Who's in the News

August, 2003

Saving Lives—One at a Time

A trip to Tanzania last year persuaded Miles White, MBA '80, that he and the company he heads, Abbott Laboratories, could and should do more to fight the AIDS pandemic in Africa. When he returned home to Chicago, White, the firm's CEO and chairman, cut the price of Abbott's HIV/AIDS inhibitor drugs to below cost for African and other poor nations. The company also announced it would spend millions rehabilitating a major Tanzanian hospital and donate nearly 20 million HIV/AIDS diagnostic test kits over five years. USA Today asked White, who is also on the board of the Federal Reserve Bank of Chicago, how he determined the amount to give. He answered with a story of "a fellow walking along a beach where thousands of starfish have washed up. He saves them one at a time by throwing them into the surf. Another guy tells him that there are too many starfish to make a difference. The fellow throws one into the surf and says, 'I made a difference for that one.'"

White added that shareholders also should be told that while giving does serve a business interest, companies give because they can and should.

Prep School Picks First Headmistress

She was contemplating divinity school when a friend sent Elizabeth Duffy a business school application. "I had no idea [business school] was also for general management," says Duffy, a molecular biologist who this summer became the first woman headmaster of the selective Lawrenceville School, a 192-year-old private high school five miles from Princeton University. A boarding and nonresidential school that was once only for men, the school has 784 students from 25 countries.

Duffy, MBA '93, who is also a trustee of Princeton, told the Daily Princetonian that business school was "like learning a foreign language" and that she has used the credentials to enhance her commitment to educational justice. She most recently worked for a foundation raising funds for teaching and technology initiatives at liberal arts colleges.

Singapore Imports the Silver Bullet

It isn't just MBA students at Stanford who sometimes get upset about not getting into their preferred classes. Ivan Png, PhD '85, found that out at the National University of Singapore, where he is a professor and vice provost. Students had been unhappy with a balloting system that allowed the university's computers to pick the winners at random when a course was oversubscribed. They circulated an online petition of complaint that quickly garnered 400 signatures. Png responded for the university at a February press conference covered by the Straits Times. Under a new online bidding system that might sound familiar to Stanford MBA graduates, each of the 20,000 students is given 1,000 points with which to bid for courses. Someone with a real yen for a particular course can bid all his or her points for it.

Skittish Sideliners Sink Startups

Too many of the Silicon Valley's most experienced entrepreneurs are sitting on the sidelines, according to Jennifer Gill Roberts, a general partner with the venture capital firm Sevin Rosen Funds in Palo Alto. "I've sat through over a dozen lunches with former high-level high-tech executives talking about new ideas and consulting arrangements. Unfortunately, not one of my luncheon partners was willing to take on the actual work of running a new company," wrote Roberts, MBA '93, in an essay for the San Jose Business Journal.

Venture funds want startups to have full-time experienced leaders, but they are finding that those with the credentials are only willing to be part-time advisors, she said. Some are working in the nonprofit sector; some are taking a sabbatical; some have downsized their careers to devote more energies to parenting, hobbies, and coaching. "Many, having failed with their last company, are once burned, twice shy. Others can't get the CEO title they once had and don't want to go back to being vice president of marketing or sales."

Repeat entrepreneurs "bring critical skills and early funding. Their experience helps a startup pace itself, sustain its efforts, and avoid the worst mistakes of the boom era."

Real Simple Execs Win Over Advertisers

Advertisers hated it, but readers kept coming in ever larger numbers to Real Simple, a magazine without a glossy cover launched by Time Inc. in April 2000. Designed mostly for women who are weary of articles about how to find the perfect mate, redo their makeup, or make gourmet meals, the magazine is drawing a young, affluent readership seeking a simpler lifestyle, according to AdWeek, which named Real Simple's top three managers the "executive team of the year." "Advertisers who once shunned the magazine are now flooding in," AdWeek said, giving part of the credit to Steven Sachs, MBA '93. As marketing director, Sachs conducted reader research and then innovative cross-marketing partnerships, such as giving Pottery Barn a small catalog insert in exchange for the retailer emailing an offer of free copies of Real Simple and a small gift to its customers. Time Inc. chairman Ann Moore called Sachs, now a vice president of consumer marketing, a "noodge. He called in all his favors and asked me to follow up. He was unmerciful," she said.

Sloan Supercop II

When this magazine photographed Sir Howard Davies, Sloan '80, for its May 2002 cover, it would have been hard to predict that another Stanford Sloan graduate would replace him as Britain's "supercop" of financial services. M. Callum McCarthy, Sloan '82, the chairman of Britain's gas and electricity regulator Ofgem, has been selected to take over in September as chairman of Britain's expansive Financial Services Agency from Davies. The FSA is the equivalent of multiple state and federal financial and consumer regulators in the United States. McCarthy's appointment "confounded most forecasts," The Economist reported in April, but added that he had "good credentials" and a background "uncannily close to Sir Howard's: same school, same Oxford college, and (same again) a year at Stanford Business School, followed by several civil service posts." McCarthy was instrumental in implementing Britain's competitive energy market, which has brought down wholesale electricity prices by 40 percent.

