaps we expected good advice for our situation: “Victory O capacity of our small fleet. The too much for the first day. Conceivably, and defeat are rarely absolutes, and there discounted reports from the sales staff the shippers did not yet fully comprehend is a whole spectrum of degree between still indicated we could expect between our unique system. Had our sales force these two extremes.” Failure is part of 300 and 450 packages. Fred was especially properly explained the differences be- business; it will happen. “The time to worried that we wouldn’t have enough tween our self-contained network and the intervene is not when things are going capacity to handle all the packages and competition, which relied on multiple well,” Patton maintained, “but when they that we would disappoint the customers. outside entities? are in trouble. It takes courage and char- In addition, (the investment banking We were beginning to feel a little less acter to engage a faltering project.” firm) White, Wield, and Co. was coming assured, less confident. Was it possible Fred was about to demonstrate his to Memphis to observe the first night’s our expectations were still too high? It courage and character. operations. The private-placement offering was understandable that shippers would was taking much longer than expected, have to try our service before they made and any hint of service failures would be a complete switch. Surely, we would have The unbelievably disastrous. at least 200 packages. That would be At least we had a contingency plan: If disappointing news we had a higher volume than expected, we came with the next could do a double run to our originating cities. The mail planes, after completing phone call. Our first their runs, could be ferried to Memphis to carry additional packages to destination day of operations cities. We were not going to leave a single package behind; in fact, we were ready to did not produce 200 give more than we promised. Our team would deliver every single package before packages, not even noon the next day. Ever more conscious of our precarious 100 packages. The financial situation, we knew the constant actual number was… search for investor funds simply had to take precedence over the thrill of watch- six packages! ing the long-awaited launch. So, on the day we inaugurated service, Fred, Mike Basch (senior vice president of customer Boot Camp Mode Roger Frock, MBA ’59 sales and service), and I left for New York The “system test” network generated so City, convinced we would have an im- few packages that we decided to cancel pressive story for the potential investors acceptable for the first day’s operation — the flight schedule and place the packages we were meeting early the next morning. not great, but we could live with it! on commercial airlines. We did not fly As we arrived in Manhattan, Fred sug- The unbelievably disappointing news planes in the package system again until gested to Mike, “While we get our bags came with the next phone call. Our first the next start-up. It was a matter of re- and arrange transportation to the hotel, day of operations did not produce 200 ducing our operating expenses and con- why don’t you call and see what the vol- packages, not even 100 packages. The serving our dwindling funds. We were ume looks like.” actual number was…six packages! facing the classic chicken-and-egg di- Mike found a pay phone and came “Are you sure you understood cor- lemma: Federal Express needed an ex- back with the news: “It looks like it’s rectly?” Fred demanded. panded network to reach higher volume going to be a little light.” “Yes, I double-checked — the number levels and an infusion of funds to expand “What do you mean, ‘a little light’?” is six,” Mike responded. Now, here was the system to a level of sustainability. Fred questioned. another dose of reality, a really serious After the March system test, Fred “Well, we don’t have all the reports dose! Having heard these results, we im- switched to Marine Corps boot camp yet,” Mike responded, “but we definitely mediately began referring to the March mode. He assembled the entire man- don’t need to be concerned about exceed- start-up as the “system test.” We did not agement staff, and, after expressing his ing the fleet capacity.” mention our first run at the investor displeasure in his finest drill-instructor “Call them back,” Fred ordered. “Tell meeting. manner, calmly explained we were now them I want the actual figures as soon as I thought we had failed Fred, but it going to reinvent Federal Express. “We those are available, and tell them we’ll call would take more than a disappointing are going to do it right this time,” Fred back once we get to the hotel.” system test to derail Federal Express. said. “Failure is not an option.” We would True, the test was frustrating to all of be ready for the formal inauguration of Crisis of Confidence us, but it forced everyone to face reality. service to an expanded number of cities During the cab ride to the hotel, we From this point on, we would follow the on April 17, just a little over four weeks. discussed the meaning of the light-volume advice of Winston Churchill: “If you’re Since Art Bass assumed responsibility reports. We rationalized that Federal going through hell, keep going.” for selecting cities for the expanded network,

dividend 39 spring 2008 acrossalumni the at largeboard

BRUNO TUCCI

FedEx workers load a fraction of the six million packages that are shipped daily to 200 countries. he immediately contacted his former service, the task force searched within the were replacement parts for the equipment partners, Tucker Taylor and Vince Fagan, Standard Industrial Classification codes installed in factories, offices, and medical at Aerospace Advanced Planning Group for industries producing small, time- facilities, 90 percent of which were devel- in New York and asked them to provide oped after the Second World War. Next, manufacturing and airline data. Charles the group examined employment statis- Brandon (operations research), Dennis Using all the available tics for the candidate industries within Sweeney (field operations), and others each standard metropolitan statistical ironed out the details for the expanded information, Charles area. That helped us to identify cities with service. Fred and I held review sessions. [Brandon] designed a the largest potential need for our service. Charles explained the process this way: The task force then looked at each “We had a limited number of aircraft, a model that no one today city’s airline-service level and assigned limited number of hours in the day, and would ever think of doing a ranking based on the number and fre- a limited capacity. We had to figure out quency of destinations receiving direct how to optimize our assets. That was a by hand. However, at service. Using all the available informa- classic operations research problem. We tion, Charles designed a model that no picked cities with real potential that would that stage in our develop- one today would ever think of doing by give us the best financial return. We did ment, we did not even hand. However, at that stage in our devel- that first problem using my HP 35 calcu- opment, we did not even have access to a lator for complex math. We pored over have access to a computer computer for the analysis. enplanement statistics, airport guides, For the April service network, the task and flight schedules, so we knew where for the analysis. force selected 25 cities within a reasonable certified airlines operated evening and distance of the Memphis hub. The new nighttime departures.” critical items with substantial intrinsic network included Chicago, Cleveland, To find the best candidates for our or financial value. Our prime candidates Columbus, Dayton, Detroit, Indianapolis,

dividend 40 spring 2008 DMITRIY SHAPIRO

One of FedEx’s original Dassault Falcons (named Wendy) is on display at the National Air and Space Museum, Smithsonian Institution.

