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Who's in the NewsFebruary, 2003 Stay-home Husbands Blaze New Trail WHEN HIS SEVENTH-GRADE daughter first learned that Steve Sueltz, MBA ’79, was planning to become the family’s homemaker, she was aghast. “What will I tell people you do?” she asked. “Now her grades have improved, her spirit is back, and Steve is a hit with her classmates who call him for help with their math homework,” says Fortune magazine. Sueltz is one of the “trophy husbands” interviewed for a story about the increasing visibility of female executives with husbands who support them as full-time homemakers. The article asks if family responsibilities, as much as a glass ceiling, have kept women from occupying more of the very top jobs. Sueltz’s wife, Pat, is a vice president at Sun Microsystems, where Kathleen Holmgren, MBA ’85, is also a vice president. Holmgren’s husband, Bob, had a thriving marketing career, but she had founders’ stock at Sun, and they had three children who needed more time, so he quit. The Sueltzes managed two careers as IBM vice presidents for 20 years, but after they moved to California for Pat’s job, they found they were making one of their daughters miserable by working long hours. Something had to give. In another article, BusinessWeek focused on highly educated women who “stop out” to care for children. Said Sharon Hoffman, MBA ’91, director of the Business School’s MBA Program: “Women are realizing it’s impossible for a human being to have it all. You can have it sequentially but not concurrently.” Ethics Messages from Today’s News ETHICS IS A HOT TOPIC IN business and law schools again, but student interest likely will wane as it does for almost every subject, academics told the San Francisco Business Times. When a topic is in the news every day, there is always more interest in courses covering related material, they said. But there is also frustration, said GSB Professor David Baron, because of the limited depth of information. “What I tell my students is we may never know the whole truth about Enron. It’s such a complex thing.” David Kreps, the Business School’s senior associate dean, told the newspaper that recent events allowed professors to “hammer home two important messages: Even if one stays within the letter of the law … pushing the envelope in violation of the spirit of the law is viewed as unethical generally by society. [And] if you get caught doing this, the consequences can be severe.” Credit Risk Revised BOTH BAD DEBTS and earnings are on the rise at Capital One, the nation’s sixth largest credit card company, where CEO Richard Fairbank, MBA ’81, bought out rivals over the past year in the high-risk, subprime credit card market. Investors are nervous about the rising level of bad debts, BusinessWeek reported, but Fairbank insists the tradeoff is what he expected: more charge-offs for higher profits. The company has its own proprietary data-mining techniques that it uses to set interest rates and credit limits on individuals’ credit. The magazine said some analysts are also worried that Capital One profits might suffer if banking regulators decide to limit late fees and over-the-limit charges on credit cards.
A Spot for Sun? INVESTORS IN Sun Microsystems value a share at less than they’d pay for a slice of pizza, Business- Week observed in a November cover story on Scott McNealy’s plans for rebuilding the 20-year-old company, which is facing new competition for its high-end computer hardware products. McNealy, MBA ’80, is pouring research dollars into network software, with the goal of having Sun servers run virtually free of human attention, a strategy the magazine called risky and bold. With layoffs and other cost-cutting, McNealy has said the company can break even by the second quarter. In the longer run, the magazine predicts, Sun will “settle into a specialty niche, providing high-margin servers with all the bells and whistles built in, a path similar to the one trod by Apple Computer in the consumer market.” Team’s In, Ego Out EGO IS OUT, TIMEXES ARE IN at Kimberly-Clark Corp., where Tom Falk, Sloan ’89, has become CEO and is slated to become chairman this month, according to the Milwaukee Journal Sentinel. Outgoing chairman/CEO Wayne Sanders told the newspaper that the 64,000-employee company has a meritocratic culture that requires finding leadership within. He said he sent Falk to Stanford’s Sloan program because he was one of a handful of employees whom he felt had the potential to run the company someday. Company teams have easily chosen to follow Falk’s lead, Sanders said, because of his talent and team-oriented style. Executives who appear self interested do not fit in well at Kimberly-Clark, he said. In 1990, Falk crafted a complex divestiture of a newsprint operation that involved transferring ownership to the subsidiary’s employees, and he was integral in the company’s $9.4 billion acquisition of rival Scott Paper. “A big part of what has made our company successful is there isn’t a lot of ego,” Falk told