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February 2001, Volume 69, Number 2 |
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February 2001, Volume 69, Number 2 |
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She Did Her Homework SHE IS BEING QUOTED from Wall Street to Puget Sound. An analyst for Robertson Stephens, Lauren Cooks Levitan, MBA '92, released a report questioning the efficiency of Amazon.com's delivery system. Curious about how the firm would do as it branched out from books into product categories such as electronics and hardware, she headed a team that for weeks placed orders in different categories. Tracking the orders, Levitan told the San Francisco Chronicle, she found the items arrived with astonishing speed. The problem was that her orders arrived on average in 3.67 different shipments, although she paid only a single shipping fee. Even though she raised issues, Levitan did not change her "long-term attractive" rating on the firm's stock. Levitan's eye for online retail earned her a spot on Fortune's list of all-star stock analysts in 2000. A reason for her success, Fortune postulated, is that after graduation Levitan spent several years working in retail. Her time on the sales floor helped her understand how a company's vision didn't always match the customer's image. Today's MBAs Are in the Catbird Seat BUSINESS SCHOOL STUDENTS are in a great position right now, second-year MBA Pehr Luedtke told the Wall Street Journal's online publication WSJ.com. With markets dropping and the dot-com world shrinking, "we can watch what's happening and take a wait-and-see attitude to determine what businesses are really going to win and then make our career decisions." Luedtke said he believes industry leaders recognize that MBA students aren't just studying business but are participating in it as well. He described being seated next to a venture capitalist at a social event. "He kept asking me about what underdeveloped marketplaces were up-and-coming because he felt that the GSB was a hotbed of ideas." B2B: Back to Basics REMEMBER ALL the talk about the new economy throwing out the old business lessons? Not so fast, says Smartbusiness. Ignoring the basics taught in the nation's business schools is behind the downfall of many of today's dot-com casualties. The magazine points to Haim Mendelson and Garth Saloner, codirectors of the School's Center for Electronic Business and Commerce, as two of the leaders who teach old lessons to the new economy. "People say strategic planning is dead and so on," said Mendelson, "but that does not mean that the formal process of evaluating business is dead. In a dot-com, the risk of making the wrong decision is much higher because there is a limited amount of resources, so making the wrong decision can destroy the company." Saloner concurs and points to a major flaw in the business-to-business sector. "They will assume that because they can build a cool-looking Web site that businesses will come flocking to their doors. That is a colossal mistake. There are massive amounts of organizational and human behavior change that must accompany the changeover to B2B. The adoption of technology is usually more about human change than it is about technological change. If you think you're going to revolutionize the way something works, ask yourself why people aren't doing it that way already." And in This End Zone TWO-HUNDRED-POUND wrestlers with Day-Glo costumes and "assistants" in slinky evening gowns are common fare for the World Wrestling Federation. The world of big-time wrestling has been turned into a multimillion-dollar entertainment empire by Vince and Linda McMahon, who give new meaning to the description of a family business. Fortune predicts we ain't seen nothin' yet. "If McMahon is as good as his bravado implies, I think they've got a real good shot," says Mark Riely, MBA '74, of Media Group Investors, one of the empire's shareholders. World Wrestling Federation Entertainment Inc. is about to launch the XFL—football with attitude—that is set to kick off in February. Start-Up Savant
WOULD THERE BE a Silicon Valley without Stanford, mused a recent issue of Fortune Small Business. Stanford is a machine that has produced the people and ideas that created much of the Valley's technological legacy, said the magazine, and "at the heart of the academic machine is H. Irving Grousbeck, codirector of the Stanford Center for Entrepreneurial Studies." In a cover article listing "15 Heroes of Small Business," the magazine described Grousbeck as someone who inspires students to think through the startup via his class in entrepreneurship. Grousbeck, who founded Continental Cablevision with $650,000 in the 1960s, came to the Business School in 1985 for what he thought would be a one-year teaching assignment; he has taught entrepreneurial topics to generations of students since. "I try to demystify the process," he said. What's with WAP? FOUNDER AND CHAIRMAN of Phone.com Alain Rossmann, MBA '83, has some impressive numbers about wireless Internet services. Phone.com is a 6-year-old company that has