Miami, Milwaukee, Moline, Newark, Sears store. incredibly long hours. There were no “spe- New Orleans, Oklahoma City, Philadel- Federal Express began running quar- cial people” in the organization, because phia, Pittsburgh, and Rochester. The se- ter-page display ads in the sports section everyone was special. It is hard to explain nior management staff quickly reviewed of the expansion cities’ local newspapers what it was really like to anyone who did the recommendations and focused all to solicit telephone responses from pros- not experience those times and events. resources on preparing for the formal pects. Ads also ran in trade magazines “Back in those days, Fred was bigger commencement of service on April 17. read by shipping and distribution man­ than life,” Dennis remembers. “I don’t Each department readied its own plan to agers. Direct mail solicitations were sent think too many people had pulled off support the expanded network. to 15,000 company presidents, vice presi- anything more impressive. There was dents, and purchasing managers in the nobody like him. He had that knack of United Front service areas to support the ads. Our inspiring people to do things they might not really feel comfortable doing.” This time, we wanted everyone in di- customer-information center contacted The dedicated people of Federal Express rect contact with customers to wear a all respondents and forwarded leads to responded to his call, and, in just over uniform, but there was no time to settle the field sales representatives. Our official 30 days, they totally repositioned the on a design, produce the uniforms in the start-up of the small-package service was company. correct sizes, and distribute them to out- going to be dramatic. We would convince lying cities. Our solution for the station venture-capital groups to invest in our From the book Changing How the World personnel, salespeople, and customer- organization. Does Business by Roger Frock. Copyright service agents was less elegant, but more We were certain that expanding the 2006. Reprinted by permission of Berrett- practical, given our circumstances: a network was going to give us a much Koehler Publishers, San Francisco. All white shirt, brown slacks, a tie with pur- better shot at success. (As it turned out, rights reserved (www.bkconnection.com). ple and orange stripes, and a tan corduroy the second start-up did produce 185 pack- blazer, all of which were readily available ages, 30 times the initial volume.) We had from our convenient supplier, the local enthusiastic, dedicated people who worked

dividend 41 spring 2008 their children’s lives in nontraditional ways. This different notion of fathering may focus Balancing Act: on coaching sports teams and attending ballgames or participating in Scouting activities and homework assignments.” Wooten reports that approximately Time Out for Family one in six full-time hourly wage earners and salaried employees works a shift out- side the traditional bounds of the 6 a.m. Juggling the demands of work and family is no longer an issue to 6 p.m. work day. Alternative shifts are particularly common among bread- facing just mothers. Fathers, too, are grappling with parenting winners earning their paychecks at pressures as they forge stronger connections with their kids, says restaurants and bars, hospitals, and manufacturing plants. So how do these Ross School Professor Lynn Perry Wooten. down-in-the-trenches daddies grapple with the difficulty of managing work- family conflicts? To find out, Wooten, who is clinical dam Hyder, EMBA ’08, tries to associate professor of strategy, manage- spend as much quality time as ment, and organizations at Ross, teamed A possible with his two daughters, up with Lawrence S. Root, professor of 11-year-old Hana and eight-year-old social work and director of the Universi- Nadia. On weekends, he coaches them on ty’s Institute of Labor and Industrial Rela- the tennis court, but during the dawn-to- tions. The two interviewed 59 workers dusk work week, the stiff demands of his and managers at a Midwestern auto-parts job as senior director of engineering at plant and asked this predominately male Yahoo Inc. in Santa Clara, California, workforce to talk candidly about the chal- often prevent him from attending the lenges of parenting in the face of relatively girls’ after-school activities. This ongoing inflexible shift schedules. Their study, “Time friction between work responsibilities Out for Family: Shift Work, Fathers, and and family obligations occasionally rubs Sports,” targeted the afternoon-evening raw nerves. shift, where fathers tend to be most work- “On one occasion, Nadia had prepared constrained from taking part in their a speech she was going to deliver in front children’s extracurricular activities after of several hundred people on the final day school and in the early evening. of her public-speaking class,” Hyder re- calls. “Unfortunately, I was scheduled to attend a very high-level strategy meeting Lynn Perry Wooten at 4 p.m. that day and couldn’t get away.” “Building a high-­ Young Nadia was crestfallen when she quality organizational learned she’d have to perform without her father in the audience, but she gamely culture is critical for told him, “Attend your meeting, daddy, and I’ll do my very best.” reconciling the chang- Hyder is not alone in his quest to find the right balance between work and fami- ing demands of work ly. What was once considered a “mommy issue” is now giving many working fathers and family. When you a healthy dose of angst, says Wooten, who has co-authored a new study examining have trust, good rela- the effects of shift work on parenting. tionships, and other vari- “When we look at societal pressures, changing values, and demographic trends ables in place, you can in the workplace, we find fathers are tak- ing a more active role in parenting,” she create a work-family explains. “Many men have wives who work, so they have to pick up the slack at environment that is in home. There also is a new generation of fathers who want to be more involved in balance.” —Lynn Perry Wooten

dividend 42 spring 2008 “Surprisingly, we found workers don’t away at the flexibility once enjoyed by com- frowning upon them for doing so,” she rely on formal company policies for bal- pany managers and executives. Indeed, a says. Wooten argues that instituting ancing work and family,” Wooten reports. 2005 Fortune magazine survey reported work-life balance programs provides a “Rather, they resort to informal approaches, that 84 percent of male executives at the significant return on investment for firms such as asking a sympathetic supervisor largest U.S. companies want more time for by enabling them to retain their best to look the other way or getting a buddy things outside work. Hyder says he often workers, reduce turnover, and realize to cover for their absence when they need dials into conference calls while driving associated cost savings. She suggests lead- to leave work early or take a long lunch his daughters to school, and works late ers take a proactive role in implementing break. In extreme instances where people nights and weekends at home. Yahoo’s strategies, such as incorporating human- feel very passionate about being there for enlightened culture and written policies resource managers in extended-hours their children, they are more willing to allow employees greater flexibility than operation teams, training supervisors take independent actions on their own, most companies, but circumstances often and middle managers to be supportive of sometimes bordering on civil disobedience impose unwanted rigidity. “If I’ve arranged work-family conflict, providing extended- and endangering their jobs.” an important strategy meeting months hours childcare, and creating affinity In the study, much of this work-family in advance and other people are flying groups for working fathers. tension crystallized around fathers’ strong in to attend it, I have to be there,” Hyder “Building a high-quality organizational desires to participate in organized sports explains. “Even though I tried to balance culture is critical for reconciling the with their children. After one supervisor my work, family life, and Executive MBA changing demands of work and family,” refused to allow a shift worker the flexi- coursework, it’s impossible to do every- Wooten concludes. “When you have trust, bility to attend a Saturday afternoon thing remotely.” good relationships, and other variables championship game being played by his Wooten believes business organizations in place, you can create a work-family kids’ football team, the worker feigned a stand to benefit from fostering family environment that is in balance.” traffic accident on his lunch break and friendly work environments supported Claudia Capos did not return to work that day. On the by formal written policies that can help following Monday morning, the worker working fathers manage the inevitable discovered that his less-pressured, off-line conflicts. “Companies also have to walk repair job had been filled by another the talk by encouraging employees to take employee and his supervisor had put him advantage of these policies rather than back on the assembly line in retaliation for his absenteeism. The pressure of balancing work and fatherhood isn’t confined to rank-and-file employees. Longer work hours, prolifera- tion of 24/7 connectivity, and not-so- subtle business pressures have chipped

