Who's in the News

November, 2003

The World's Her Stage

Why not supplement Hollywood with Bollywood? That's what stage, film, and TV actress Jennifer Siebel, MBA '01, has decided to do, according to the Times of London and the Economic Times of India.

Siebel was in gossip columns not long ago for dating actor George Clooney. They are just friends now, she told Parade, because "our careers left little time for a relationship."

After business school, Siebel studied at San Francisco's American Conservatory Theater, then moved to Hollywood, where she costarred in the television show Presidio Med and the film Waiting for Anna. Her most recent part is as "Leggy" in an upcoming Jack Nicholson-Diane Keaton film.

Siebel is breaking into producing in India, where she said she also plans to costar in a Hinglish movie "about an American girl who, after flying down to India as part of a Survivor-type reality show, loses her way."

He Went Against the Grain and Won

During the crazy stock boom years, Seagate CEO Steve Luczo, MBA '84, was frustrated that Wall Street investors saw so little value in his company's disk-drive business. The company's stake in the software company Veritas was actually trading at a higher value than Seagate. The solution, Luczo thought, was to take the company private, but he would need investors besides himself who were willing to go into a cyclical business. In August 2000, he identified Silver Lake Partners, a venture capital partnership that invested $382 million. Two years later, according to Fortune, Silver Lake's investment was worth $1.8 billion when Seagate was taken public again.

"Our business is an odd one," Luczo said. "If you're behind in technology, the answer isn't that you cut expenses or capital. It's that you add expenses in the form of R&D and add capital. This isn't intuitive to the guys buying bottling plants and whatnot."

Goldilocks's New Plan Is Ju-u-u-ust Right

Among the foreign food brands finding success in America is Goldilocks, a Filipino bakery and restaurant founded when two sisters began baking cakes to go with fairy tales in 1966. Run now by their children, Goldilocks employs 4,000 in the Philippines, 25 in Canada, and 800 in the United States, where Mary-Ann Ortiz-Luis, SEP '00, is vice president of finance. The daughter and niece of the founders, she started work in the bakery as a child but then took off for medical school and spent a decade as a pediatrician in Toronto before the family business drew her back.

Ortiz-Luis and several relatives decided to improve efficiency in the United States by centralizing their operations in Northern and Southern California commissaries. All the goods are baked and distributed to their stores and other retail outlets such as Wal-Mart, Costco, and Marriott. "Thai, Chinese, and Japanese cultures have been recognized, but not Filipino culture," Ortiz-Luis told the Oakland Tribune. "If we can mainstream our brand, we can be recognized as a separate Asian entity."

Seed Money to Sprout 100 New Schools

The Bill and Melinda Gates Foundation recently gave $22 million to the San Francisco-based NewSchools Venture Fund, co-founded by Kim Smith, MBA '98.

Smith, who also helped start Teach for America, said the grant will be used as seed money to develop at least five charter management organizations that will then be expected to create 20 new public schools each over a decade, according to the San Francisco Business Times. "It's an opportunity to build a system where the governance, management, and the teachers, parents, and students come together," Smith said. "It's a charter environment, so everyone chooses to be a part of it. In a public school district, it's a struggle to get the constituencies aligned."

Venture Capital on Rise

Silicon Valley's pessimism has given way to new venture capital funds, according to a recent article in the Los Angeles Times. "It's a great time for investing in early-stage companies that will mature in three to five years," said Larry Kubal, MBA '82, managing partner of Labrador Ventures. The firm recently raised $100 million for its fifth investment fund—$10 million more than its last fund launched at the end of 2000.

"In the bubble, all the VCs felt very smart," Kubal said. "Then for the last three years we all felt foolish. No one's IQ has changed. Egos have. The pendulum always swings too far in the venture business."

Do What You Do Best

Since David Levin, MBA '87, took over as CEO of privately held Symbian Ltd. in London, the company's operating system software has caught on with cell phone makers and consumers. "Meanwhile, rival Microsoft is still having trouble getting traction in a market it views as critical to its future," according to BusinessWeek Online. Levin credited his predecessors with developing a strong product and said his contribution has been "mostly a perceptual turnaround." The company gave up trying to make a "soup to nuts operating system" for all handheld devices, he said. "Nobody knows yet what consumers really want," and Symbian has found it can keep 85 to 95 percent of the computer code unchanged as it accommodates the desires of different cell phone manufacturers. Levin's own prediction for the future? Smart cell phones are not replacements for personal computers but they "will eat into the markets for cameras, games, and PDAs."