the newspaper. “You’ve got to be able to drop your ego and any other pretensions you might have.” According to colleagues, Falk drives a 2002 Corvette but he counters that image by wearing a $29 Timex. Signed with Surety “WE HAD NO HESITATION whatsoever,” Hank McKinnell, CEO of Pfizer, told Fortune about signing his John Hancock to certify the company’s financial statements last August under a new u.s. law that requires top executives to swear to their accuracy, as well as the accuracy of their accountants. McKinnell, Sloan ’66, MBA ’67, PhD ’69, gathered 15 people for a two-hour examination of a year’s worth of financial statements—filling 300-page binders—the day before the signatures were due. McKinnell didn’t fret, the magazine said, because his pharmaceutical company “doesn’t report pro forma earnings, doesn’t pay auditors for consulting work, maintains a 15-person governance department, and is regularly praised for the independence of its board.” |
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I’ll Trade You Two Suttons for a…
AMERICANS LOVE TO rank everything from hot dogs to business schools, but it is even better if you can express your opinions on trading cards. That must be the philosophy behind Business 2.0’s decision to print management guru trading cards for the second year in a row. The eight icons chosen for the 2002 cards include GSB and Engineering School Professor Robert Sutton, nicknamed the “idea machine” for his book Weird Ideas That Work, and Debra Meyerson, PhD’89, now a Stanford education school professor, nicknamed “genteel rabble-rouser” for her 2001 book, Tempered Radicals (see November 2001 Stanford Business). The 2002 “Most Valuable Player” honor was given to Jim Collins, MBA ’83, for his best-selling book Good to Great: Why Some Companies Make the Leap … and Others Don’t. The Babe Ruth of this cult is none other than the legendary consultant Niccolo Machiavelli. Smart Locks Make for Tight Ships MORE STRINGENT U.S. security requirements are behind the development of “smart locks” for cargo that will be shipped through ports, Business School Professor Hau Lee told the South China Morning Post. Long-distance shippers will be able to speed through security checks in the long run, Lee told the Post, by using disposable locks, costing “a few dollars,” that will have computer chips showing the containers’ contents and programmed at the source. The information will be relayed via the Internet to the recipient. “If there is a breach, you stop the box as soon as possible. If the breach is that some unauthorized person gained access at the factory, you don’t put it on the boat.” Shippers and ports who are quick to adopt the technology and make sure their trading partners do also will have a competitive edge as tighter security requirements are phased in, he said. The technology has undergone a trial in Singapore but approval of a smart lock system is probably a year off. Meanwhile, Lee, the director of the Stanford Global Supply Chain Management Forum, told the Los Angeles Times that many U.S. companies with foreign supply chains are looking for backup suppliers in the United States because of the 10-day lockout at West Coast ports in October. Companies are learning that “you have to have a second source as a default. A local supplier can give you that flexibility,” he said. Pills and Profits IMPOTENCE DRUGS are potent in the marketplace, according to Bloomberg.com, which reported in October a setback for GlaxoSmithKline PLC because release of the company’s impotence drug, Levitra, was delayed for more testing. Jean-Pierre Garnier, MBA ’74, the CEO of Glaxo, had hoped to use the partnership he had formed with Bayer AG to take on his biggest competitor, Pfizer, the maker of the anti-impotency drug Viagra. “Now Glaxo may be left behind as Pfizer gets even bigger with its acquisition of Pharmacia Corp.,” Bloomberg said. Still, Garnier has reduced costs by more than $1.1 billion since he took over in 2000, the news agency said, and he has a “successful record of getting products through the u.s. Food and Drug Administration.” That agency approved a new extended release version of Augmentin, an antibiotic that is Glaxo’s second best-selling drug, in September. Finance for Couples MBAS MAY BRING a sophisticated understanding of finance to a marriage, but that doesn’t mean they won’t have money conflicts if two marry each other. Brandy and Lara Thomas, both MBA ’93, couldn’t agree to move from Arlington, Va., to a more expensive home in McLean, Va., Brandy told the Baltimore Sun. “We discussed this every way possible and daily,” he said. “It was some-thing I always wanted. But she liked stability. Moving for her was a hard thing.” The Internet entrepreneur eventually persuaded his wife, Lara, of PricewaterhouseCoopers to make the move. Finance counselors told the newspaper many marital disagreements about money are really about feelings of security, power, control, self-esteem, and freedom that are tied to money.
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