dividend 43 spring 2008 SeedSeed CapitalCapital

PLANTING OIL IN AFRICA

Students use business Enterprise, the Samuel Zell and Robert H. “We didn’t even know what jatropha plan competitions as Lurie Institute for Entrepreneurial Studies, was,” says LeBrun, referring to the hardy, a string of victories in national business drought-resistant plant whose seeds pro- “fuel” to grow venture. plan competitions, and the support of the duce up to 40 percent oil. Adds Moazed: world’s largest mining company, BHP Billiton. “It has kind of exploded in the past year, hat does it take to grow a The result is nascent biodiesel firm ever since we started looking at it.” globally sustainable, strategi- Mozergy, which is slated for headquarters W cally viable biodiesel producer in Mozambique and helmed by dual-degree Cultivation in sub-Saharan Africa? graduate students Tony Gross, Mike The Mozergy team discovered jatropha A tiny little seed named jatropha. Hartley, Jeff LeBrun, and Ali Moazed. while evaluating renewable-energy tech- Now, add the Ross School of Business, What began as a master’s project at the nologies to serve BHP Billiton’s primary the School of Natural Resources and En- School of Natural Resources and Environ- energy need — electricity — in the south- vironment, the Frederick A. and Barbara ment is now a robust, award-winning busi- east African nation of Mozambique. (BHP M. Erb Institute for Global Sustainable ness plan ready to roll out of the Ross School. Billiton has committed $300 million to

ell Worldwide Procurement tech- judges. The top prize in Tauber’s annual nologists were counting on results “Spotlight!” competition is $10,000, but the Setting Off D when they asked a team from the confidence gained from solving problems Tauber Institute for Global Operations to at such firms as Boeing, Raytheon, Dow resolve a problem in testing microchips Chemical, and General Motors tends to a (Supply) used in computer motherboards. MBA trump the financial reward, says Damian candidates Priya Ranjan Dass and Ma- Beil, assistant professor of operations and karand Deshmukh and BSE/MSE candi- management science. Chain date Kyle Chilcutt delivered that solution “Having Michigan faculty and company and more — their contribution to Dell managers drive students toward a finished could transform the way microchips are report that must demonstrate significant Reaction tested industry-wide. results creates a challenging summer Each summer, Tauber teams of busi- experience,” says Beil, Ross faculty advisor ness and engineering students are paid by on the Dell project. “The most successful corporate sponsors to consult on issues in projects are the ones that produce solutions operations, manufacturing, and supply- the sponsors love, but didn’t anticipate.” chain management. After 14 weeks, the Last summer, Dell challenged the Tauber student teams return to campus to present Institute team to develop a comprehen- their recommendations before a panel of sive solution to address the high number

dividend 44 spring 2008 Team Mozergy’s Tony Gross, Ali Moazed, and Jeff LeBrun won $10,000 and first prize in a competition sponsored by Knox Lawrence Inter­ national. (Not pictured, Mozergy’s Mike Hartley.) reduce its global-emissions footprint.) Though the students determined that jatropha cultivation did not resolve the issue at hand, they did unearth an unexpected business opportunity: an agricultural/ biodiesel enterprise in which local farmers could participate and generate income. BHP Billiton did not want to launch into biodiesel production itself, but the students were encouraged to move toward a stand-alone business model that could help the company and the local commu- nity. The proposed venture dovetailed neatly with BHP Billiton’s charter to seek opportunities for economic development in the communities near its operations. “The company saw biofuels as a way to Competition. LeBrun convinced the team finance and new-venture creation. Plus, provide local farmers with an additional that the contest provided the perfect “gut LeBrun already had written a business cash crop, to help them modernize their check” to develop and test their pitch. Sud- plan on biodiesel produced from algae. agricultural practices, and to diversify their denly, the students’ master’s project with its Eventually, a realistic vision took root agricultural mix,” says Hartley. Jatropha long lead time was transformed into a high- for Mozergy. (The name is a hybrid of grows in harsh conditions and marginal stakes standoff with an imminent deadline. Mozambique and energy.) Once land, soil that doesn’t support food crops. “We had never considered Mozergy equipment, and supplies could be pur- As the team set about developing a stand-alone business until that point,” chased, Mozergy would implement a an economic model to test the viability Gross says. franchise-based model to produce raw of jatropha biofuel production, LeBrun feedstock with its own core farm at the discovered a business-plan competition Planting hub. The company would employ local sponsored by private-equity firm Knox As the team honed its plan, they drew farmers and train them to grow jatropha Lawrence International (KLI). The firm’s on shared experiences with the Frankel on a commercial scale. Mozergy would principals were seeking investment oppor- Commercialization Fund and the Wolverine extract the raw oil and sell the “crude” tunities in Africa and had partnered with Venture Fund, both of which are student- to regional and global refineries. New York University’s Stern School of Busi- managed venture funds at Ross. They also Farmers who successfully completed a ness to host the KLI Africa Business Plan relied on business courses in international Mozergy-endorsed agricultural-extension

of can-not-duplicate (CND) occurrences that could destroy evidence of what caused in quality testing throughout the company’s “The most success- the failure and also create new problems supply chain. A CND occurs when a that hadn’t existed. The students’ innova- motherboard manufacturer reports a ful projects are tive method allows testing without remov- microchip failure and returns the suspect al of the chips from the motherboards. part to the microchip supplier, who sub- the ones that pro- Ancillary benefits of the new approach sequently is unable to recreate the failure. include more extensive and efficient test More than 50 percent of these reported coverage up the supply chain, Beil says. microchip failures are CNDs, costing Dell duce solutions the “The beauty of the solution is that it and its supply-chain partners approxi- addressed a lot of problems simultane- mately $1.25 million each year in scrap sponsors love, but ously and exceeded the original scope of and labor, and confounding root-cause the problem,” he says. “The students’ rec- analyses of quality problems. didn’t anticipate.” ommendation is being implemented now. After examining the correlation errors, It potentially will drive a change in the the Tauber students devised a whole new —Damian Beil overall industry, as PC makers and their way to test the chips using JTAG (joint test partners move toward using the JTAG ports action group) technology. Previously, Dell for testing microchips in the future.” had been removing suspect chips from motherboards to perform tests, a process

dividend 45 spring 2008 “When you’re pitching to a venture capitalist, you can talk about the market all you want, but until you can prove you have a customer there’s a lot more risk associated with the idea.” —Tony Gross

