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Sloan Swan Song

Memorial

Sloan Fellows, spouses, and partners jump-started a study trip to China, Vietnam, and Hong Kong with a visit to Beijing’s Bird’s Nest Olympic Stadium in July 2008, six weeks before the Summer Olympics events began there. From left, Caroline Barlerin, Sloan ’08; Patricia de la Maza Calderon; Dolores Paz Saguier; June Yang, Sloan ’08; Michelle Boyapati; Suzanne Jensen; Kiirsti Haatanen; and Jill Gillialand. A study trip outside the United States is the culminating event for each Sloan class. This year’s class went to Brazil, Argentina, and Chile.

Time Warner's Bewkes: "Corporate Teams Lack EQ, not IQ"

Most of the business train wrecks witnessed by Jeff Bewkes, MBA ’77 and CEO of Time Warner, are from a lack of EQ, not IQ. That emotional quotient, or common sense, seems to have been lacking in the institutions creating the current global banking crisis as well as in the rooms where the AOL-Time Warner merger was worked out in 2000, he told other Business School alums recently.

The occasion for his remarks was the April 14 Excellence in Leadership dinner at New York’s Rainbow Room, where the Business School presented Bewkes with its leadership award. About a month later he announced the spinoff of AOL from Time Warner. The pared-down company, he said, would concentrate on its core content businesses—TV and film production, television networks, and publishing. Bewkes, who had headed Time Warner subsidiary HBO at the time of the AOL merger, has been dealing with fallout from it since he became CEO in January 2008.

Referring to that well-intentioned but myopic merger in his speech to alums, Bewkes reflected on the skills he and others were taught through the case method in Stanford Business School classrooms.

“Had a group of MBA students been presented with a case where one company is trying to buy another with stock valued 100 times over earnings, they would have asked if it was a trick question,” he said. “The fact that stuff like that happened in the real world says something about the way people perform in groups.”

“So many companies want to be tough and smart,” he added. “But sometimes saying ‘let’s talk through this again’ is tough and smart.”

Social Entrepreneurship Fellowships for New MBAs

When Brian Lehnen came up with an idea for breaking the cycle of poverty in East Africa in the late 1980s, fewer students and even fewer funders were interested in social-innovation startups. Lehnen couldn’t afford to quit his biotech job, so he borrowed just enough money to buy a Macintosh Plus and devoted his weekends to the new venture, the Village Enterprise Fund.

Now the School’s Center for Social Innovation, in partnership with the Robertson Foundation, is beginning a 3-year pilot program to enable mission-driven Stanford MBAs to devote their full energy after graduation to addressing an important social or environmental problem. Year-long fellowships with $80,000-$120,000 stipends are to be awarded on such criteria as project viability, including strength of innovative approach and likelihood of success, and applicant qualifications and commitment.  To help students strengthen their proposals, the Center last winter invited them to hear advice from several successful social entrepreneurs. 

Lehnen, whose organization has helped clients start 17,000 businesses in Africa since 1987, urged the students to emphasize action over long periods of planning.  He cited Matt Flannery and Jessica Jackley, MBA ’07, who were told they needed to raise $50,000 to $200,000 to launch Kiva, now a successful web-based micro-lending program matching individual lenders and small business people. Lehnen worked with the founders to figure out the minimum action they could take.

“We got it down to a little demonstration for less than $20,000. If you start out small,” he advised, “it means the mistakes don’t have huge effects.”

The first Social Innovation fellows, announced in June, were  graduating MBA students Federico Lozano Fernandez and Jayampathy “Chari” Ratwatte Jr. Ratwatte received a summer research fellowship to develop his proposal to empowering Sri Lankan rice paddy farmers, while Lozano plans to develop an employment agency matching poor, semi-skilled Mexican laborers with employers in Spain experiencing labor scarcity.

Alumna Defends Merits of High School ROTC

Company president and football mom Quincy Yu, MBA ’85, never expected to become a political activist. But a decision by the San Francisco Unified School District board three years ago propelled her into an electoral battle.

