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Builders&Leaders

Boston University School of Management FALL 2009

inside

MBA Now Ranks 21st

Tackling the Smart Grid

BusinessWeek: EMBA Best in New England

11 New Faculty Join Us

Sparkling CareerBeryl Raff SMG ‘72CEO, Helzberg Diamonds

The School of Management is proud to present…

Builders & Leaders online.Featuring: • Latest issue • Special web content • Classnotes • Alumni events schedule • Downloadable PDFs • Archives

Visit us at www.bu.edu/builders-leaders

Builders&Leaders

Builders & Leaders is printed with soy inks on Galerie Art paper, made with 30% recycled fiber and chlorine free (TCF/ECF) pulp using timber from managed forests (FSC).

Builders & Leaders is published twice a year for alumni and friends by the Boston University School of Management. Please address comments or questions to: Builders & Leaders, Boston University School of Management, 595 Commonwealth Avenue, Boston, MA 02215; Phone: 617.353.3582, Fax: 617.353.5581, e-mail: [email protected], Website: www.bu.edu/builders-leaders ©2009 by the Board of Trustees of Boston University. All rights reserved.

Boston University School of Management

Taking a Leap.Tess Waresmith,

SMG ’10. 8

595 COMMONWEALTH

Think Quick. Fast Facts About the School. 3

Top 25. Rankings Rise Again. 3

New Dual Degree. MBA/MS in Media Ventures. 5

The Index. The School by the Numbers. 9

PROFILES

Marketing Genius. Tyler Altrup, MBA ’10. 10

Say PEMBAhhh. Steve Sentovich. 11

FEATURES

Institute for Global Work. 12

Beryl Raff, SMG ’72. Sparkling Career. 14

FACULTY

11 New Faculty. Welcome to All. 19

Research: Mobile Financial Analysis. 20

Faculty Profile. Janelle Heineke. 25

Faculty Accolades. Honors and More. 26

ALUMNI

Giving Back. 2008-2009 Donors. 27

Up and Running. Shannon Varney, SMG ’05. 30

A Policy of Unity. Nao Valentino, SMG ’04. 32

Paparazzi. Keep Smiling. 33

Classnotes. New Careers, New Kids. 34

DEAN’S COMMENTARY

The Unaddressed Root Cause. 39

LAST WORD

Joanna Alberti, SMG ’03. Inside Back Cover

Fusing the Art, Science, and Technology of Business.®

The Green Pages.Smart Grid Cuts Emissions. 6

Builders&Leaders

Fall09

Faculty Forum.US Health Care. 22

MY RETIREMENT PLANNING

Dear Fellow Alumni and Friends,

During this academic year, under the leadership of President Robert Brown, the University will update its strategic plan. That plan will form the underpinning for the major capital campaign the University will likely launch next spring and will run through the next 10 years or so. In such an important campaign, deans will play a leading role. In light of that critical upcoming period for our University, I’ve given a great deal of thought to how many more years I could effectively lead SMG. I’m beginning my 19th year as dean; so I recently welcomed freshmen who weren’t yet born when I became dean! Although my general health is excellent, thank God, normal age-related aches and pains suggest it’s unrealistic to assume I could serve, in the way I would expect of myself, throughout an entire decade. Accordingly, and out of fairness to the University, I proposed to President Brown that this academic year be my final active year. In that way, the University could begin an orderly search for my successor. Hopefully, our new SMG dean would be on board next fall and could lead the School through the entire capital campaign. If the new dean is not available to begin on September 1 next year, I’ve committed to President Brown and Provost David Campbell to serve as long as necessary to assure a smooth and seamless transition. In my retirement years, as a committed alumnus, I hope to continue involving key benefactors in the life of our University—and to remain a part of the School of Management family. Meanwhile, with many tasks still ahead, I look forward to working with our talented faculty, staff, and students. We are all determined to maintain the School’s exciting momentum. You may have heard that in the recently published rankings of the world’s MBA programs by The Economist, our School made the largest gain, vaulting 31 places to 21st in the US and 40th globally. In these pages, you’ll read of the exciting goings-on at the School and of the people who are transforming the way management is taught and, hopefully, practiced. A wonderful example of our business-leading alumni is this issue’s cover subject, Beryl Raff. You’ll enjoy reading about her remarkable ability to build and lead retail enterprises. I welcome your involvement in the work of your alma mater and invite you to keep in touch—with the School and with each other.

Cordially,

Lou Lataif

BOSTON UNIVERSITY SCHOOL OF MANAGEMENT

DEAN

Louis E. LataifSENIOR ASSOCIATE DEAN

Michael E. LawsonASSOCIATE DEAN, ACADEMIC PROGRAMS

John ChalykoffSENIOR ASSISTANT DEAN, ADMINISTRATION

Martin CarterASSISTANT DEAN, GRADUATE ADMISSIONS

Hayden EstradaASSISTANT DEAN, GRADUATE PROGRAMS

Katherine NolanASSISTANT DEAN, UNDERGRADUATE PROGRAM

Sandra ProcopioASSISTANT DEAN, CAREER CENTER

Scott TimminsDIRECTOR OF MARKETING

Suzanne Otte

BUILDERS & LEADERS

PUBLISHER

Louis E. LataifEDITOR

John DiCoccoASSOCIATE EDITOR

Alissa MarielloCREATIVE

David Linde emergedesigngroup.com

CONTRIBUTORS

Joel Carlton-GysanHannah Gathman Jennifer Ivers Tenny Pandika Tracy Slater Jennifer TobinPHOTOGRAPHY & ILLUSTRATION CREDITS

Jay Baldwin Julie Cordeiro John DiCocco Kathleen Duncan Connor Gleason Alissa Mariello David A. Riffel Len Rubinstein Jennifer Tobin Dan Watkins

DEAN’S MESSAGE

2 Builders & Leaders

Builders&Leaders

RANKINGS STILL RISING. With the largest gain of any institution surveyed by The Economist, Boston University School of Management MBA Program improved its standing by an impressive 31 spots to place 21st in the United States and 40th internationally. The survey emphasizes four student-centered criteria: the extent to which the program opens new career opportunities; the level of personal development and educational experience; post-program increase in salary; and the networking facilitated by the program. The School of Management was recognized for its success in each of these areas, and was named No. 1 in the world in terms of diversity of recruiters. The other four schools from New England were Harvard, Dartmouth (Tuck), MIT (Sloan), and Yale. BusinessWeek ranked the Executive MBA Program first in Boston, 18th in the US, and 23rd in the world. The magazine’s panel gave grades of “A+” in “Curriculum” and “Student Support.” BusinessWeek’s April 2009 “top undergraduate business schools” specialty rankings have placed the undergraduate program second in the Boston area and in the top 30 nationally across multiple disciplines, with a top 20 ranking in accounting and corporate strategy. These rankings come on the heels of a slew of honors for the School’s undergraduate students—including their triumph over Harvard and MIT MBAs in the 2009 Investment Research Challenge and APICS operations management case competition—highlighting the unique strength of BU’s undergraduate management curriculum. Times Higher Education recently ranked Boston University as an institution 19th overall in the US.

RESPONSIBLE WINNINGS. Give and ye shall receive. This past June, the Graduate Management Admissions Council (GMAC) named Boston University School of Management the recipient of the 2009 TeamMBA Award. The award “recognizes a school for its commitment to promoting and supporting social engagement by its students through school-led programs, services, institutional culture, and more.” The School was honored in recognition of its longtime tradition of encouraging students to volunteer with local organizations, and was also praised for promoting social responsibility and sustainable activities, many of which are promoted or supported by the School’s Public & Nonprofit Management Program.

MBA students cleaned the Charles River bank and worked at several sites around Boston during an Orientation Week day of community service.

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Think Quick.

MBAs CLEAN UP REAL NICE. You can lead an MBA to water…and then watch what happens. Nearly 140 first year MBAs contributed a day of service during their August Orientation week. Tasks included cleaning the Charles riverbank, weeding at Waltham Farms (a community food source), sorting toys for Cradles to Crayons, and preparing food for Community Servings. “This was our largest turnout ever,” said Gail Justino-Miller, director of the Graduate Programs Office. “I think increasingly the people we see coming to BU are more socially conscious; they’re more aware of their responsibilities as future leaders to give back to society.”

The Boston University School of Management MBA Program was recently ranked 21st in the United States and 40th internationally.

bu.edu.management 3

BY JOHN DICOCCO

FERPA — THE NEW PRIVACY. Mom can ask, “How are your grades?” But Sherry Sophomore doesn’t have to answer, and Professor Paul isn’t allowed to without Sherry’s permission. Mom won’t get the grades by mail either. From now on, parents and guardians will receive a lot less information from the University than before. The policy conforms with requirements of the Family Educational Rights and Privacy Act (FERPA), which describes what records parents have a right to review. The law says that beyond the high school level, in most cases students control access to their personal records. According to the revised policy, in effect since September 1, the University will no longer send grade reports and notices of preliminary disciplinary actions to parents or guardians. It will also refrain from answering parent inquiries about a student’s academic progress or general well-being. The exception is when a student faces expulsion or has a serious health or safety issue. BU President Robert A. Brown says the new practices are consistent with the University’s view that “students should be treated like responsible, independent adults.”

CAN’T GET ENOUGH? Information overload? Not for MS-MBA students. The Summer Intensives, short and demanding courses taught just after the spring semester, have long been one of the defining traits of the MS-MBA degree. Now add to that the new Winter Intensives, one-week courses offered just before the spring semester. They were created to further enhance the MS-MBA curriculum, focusing on a few specific topics targeted by the faculty. Students will be able to choose one course from each week. The first session runs January 4-8, and includes IT Applications in Management, Business Transformation: Role of Information Technology, Ethical Decisions, and Negotiations. Courses offered January 11-15 include Executive Presentation, Executive Written Communication, Clean Energy Services: Financial Models and Incentive Structures, and Emerging Perspectives and Synthesis. Other (non-MS-MBA) students will also be offered Current Topics in Law and Ethics, and Improving Your Decisions.