program could then pursue microfinance Oil-bearing jatropha is a hardy plant, which whatever crude Mozergy can produce, loans to purchase equipment and plant grows on land that doesn’t support food crops. and may participate in the developing their own jatropha. Mozergy would supply project. That’s good news for the team, as the initial saplings and agree to buy the 50 slides and two days’ worth of informa- they raise seed capital and plan a return farmers’ output. tion in no logical order.” trip to Mozambique this summer. “The training and purchase agreements The team looked to Drew Horning, “When you’re pitching to a venture demonstrate to microfinance institutions program manager at the Erb Institute, and capitalist, you can talk about the market that these farmers are a lower-risk invest- Paul Kirsch, program manager at the Zell all you want, but until you can prove you ment than people who don’t have a guaran- Lurie Institute, to review the presentation. have a customer there’s a lot more risk teed customer and price for their product,” “Paul struck this great balance of telling associated with the idea,” Gross says. Moazed says. “Therefore, the people coming us how far we were, but also how much The team also has applied to BHP Bil- from our program would be more likely potential we had,” Gross says. “He really liton, KLI, the Erb Institute, the Zell Lurie to get credit.” inspired us to believe we could win, which Institute, and the William Davidson Insti- Mozergy would reap benefits too. motivated us to work incredibly hard.” tute for additional funding. Meanwhile, “The demand (for biodiesel) is high both The few remaining days before the KLI since the KLI win, Mozergy has won a regionally and globally,” Gross says. “This event were marked by sleepless nights, $10,000 “Dare to Dream” grant award takes the burden off Mozergy to produce a blur of finals, and a host of scheduling from the Zell Lurie Institute and a everything on commercial-scale farms. It conflicts. LeBrun actually walked out $20,000 award from the Better Living enables the business to grow more rapidly of a final group presentation at Ross after Business Plan Challenge, sponsored by while allowing farmers to do what they giving the introduction so he could catch Wal-Mart Stores Inc. They also repre- do best. And instead of having to manage a waiting cab, hop a plane to New York sented Ross at two national business-plan 20,000 people, the company can have City, and arrive at NYU just moments competitions: the Rice University Busi- 20,000 people supplying it while ensuring before Mozergy took the stage. Hartley ness Plan Competition and the Global suppliers are obtaining the best plant had to stay behind for an exam, but his Social Venture Competition. varieties and cultivation techniques.” teammates still won the $10,000 first “We all joined the Erb dual-degree prize, beating teams from Columbia Uni- program because we had a passion for Pruning versity and the University of California- business and for making a positive impact With the concept taking shape, the Berkeley’s Haas School of Business. on the world from an environmental greatest challenge Mozergy faced was perspective,” Gross says. Adds LeBrun: winnowing down a complex business Reaping “We knew there were amazing projects plan into a concise presentation for the LeBrun is now nurturing contacts and opportunities both at Ross and the KLI competition. “We had the capacity with potential customers and agricultural School of Natural Resources and Envi- to convey our deep knowledge about the experts in Africa and the United States. ronment. But as far as this specific project issue, Mozambique, and the plan itself,” He says a U.S.-based biodiesel refinery goes, I think we had no clue what we Gross says. “But we had assembled about has verbally committed to purchasing were in for.” Deborah Holdship

dividend 46 spring 2008 he subject of male grooming had “Manscaping America, One College it. In doing our research, we found that never really been top of mind for Campus at a Time,” the marketing cam- most of the touch points had humor T Karima Holland, a first-year MBA paign created by Holland, Hoffman, Patel, around them, and we decided the best student at the Ross School. Especially the and Sharp, suggested online contests and way to reach this audience was to create topic of male grooming below the neck. promotions, along with a “Manscaping” an integrated approach using that humor.” That all changed when she and three campus comedy tour. The Ross team Braun Global President Bracken Darrell female classmates entered the “Create a developed its promotional plan after talk- said the competition judges were impressed Buzz for Braun” campaign, sponsored by ing to 150 college-aged men about battling with the Ross team’s clever messaging Procter & Gamble. unwanted body hair. Research revealed strategy, derived from keen observations The challenge was to create a marketing that grooming “really does matter” to this of the competitive landscape. plan around a Braun body shaver targeted younger demographic, yet no tool exists “We were very excited about the final- to college-aged men. The quest was to win to meet their specific needs. Consumer- ists’ presentations, and felt each offered the $40,000 grand prize in the national focus groups and interviews often de- great insight into reaching our target case-study competition. The results ex- volved into hilarious sessions in which consumers,” he said. “Ultimately, though, ceeded expectations, as the women did, participants detailed their creative tactics Michigan’s plan rose to the top.” in fact, walk away with more than just and innovative methods of “manscaping.” In addition to the prize money, Hol- first prize . “We discovered that pretty much all land and her teammates hope to net the “I know way too much about some of my men do it, in some form or another,” says added bonus of seeing their tag line and (male) classmates now,” Holland says. She Holland, referring to male grooming. other elements of their proposal and teammates Emily Hoffman, Mihira “And they are not shy to talk about appear in the product’s promo- Patel, and Holly Sharp earned top hon- tional rollout. ors in the competition among nearly 300 “It will be so incredible if student teams drawn from the country’s they choose to use some of top-ranked MBA programs. In addition, our materials in the actual Sarah Doak, who received her Ross MBA campaign,” says Holland. in December, tied for second place and “This was one of the best received $5,000. experiences I’ve ever had. You just never know Ross first-year MBAs and “Buzz for what you can create.” Braun” winners (from left): Holly Sharp, Emily Hoffman, Mihira Patel, and Karima Holland

dividend 47 spring 2008 alumni activities

Washington, D.C., Alumni Enjoy a Taste of Boston oston-based chef Jim Solomon, MBA B’92, commandeered the kitchen of Eugene Procknow, MBA ’78, and wife Mary when they hosted local Ross graduates in their Washington, D.C., home for an evening of fine dining. Solomon, the owner and operator of the Fireplace Restaurant in suburban Brookline, Massachusetts, pre­ pared his signature spit-roasted, maple- glazed half chicken with savory mushroom bread pudding and sage brown butter. Grilled duck sausage with creamy dijon and butternut squash bisque (with roasted chestnut cream and pumpkin seeds) opened the feast. Boston baked beans and brown bread also appeared on the menu (of course).

TOP PHOTO Enjoying Solomon’s haute cuisine, left to right: Ross Director of Development, Eastern Region, Ed Ollie, Lisa Leandre, Al Leandre, MBA ’02, and Alex Lilavois, MBA ’01. LEFT Arnie Esterer, MBA ’55, makes sure to keep host Gene Procknow, MBA ’78, in fine spirits. CENTER Chef Jim Solomon, MBA ’92, is a master of the kitchen. RIGHT Tige Savage, MBA ’98, and Kipp Kranbuhl, MBA ’04, enjoy the Procknows’ hospitality. Rachel Zimmerman, MBA ’00, and Haley Sawyer, BBA ’06, are pictured in the background.

Tokyo Alumni Pass the Torch and Celebrate inety-four alumni representing the Ngraduating classes of 1969 to 2007 convened in Tokyo when the Ross Alumni Club of Japan held its annual meeting in February. The networking event was the first official gathering since the club presidency passed from Takeo Suzuki, MBA ’76, to Makoto Ariga, MBA ’93.

TOP PHOTO Alumni in Japan attending the February event, from left to right: Mami Tamura, AB ’03, Takashi Sone, MBA ’06, Yusuke Narimatsu, MBA ’06, Keiko Shiine, MBA ’06, and Kyung Ho Yoon, MBA ’06. Crouching in front, Koji Yamagata, EMBA ’06.

LEFT Takeo Suzuki, MBA ’76, accepts thanks and accolades for his contribution as president of the Ross Alumni Club of Japan.