Companies Seek Seasoned Consultants

In the wake of corporate scandals and a recession, firms are forcing management consulting firms to rethink their business model, Fortune magazine claimed recently. That model relies on smart, young MBAs to give strategy analysis advice under the supervision of partners who make bigger salaries. More companies want smaller teams of more seasoned consultants, the magazine said, admitting it may be a temporary trend. John Donahoe, MBA '86, worldwide managing director of Bain & Co., said that to satisfy clients' demands for seasoned pros, the firm brought in 20 new partners over 18 months, some poached from competitors. Donahue defended young consultants' number crunching skills, however. "Rather than say we know the answer on day one because we've done it five times before, we're focused on developing customized strategies for our clients."

Alumni to Know

Faculty

Newsmakers

Crossover Zeitgeister

Jim Collins, MBA '83, is a crossover artist, according to Newsweek. By that the magazine means that his business book, Good to Great, has developed mass appeal with more than 1 million hardcover sales. The book is about how 11 companies transformed themselves from good to great performers. Fortune asked Collins to write a cover story, "The 10 Greatest CEOs of All Time," and later named him to its shortlist of five "zeitgeisters—people who have an uncanny ability to influence what others think."

Late Trades Leave Trail in Mutual Fund Data

Eric Zitzewitz, assistant professor of strategic management, was interviewed by CNBC and others in September for his work on mutual fund trading practices.

After New York Attorney General Eliot Spitzer announced his investigation of late trading practices in mutual funds, Stanford Business School faculty member Eric Zitzewitz decided to check one of his mutual fund data samples for evidence. What he found surprised him: evidence of illegal after-hours trading in 16 of 104 mutual funds. The results produced a clamor among media wanting to interview him.

In one interview with CNBC, he was careful to point out that he had no evidence that the fund firms themselves had knowledge of illegal activity. "It could just be a broker was placing these trades across a number of firms, and they were sneaking them in."

In 2002, Zitzewitz studied market timing in mutual fund trades, a practice that is not illegal under most circumstances, but which permits day traders to take some profits at the expense of long-term investors. The practice was dramatic in international funds because many of the funds set their share price at 4 p.m. Eastern time-or 14 hours after the Tokyo exchange closed, for example. That means frequent traders can gather information about the share price before it is formally set.

Long-term investors lose more from the legal practice than the illegal one, Zitzewitz told CNBC and numerous other media who interviewed him. "Market timing costs the average shareholder in international funds about 1 percent of assets per year or $1 out of every $100. The late trading costs about another nickel, or $1.05 total," he said.

Doctor's Specialty: Ailing Hospitals

In just two years Dr. Andrew Agwunobi, MBA '01, brought one of Atlanta's large private hospitals back from the brink of bankruptcy, according to the Atlanta Journal-Constitution. Now Agwunobi, a native of Scotland whose father was a doctor from Nigeria, is heading Grady Health System, Georgia's largest public hospital system. Grady faces a $20 million deficit, and in newspaper interviews and reports from county supervisor meetings, Agwunobi has prescribed structural changes that include making more of the hospital's operations transparent to the public. "Sunlight helps to cure festering wounds that covering up doesn't help," the doctor said.

Stop and Smell the Gardenias

Fragrance, texture, and sound are easily overlooked keys to designing a spectacular garden, according to Stephen Suzman, MBA '74, the owner of Suzman Design Associates, a 20-year-old San Francisco Bay Area landscape design firm that employs 30 professionals who work on gardens around the world. In an interview with the San Francisco Chronicle in his flower-filled Castro District garden, Suzman said that smell is the most primal of our senses and it evokes strong memories. For example, the heavy perfume of gardenias in his family's Johannesburg garden is one of his earliest memories. For noses in heavy San Francisco shade, however, he suggested Daphne odora and Rhododendron fragrantissima. If you live in the sun, try lemon verbena, scented geraniums, and freesias.