DBA TO BECOME PHD. The School of Management currently has about 25 students in the doctoral program. To bring the program more in line with the rest of the University, the provost’s office, together with the faculty, is looking at ways to transition the current DBA into a more traditional PhD degree. Senior Associate Dean Mike Lawson says, “If things go as planned, we hope to have full approval by mid-December [2009].” Because current doctoral students range from first to

SYMPOSIUM FOR MBA CAREERS. Got résumés? Come to the annual MBA Symposium, the year’s largest MBA student-sponsored and -run event, on February 6, 2010, at the School. Symposium is a day-long event focused on career education. The idea is to present a cross section of varied industries and how MBA talents are valued within them. Featuring a C-level keynote speaker and a series of panel discussions assembled by BU MBA student clubs, the event brings together the extended MBA community, traditionally attracting more than 250 students, alumni, faculty, staff, and distinguished business professionals. The MBA Symposium has recently hosted speakers from companies such as Deloitte Consulting, EMC, J. Crew, Motorola, Dunkin’ Donuts, and Ocean Spray. For further information visit www.bumbasymposium.net

EMBA Reigns Again.In the 2009 BusinessWeek rankings, the School’s Executive MBA Program was named best in New England and 18th in the US.

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Cranberry crushers working hard from Symposium 2009.

last year students, those with only a year or two left will most likely receive DBAs. One of the main differences between the two degrees is a more rigorous research requirement for the PhD. According to faculty director of the doctoral program and chair of the Organizational Behavior Department Professor Lloyd Baird, “That shouldn’t pose a problem for our students.” On a related note, this fall, the School of Management enrolled its first post-doctoral student, in the Strategy & Innovation Department. Post-doctoral study provides an opportunity for DBAs and PhDs to add one to two years to their research and teaching experience, resulting in better performance in the classroom and increased publications. And among candidates for new faculty positions, a post-doctoral student may offer a more appealing profile to a hiring university. Baird says, “We have no quota for post-docs. The number will certainly vary year to year, but it will never be more than a handful.”

NOVOPHAGE WINS $50K COMPETITION. Bacteria, beware. Microbes, be very afraid. This past spring, in “the most competitive contest to date,” according to executive-in-residence and competition director Peter Russo, NovoPhage emerged the winner of the ninth annual Institute for Technology Entrepreneurship and Commercialization (ITEC) $50K Business Plan Competition. The other finalist teams were AirGo, Bike Now, and Click Chemicals. Congratulations to NovoPhage team members Michael Koeris, Tanguy Chau, Ann DeWitt, and Timothy Lu. NovoPhage provides an advanced biological solution to treat resistant

bacterial infections in a clinical setting. Current antibiotic strategies suffer from declining effectiveness against multidrug-resistant

bacteria. The engineered bacteriophage that NovoPhage plans to commercialize will provide a safe and highly effective biological alternative to antimicrobial treatments. The benefits from using this genetically engineered bacteriophage include suppression of the evolution of antibiotic resistance, high efficacy in combating bacterial biofilms, and a broad spectrum of activity against

different bacterial species. To follow the progress of the 2010 competition, visit www.bu.edu/itec.

IM845: ASIAN FIELD SEMINAR INFORMATION SESSIONS. How do we prepare for the emerging opportunities and challenges that China’s economic development and Asia’s growing presence continue to create? This two-week seminar through six cities in China and Korea provides future global business leaders an opportunity to contemplate answers to the above question. Students will visit companies (both multinational and local) competing in this dynamic market, meet governmental officials to hear about policies and implications, learn from local MBA professors how they view US strengths and weaknesses, participate in real market activities, and develop a global network of knowledge with local MBA students and BU alumni in the region. This intensive seminar will take place at the end of the spring semester, May 24 to June 4, 2010.

Media Moguls Wanted. The world of new media requires new business models. Enter a new Boston University dual degree. In partnership with the College of Communication, the School of Management now offers a joint MBA/MS in Media Ventures. This program is for creative, entrepreneurial people who want to develop innovative content—students who love technology, business, and media—and who want to collaborate to see their new ideas brought to the marketplace. To learn more about this exciting new program, visit www.bu.edu/com/mediaventures/.

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bu.edu.management 5

Smart Grid:Smarter Users.


BY JOHN DICOCCO

The energy problem—the inefficient and carbon-emitting use of fossil fuels —is partially due to an information gap,” says Nalin Kulatilaka, The Wing Tat Lee Family Professor in Management. “End users don’t know the

true cost of the energy they consume. Providing the right information, at the right time, can create smarter, more responsible usage. And save money.” The “smart grid” idea is addressing this challenge. Smart grid is the umbrella term used to describe a menagerie of technologies that offer an emerging alternative to our aging, inefficient, and capacity-constrained electric power distribution grid. Kulatilaka, a professor in the Finance Department, together with a diverse, University-wide team, is exploring the tremendous opportunities presented by the smart grid. He serves as co-director of the Boston University Clean Energy

CEESI’S APPROACH. The Smart Grid Project is backed by the Boston University Clean Energy and Environmental Sustainability Initiative (CEESI). CEESI is an embodiment of President Robert Brown’s goal of “One BU,” where diverse talents from highly specialized core facilities and knowledge bases tackle multi-dimensional challenges. Participants include faculty from departments and lab groups from the College of Arts and Sciences, College of Engineering, School of Management, School of Law, and School of Public Health. CEESI provides faculty and students the unique opportunity to gain a synergistic understanding of novel and efficient energy technology; climate science; governmental policies; political disputes; health concerns; climate tracking; technical materials; ethical, psychological, and socioeconomic ramifications; and cost-reflective markets that promote a sustainable energy future.

GREEN PAGES

Smart Grid is the umbrella term used to describe a menagerie of technologies

that offer an emerging alternative to our aging, inefficient, and capacity-constrained electric

power distribution grid.

The energy problem—the inefficient and carbon-emitting use of fossil fuels—is partially due to an information gap. End users don’t know the true cost of the energy they consume. Providing the right information, at the right time, can create smarter, more responsible usage. And save money. –Nalin Kulatilaka

GREEN PAGES

bu.edu.management 7

and Environmental Sustainability Initiative (CEESI), which is studying the smart grid, among other environmental topics. (See sidebar, page 6). “To have a chance to arrest global warming,” he continues, “mankind needs to do two things immediately and simultaneously. One is to change energy consumption behaviors, and the other is to create alternative and renewable energy sources as rapidly as possible. “For new behaviors, we must change the mix of capital goods we purchase and change how we use those goods. For instance, we need to buy more fuel-efficient cars and drive less; we need to purchase more efficient heating systems and change set points in our thermostats. Having timely information and designing contracts that align cost savings with carbon reduction can bring about these behavior changes.” The smart grid also plays a vital role in the adoption of renewable energy sources. “The bonus is that by helping ourselves environmentally, we will help ourselves economically as a nation. The smart grid is a marriage between the physical power distribution system and the cyber infrastructure. We already lead in the latter. What we can achieve is a position where the world will come to us to buy, build, consult on, and service the new technologies. This is the ‘next big thing’—we need to be out in front.”

Smart grid is a game changer.Although energy prices in the wholesale markets reflect supply and demand conditions, most end users can’t see the true costs and consequences of their usage. The power bill comes several days after a 30-day usage cycle, far removed from the time of our energy use, and doesn’t tell us which appliance (oven? computer? water heater?) burned how much energy on which day. Users also don’t realize that electricity costs differ throughout the day. In fact, most users face a flat rate structure based on the average costs of generating, transmitting, and distributing electricity. Because of this, massive overusers drive up the cost for moderate and low users. Since electricity cannot yet be stored in a cost-effective way, the supply and demand must be balanced

at every instance in time and location. At peak times of usage—such as hot summer afternoons—critical generating and distribution resources are stressed. The current power system is built to serve peak demand. In order to prevent blackouts or brownouts, utilities gear up for the highest demand hours, which vary by season and locale. Furthermore, the unpredictability of demand means that the system needs to keep reserve capacity at the ready to come on at short notice, adding to the system costs. In fact, about 10% of the capacity is built to meet demand conditions that occur less than 1% of the time. Thus, a 1% reduction at peak time could result in a 10% reduction in capacity, costs, and pollutants. But end users don’t see these high prices or their high carbon emissions. Nor do they see the low prices during off-peak times. Once they have this information, they can set various commands for homes and offices that reduce prime time usage and defer it to less expensive times. “A smart grid,” explains Kulatilaka, “provides this feedback to the user, and even to particular appliances. A smart dishwasher would know it is better to run at 3am when there’s low demand and a lower price per watt. “Thus smart grid encourages potentially millions of clean power providers, from a Cape Wind project to the solar panel on Ms. Smith’s garage roof. “We need collaborative action to achieve this. First, we need coordinated policy action to attach a price to carbon emissions (the ongoing cap and trade debate). This is not just a regional or national issue but a global one. We’ll see a great deal of international discussion in the coming months, particularly the December climate talks in Copenhagen,” which Kulatilaka and other BU faculty will attend. Kulatilaka and Strategy & Innovation Executive-in-Residence Paul McManus will blog from the site at http://smgclimate.blogspot.com. Second, to bring this price to end users, he continues, “we need new business models involving many firms and organizations: not just traditional energy players like utilities and regulators, but also information and communications firms, smart appliance makers, and electric vehicle makers. Realizing the smart grid vision is a challenge and a goal for this ecosystem of players.” (Continued on page 37.)

Taking A Leap.Tess Waresmith, SMG ’10.