RIGHT Makoto Ariga, MBA ’93, embraces his new title of club president.

dividend 48 spring 2008 alumni activities

MILWAUKEE — Matt Gnau, MBA ’03 (left), and Alec Granger, MBA ’95, MIAMI — Members of the Ross Alumni Club of Miami recently hosted Al brought a little sweat equity to a Milwaukee Bucks basketball game earlier Cotrone, director of the Ross School’s Office of Career Development and this year. Together, they hit mid-court at the Bucks’ Bradley Center to Student Life. Pictured, left to right: Gabe Gerenstein, BBA ’02, Marcelo present the game ball to the team captains and referees. Other local Dutra, MBA ’03, Jerome Hesch, BBA ’66, MBA ’67, David H. Isaacs, alumni who attended the game as part of a club outing included Sally MBA ’67, Cotrone, Gabriel Freund-Vega, MBA ’04, and Juan Bermudez, Sadosky, MBA ’96, John Bayless, MBA ’04, Ted Wentzel, MBA ’96, MBA ’98. Michael Harris, BBA ’00, and Jaclyn Gentner, BBA ’06.

Connect with your club www.bus.umich.edu/alumni

9.18.08

dividend 49 spring 2008 Class Notes

Robert MacKay, MBA ’50 of Quality and Reliability Management; and Daniel A. Redstone, MBA ’67 worked for five years with Arthur Ander- (2007) “Daily variation, capital market received the American Institute of Archi- sen, earning his CPA designation. In 1955, efficiency, and predicting stock returns for tects’ highest honor, the Gold Medal, from he joined Procter & Gamble Co.’s inter­ the Hong Kong and Tokyo Exchanges,” the Detroit AIA chapter during its annual national division, where he was assigned Applied Economics. Jeffrey was awarded Celebration of Excellence on November first to P&G Canada, then to P&G Italia a sabbatical leave for the spring semester 16, 2007. Daniel’s involvement with the in Rome, and later to P&G Geneva. In and will visit Australia, Brunei, Indonesia, Detroit chapter began shortly after he was 1957, Robert went back to P&G Italia as Hong Kong, Macao, Vietnam, Cambodia, licensed in 1972; in 1985, he was elected comptroller, serving first in Genoa and Thailand, and Singapore. You can reach president. Daniel is also active with the then in Rome. In 1967, he returned to him at [email protected]. National Council of Architects Registra- Cincinnati with P&G. Robert joined the tion Boards where he championed eased Clorox Co. in Oakland, California, in Richard Metzler, MBA ’66 reciprocity and facilitated cross-border 1977 and retired in 1990. Since then he and his son, Jon, are co-authors of Lore of movement of architects between the U.S. has had several consulting assignments Wizards: Consultants on Consulting. The and Canada. with International Executive Service Corps title is being serialized online at www. and keeps very busy with volunteer work, loreofwizards.com. New chapters are Ronald L. Thompson, BBA ’69 particularly with the United Way of the available monthly until the book is com- recently was appointed chairman of the Bay Area. Robert lives in Walnut Creek, pleted this summer. At that time, all chap- board of trustees of the Teachers Insur- California. ters will be bound into a single volume ance and Annuity Association (TIAA). and offered for sale. Lore of Wizards com- Thompson joined the TIAA board in Jeffrey E. Jarrett, BBA ’62 prises interviews with industry veterans 1995 and most recently served as its pre- is a professor of management science at and captures wisdom gained through siding trustee. From 1993 to 2005, the University of Rhode Island College of decades of experience. Chapters cover Thompson served as chairman and chief Business Administration where he recently topics such as rating and dealing with executive officer of Midwest Stamping received the Dean’s Annual Award. He also clients, ethics, traveling, and international and Manufacturing Company, headquar- has published business. Management consultants are tered in Maumee, Ohio. He has taught at the following encouraged to e-mail their own tales from Old Dominion University, Virginia State articles: (2007) the trenches to [email protected]. University, and the University of Michi- “Forecasting Top submissions may be included on the gan. In addition, he serves on the board occupancy Web site or in future editions of Lore of of Washington University in St. Louis. levels: A Wizards. (All submissions will be reviewed, problem for and contributors will be contacted prior Stephanie Bergeron, BBA ’75 management to publication.) Richard began his 29-year recently was named president and CEO of forecasters,” career in management consulting in 1969 Walsh College in Troy, Michigan. Stepha- Journal of at Cresap McCormick & Paget, which since nie served on Walsh’s board for 12 years Business and Management, 12(1), 57-90; has been absorbed into Towers Perrin. He before becoming interim president and (2007) “The quality control chart for later joined Theodore Barry & Associates then president. The college has three cam- monitoring multivariate auto-correlated and ultimately opened his own firm, Met- puses with 4,500 students. For 25 years processes,” Computational Statistics and zler & Associates, which is now Navigant Stephanie worked in accounting, support- Data Analysis, 51, 3862-3870; (2007) Consultants. Throughout his career he ing automotive-products manufacturers. “Using vector autoregressive residuals honed a specialty in the utilities industry. She and her husband Jeff and their two to monitor multivariate processes in the Richard currently helms Trove Capital LLC. dogs reside in Birmingham. They have presence of serial correlation,” Interna- Trove’s primary product is the Woodley two children, Michael, 25, and Katie, 23. tional Journal of Production Economics, Fund LP, a long/short dollar neutral in- Stephanie says her three greatest passions 106, 204-216; (2007) “Monitoring vari- vestment fund. His son, Jon, is founder are family, dogs, and chocolate. ability and analyzing multivariate auto- and president of Blue Field Strategies, correlated processes,” Journal of Applied a consulting firm specializing in wireless Robert D. McTaggart, MBA ’75 Statistics, 34(4), 459-469; (2007) “Ran- communications, and regulatory and public- recently moved his law practice and changed dom walk, capital market efficiency, and safety issues. the Dallas-based firm’s name to McTaggart predicting stock returns for Hong Kong & Associates. Robert is board-certified as exchanges and clearing limited,” Manage- a specialist in commercial real estate law ment Research News; (2007) “The guide- by the Texas Board of Legal Specialization. line and procedures using VAR residuals He assists individuals and businesses in the for quality control,” International Journal purchase, sale, lease, and development of

dividend 50 spring 2008 CLASS NOTES

commercial real estate. He also per- forms other legal services, including the review and preparation of business contracts and the formation of entities such as corporations, limited liability companies, and partnerships. Robert, his wife Carmen, and their 7-year-old son Grayson live in Dallas. You can reach him at [email protected].

Charlie E. Mahone Jr., MBA ’78, PhD ’81 was appointed dean of the School of Busi- Peter Mertz, MBA ’81 ness and Public Administration at the and his wife Carolyn recently gave a investment management organizations in University of the District of Columbia in $250,000 gift to the Frederick A. and Bar- the world. He is a certified forester and August 2007. Prior to that, Charlie was bara M. Erb Institute for Global Sustainable a member of the Society of American professor of international business at How- Enterprise. The newly established endow- Foresters and the World Business Council ard University’s School of Business, where ment will provide tuition support to students for Sustainable Development. In addi- he had been teaching since August 1989. enrolled in the third year of Erb’s dual-degree tion, he is a member of the Erb Institute While at Howard he also served as direc- MBA/MS program. The gift also qualifies External Advisory Board. Carolyn is a tor of graduate programs, department for the Graduate Student Support Chal- graduate of Southern Methodist Univer- chairman, and associate dean. Charlie has lenge, recently launched by University of sity, where she earned a BA in Spanish conducted research and taught courses in Michigan President Mary Sue Coleman. and an MBA. She now chairs the board international business, small and minority As a result, the University will match 50 of trustees of the Montshire Museum enterprises, and corporate strategy. You can percent of the gift, adding another of Science, which features interactive reach him at [email protected]. $125,000 to the Mertz endowment fund. learning about the natural and physical sciences, ecology, and technology. The Peter is CEO and founder of Global couple lives in New Hampshire with Forest Partners, one of the largest timber their two daughters, Anna and Carla.