In 2006, the board voted to phase out its Junior Reserve Officers’ Training Corps program in all San Francisco public high schools by June 2009. Board members reasoned that JROTC, as a recipient of military funding, discriminates against openly gay instructors because of the military’s don’t-ask-don’t-tell directive. Additionally, they worried that the program might be used for military recruitment.

Yu is the founder of SeaYu, an eco-friendly pet cleaning products company, and mom of a blended family of five kids plus “one large furry dog.” Although her high school–age son was not a member of JROTC, she knew kids who were and believed they were getting invaluable hands-on training in leadership as well as forming important peer relationships through the after-school program.

JROTC, she learned, had been serving 1,600 students in San Francisco, some openly gay and 80 percent of them from minority populations. Contrary to the JROTC opponents’ claims, she said, the organization forbids its instructors to recruit.

With support from parents, teachers, school administrators, and students, Yu led the campaign for an advisory measure on the November 2008 ballot that would direct the school board to save JROTC. It won by 10 percentage points.

Despite the measure’s passage, the school board signaled its intention to go through with the plan to close the program. Yu and her fellow activists kept up the fight and  during an emotional meeting just two weeks before the program was to end, the board voted 4–3 to keep JROTC.

MBA Classmates Assist Stroke Victim

Henry Evans

Karen Melchior, Henry Evans, both MBA ’91, and Jane Evans in the bathroom rebuilt with funds raised by his classmates.

Taking a shower became a monumental ordeal for Henry Evans, MBA ’91, after his 2002 stroke, which left him quadriplegic. He was also unable to speak, which made communicating even more difficult. That has changed, thanks to his GSB classmates and a member of the Class of 1990.

When Evans showed up to his class’s 15th reunion in a wheelchair, alumni asked him and his wife, Jane, what they could do to help and were told that the Evans’ cramped bathroom made showering an often painful experience, because muscle spasms caused Evans to kick the wall and injure himself.

Allyson Campa, Karen Melchior, and Katie Roper organized a “Work One Day for Henry” campaign that encouraged classmates to donate a day’s wages to help expand the Evans’ bathroom, allowing for more space and multiple shower heads. By the next year the bathroom was finished and leftover funds were applied to the more than $60,000 in medical bills not covered by insurance. Finishing touches were made to the bathroom last May.

Meanwhile, Jim Shea, MBA ’90, read about Evans in the Class Notes section of Stanford Business. Shea had recently joined DynaVox, a provider of communication devices for people with disabilities. He flew out to meet Evans (they had never met during the year they overlapped at the GSB, nor during their undergrad years at Notre Dame) and set him up with a pre-release version of the company’s latest device. As a result, Evans is able to speak, use email, surf the web, and control his environment via infrared remote control.

“The bathroom was the beginning of rebuilding our lives,” Evans said. That and the technology Shea introduced have enabled him to be a more independent and active member of his family.

Alums Help U.S. Veterans Re-enter Civilian Life

Reading the war news from Iraq and Afghanistan, Dana Hendrickson, MBA ’77, felt he was not shouldering his share of the burden. He had visited the Palo Alto Veterans Hospital looking for ways to help but found no volunteer opportunities that fit his particular skills. “I thought I could do something with technology,” he recalls, “but I couldn’t think what.”

Then he learned about Kiva, an online site where potential investors meet entrepreneurs in the developing world who need financial help. Hendrickson’s nonprofit, Rebuild Hope, is built on that model, offering a site where donors read the stories of military service members who need a financial boost to get their lives in order.

Successful applicants are post-9/11 veterans or service members who received life-altering injuries while in active service and who demonstrate a realistic plan to balance their budgets over 6 to 12 months. Recipients are offered counseling—financial or otherwise—and awarded up to $3,000 total, paid in monthly installments, to help them overcome their short-term financial problems. The stipends may be small, but they are meant to act as a stimulus to get the recipient past an emergency situation.

Each situation is different. Awards may pay for a car to carry a veteran to school for job training, allow distant parents to visit a hospitalized soldier, provide vital home repairs for an injured vet who can’t yet do it himself, or help straighten out a troubled credit history.

Simply compiling an application can be a first step toward getting a life—or a military family—back on track. “We’re trying to change the model,” Hendrickson says. “Assuring a 12-month cash flow helps them see where they are going.”