BY ALISSA MARIELLO

Tess Waresmith (SMG ’10) has stood at the edge more times than she can count.

The edge of a diving board, that is. Growing up in Dover, Mass., she started diving at the age of 11. With considerable talent and a lot of practice, by the age of 15, Tess had a promising future as a diver. Things don’t always go as planned, though, and an ankle injury cut her diving career short. After transferring in 2007 to Boston University School of Management from the University of Miami, she had all but given up on her dream. But with the encouragement of BU’s diving Head Coach Agnes Miller, Tess found herself once again on the edge of a diving board. In fact, by 2008, she was the captain of her team as well as the first Boston University diver in 20 years to make it to the women’s NCAA championship—and with a past injury no less. “Injuring my ankle was really awful, but everything happens for a reason. “I came back to the Northeast, which isn’t known for its diving, but was happier, and more successful,” says Tess. “I was enjoying school a lot more and training just the right amount.” Divers have to achieve a certain score during the regular season just to qualify for the NCAA’s zone meet, where they then compete to qualify for the NCAAs. Coming from the Northeast zone, Tess had to place in the top three to make it into the championship.

Not only did she place in the top three, but she went on to finish 23 out of 42 in the NCAAs themselves. “After my ankle injury, I had to reevaluate my goals. The Olympics weren’t going to happen, but it felt really good to make it to the NCAA championships,” she says. Now, having exhausted her NCAA eligibility, Waresmith is leading the Boston University women’s diving team as the assistant coach. Her collegiate diving career may be over, but she hopes that the sport remains in her life in one form or another. As she moves forward with her business career, she knows that the lessons she learned will come in handy: One, the importance of precision. Two, the willingness to change and be flexible. Three, risk management. And four, plain determination and guts. “A lot of times you’ve been doing something one way for so long that when someone tells you to do it differently, it can be scary. But you have to be willing to make the change and realize that at first it might not be as good. A lot of times when you make changes in diving, you take three steps back. But then, eventually, you take five steps forward. I think this is an important lesson in business too.” Tess is concentrating in marketing and expects to graduate next spring.

STUDENT PROFILE


“Diving taught me that unless you’re enjoying what you’re doing, you’re not going to be successful; it doesn’t matter how good you are.”

The School by the Numbers.

87Age of Rhett the Terrier (that’s 546 in dog years).

230,308 Daily weekday ridership on the Green Line.

Miles of neon tubing in the Citgo sign in Kenmore Square.

Years Louis E. Lataif will have held the position of Dean of SMG: 19

Combined years the previous three deans held the position: 14

Boston University presidents to date: 13

Years the current Citgo sign has been lit: 44

Stops the “B” Green Line makes along Commonwealth Ave.: 18

Green Line tops at BU along Commonwealth Ave.: 8

Years the Campus Trolley has served the BU community: 21

MBTA subway fare upon its debut in 1897: $.05

Fare in 2009: $2.00

New SMG full-time faculty members for 2009/2010 academic year: 11

Nationalities represented by full-time MBAs in September ’09: 53

SMG undergraduate student organizations: 34

Countries where BU sponsors study abroad programs: 20

Google-generated search results for “BU SMG”: 462,000

Students housed in the new Student Village II: 960

Steps from the atrium to the second floor: 38

THE INDEX

bu.edu.management 9

TM

COMPILED BY TENNY PANDIKA

Marketing Genius.Tyler Altrup, MBA ’10.

STUDENT PROFILE


“My early exposure to marketing gave me a huge head start. But there’s also a certain part of it that’s just being willing to fumble around and figure it out as you go.”

BY ALISSA MARIELLO

Tyler Altrup has been focused on marketing since he was a junior in high school. So when he started a

promotional apparel marketing company, Genius Apparel, as an undergraduate at the University of Missouri, he at least wasn’t running into it blind. “My early exposure to marketing gave me a huge head

start,” says Tyler. “But there’s also a certain part of it that’s just being willing to fumble around and figure it out as you go. And we did a whole lot of that. But we did really well. Even being price-competitive, we kept very healthy margins.” Getting his inspiration from friends making T-shirts for fun, Tyler saw a chance to turn a hobby into a profitable business. He says, “I thought if we could find a way to contract out all the work, we knew enough people in charge of various organizations on campus who’d probably rather buy from us. And that was absolutely the case.” From there, the foursome developed a burgeoning business under Tyler’s leadership. Two partners dropped out, but as a duo, Tyler and his remaining partner together made sales, designed apparel, and managed operations. As they neared graduation, though, they had to make a decision. “We had made something out of nothing,” says Tyler, “successfully running Genius Apparel out of our basement for three years. But there wasn’t anything keeping others from doing that too. So we had to make a decision. It was either raise $1 million in capital or move on to something else.” Currently the youngest full-time MBA in his class, Tyler, 23, made Genius Apparel the centerpiece of his MBA application. “At the time when I was applying to business school in the fall of 2007, that was the big thing on my resume. That was the talking points for the essays. That was everything.” The same savvy he developed as a business owner has

also helped Tyler in some of his more recent endeavors too, including his campaign for MBA Council president this past spring (he won) and his search for a summer internship. Looking for something in brand management, Tyler spent four months searching in a tough economy without much luck until one day on MiTrac, the Feld Career Center’s job and internship opportunity database, he caught a job opening at EA Games.

“Until then gaming had always been something I really enjoyed but never thought of as a possible career,” says Tyler. “But when I saw that opening, I thought, ‘Well, if EA is taking MBA interns, I bet the major publishers probably all are.’ “So I just started contacting anybody in the industry who would talk to me, and did about a dozen informational interviews. One of the companies I finally took a look at was Ubisoft. They had a posting for an undergraduate internship in brand management. But at that point, it was getting down to the wire, so I thought, ‘I don’t care if it’s an undergraduate spot. It’s probably still worth doing.’” Tyler spent the summer working in Ubisoft’s San Francisco branch, leading the branding of major titles in the works, such as a new Teenage Mutant Ninja Turtles game for the Nintendo DS called TMNT: Arcade Attack. “Brand managers touch almost every piece of the process. They are the centerpieces between PR, the digital marketing team, the senior brand management, and vice presidents of marketing. But they also talk to the developers and the designers too. As brand manager, you have to be the person sitting in the middle making sure everything’s going in the right direction.” For Tyler’s part, everything seems to be going in the right direction. Back in Boston for the final leg of his MBA education, he expects to graduate in May with a marketing concentration, and, with any luck, he’ll be back in San Francisco before he knows it. And this time he won’t have to fumble around.

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Say PEMBAhhh.Dr. Steve Sentovich, PEMBA, Health Sector Management.

“During all those years of medical school, I had zero training in business and administration. Nobody said a thing about it.”

STUDENT PROFILE

BY ALISSA MARIELLO

With a mother who majored in math and a physicist for a father, Steve Sentovich (PEMBA), now a colon and

rectal surgeon, thinks of himself as a bit of the family rebel, having chosen medicine over science, and being, at least in his mind, the least educated in his family. “My parents cultivated a solid learning environment throughout our lives. In high school, I definitely gravitated toward math and science. I had an excellent biology teacher who really inspired me, and I read a lot of books on medicine. I knew I wanted to be a doctor, but my parents kept saying, ‘You could always fall back on engineering.’” It’s not often that someone’s backup plan is engineering, but it turned out that Steve didn’t need one anyway. He completed a seven-year undergraduate/medical school program, five years of general surgery residency, and a two-year fellowship in colon and rectal surgery. Then he was recruited to work at Boston’s Deaconess Hospital (now Beth Israel Deaconess Hospital), where he worked for five years. He has spent the past 10 years at the Boston University School of Medicine as an associate professor, and he runs his practice at Boston Medical Center. “Being a physician was very appealing to me because I wanted to care for people. And surgery allows me to do that in a physical way,” he says. But something was still missing. On the flip side of patient care, Steve had a practice to run, and discovered that he was without the right information to make many

of the administrative decisions he was facing. “During all those years of medical school,” he says, “I had zero training in business and administration. Nobody ever said one thing about it.” Inspired by a colleague who had attended the School’s Executive Education program and encouraged by the accommodating schedule of the part-time Professional Evening MBA program (PEMBA), Steve added “earn an MBA” onto his already busy schedule of clinic and office visits, surgery, and lecturing. He’s concentrating, of course, in health sector management. “I really started with zero management knowledge. In fact, for a lot of these MBA classes, I walked in and really didn’t even know what we were going to be talking about. But my professors and classmates have given me a framework for understanding how you organize people, how you learn, and how finances are managed. And with that, I have immediately started applying it to what I do.” Although Steve understands how important efficient processes, operations, management, and technology are to running his practice, he’s more excited by how his new understanding of health sector management will help make him a better doctor. “When it comes down to seeing a patient in my specialty, I’m able to provide them with the latest, most effective, and comprehensive treatment. It’s still that personal one-on-one that I’m most proud of. And it’s very satisfying when you have a happy outcome.”

BY ALISSA MARIELLO

Attention, companies! Shutter your headquarters and close your back offices. You’re about to enter the future of work. The new global marketplace has no need for terms like “headquarters”

anymore, according to Professor N. Venkatraman, The David J. McGrath, Jr. Professor in Management, of the School’s Information Systems and Strategy & Innovation departments. Companies can locate offices around the world, and source and deploy their talent anywhere. They can exploit receding barriers to entry by employing locals who understand native cultures and customs, and, utilizing technology and managing a communication strategy, they can gain a 24/7 work schedule. “Today the discussion within companies gets framed as ‘outsourcing’ versus ‘insourcing,’” says Venkatraman. “And it is seen as either/or. Companies need to figure out the best location and talent for an activity, and start using a different language system to connect how these different teams will work together. They need to rethink and redesign the architecture of work itself. Innovation and execution can happen anywhere.”