L. Lee Gorman, BBA ’79, MBA ’83 He was president of GM’s operations in has been named director of the automotive- Asia Pacific; Europe; and Latin America, business unit at Coherix in Ann Arbor. The Africa, and Middle East before returning high-tech company supplies next-generation to Detroit in January 2006. In 2007, Hen- holographic and optical-inspection sys- derson was a key player in labor talks with tems to measure production and compo- the United Auto Workers. He helped to nent quality in the automotive, aerospace, forge a landmark, cost-cutting contract electronics, medical-supply, and semicon- that is expected to save $5 billion in labor ductor industries. Previously, she was a costs by 2011. He also was crucial to re- principal at Barton Consulting Services in solving a labor impasse at Delphi Corp. Ann Arbor and also held key management last year. positions at Ford Motor Co. Ellen Ernst Kossek, MBA ’81 Frederick (Fritz) Henderson, BBA ’80 is co-author of the new book CEO of Me: was elected General Motors Corp.’s presi- Creating a Life That Works in the Flexible dent and chief operating officer in February. Job Age (Wharton School Publishing). He has worked at GM for most of his Kossek is professor of human resources professional career, and most recently and organizational behavior at Michigan held the post of vice chairman and chief State University’s School of Labor & Indus- financial officer. Henderson is one of the trial Relations and a leading expert on few automotive executives to have presided work-life balance issues. In the book, she over operations in every region of the world. and co-author Brenda Lautsch, associate

dividend 51 spring 2008 CLASS NOTES North Carolina. You can find her on Linkedln or via e-mail at mishraka@ professor at Canada’s Simon Fraser Univer- Colin Wahl, MBA ’85 meredith.edu or [email protected]. sity, provide a practical blueprint on how worked in brand management with Procter She and her husband, Aneil Mishra, PhD to manage the physical and psychological & Gamble Co. after his graduation from ’92, recently released the book Trust Is mixing of work and personal life. After the Ross School. Later, he applied his Everything: Become the Leader Others Will interviewing hundreds of professionals at experience to the field of investment Follow (www.lulu.com/content/2196924). different companies in North America, management and founded several compa- Visit their blog at www.totaltrust.word- the authors found workers across the nies, including an Internet-based firm, press.com. board were hungry for better ways to designed to help institutional investors. manage work-life relationships. Kossek and After selling his business interests, Colin David Robson, MBA ’89 Lautsch identify six work-life patterns — took a break from the corporate world recently was named chief operating of- three positive and three negative — and and taught entrepreneurship in the grad- ficer at Detroit-based Miller, Canfield, offer step-by-step guidance on how to move uate business school at the University of Paddock, and Stone, P.L.C. Miller Can- toward a more productive and comfort- North Carolina-Chapel Hill. Recently, he field is Michigan’s largest law firm with able “flexstyle.” They report more compa- started a business called Client Opinions, nearly 450 attorneys and paralegals and nies now offer flexible policies in setting which helps organizations conduct client/ seven offices in the state, as well as offices work schedules and locations, and that customer and employee research. In his in Chicago; New York City; Cambridge, society and technology have changed to spare time, he still plays ice hockey with Massachusetts; Naples, Florida; Windsor, enable a greater overlap between work and other northerners in the Chapel Hill area Ontario; and in Gdynia, Wroclaw, and personal life. However, the authors warn and enjoys rollerblading and traveling. He Warsaw, Poland. Prior to his April that such mixing can lead to unhappy just returned from a trip to India where he appointment, Robson was senior vice workers and even burnout. “Unless we visited relatives and played tourist. Colin president, chief financial officer, and actively manage how we use flexibility, lives in Chapel Hill with his wife Kerri, a chief information officer at Boston-based the flexibility that was supposed to help transplant physician at Duke University Pembroke Real Estate Inc. He previously us can actually make our lives worse,” Hospital, and daughters Sarah, a high worked in finance and strategy at General they say. Kossek has contributed an essay school senior, and Shaina, a senior at Duke. Motors Corp. with stints in New York and to Dividend detailing her own efforts to Colin would be delighted to meet with any Brussels, Belgium. manage a work-life balance with her hus- Michigan alumni visiting the area and can band, fellow Ross School graduate Sandy be reached at [email protected]. Jim Lesinski, BBA ’90, and Kossek, MBA ’81, and their children. Kim (Kotwicki) Lesinski, MBA ’96 Gary E. Baker, MBA ’86 along with their son Bryce, are happy to Martin M. Shenkman, MBA ’81 has been named vice president of infor- announce the birth of their second son, recently published his 34th book, Funding mation-technology delivery services for the Cure. Martin’s wife, Patti S. Klein, M.D., Borders Group in Ann Arbor. Gary will recently was diagnosed with multiple scle- be responsible for the development and rosis, and the book stems from the couple’s execution of IT strategic processes related efforts to spur donations and to accelerate to the delivery of technology. He also will efforts of the National Multiple Sclerosis lead company teams to ensure that busi- Society to find a cure for the disease. Fund- ness goals are met through the delivery of ing the Cure helps individuals who have necessary IT products and services. Prior MS, or loved ones touched by it, to cope to joining Borders, Gary served as direc- with the condition. The book also demys- tor of IT transformation services at Alix- tifies the process of charitable and planned Partners in Southfield, Michigan. Before Braden Wayne Lesinski, in March. The giving, and presents other approaches to that, he worked at EDS in Detroit, served family currently resides in Excelsior, funding and supporting research. Fund- as a partner at Arthur Andersen, and held Minnesota. Kim, Jim, and Bryce are ing the Cure is available through Demos the positions of CEO and chairman of already teaching Braden how to sing Medical Publications, 386 Park Avenue Online Technologies Corp. in Ann Arbor. the Michigan fight song, and to high step South, Suite 301, New York, NY 10016. in preparation for joining the Michigan It also may be obtained online through Karen Mishra, MBA ’88 Marching Band of which his mother was Demos Medical Publications’ Web site, finished her PhD in marketing communica- a proud member. www.demospubmed.com. A follow-up tions at the University of North Carolina- book called A Practical Approach to Estate Chapel Hill Allen Banez, MBA ’90 Planning: Options for People with a Chronic in May 2007. recently launched a new consumer- Disease or Disability is in the works. Mar- She is now advocacy service called the LetterChamp. tin is a private attorney practicing law in assistant “We help unhappy consumers obtain hassle- Teaneck, New Jersey, and New York City. professor of free refunds and product replacements,” marketing says Allen. LetterChamp is a full-service and advertis- firm that handles research, complaint ing at Mere- letters, product returns, and phone calls. dith College “We have a passion for getting our clients in Raleigh, the quality products and excellent cus-