Rebuild Hope cofounder Wes Rose, MBA ’80, helped with the organization’s incorporation and remains on the board of directors. Silicon Valley venture capitalist Jim Anderson, MBA ’77, came aboard in January as an advisor on fundraising strategy.

Meanwhile, John Reynolds, MBA ’79, has launched the nonprofit Veterans2Work. Its mission: to improve the employability and job success of special-needs veterans and their caregivers. He leads an enthusiastic, all-volunteer staff advised by current and retired military officers and GSB classmates such as Dave Torrey, Jim Russell, and Phil Gioia.

Novogratz Pays Tribute To Faculty Mentor Gardner

“You should focus on being more interested than interesting,” the tweedy professor said to the young MBA student who wore purposely mismatched earrings. She wore them, she told him, to “make people think.”

Thus began in 1989 a 12-year friendship between the late John Gardner, a favorite professor of many GSB students who were interested in social welfare, and Jacqueline Novogratz, MBA ’91, the eventual founder of Acumen Fund, a nonprofit global venture fund that tries to bridge the gap between grant-based philanthropy and capital markets.

In her recent autobiography, The Blue Sweater, Novogratz relates her experiences working with Rwandan bakery employees who later became caught up in their country’s genocide, but she also reflects on her time at the Business School under Gardner’s wing. She came looking for ways to be more effective at improving the lives of the world’s very poor, she says, and wasn’t thrilled to find herself studying “vector analysis” but felt it might give her more power.

Gardner, an advocate of volunteerism who was also instrumental in creating Medicare, taught in the Public Management Program and listened to Novogratz with an almost monk-like stillness, she writes, but he also insisted she “root yourself more strongly in your home’s own soil” before trying to save the world.

“John was right: It didn’t matter if the people lived in Bangladesh or Bangor, Maine. Everyone wanted the same things. Low-income people the world over were challenged by similar constraints.”

Health Care Costs Plague U.S. Automakers

“Change is inevitable, but progress is optional, and that’s where unions come in,” said Andy Stern, head of the Service Employees International Union.

The world is undergoing a profound economic revolution, he told the mostly student audience at an April View from the Top event. National economies are being transformed to international ones, and America is shifting from a manufacturing base to a service/knowledge/ financial/green economy, he said. Employers used to manage the work lives of employees, but the next two decades will see a shift toward more worker self-management as contract assignments, freelancing, and working from home grow in popularity.

Asked about the U.S. auto industry’s crisis, Stern pointed to a lack of planning by company managers and union leaders. He said the union worked well when all automakers had essentially the same labor costs, but it didn’t adjust quickly enough to face global competition, which allowed non-U.S. auto companies to produce vehicles far less expensively.

The firms’ costs for employee health care, which are covered by governments in many of the competition’s home countries, also put U.S. automakers at a disadvantage, he said.

The son of lawyers, Stern urged students to figure out their passion and follow it, but also to be aware of the dangers of rising to the top of an organization. “You can get really seduced, become arrogant, and believe the rhetoric that you’re responsible for a company’s success,” he said. “So many of us are caretakers of organizations others built.”

Electric Car Retrofit Researched by MBA Students

Cars and trucks powered by domestic electricity rather than imported oil is an exciting but daunting vision. The first step could be retrofitting a million vehicles to run on electricity as well as gas, say Stanford Business School Professor Robert A. Burgelman and Lecturer Andrew S. Grove, former chairman of Intel. They describe this as the “minimum winning game,” a significant step toward a long-term objective.

To start the ball rolling, the two asked MBA students to research how the country could reach that goal. As part of a seminar last year, teams developed strategic action plans for four areas: batteries; manufacturing retrofits; retrofit marketing, sales, and delivery; and public policy and legislative action. The richly detailed plans are contained in a Graduate School of Business research report titled “The Drive Toward the Electric Mile—A Proposal for a Minimum Winning Game.” 

Among the conclusions: Lithium ion batteries show the most promise; independent, possibly franchised, garages that already have service facilities, trained employees, and loyal customers should do the retrofits; government support will be necessary; and half the retrofits should come from affluent, environmentally conscious consumers and the other half from fleets.