Three Core Realities.In 2007, the Keane Foundation donated $1.7 million to the School of Management with this request: Help us ask the right questions about how to work in the new global marketplace and uncover some solutions about what needs to change. And thus was born the Institute for Global Work (IGW) at Boston University School of Management. “IGW seeks to explore and understand how a connected world will impact the way people live, work, and play,” says IGW Director John Henderson, The Richard C. Shipley Professor in Management and chair of the Information Systems Department. “We start with what we believe are three core realities. One, that the world is connected by global and intelligent networks. Two, that there are powerful imbedded computational capabilities. And third, receding barriers. So you take those three factors, and we believe you have the conditions for profound transformation. “IGW also seeks to understand how organizations will compete and work in new and different ways. We want to understand the implications of that for

THE INSTITUTE FOR GLOBAL WORK.

IGW is a member-driven institute that focuses on the global issues companies need to solve today for tomorrow’s international marketplace. IGW is focused on organizations’ real-time challenges as they try to integrate the realities of global work into what they do. The Institute addresses several projects at once, with different faculty members participating depending on the topic and their areas of expertise. Some of the projects currently in the works are:

Globalization 3.0 through Global Networks: Opportunities and Challenges

Global Talent Management: The Challenge of Staffing Global Solutions Centers

Networked Teams: A New Model for Team Effectiveness in the 21st Century

A New Approach for Innovation

FEATURE


“IGW seeks to explore and understand how a connected world will impact the way people live, work, and play.” –John Henderson, Director, IGW

Welcome to the Future.The Institute for Global Work: We’re All Connected.

the workforce, for the skill sets that people will need, and for the attitudes and concepts they’re comfortable with. We think it ultimately will have a big impact on our society.” Look at the iPhone, for example, Henderson says. The fact that Apple could produce a new technology platform, and, in less than two years, have more than 85,000 applications created by people who don’t work for the company is a profound change. IGW is able to take a unique look at how companies should be adapting to these changes because, unlike consulting firms, it utilizes an unbiased academic approach of rigorous research and tested data to back up its recommendations. The faculty members of IGW utilize their expertise to guide companies toward the right questions and solutions in the areas of leadership, management, employment, and communication. “The connection enabled by information technology challenges companies to rethink the way they have been working, which was inherited from the Industrial Age,” adds Venkatraman. “Our research will focus on the best ways for companies to design work for the global world.” And there’s an even bigger vision, too, that, as a University institute, IGW is in a particularly good position to address. “We would like to teach the students at Boston University, irrespective of which school they attend, to think about their role as part of the global world,” says Venkatraman. “Although they may not live or work outside the US, they are part of the global market, and we want to design something that gives them the perspective of the global context.” “One of the initial commitments we made was to infuse the University’s curriculum with the experience of working on a globally distributed team, so that everyone has the opportunity to work with students from another part of the world,” says Kathleen Curley, research professor in the Information Systems Department, who focuses on IGW-influenced educational programs for the School. “Part of the education mission is to make students aware of the fact that this will be the world in which they will work. It’s the workplace of the future.”

It’s Really About Being Connected.While no one would disagree that technology, particularly the Internet, was the impetus for the global marketplace, it’s not really about technology, says Henderson, because that’s always changing. It’s about connection. “Once you start with the premise that everyone is connected,” says Henderson, “there are profound implications for how you work, how you live, how companies compete, and how we think about the nature of organizations. “In such a world, many of the old concepts just simply are not relevant. And they’re certainly not as powerful. So while it’s true that there’s still a physical reality of business, it’s now more about managing and sharing information. For example, UPS sees itself as an information company, not as a package delivery company, because the core of the company’s competitive strategy is about how to manage information about customers and products, not about how to physically drive it.” One important effect of being connected is the ability of companies to source talent from around the world and for those workers to effectively communicate with each other. Organizations are starting to realize that their odds of hiring the best person for the job are greatly increased if they source their talent from anywhere and

(Continued on page 38.)

FEATURE


“The connection enabled by information technology challenges companies to rethink the way they have been working, which was inherited from the Industrial Age. Our research will focus on the best ways for companies to design work for the global world.” –N. Venkatraman

“One of the initial commitments we made was to infuse the University’s curriculum with the experience of working on a globally distributed team, so that everyone has the opportunity to work with students from another part of the world.” –Kathleen Curley

BY JOHN DICOCCO

After earning her BSBA (magna cum laude) from Boston University

School of Management and her MBA from Drexel University, Beryl Raff started her career in the housewares department at Macy’s in Deptford, New Jersey. Over the years she impressed her bosses, building the gourmet cookware and lifestyle furniture departments, and in 1985 was selected to manage and build the fledgling fine jewelry business for Macy’s New Jersey. “I didn’t know a blessed thing about jewelry,” she says. “It wasn’t in my universe.” Apparently this was not a major problem. Raff totaled 19 years at Macy’s, rising to become a senior vice president and general merchandising manager.

COVER STORY


Sparkling CAREER

BERYL RAFFBSBA, Boston University ’72MBA, Drexel University ’76CEO, Helzberg DiamondsMarried, one son.Lives in Dallas for the time being and commutes to Kansas City.

COVER STORY


From there, Zales Jewelers tapped her to be their president. She rose to become president of the entire Zale Corporation, then CEO, and eventually board chair. After 18 months as CEO and 6 months as chairman of the board, however, a hostile board forced her out. The next stop was JC Penney in Dallas from 2001 to 2009. Then, most recently, Warren Buffet, the legend behind Berkshire Hathaway’s collection of companies, was considering a change in leadership for his 270-store Helzberg Diamond chain, based in Kansas City. When Raff got the invitation from Buffet, it didn’t take her long to decide. She started at Helzberg in April 2009. We chatted by phone with Raff about her recent managerial past, her new challenge, and what she’s planning next.

CAREER CHALLENGESYour career followed quite a rapid arc at Zales. I started as president of Zales Jewelers, a Zale Corporation brand, in 1999 (which also owned Bailey Banks and Biddle, Gordon’s Jewelers, Peoples Jewelers in Canada, Piercing Pagoda, and, for a period of time, a division called Diamond Park). I was promoted to executive vice president, chief operating officer, so all the division presidents reported to me. Eventually I became chairman and CEO of Zale Corporation. At that time, September 2000, there were about 12 females in the role of ‘Chairman and CEO’ among the Fortune 100 Companies. It’s a long story, but six months later, in a political upheaval in the board room, I was ousted. And that was very, very difficult. But I’m not somebody who sits and says, “Woe is me.” So I picked myself up, reflected on the situation, and tried to look at it as a learning experience. Then I started to figure out how to move forward. Then Allen Questrom, another of our successful alums (SMG ’64), former CEO of Federated, Chairman and CEO of JC Penney, recruited you. Yes, Allen had just come to JC Penney. They had a large jewelry business that was going downhill. Allen’s philosophy is to hire the best people in their fields and let them do their jobs. Fortunately, I was one of those he reached out to. Certainly I had apprehensions. It was clearly a step backwards, in terms of title [executive vice president], and involved going back into a department store environment versus a specialty environment. Quite frankly, specialty is more entrepreneurial. It’s much more nimble and less bureaucratic, and I prefer that. But Allen is a retail “rock star” and to work for him was a great opportunity. Under his guidance, JC Penney became the retail turnaround of all time. You had an excellent run there: the first general manager to ever receive the JC Penney Chairman’s Award, the company’s highest tribute to managerial excellence, an honor you received multiple times. Turning around fine jewelry for JC Penney was really a worst-to-first scenario. I assembled a great team. That’s the most important thing you could possibly do to ensure success. Then in 2009, Warren Buffet came calling. Out of the clear blue this past February, an acquaintance called and said, “Do you have an interest in running Helzberg Diamonds? If you do, Warren Buffett would be interested in talking to you.” Three days later, on a Sunday morning, I was on a plane to Omaha, where Warren lives. He picked me up at the airport himself and it was an extraordinary day, ending with an offer for the job. Two days later I called back and accepted the position. I believe I am still the happiest, luckiest person in America.

MEN ANDdiamonds“With all due respect,” says Beryl, “you men, when you show up in our store, with your eyes glazed over, just days before the holiday? The true desperate male. We love you dearly.” “There’s a big target on our foreheads?” “Yes, you’re our favorite. You come in pretty uncertain. You think she ‘talked about this.’ She ‘saw this on television.’ ‘What’s she going to like?’ You don’t know. So you’re depending on the sales associate to tell you, ‘This is going to make you a hero’ and ‘This is going to put a smile on her face.’ So we tell you and sell you. And you walk away relieved, with a purchase.”

THE BUFFET LINEWhat’s it like to be in the Buffet constellation? Warren’s an amazing person in every way. As smart as he is as a businessperson he is just as wonderful on a personal basis. His business approach is taking things down to the most common denominator and common sense. He does not create or like complexity. He wants his businesses run properly, for the long-term, to be sustainable and profitable. He is also very realistic. The pressure of “What-are-we-doing-to-make-the-quarter?” doesn’t exist. Because expedient decisions are typically not good long-term decisions. It’s absolutely a dream come true.

And as busy as Warren is, he always has time for us, his managers, should we want to talk or meet with him. He is very supportive and motivating. What are your first-year tasks? When you walk into a new situation, regardless of historical performance, you first have to understand what you’ve got and assess all the pieces to understand the full picture. Then look at where the company is or can be best in class in its industry, the market opportunities both in the industry and the company, and areas the company feel passionate about. Defining who you are and where you fit in the landscape is step one to creating a vision. A team can’t move forward if it doesn’t know where it is going, so the leader articulating the company vision with clarity and strength is critical to leading the team. What’s your managerial mindset? While I believe innovation is a critical component of success, I like to be grounded, and thorough planning, along with structure and process, is my anchor. So I can allow and encourage creativity and innovation as long as everyone knows and respects what’s on the business agenda. That grounding makes it easy to be entrepreneurial and take smart risks. I like to look at the downside of every initiative and figure out how to get out of trouble if things don’t go as planned. That has served me well over the years. I’ve been at Helzberg Diamonds going on nine months. I feel really good about how the team has come together. This is a group who really embraced change, which is unusual. They want to win, and I think I have a winning team.