dividend 52 spring 2008 CLASS NOTES more about the Dallas firm at www.aba- consulting.com. Menno published two tomer service they paid for and deserve.” J. Ronald Totaro, MBA ’90 articles recently: “Optimizing agency You can hear Allen explain his services at has been appointed senior vice president relationships” appeared in the May 2007 http://youtube.com/letterchamp and visit in the office of the COO for ACI World- issue of AgriMarketing, and another article his Web site www.letterchamp.com. Allen wide, a leading international provider of was featured in the December 10, 2007 is located in Tracy, California, and can be software for electronic-payment systems. issue of Convenience Store News. Menno, reached at [email protected]. Ron brings 20 years of experience in cor- his wife Keri, and their children reside in porate strategy, marketing, sales, product the Dallas area. You can reach him at James Mastan, MBA ’90 development, and financial and opera- [email protected]. is a highly regarded marketing and busi- tions management to ACI. He recently ness strategy expert, speaker, and founder served as vice president and general man- Tom Garfinkel, MBA ’00 of Blue Rain Marketing LLC (www.blue­ ager of global credit scoring solutions at executive vice president and COO of the rainmarketing.com), a premier northwest Fair Isaac Corporation. Prior to that, he Arizona Diamondbacks, and Jeff Moorad, business and marketing strategy and pro- was vice president of interactive market- general partner and CEO of the Diamond- gram consulting firm. Mastan has 14 years ing and media with AOL Time Warner. backs, have purchased a majority interest of Microsoft marketing and launch expe- in Hall of Fame Racing from NFL Hall of rience and over 20 years’ experience in Lauren Liang, BBA ’97 Famers Roger Staubach and Troy Aikman. creating effective business and marketing has been appointed executive director of Tom, who lives in Paradise Valley, Arizona, strategies and programs that have deliv- the Peacock Equity Fund-Asia Pacific. The is a diehard Michigan football fan; ironi- ered significant business value for many fund is a $250 million joint venture formed cally Jeff, a graduate of the University of clients. The June release of his book by GE Commercial Finance’s Media, Com- California, Los Angeles, feels the same about Product Launch the Microsoft Way distills munications & Entertainment business the UCLA Bruins. Their driver this year is his years of Microsoft marketing and and NBC Universal. Lauren is based in J. J. Yeley, and they hope to bring in a second product launch expertise into one conve- Singapore, where she will work in partner- driver. “The Wolverines will be Big Ten nient, in-depth “how to” for all aspects of ship with NBC Universal focusing on champions — absolutely,” said Tom. “And a product launch: increasing the effective- identifying media investment opportunities they’ll beat Ohio State.” Added Jeff, “I ness of your launch process, strategy and in the Asian market’s media and technol- think the Bruins will play Michigan in the execution; and learning the product ogy sector. Prior to joining the fund, Lau- Rose Bowl, which would be a great game.” launch techniques, tips, and best practices ren held numerous positions within NBC of the Microsoft marketing machine. Universal and GE Capital. Alland Leandre, MBA ’02 was named 2008 Black Engineer of the Year/ Larry P. Nieman, Jr., BBA ’90 Elaine Dodson O’Gorman, MBA ’98 Entrepreneur in February. The award is has been named dean of the School of Busi- has been promoted to senior vice presi- presented by the National Society of ness Administration at Robert Morris dent of marketing and product strategy Black Engineers and is one of the most College in Chicago. In 1994, after receiv- for e-mail service provider Silverpop. prestigious and competitive honors in ing his MBA from Central Michigan Uni- Elaine is responsible for both the delivery engineering and technology management. versity, he took a position in residential of products to Silverpop’s clients and the Al owns and operates Vyalex Management lending with Citibank, where he later became creation of go-to-market strategies that Solutions Inc., an avionics systems engi- a credit man- attract quality customers. Having held neering and technology firm of which he ager. Larry previous positions with Kraft Foods and also is president and CEO. Al and his team started his American Airlines, she brings a tremen- work with students, faculty, engineers, teaching dous background in marketing and chan- and support staff at the Morgan State career as nel development to Silverpop. Elaine is University Clarence M. Mitchell School of an adjunct a certified managerial accountant and Engineering in Baltimore and the Naval accounting a certified project manager. She and her Air Systems Command in Patuxent River, instructor husband Kevin and their three children Maryland. Together they are creating a at Robert Mor- live in the Atlanta area. You can reach her sustainable and professional workforce ris and joined at [email protected]. reflecting the diversity of our society. the college’s full-time faculty in 1998. Lar- ry accepted the position of director of the Menno Ellis, MBA ’99 business institute at Robert Morris in is a partner at ABA Consulting, which 2001 and developed relationships with develops marketing plans for public and business and industry for individual, private companies in multiple industries. group, and class internships. He was The firm focuses on the primary market- named associate dean in February 2007. ing levers to help companies achieve prof- Larry has been a licensed real estate bro- itable revenue growth. ABA assists clients ker in the state of Illinois for the past in selecting the best advertising and com- eight years, and is currently working on munications partners, and in optimizing his doctorate in business administration. the client-agency relationship. You can learn