teamed with firms like Nokia, Motorola, and Ericsson to create Wireless Application Protocol (WAP), described as the standard for connecting wireless phones to the Internet. The firm recently merged to become part of Openwave Systems Inc. The Industry Standard quotes Rossmann as estimating 4.1 million people worldwide subscribe to service based on his firm's technology, and 12 million use its browser. He told the magazine he uses his own WAP phone constantly. "I have 900 employees and I check my employee directory and dial them directly. I know the arrival times and gates of planes faster than the airline agents." Business, Asian Style ASIAN COMPANIES that once shipped parts to European and U.S. firms for final assembly are now taking their place at the head of the international supply chain, Business School professor Hau Lee told Finance Asia. As an example, Lee told the Taiwanese publication during a visit in the fall, Lucent Technologies is now assembling telecommunications switches in Asia for Asian use. Companies are being forced to develop new models for conducting electronic commerce in Asia, he said. For instance, a typical U.S. model for electronic business will not work in most of Asia, where the use of credit cards is not as common, so companies are being creative. In Japan, Lee said, customers can use the Internet to order small electronics products from 7-Eleven stores. Instead of paying for the items online with a credit card, shoppers pick their purchases up at their local 7-Eleven store and pay in cash. Customer Pleaser KNOWING WHAT her customers think is important to Sue Bostrom, MBA '86. Her job depends on it. As senior vice president at Cisco Systems, Bostrom heads a group that works with Cisco customers to help them use the Internet to competitive advantage. Cisco employees get bonuses based on customer satisfaction. The San Jose Mercury News reported that Cisco itself saved $1.4 billion last year by running basic functions like expense systems and sales training on its data networks. Bostrom credits CEO John Chambers' attention to customers for much of Cisco's remarkable financial success. She told Fortune that after talking with a CEO attending one of his speeches, Chambers called her group in to meet with the potential customer and explore new ways to use the Net. They are now doing business. It's no wonder Bostrom made Fortune's list of the 50 most powerful women in business. Also on Fortune's list are Hewlett-Packard execs Ann Livermore, MBA '82, and Carolyn Ticknor, MBA '77. Livermore, who is president of the business-customer organization, runs HP's $35 billion sales arm. Ticknor is president of imaging and printing systems, responsible for 60 percent of the company's profits. No Stone Unturned AFTER NEARLY 25 YEARS leading the Stanford Alumni Association, Bill Stone, MBA '69, has announced he is retiring, "so I may be able to cut back to full time." During his tenure, Stone told Stanford Report, the organization gained a reputation for being "one of the more innovative, daredevil [alumni] organizations in the country... We don't encourage failure, but we have a climate that doesn't put someone in the penalty box if an event doesn't sell out." Stone took a deep breath a few years ago when he returned from a trip: In his absence the Association had purchased the old wooden seats from Stanford Stadium that were being replaced by aluminum. The plan was to fashion them into garden benches and sell them to alumni/ae. "I'll be darned if we didn't sell out," Stone recalled. You Go, Girl IN 1993, when classmates Denise Brosseau and Jennifer Gill Roberts founded the Forum for Women Entrepreneurs while they were still MBA students, "you could count the women VCs and CEOs on one hand," Roberts told Inc. Today, 41 percent of venture-backed businesses have women in senior management, although women-led companies still get only a marginal 5 percent of all money invested by VCs. Brosseau and Roberts hope to change all that with their San Francisco-based organization. "Venture capitalists fund people who they know, who they know of, or who are like them," said Brosseau, who finds the increase of women in venture-backed business encouraging. "It means that there are women now who have been before the VC community, and so women in general will be perceived as less risky." Save the Stamp IN THE FUTURE you will probably be receiving and paying your bills electronically. Rick Inman, MBA '75 and CEO of Tucker Federal Bank in Atlanta, argues that commercial banks had better take the lead in electronic bill-paying or they're going to be left behind. "Check processing and payment is one of the last areas where banks have a strategic advantage," he told Community Bank Systems and Technology magazine. "They need to make sure they don't see that eroded." Tucker Federal recently acquired NextBill.com, a firm with a paperless system that lets merchants email bills directly to customers and allows customers to make their payments electronically. Inman serves as CEO of both Tucker and NextBill.
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