At this point, everyone feels hope, enthusiastic about holiday sales, and excited about the future.

HELZBERGTell me a little bit about Helzberg. Why should we shop there? Because we need the business! [Laughter] [Laughter] Best interview answer I’ve ever heard! Seriously, I define us as the best top-of-the-middle jewelry retailer. And that means …? If you shop the mall, we have the nicest diamonds in the mall, hands-down. This organization has always been very quality-conscious in terms of not only the stones but the construction of the merchandise. We’ve got the best selling organization out there. The salesperson knows much more than the buyer. Yes. You have to be comfortable, not only with the store that you’re in but with the associate who’s helping you. I often say there’s never been a piece of jewelry that’s been bought. Every one of them has been sold. This is not a self-service business like clothing or groceries. It’s a big ticket, relatively intimidating, and highly emotional product. What we really sell is aspiration, dreams, and romance. Aretheredifferencesnationwideinwhatpeoplelike? Not that much. About 90% is the same. You often get differences based on what the associate favors, because the product is sold, not bought, and is a desire not a need. So if the sales associate really likes style number 12, they’re going to sell style number 12, many times over. Do we have bestsellers across the board? Absolutely. But the deviations underneath that are pretty extreme.

The Helzberg family founded the business. Are any Helzbergs still involved?

We have a wonderful treasure in Barnett Helzberg, as an informal consultant. He’s third generation and the person who sold the company to Warren Buffett in 1995. He and Shirley, his wife, live here in Kansas City. They’re wonderful people, and Barnett is a

real character. He came up with this saying, when he proposed to Shirley (the story is on our

website): “I Am Loved.” We’re taking “I am loved” and really wrapping

the organization around it, using it as an umbrella to the brand, because it’s so applicable. There are real human beings behind a true story. And there’s so much emotion to it. We’re also extending that to the Make-A-Wish Foundation, which will be our charity of choice. The two really work beautifully together. What’s the status of the jewelry industry, the financial picture, in this recession?

COVER STORY


Right now, if you’re not evolving yourself, protecting yourself, and innovating at the same time, you can’t survive.

This industry is struggling. It’s never been well capitalized on either side. On the retail side, it’s very fragmented between mom-and-pops, people who own two stores, three stores, twelve stores, then the mid-sized chains that might be 50 to 100 stores, and the big guys, which would be the Zales and the Kays of the world, and the Helzbergs, although the two of them are much bigger than we are. Cash is an issue on the vendor side. The diamond business is really a cash business. You’re dealing with commodities. So in terms of manufacturing, all you chase is labor, gold costs, diamonds; they cost what they cost. It’s pretty transparent. The vendors have been hit very hard in the last 24 months with bankruptcies, and so have the banks. There are very few banks that want to fund this industry anymore. It’s very, very difficult.

TO COMPETE, CONTINUALLY CHANGESo how does one stay competitive? The reality is, in jewelry and everything else, those who do not continually adapt and innovate won’t be in business. Value is also a critical component to staying competitive. The consumer is particularly value conscious today. Value is more than price and each business has to figure out and define value for itself. But if the consumer doesn’t understand your value, she isn’t shopping with you. Adapt how? We all have to be smarter. We all have to think differently, think out of the box, and challenge the status quo. We have to look at everything we do and reprioritize. I believe every business has to recreate itself on an evolving basis, about every five years, because the world changes. Right now, if you’re not evolving yourself, protecting yourself, and innovating at the same time, you can’t survive. The business model in jewelry that has existed for many, many years has to be adapted to today’s reality. Unfortunately many people look at product development or marketing as expenses they can cut. Those are opportunity costs and are the expenses that will keep you alive. Sadly I think there will be more fallout before it’s all said and done. But ultimately that is probably necessary and best for the industry going forward. How much and in what ways does the global marketplace and geopolitical turmoil affect your business? What’s happening in the commodity world is very much on our mind. I watch the price of gold multiple times a day. The price of platinum, rhodium, palladium, and silver has a huge impact on us. De Beers and their Diamond Trading Company (their marketing arm) have really been the force behind driving consumer demand in the diamond business. Their business model is changing. How that impacts retail is yet to be seen. But I have to try to see around those corners. So the global marketplace and geopolitical turmoil have great impact on the jewelry business. Do I think the world’s going to run out of diamonds? No, but I do concern myself with what’s happening in different parts of the world as it impacts commodity pricing and supply. As gold, silver, and rhodium prices have soared over the past 18 to 24 months the impact on the costing of our product is very significant. These kinds of changes force us to look at our business model and figure out how to adjust. Just because the price of these precious metals has doubled doesn’t mean the consumer is just going to pay that much more for the same item. We have to figure out how to give more value at the higher retails and how to fill in the lower retails with strong desirable product.

COVER STORY


THREE WAYS TO OBTAINdiamondsOne is to travel to the best-known diamond sites (eastern Russia, southern Africa, south central Canada, or southern Australia) and arrange for a hotel. Bring lots of books. Wait 1 billion to 3.3 billion years. They have to “cook” at about 1650–2370 °F (900–1300 °C). When the timer goes off, dig down 90 miles or so into the earth’s crust to find your jewel. Or camp out at an observatory and watch the sky for potential high-impact meteors. Following the explosive collision with the Earth, go down into the crater and see if the extreme heat and force created any diamonds. Please step carefully. Or you can go to Helzberg Diamonds and find your polished gem, and even better, it will come in a lovely setting. So it’s good to have choices.

COVER STORY


THE IT ASSETAt the School of Management, we continually talk about the strategic value of technology. How tech-oriented is Helzberg? Actually, my IT department is very “can-do,” business positive, and nimble, it’s absolutely refreshing. Upon arriving at Helzberg, we had a strong IT infrastructure, but it just wasn’t optimized. For a very modest investment, we put that infrastructure to work and we will be close to state-of-the-art for merchandise planning very shortly. Our new planning system software begins with the classic merchandising planning tool that helps us manage sales, inventory, discounts, and open to buy. But it then takes us to the next level by allowing us to closely monitor our mix of regular priced and clearance businesses, manage asset and consignment inventory, and break down our business by new, closed, and comparable store groups. All on a two-year rolling forecast so that we can really plan for the future. We also enhanced our forecasting system to allow us to manage our assortments from concept to core item to clearance—it will track each step in the life of a SKU by forecasting sales and margin for future time periods, recommending optimal pricing, and identifying the right stores for each item. But I also believe that everybody needs to know how to use a calculator. And it kind of puts me over the edge when you ask somebody something about their business and they say, “Well, the system was down.” And I’m thinking, “Well, was your brain down?” We still have a business to run. Where is good old-fashioned intuition? How about your online operation? Five or ten years forward, when today’s students are the core consumer, retail will be a very different business. On-line merchandising will be at the heart of it.

CAREER ADVICEIf students are looking for a career in retail, particularly in jewelry, how should they be preparing? For a position in retail, the [department store] training squads are your best opportunity to get started. Most of them are pretty strong and well structured. After BU gave me a great education, I got to apply that knowledge to real-life situations on the Macy’s training squad. That combination gave me the foundation to do everything I’ve done throughout my career. For the first six months of any position, the company’s taking care of you. So you’ve got to be in that position long enough to pay them back and really learn, and to not look right and left and worry about who got promoted. Worry about yourself. Until you have had to compare your own work year over year, you haven’t learned enough in the role to move forward. If the job requires that you go five miles, then go seven, because somebody’s going to notice. If you go four and you think you’re fooling somebody, you never are. Wherever you start, get a solid foundation and experience. Being a ‘job hopper’ is not a good thing, but reasonable multiple experiences broaden your background and is often beneficial to a career. I really believe that hard, smart work is recognized. Be patient. Take the extra steps. Learn it, study it, be curious. Pick yourself a mentor. It’s really, really important. Create a network as you’re going along. Understand how important your network is to you. Beryl, thanks so much for your time. It’s been delightful. It was my pleasure.

Keeping busy withBerylBeryl Raff serves on the board of Jo-Ann Stores, Inc. where she is Chairman of the Compensation Committee; Group 1 Automotive, Inc.; Jewelers of America; the National Association of Corporate Directors (Heartland Chapter); the advisory board for Jewelers’ Circular Keystone; and The Jewelers Vigilance Committee. She is also very active and involved with the Make-A-Wish Foundation.

A robust recruiting year here at Boston University School

of Management has yielded 11 outstanding new faculty members, the largest such “class” in more than 15 years. “Given the intense global competition for exceptional management scholars,” says Dean Lou Lataif, “we’re delighted to have attracted so many first-choice candidates who offer both strong teaching talent and relevant, ground-breaking research. Their credentials and research interests dovetail perfectly with our mission of fusing the art, science, and technology of business.”

James Rebitzer, Professor and Chair, Business Policy & LawRebitzer joins us from the Case Western Reserve University’s Weatherhead School of Management. At Case Western, he held two chaired positions as the Mannix Medical Mutual Chair and the Frank Tracy Carlton Chair in Economics. He also taught at MIT Sloan School of Management and University of Texas at Austin. He received his PhD in economics from the University of Massachusetts at Amherst and his BS from University of Illinois-Urbana. Rebitzer’s research interests include the economics of organizations and incentive systems and personnel economics.