dividend 53 spring 2008 CLASS NOTES Brian Hung, BBA ’07 a four-year letter winner for the men’s Jeff Benz, MBA ’06 tennis program, has been named the male has been named chief administrative offi- recipient of the 2007 NCAA Sportsman- cer, secretary, and general counsel for AVP, ship Award. Framingham State College’s a leading lifestyle sports entertainment women’s soccer team was the female re- company focused on the production, cipient. They were chosen from a group marketing, and distribution of profes- of 97 nominees from all three divisions sional beach volleyball events worldwide. of the NCAA. “I am extremely honored Before joining AVP in 2007, Jeff was to be given this award,” Brian said. “I have a senior executive at A2 Holdings LLC, always prided myself in displaying good a venture-funded start-up committed to sportsmanship on the court.” Brian, the improving the sport of boxing at all levels. first-ever student athlete from the Big Ten Prior to that, he served for five years as to receive the NCAA Sportsmanship the general counsel, secretary, managing Award, graduated with high distinction director of legal and government affairs, in April 2007. He is working as an invest- and acting ethics officer for the U.S. ment banking analyst with Merrill Lynch Olympic Committee. in New York City. TRUE BLUE. Jeffrey Lieberman, MBA ’02, and Woong Oh, MBA ’02, show their true colors on a recent trip to Easter Island. obituaries Darys Estrella Mordan, MBA ’02 is CEO of the Dominican Stock Exchange. She recently was selected as a Young Global Richard C. King “Fred” Francis Garych Leader 2008, an honor bestowed each year MBA ’50 MBA ’51 by the World Economic Forum to recog- nize and acknowledge the top 200-300 passed away on October 23, 2007, at the passed away on October 19, 2007, at the young leaders from around the world for age of 83, after a short illness. He is sur- age of 80, surrounded by loved ones. Fred their professional accomplishments. Darys vived by his wife of 57 years, Dr. Monique was born in New Britain, Connecticut, hopes to leverage her position as a Young King, and a nephew, James R. King. Rich- and served in the U.S. Navy during World Global Leader to bring more attention to ard was born in Cleveland, Ohio, and War II. He earned his bachelor’s degree investment opportunities in the Dominican enlisted in the U.S. Navy as an apprentice from the University of Connecticut and Republic and to promote best practices seaman in 1943. He served as a commu- continued his studies at the University of regionally for capital markets in Latin nications officer aboard the U.S.S. Mt. Michigan to earn his MBA. Fred worked America and the Caribbean. McKinley, and performed various roles in New York City for General Electric Co., on the staff of the Task Force Commander primarily in the international division, for Patience Allen, MBA ’04 during atomic bomb tests at Bikini Atoll nearly 40 years. He and his wife, M. Eileen writes, “Since coming to Norway in 2004, in July-August 1946. He was honorably Tierney Garych, had four children. Eileen I have been busy in both the arts and discharged in September 1946, with the passed away in 1984. Central to Fred’s life entrepreneurial areas. In 2006, I started rank of ensign. After receiving a liberal was a love of education and gardening. In The New Glass Company with a business arts degree from Harvard College in 1948, June 2007, he hosted a celebration of his partner (www.thenewglasscompany.no). Richard earned his MBA at the University 80th birthday for friends and family. Fred It is focused on promoting Norwegian of Michigan. In 1950, he went on to join is survived by his brothers George Grzesczyk artists internationally. Over the Christmas Standard Oil of Ohio (now BP Amoco), and Lawrence Garych, his son Paul Garych, holiday, I bought one-third of the con- holding various management positions and his daughters Susan Garych Buller, sulting company www.etablere.no, which during 30 years of service. He established Maura Garych Fritz, and Kathryn Garych, specializes in helping entrepreneurs start a minority affairs program at the company as well as six grandchildren. their own businesses. I plan on being in and became a community leader in that Oslo for awhile, so if anyone is in the area. In 1979, Richard joined the broker- area, be sure to look me up.” You can reach age firm of Prescott, Ball, and Turben in Patience at [email protected]. Cleveland. Upon retirement, he assumed a busy role as a volunteer, teaching English Brian Lafer, BBA ’04 to foreign students at the Cleveland Insti- has been promoted to assistant vice presi- tute of Music and serving as president of dent at U.S. Equities Realty in Chicago. the Cleveland Chamber Music Society. Brian is a licensed real estate salesperson. Richard and Monique moved to Tucson, The company serves as a strategic real estate Arizona, in 1994, where he continued to advisor to clients throughout the U.S. and pursue such interests as music, invest- Do you have news to share with Latin America. ments, exercising, and playing bridge. He classmates? Send your Class Notes to also authored a short novel for children. [email protected].

dividend 54 spring 2008 First person A Day in the (Working) Life by Ellen Ernst Kossek, MBA ’81

t’s 10 a.m. on a snowy Ann Arbor balance (not to mention ego Anne Stanton morning in winter 1979. I am sitting management) so familiar to I in an accounting class that is predom- double-MBA households. We inately men, and trying to concentrate. both entertain great offers, Professor Earl “the Pearl” Keller has just domestically and internation- sped through a term’s worth of informa- ally; and we both have turned tion on pensions in a single session before down tremendous opportu- dismissing us with his signature phrase: nities, depending on whose “Well, it’s martini time somewhere in the career track takes precedence world!” The classmate sitting next to me at any given time. is an attractive, smiling guy with a funny The balancing act started East Coast accent. All during the hour, he as early as summer internship has whispered jokes and kept me in good season, shortly after we’d humor. Throughout the term we have begun dating. I was in Japan become friends who share the fate of being working for Hitachi. He was liberal-arts undergrads new to LIFO and in St. Louis working at Mc- FIFO lingo. Our common goal is to avoid Donnell Douglas. Little did a dreaded B-minus on Keller’s grading we know this would be the first of many Even expert Ellen Ernst Kossek, MBA ’81, faces curve, in effect a “fail” for the course. times we would face the challenge of the challenge of managing her workload in the Flash forward to 6 a.m. on a snowy morn- matching geo­graphy in the job search. At “flexible job age.” ing in 2008. That same classmate who graduation, we agreed to take the best entertained me in Keller’s class is now my offers possible, with the plan to transfer if decades to work out the logistics of build- husband of 26 years. He has just gotten off our union was meant to be. I started in ing a life together. There are times when the phone with a co-worker in Singapore, international human resources manage- we’ve had two homes and lived in separate and is packing to fly to Atlanta later today. ment at the now-defunct GTE in Geneva, residences. There are other times when I am used to the routine and have long Switzerland. He went with IBM in upstate we’ve shared adjoining home offices and since learned to cope with separation New York (wearing the obligatory white seen each other more than most married anxiety. Besides, as a professor at Michi- shirt to work each day). couples. Sometimes I marvel at the rela- gan State University, I have my own itin- That December, I was asked by my boss tive stability we’ve been able to achieve in erary to worry about. I’m prepping for a if I wanted to stay permanently in Europe. our careers, despite all the apparent dis- class and refining a speech that I’ll deliver I opted instead for a job at corporate head- ruption and lack of traditional routine. tomorrow. I also have quarters in Connecticut. At least my rela- He has just completed 28 years at IBM, notes to review in prepa- tionship would have a better chance if both and I’ve logged 21 years with MSU. We have ration for a phone of us lived on the same continent. I was four children, including one who is now a interview with a re- right. Shortly thereafter, my husband pro- sophomore at the University of Michigan. porter about my new posed marriage and requested a transfer When I think back on our careers and the book, CEO of Me. with IBM to the Connecticut area — for me. choices we have made for ourselves and As with most As newlyweds, we settled in Fairfield our family, I have come to the following MBAs throughout County, and for a little while, we actually conclusion: There are trade-offs and there history, my husband lived like a “normal” couple who went to are sacrifices. Though we’ve both made and I started our work each day at our respective firms. Then trade-offs throughout our professional degree program at I decided to pursue a doctorate at Yale, and and personal lives, we haven’t actually sacri- Michigan as goal- he started traveling to different IBM loca- ficed anything at all. oriented over- tions. When I graduated, I accepted an offer achievers who at Michigan State University as a professor Ellen Ernst Kossek, MBA ’81, is a profes­sor of wanted to be the first of human resources, in part because there human resources and organizational behav- and best at everything we did. Today, as was an IBM branch — where he could ior at Michigan State University’s School of a two-MBA couple, we still want those work — in Lansing. Today, my husband Labor & Industrial Relations. She earned things. But the reality is this: There is only works for IBM Global Services as a mo- her PhD from Yale University in 1987. Ellen room for one at the top. And I now real- bile employee, traveling and largely work- is married to Sandy Kossek, MBA ’81, and ize that our history, since first meeting in ing from our home. is the co-author, with Brenda Lautsch, of that Ann Arbor classroom, has been an We both have made career compromises, CEO of Me: Creating a Life that Works in ongoing exercise in the delicate work-life and shared giving and taking over the past the Flexible Job Age (Wharton Press, 2008).

dividend 55 spring 2008 AlumLeftFormDivAd.pdf 1/31/07 6:03:15 PM

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