Gay-Friendly Schools

In the past seven years, the nation's top business schools have become increasingly gay-friendly, according to a study by Jason Lorber, MBA '95 and president of Aplomb Consulting. Based on interviews with school administrators, faculty, students, and alumni, Lorber concluded that the highest ranked in the gay-friendly category were Stanford, Harvard, and Wharton, three schools that rank at the top in other categories, too. Lorber said 71 percent of the schools surveyed currently host corporate employers who specifically recruit gay, lesbian, and bisexual students, and 29 profile gay students in their admissions brochures. Stanford MBA program director Sharon Hoffman told PlanetOut News that the GSB was one of the first to profile a gay student and that "we saw more people coming out in their applications the subsequent year. On that front we contributed to breaking down a door that really is the last bastion of acceptable prejudice."

Alumni to Know

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Newsmakers

Silicon Valley Adopts Pay-as-You-Go Model

The world may think the high-tech bubble has burst but a big bang is under way, according to Fortune, which says the successful companies now are those who are cutting prices for their customers—other businesses and consumers—rather than increasing profits for their investors. Among those lowering prices are Arena Solutions and other "pay-by-the-drink" enterprise software providers, the magazine said. Arena's specialty is allowing outsourced manufacturing to be managed over the Internet. Eight GSB alums are involved in the company, including board chairman John Pasquesi and investors Dan Baldini, Andy Drexler, David Edelson, and Paul Vogel, all from the Class of '85, and Tien Tzuo from the Class of '98. Michael DeLapa, MBA '85, is vice president of business development.

Banker Faces Obstruction Charges

As of press time, former investment banker Frank Quattrone, MBA '81, had been indicted by a federal grand jury on charges that he obstructed justice and destroyed evidence. Quattrone has maintained his innocence and was expected to mount a vigorous courtroom battle against prosecutors who are looking for their first criminal conviction of a financier stemming from the stock market bust, the New York Times said. The charges stem from the allegation that Quattrone sent an email to colleagues asking them to follow the company's policy and clean out their files. Prosecutors claim the email came after he had been told by his employer's lawyers that regulators and prosecutors had issued subpoenas for documents concerning the allocation of stock options at Credit Suisse First Boston, where Quattrone, during the bull market's heyday, was among Wall Street's elite investment bankers and helped push CSFB to the top of the IPO rankings. Many friends of Quattrone have been quoted saying they believe prosecutors singled him out as an example to other investment bankers who followed similar stock allocation practices. In a March letter to the San Jose Mercury News, GSB classmates Debbie and Russ Hall said Quattrone "is an honest and generous man, and loving father and husband. … We can no longer sit back and watch the press make Frank a scapegoat for the fall of the market."

From Clicks to Bricks

Rob Forbes, a San Francisco potter who founded his New Economy furniture store online (www.dwr.com) in 1999, has been busy opening bricks-and-mortar stores in recent months. As he prepared to open a Design Within Reach studio in Manhattan, the New York Times dispatched a reporter to Forbes' Russian Hill penthouse to check out his personal style. He found Forbes, MBA '85, living in a converted ballroom with just a smattering of his firm's vintage pieces from the mid-20th century. "You know I really like this place without anything in it," Forbes said. "The space and the view are luxuries on their own."

Forbes' profile is rising in the design world, the Times said, partly because folks in the decorating and architecture businesses like his faster deliveries and his email newsletter, which details his trips and visits with designers around the world. The stores are being added, Forbes said, because "for many people, shopping is a huge pleasure." The private company says its sales were about $60 million in 2002.

Defense Déjà Vu

Defense Secretary Donald Rumsfeld is embracing a course with "uncanny parallels to the early 1960s" and to actions taken by then Secretary Robert McNamara, according to the Christian Science Monitor. To bolster its argument, the newspaper quoted GSB Professor Alain Enthoven, who headed McNamara's systems analysis office. Instead of depending on massive nuclear strikes, Enthoven said, McNamara wanted stronger conventional forces, and expanded the president's menu of options to include the same troops of Special Forces now favored by Rumsfeld.

Shareholders Reject CEO's Pay Package

Under a new investor-protection law in Britain, shareholders of GlaxoSmithKline voted by a slim margin to reject the proposed pay package of the company's chief executive, Jean-Pierre Garnier, MBA '74, the New York Times reported in late May. The vote is not binding but directors ignore the results at their own peril, investors said. The pay plan component that drew the most criticism, according to the newspaper, was a severance provision that would have entitled Garnier to $23.7 million in bonus salary and stock if he were to resign or be dismissed any time through 2007.