Chrysanthos DellarocasAssociate Professor, Management Information SystemsDellarocas joins us from the University of Maryland’s Robert H. Smith School of Business. Prior to Maryland, he taught at NYU Stern School of Business and MIT Sloan

School of Management. He received his BS in electrical engineering from the National Technical University of Athens (Greece), and an MS and PhD in electrical engineering and computer science from MIT. Dellarocas’s research interests include the impact of marketing activities on the financial performance of firms.

Robert Marquez Associate Professor, FinanceMarquez joins us from Arizona State University’s W.P. Carey School of Business. At Arizona, he held the chaired position of the Craig and Rhonda Cerny Professor in Finance. Prior to this, he taught at the University of Maryland Smith School of Business and the Wharton School of Business. He received his AB in economics from the University of California at Berkeley and his PhD in economics from the Massachusetts Institute of Technology. Marquez’s research interests include banking and corporate finance theory.

Siobhan O’Mahony Associate Professor, Strategy & InnovationO’Mahony joins us from the University of California at Davis Graduate School of Management. Prior to this, she taught at Harvard Business School. She received her BS and MPA from Cornell University and her PhD in organization studies from Stanford University. O’Mahony’s research interests involve how community forms influence the adaption and diffusion of technology, knowledge, and innovation.

Berardino Palazzo Assistant Professor, Finance Palazzo recently completed his PhD in economics at New York University. He received his BA and MA in economics from Bocconi University, Milan. His areas of interest include asset pricing, corporate finance, macroeconomics, and econometrics.

Delvon Parker, Assistant Professor, Operations & Technology ManagementParker recently completed his PhD

(Continued on page 21.)

New Faculty.

FACULTY NEWS


BY JOHN DICOCCO

New fulltime faculty arriving in September included (from left) Robert Marquez, John Teopaco, Siobhan O’Mahony, Berardino Palazzo, Timothy Simcoe, Julie Lei Zhu, James Rebitzer, and Chrysanthos Dellarocas. Missing are Delvon Parker, Remi Trudel, and Yanbo Wang.

BY JOHN DICOCCO

As we go to press, there are more than 6 million personal digital assistant (PDA) users in the US alone.

As applications grow (Apple now claims there are 85,000 applications for the iPhone), we can only expect this field to expand. At the School of Management, students and professors have been looking at developing some applications of their own for the business and academic worlds. In 2003, Scott Stewart, associate research professor and faculty director of the MS in Investment Management program, began exploring whether web-connected PDAs offered a potential to support investment professionals making complex decisions based on sharing sophisticated information. This research has earned the support of IBM, Sprint, Lucent, Qualcomm, AT&T, and Pyxis Mobile, and has been presented at three academic conferences so far. To date, small mobile devices, hampered by minimal software, small screens, and difficult-to-use keyboards, have not been as effective as desktop computers for high-level decision making. But Stewart seeks to explore their potential as they grow in power and sophistication and determine whether they can improve communication, learning, and decision-making, as well as what the roadblocks might be. The idea for the research was born in late 2002, Stewart explains, “when Senior Associate Dean

Mike Lawson and Professors John Henderson and Nalin Kulatilaka encouraged me to think about applications of wireless technology to problems in investment management. Associate Professor Stephanie Watts helped me understand the rigorous IS survey techniques necessary for the project. I’m a finance guy and we don’t tend to utilize surveys, but I’ve subsequently applied that approach in new finance research.” Stewart’s research began with feasibility studies utilizing older technology (HP iPaqs running MS Pocket PC software), determining that while off-the-shelf devices were cumbersome to use, they did provide capability to support “urgent decisions.” Once they were loaded with customized software, the value of the devices improved dramatically.

Three EssentialsAfter years of collecting and analyzing data, Stewart determined that mobile PDAs can improve communication and the learning process, even with high-level tasks, as long as three essential factors are in play: a tailored website or other software, training, and reliable connectivity. Specifically, for sophisticated use, these devices can be an effective supplement to desktop machines (and full screen laptops, of course). “Our goal is to test whether we can replace the desktop,” says Stewart, “to enable anytime/anywhere access. In a flattened, 24/7 financial

On The Go Financial Analysis.Handholding Finance.

FACULTY RESEARCH


world, analysts, traders, and portfolio managers are going to need that kind of access.” Currently partnering in the research with Pyxis Mobile and AT&T, Stewart’s students can get all the same data on a PDA as on a desktop, using software that automatically reformats it. The current test includes software on a PDA; an earlier test involved a custom website. Picture a normal 8.5 x 11” web screen that gets restructured (not shrunk) into a 3x5” size that doesn’t require scrolling. “Pyxis worked directly with us to develop software that accesses data behind the website and displays it efficiently,” said Stewart. “Trying to read the desktop material on the small three-inch PDA screen would be painful. We started off using iPaqs and Blackberries, and we’re now looking to utilize Apple iPhones.” The information an investor seeks on a PDA is always the same: What is the investment thesis? What’s the target price? And where’s the backup data to support the thesis? With that info, an investor can make a reasonable buy/sell/hold decision or ask some follow-up questions. The next step in software development is to extract the most vital data, with the results being pulled into a template the investor can read quickly. The degree and quality of training offered a valuable, if not surprising, outcome. “Those who became frustrated with PDAs eventually gave up, and then they only worked with a desktop or laptop. We found when we and the student invested more effort in training—making sure the user was comfortable with the PDA applications—that person’s use increased over time, in relation to desktop use,” said Stewart. “More importantly, though, we found that students who were satisfied using PDAs communicated more actively than those who weren’t. That is, there were shorter time lags between questions and answers for student stock analysts using PDAs. This was because they could access sophisticated stock reports and earnings models, and inquire about the analysis anytime. What this says about social life is something different, of course,” he smiled. Asked if the emerging “notepad” computers might become the preferred technology for his uses, Stewart said, “I still think a device like a smart phone, which is small and easy to carry, will be the winner. There are many trends in IT which support this thinking.” Stewart also discovered that students satisfied with their PDAs found the website more useful, learned more from the fund experience, and in turn were more satisfied with their course work. Wouldn’t every professor love to say that?

FACULTY RESEARCH


(Continued from page 19.)

at Michigan State University. He also received his BS and MS degrees from Michigan State University. His areas of research concern the interrelationships among the structures of manufactured products and their supporting production systems.

Timothy Simcoe, Assistant Professor, Strategy & InnovationSimcoe joins us from the University of Toronto’s J.L. Rotman School of Management. Prior to this, he was a senior consultant in economics for Ernst & Young and a research assistant at the Council for Economic Advisers. He received his AB in applied math and economics from Harvard University, and an MA in economics and PhD in business administration from the University of California at Berkeley. His area of interest is in the application of economics and econometrics to standards setting processes.

Remi Trudel, Assistant Professor, MarketingTrudel recently completed his PhD at the University of Western Ontario’s Richard Ivey School of Business. He received his BGS and MBA degrees from Simon Fraser University in Canada. His areas of research include ethical consumerism, consumer judgment, and decision making.

Yanbo Wang, Assistant Professor, Strategy & InnovationWang recently completed his PhD at the MIT Sloan School of Management. He received his BL in international studies from Peking University (China) and MA in political science from the University of Arizona. He also completed his PhD coursework in political science from the University of Pennsylvania. His areas of interest include social networking relationships and their effect on entrepreneurship (primarily focused on China).

Julie Lei Zhu, Assistant Professor, AccountingZhu recently completed her PhD from the Columbia Business School. She received her MS in finance from Boston College, her MS in accounting from Temple University, and her BA from Fudan University (P.R. China). Her area of interest is accounting performance related to mergers and acquisitions.

John Teopaco, Lecturer, MarketingPrior to joining Boston University, Teopaco was a lecturer at Northeastern University and an assistant professor at Miami University of Ohio. He has also taught at Harvard Extension, Boston College, and Babson College. In addition, he served as an account executive for Ogilvy and Mather Advertising and as a product manager for the Pillsbury Company. He received his BSB and MBA from the University of Minnesota and his DBA from Harvard Business School.

To learn more about the School faculty, please visit http://management.bu.edu

Janelle Heineke: The delivery of health care today is both inefficient and ineffective. Clinicians all work hard and do their best, but most of the time, the overall “big picture” of a patient’s care is often not known by anyone. Care has become so complex that it is difficult for any one person to have a handle on all of the details. One way to address process complexity is to standardize. Another way is to build in redundancy. Stephen Davidson: While it is generally thought that the healthcare sector is inefficient, change to both small physician practices or large teaching hospitals is difficult to bring about and, in many cases, quite expensive. Until the system is reformed in definable ways, most organizations that attempt efficiency-enhancing changes will buy themselves considerable grief without any direct benefit. Most will gain no new patients and no new revenues; they may even lose revenue if, by becoming more efficient, they provide fewer duplicate services. It will continue on this way until the system is reformed in ways that change the incentives faced by these organizations. JH: Right. The costs to individual practices are relatively high and the benefits may accrue to other parties (insurers). Initially, costs will rise as appropriate care is provided, and it will take awhile before the benefits of disease prevention begin to appear and lower costs. Another huge challenge is that information systems may be good for one part of the system but may not communicate with other parts. There are potential advantages over the old paper systems, but the flexibility of the old systems (even though they were inefficient) is lost. SD: Yes, but the probability that these or other good ideas will be adopted widely throughout the system is small at the moment. Also, the probability of making a big impact on the system as a whole (e.g., reducing the rate of increase in spending or improving health outcomes) is small until and unless we address the health insurance problem. Some of what we think of as inefficiency is not inefficiency in care processes but inappropriate utilization patterns. Many people do not get the care they need and, therefore, when they do get sick, they are much sicker than they should have been, and the services are often provided in expensive hospital emergency departments and inpatient beds instead of in doctor’s offices. Many people get the wrong care because doctors don’t know what to do for them and don’t have access to information systems that could help them. Later, those patients may get the right care, but that will be in addition to the wrong care they will already have received. Some people get too much care for a variety of reasons—doctors practice defensive medicine, records of previous services get lost so they need to be repeated, and sometimes doctors provide more services in order to make up for low payment rates. JH: I agree with all of this, but there are also processes with too many steps, too little coordination, and often, excess capacity because planning and

Who Will Heal The Healers?How Can We Make Progress?

