Spreadsheet Three

Illustration by Carl Wiens

Birth of Financial Aid

AS PRESIDENT of a “little group hardly big enough to call a student body,” Lawrence Hogue, MBA ’33, saw his Business School classmates dropping out of school as the financial woes of the early thirties multiplied. “Fifty started in my class and only 37 finished. The second-year class was down to 35,” he recalls. “Some flunked out. They were trying to work and go to school, and let me tell you, it was really tough to do that.”

Hogue decided to do something about it. After one dinner at the Old Union, he and several classmates asked members of the Classes of ’32 and ’33 to contribute $5 or $10 to start a financial aid fund for classmates who were struggling. The student body raised $200, which three students, including Hogue, delivered to Stanford President Ray Lyman Wilbur in the spring of 1932.

Despite the Depression, over the next decade, donations and interest payments swelled to more than $6,000, and by 1942, the fund had loans outstanding to 29 individuals.

Was the sacrifice of being a poor student worth it? Not the first 10 years, says Hogue, who went to work for a Los Angeles bank at $40 a month.

Some didn’t get a job, and most couldn’t afford to get married, Hogue said. But after a World War II stint in the Navy, his career took off. Working for a Dole cannery in San Jose, he retired in 1974 as a Dole Foods vice president and director.

Fast-Change Artists Garner Baldrige Award

ALTHOUGH IT WAS Don Evans, MBA ’79, who accepted the accolades from outgoing President Clinton and then-Commerce Secretary Norm Mineta on December 19, Evans is emphatic about who deserves the credit for his company’s 2000 Malcolm Baldrige National Quality Award: the 1,394 employees of Operations Management International Inc. (OMI).

Evans’ company takes over management and operations of water and wastewater treatment facilities that are problem-plagued or have fallen into noncompliance. Remarkably, OMI must turn a plant around within 24 hours. Its goal is to accomplish this while retaining at least 90 percent of the facility’s workforce.

Headquartered in Greenwood Village, Colo., OMI, a subsidiary of the American engineering company CH2M HILL, operates and maintains more than 160 public- and private-sector wastewater and water treatment facilities in the Americas, the Middle East, and Asia.

President and CEO of OMI since 1986, Evans says, “We reorganized our whole company around the Baldrige criteria in 1988. I think everyone who has used this strategy has found that the Baldrige criteria are an excellent way to organize and manage and motivate a company’s employees. If you can meet these criteria, you will deliver phenomenal value for your shareholders, customers, and employees.”

Named after a former Secretary of Commerce, the Malcolm Baldrige National Quality Award was established by Congress in 1987 to enhance the competitiveness of U.S. businesses. Applicants undergo a rigorous 300- to 1,000-hour examination process. Their profiles are reviewed by an independent board of about 400 examiners primarily from the private sector. The award has been given to just 41 U.S. organizations.

Some of OMI’s achievements: an increase in core segment market share from about 50 percent in 1996 to almost 60 percent in 2000, while competitors’ share during the same period remained at less than 20 percent; high customer satisfaction as shown in a survey of industrial clients, which found that OMI met expectations 100 percent of the time and exceeded them 88 percent of the time; and while its workforce increased by 50 percent over two years, employee turnover decreased to 15.5 percent in 1999, better than the national average of 18.6 percent and the service industry average of 27.1 percent.

A Positive Spin on the Dot-com Shakeout

“WHY DID WE RAISE interest rates while energy costs were skyrocketing? It doesn’t make sense to me,” said Sun Microsystems chief Scott McNealy before television cameras at a January campus forum. The Federal Reserve Board raised interest rates last year, making it harder to obtain the capital needed for the next generation of wireless and cable networks, McNealy, MBA ’80, told an audience of students and faculty at a taping of the PBS television program CEO Exchange, held at the Stanford Business School.

On the dot-com shakeout, McNealy stressed that these were still early days for the Internet: “It’s not the second half; it’s the first or second minute of a 60-minute game.”

The second show guest, Marc Andreessen, a founder of Netscape and now chairman of Loudcloud Inc., a provider of e-business infrastructure services, was equally unfazed by Wall Street’s change of heart about technology stocks and even pointed to possible benefits of a cooler market.

With expectations back at a more realistic level, entrepreneurs have more time to build a company, select employees, create a culture, and communicate. “You have more time now to do it right,” Andreessen said.

The show aired on PBS television stations in April.