FACULTY FORUM


EDITED BY ALISSA MARIELLO

With conflicting opinions circulating

around the reform of the United States health care industry, we sat down with Janelle Heineke, professor and chair of the Operations & Technology Management Department, and Stephen Davidson, professor in our Business Policy & Law Department and faculty director of the Health Care Management Research Center, to get some perspective. We asked, “What significant problem in the healthcare industry could be solved with more innovative or efficient business practices?”

controlling aren’t done systematically. These issues cannot be managed at the level of the whole health care system; they need to be managed at the local unit level and even at the

specific process level. SD: Medical practices spend inordinate amounts of money to cope with the huge number of insurers and insurance policies. One result is that the probability of being paid for services rendered to people who actually have insurance is considerably less than 100 percent. Yet it would be even lower if the doctors did not hire staff—another large, non-service expense—who spend much of their day on the phone with representatives of insurance companies trying

to ensure that their patients can afford the prescribed treatment and, not incidentally, that the doctors

themselves get paid. JH: Right. And this is actually pretty easy to fix.

At the national level, forms and reported information could be standardized. Then the insurers would have to change their systems so that a single form could

be used, rather than have all providers change their systems to conform to the requirements of a large number of insurers.

SD: But while it is good to know how technology and various management techniques can improve efficiency, I believe that the chance that those innovations will have a large impact on the health care system is small until we enact sensible reforms. JH: Sadly, I have to agree. Although there’s some low-hanging system-wide fruit

(like the insurance forms), a lot of it just has to be done at the local level. SD: So while we need to engage willing organizations on process issues, the payoff for the nation as a whole won’t come until

the system is reformed. And if our leaders in Congress refuse to sink their teeth into it—as opposed to

finding the “least offensive something” that will pass—we are condemned to millions with no access, expenditures that continue to rise too fast, and quality that remains unreliable. JH: Yes, but how do you reform the system operationally? I can’t see, other than some low-hanging fruit, how that would ever happen. SD: Good question. I think you can’t reform the operation of the system, but you can reform the conditions under which the players operate. In other words, you can change the incentives so that people will have a reason to do better. For example, if we pay providers not for each service they

FACULTY FORUM


provide but for taking care of people, rational providers will behave differently than they do now. That’s why (for slightly different reasons) Group Health of Puget Sound and the Cleveland Clinic, among others, provide good care at much lower cost than the rest of the system. JH: But when Diagnostic Related Groups (DRGs) were introduced, the logic was that providers would have an incentive to be more efficient and effective, but the behavior that actually occurred was that providers got better at coding and gaming the coding system. Care didn’t get more efficient. When you have a whole organization, like Kaiser, that shares a basic incentive structure throughout and has leadership to pull all the pieces together, I think you can make it happen. But it’s still occurring at the unit level. Kaiser’s performance overall in terms of both efficiency and effectiveness (at least when I was studying it awhile back) was better than the average, but there was considerable variability across units within Kaiser. SD: I think we are both right. No system is perfect. Kaiser worked because it had not only the right incentives but also a structure and a culture (and a self-selected group of professionals) committed to providing good care. But there is always variation, as you taught me, and one of the goals of management is to reduce the variation and move the tighter new curve ahead. JH: So the challenge becomes: How do we change what can be changed at the system level (like insurance forms, to pick an easy example) but also effect change “where the rubber meets the road” at the process level, unit by unit? SD: Yes, but if we add millions of people with insurance without changing other aspects of the system, as we move forward, health system costs will continue to go up. That will put pressure on officials to either cut benefits or eligibles or to reform the payment part of the system—and hopefully change the incentives. JH: Adding lots of people will add lots of demand, which will increase costs overall. But again, I’m not sure what incentives will motivate change at the unit level. SD: That’s an interesting problem: How do you go from incentives at the system level to change in the examining room or at the bedside? It will take more than incentives by themselves. On the other hand, physicians and hospitals, etc. don’t seem to have trouble knowing how to respond to fee-for-service incentives. JH: Yes, they respond (and sometimes inappropriately) to the fee-for-service incentives because they’re directly affected. In theory, doctors could do better by doing less, but then you still have to monitor and control to make sure they don’t do too much less! I remember one Kaiser system I looked at in my dissertation research. They wanted to decrease the Caesarian-section rate in a system that had always paid docs more for C-sections than for vaginal deliveries. So they calculated the weighted average of the payments for C-sections and vaginal deliveries at the starting (higher) C-section rate, then set that as the fixed rate for either type of delivery. C-section rates dropped! The docs didn’t lose anything and the patients (and the HMO) gained. SD: There already are some organizations that have good processes, deliver good care, and are relatively inexpensive. What I think we want is for all organizations—including small physician practices—to be like that. It seems to me that what we are concluding is that the incentives need to change. Then we need good managers to use those incentives to engage clinicians in an interactive process that aims to produce a higher probability that the care they deliver is the right care and that they do it in smooth and efficient processes.

FACULTY FORUM


“How do you go from incentives at the system level to change in the examining room or at the bedside? It will take more than incentives by themselves.”

–Stephen Davidson

“The challenge becomes: How do we change what can be changed at the system level, but also effect change ‘where the rubber meets the road’ at the process level, unit by unit?”

–Janelle Heineke

“Processes are everywhere. As a clinician and manager, I designed and managed processes and also participated in them. As an academic, I study processes and how to make them more efficient and effective. Then and now, quality of both content and process is paramount.”

“Successful manufacturing companies have come to realize that goods alone are not enough. They know they add value when they

meet customer needs. Goods quickly become commoditized, but firms differentiate themselves on the bundle of goods and services they provide.”

“Technology can reduce waiting time and add convenience, reduce errors, enhance the experience, and so on. And it all requires processes to develop the technologies and

use them well.”

“Quality doesn’t happen all by itself. Someone has to make sure it happens. And it’s a multidimensional thing. If I ask you about the quality of a car or a restaurant, how many different kinds of elements

come to mind?”

“Services are particularly tricky to manage for quality because customers and service providers are often directly

interacting. Every customer’s ideas about what constitutes good service are a little different than everyone else’s, and

every server’s ideas are also a little different. So there is a lot more variation in the service encounter than there is on the assembly line, where the inputs can be more controlled.”

“The technical elements of quality are difficult for customers to assess, but the functional quality—how the service provider interacts with you as a customer—is something we can assess well. This technical/functional quality issue puts extra responsibility on the manager to make sure that both are present for the customer.”

FACULTY PROFILE


Janelle Heineke. Chair, Operations & Technology Management Department.

EDITED BY ALISSA MARIELLO

Janelle Heineke, professor and chair of the Operations & Technology Management Department, started her career as a labor and delivery nurse. She earned a master’s degree in maternal/child health nursing from Boston College, then later earned her MBA from Babson College. She earned her DBA in operations at Boston University School of Management in 1992. In her time at the School, she has also served as associate dean for Graduate Programs and faculty director for the University’s Center for Excellence in Teaching. Last year Professor Heineke was named a fellow at the Decision Sciences Institute and won the Instructional Innovation Award. Her research focuses on service management, quality management, and managing professionals.

FACULTY NEWS


NEW FELD CHAIRS COMING

In October, Ken Feld (SMG ’70), announced a $10 million gift to Boston University to fund three endowed chairs, one each for the School of Management, College of Communications, and College of Arts and Sciences. Feld, a Boston University trustee, is chairman and CEO of Feld Entertainment, which owns and operates Ringling Brothers Barnum & Bailey Circus, Disney On Ice, and Disney Live.

Since the Spring issue of Builders & Leaders, a number of faculty have received honors and promotions.

HONORS

Ana Albuquerque, assistant professor of Accounting, won the School’s 2009 Broderick Prize for Excellence in Research Scholarship, granted last May.

Janelle Heineke, professor and chair of Operations & Technology Management, was given the Doctoral Student Association Mentoring Excellence Award.

John Neale, assistant professor of Operations & Technology Management, won the Broderick Award for Excellence in Teaching.

TENURE & PROMOTIONS

Rui Albuquerque, of Finance & Economics, was awarded tenure and promoted to associate professor.

Z. Justin Ren, of Operations & Technology Management, was awarded tenure and promoted to associate professor.

Stephanie Watts, of Information Systems, was awarded tenure and promoted to associate professor.

Patrick Kaufmann, professor and chair of Marketing, was named the newest Everett V. Lord Distinguished Faculty Scholar.

William Kahn, professor of Organizational Behavior; Justin Ren, associate professor of Operations & Technology Management; Shuba Srinivasan, associate professor of Marketing; and Stephanie Watts, associate professor of Information Systems, were all named Dean’s Research Fellows.

ACADEMIC JOURNALS

Susan Fournier, associate professor of Marketing and Dean’s Research Fellow, was recognized by Social Science Research Network (SSRN) for two papers: 1) Top 10 downloaded marketing article, for the period 1997-2009: “Brands Matter: An Empirical Demonstration of the Creation of Shareholder Value through Brands;” and 2) Most cited marketing paper, for the period 1998-2009: “Consumers and Their Brands: Developing Relationship Theory in Consumer Research.”

Samina Karim, assistant professor of Strategy & Innovation, was invited in July to join the editorial board of the journal Organization Science.

Lihui Lin, assistant professor of Information Systems, has been named an associate editor of Decision Support Systems (DSS) and was invited to join the editorial board of Journal of the Association for Information Systems (JAIS).

Marshall Van Alstyne, associate professor of Information Systems, had four articles named to SSRN top 10 sub-category lists: “Information Complements, Substitutes, and Strategic Product Design,” “Information Asymmetry and Thwarting Spam,” “Productivity Effects of Information Diffusion in Networks,” and “Opening Platforms: How, When, and Why?”

Van Alstyne also had the Best Paper at the 2009 MIT Spam Conference.

Rick Swanborg, executive-in-residence of Information Systems, has been appointed to the board of advisors for IT World in Canada.

MAJOR GRANTS

Shulamit Kahn, associate professor of Business Policy & Law, along with a colleague, won a four-year $1.3 million grant from the National Institute of Health to research “Economic Explanations for Gender Difference in Bio-Medical Careers.”

Marshall Van Alstyne and colleagues won a $700,000 National Science Foundation Grant for a three-year series of studies in platform-driven innovation. The grant supports a team of researchers at BU, Tulane, and the University of Texas, Austin. Cisco Systems contributed another $250,000 for the same study.

Faculty Accolades.Honors, Promotions, and More.

GIVING BACK


Gifts and Pledges of $1,000,000 or higherLucia H. ShipleyRichard C. Shipley SMG ‘68, GSM ‘72H

Gifts and Pledges of $500,000 to $999,999Factset Research Systems Inc. Capital IQ, Inc.H

Jay M. Cashman SMG ‘75

Gifts and Pledges of $100,000 to $499,999Barr Foundation Johnson & Johnson William H. Kremer SMG ‘86Steven J. Lipman CGS ‘86, SMG ‘87Robert Margolis CGS ‘67, SMG ‘69MSCI BarraH Russell Sage FoundationJohn F. Smith Jr. GSM ‘65, HON ‘93

Gifts and Pledges of $50,000 to $99,999Anonymous Cisco Systems, Inc. Christopher T. Perkin GSM ‘02Gary S. Siperstein SMG ‘80H

Mynde S. Siperstein SAR ‘78H

Gifts and Pledges of $10,000 to $49,999AnonymousHu

Brown Rudnick Berlack Israels, LLPH

Maxwell Burstein Chevron Products Company Deborah P. Dawson GSM ‘82Gururaj Deshpande Jaishree Deshpande MET ‘89Ambassador and Mrs. Yousif B. Ghafari Ronald I. Heller Kevin H. Kelley SMG ‘72H

Alan G. Lafley Martin J. Linsey SMG ‘57Artemis Nazarian SMG ‘53Seyfarth Shaw, LLP Stephen R. Weiner SMG ‘63

Gifts and Pledges of $1,000 to $9,999Leslie G. Aronovitz GSM ‘81H

Mack A. Basil n

The Brain Pickers Samuel Cabot III GSM ‘68 Mr. and Mrs. Martin R. Champagne n

Betty Borgh Cushman Ernst & Young, LLP Beth L. Goldstein GSM ‘91u

Gunderson Dettmer Stough Et Al Hanover Insurance Co. The Hanover Insurance Group Foundation, Inc. George Hansen SMG ‘41 n

Eugene D. Hill III GSM ‘80 Joan A. HillJoseph F. Jabreu

Kodiak Venture Management, LLCH

Louis E. Lataif SMG ‘61, HON ‘90Hu

Alan and Sherry Leventhal HON ‘09H

Lawrence M. Noe SMG ‘79Ocean Spray Cranberries, Inc. Howard S. Reef SMG ‘71H

Christopher H. Richmond GSM ‘79 Debra A. Simmons SMG ‘80H

Maria N. Stata CAS ‘82Ray Stata Stratx International Corp. John A. Terry GSM ‘92 ThermoFisher Scientific Unilever United States Foundation, Inc. Jerry A. Viscione GSM ‘67, GRS ‘69, ‘73William J. Vogel Susan L. N. Vogt GSM ‘82Carol M. VolpeLouis J. Volpe GSM ‘78 Harold Wylie

Please accept our sincere apologies for any mistakes or omissions. We have made every effort to prepare this donor list accurately. For questions, please contact Joel Carlton-Gysan, School of Management Development & Alumni Officer, at 617-353-6137 or [email protected].

H Donated to SMG last 5+ years n Donor increased gift via company match u Faculty/Staff l Past 10 year graduates are eligible for Bronze Society with $500 minimum gift.

Leaders and Givers.July 1, 2008 to June 30, 2009.

Leadership Donors

Donor support of the School of Management is critical to ensuring that the School maintains its rigorous standards of academic excellence, recruits and retains the very best faculty, and educates the highest caliber of students. We are most grateful to the following donors, who have invested in the School through restricted funds in support of faculty research, scholarships, and student activities and development. This roster lists supporters who gave at the leadership level during fiscal year 2009 (July 1, 2008-June 30, 2009). For a full list of the School’s donors, please visit www.bu.edu/smgalum.

Annual Fund Leadership Giving Society MembersAnnual Fund donors provide vital unrestricted operating support to the School of Management. In an environment where tuition covers only 58% of the cost of a BU education, the Annual Fund gives the School operating flexibility to support its students and faculty scholars in pursuit of excellence. Unrestricted gifts to the annual fund allow the School to make strategic investments in technology, scholarships, student support services, and other critical functions, and are greatly appreciated by the Dean, faculty, staff, and students. The following list recognizes leadership-level donors to the Annual Fund during Fiscal Year 2009 (ending June 30, 2009). For a complete list of the School’s investors, please visit www.bu.edu/smgalum.

President’s Circle($25,000+)Bonnie T. Feld CAS ‘73Kenneth J. Feld SMG ‘70 George R. Hutchinson SMG ‘78, ‘93H

Charles Reiner Lax SMG ‘82H

Cathi E. Luski CAS ‘80H

David Luski SMG ‘80H

Allen Questrom SMG ‘64Lucia H. Shipley Richard C. Shipley SMG ‘68, GSM ‘72H

President’s Associates($10,000-$24,999)Anonymous GSM ‘71H

Barbara A. Arditte COM ‘97, GSM ‘80 n

Edward C. Arditte GSM ‘80 n

William D. Bloom CGS ‘82, SMG ‘84Michael E. Bronner SMG ‘82Andrew M. CarterJay M. Cashman SMG ‘75H

Bernard Chiu Maureen E. Cullinane GSM ‘81H

Robert F. DeBesse SMG ‘52John D. Doherty GSM ‘95Ahmass L. Fakahany SMG ‘79Edward J. Goldstein SMG ‘64, LAW ‘66Edward J. Hartnett SMG ‘54, GSM ‘58H

Robert W. Hawley Jr. SMG ‘74H

Thomas W. Jones GSM ‘78Nikolaos Martinos SMG ‘04Shaifalika Panda SMG ‘92Subhrakant Panda SMG ‘93Peter T. Paul GSM ‘71H

David M. Rosenberg SMG ‘88H

Steven Z. Schwartz SMG ‘82Barrie Shore SMG ‘53H

Sidney D. Wolk SMG ‘57Edward J. Zander GSM ‘75, HON ‘05

Gold Annual Giving Society($5,000-$9,999)Anthony J. Allott SMG ‘86John K. Billock GSM ‘75H

Ifigenia A. Boulogiane GSM ‘65Hn

Robert H. Clark Jr. SMG ‘64H

Richard Dieter SMG ‘65H

Peter R. Dunn Bertram Flaxman Lucy L. Halperin CGS ‘75, SMG ‘77Arnold M. Karp SMG ‘81William H. Kremer SMG ‘86Paula L. Kremer SED ‘87Mr. and Mrs. David S. Lederman Jonathon Lee Levin CGS ‘89, SMG ‘91Christian F. Martin IV SMG ‘78J. Kenneth Menges Jr. SMG ‘79Lawrence A. Merse SMG ‘70Shirley M. Sontheimer SMG ‘58H

Debra Sutton CAS ‘83Henry Sutton SMG ‘83Elinor Svenson GSM ‘75David S. Taub SMG ‘61Andrew M. Vrigian SMG ‘88James D. Watt CGS ‘83, SMG ‘85Ronald G. Weissman SDM ‘77

Silver Annual Giving Society($2,500-$4,999)Herbert S. Alexander SMG ‘64H

Arma E. Andon SMG ‘41H

Stephen J. Bakonyi SMG ‘90David L. Bedard GSM ‘00Kerry Locke Bedard GSM ‘00Henry G. Booth Jr. GSM ‘69H

Nancy Stanley Brickley GSM ‘86Ike Brown SMG ‘76Glen P. Calderon SMG ‘84Douglas Campbell Chamberlain MET ‘74, GSM ‘76H

Benjamin S. Clark SMG ‘62Prescott C. Crafts Jr. SMG ‘42H

Roger P. Day GSM ‘87Daniel R. Frank SMG ‘79John A. Foppiano SMG ‘53H

Henry Gardiner SMG ‘74H

Michael W. Goldberg SMG ‘82Terri L. Goldberg CAS ‘85Sheryl H. Haberman LAW ‘85William M. Hewitt SMG ‘85David E. Hollowell ENG ‘69, ‘72, GSM ‘74Kathleen A. Hollowell GRS ‘71, SED ‘77Carl I. Hoyer SMG ‘51H

Pamela B. Jackson GSM ‘91 n

Alan H. Jacobson SMG ‘53Barbara Jacobson CAS ‘53Donald W. King SMG ‘74Dana F. Klein SMG ‘82Paul S. Kramer SMG ‘53, GSM ‘54H

Lawrence E. Langsam SMG ‘57H

Fernando Malenchini GSM ‘00H

Bernard F. Mariette Mr. and Mrs. William Nelson Richard E. Norton SMG ‘59H

Richard L. Pearlstone SMG ‘69H

Mr. and Mrs. Robert W. Rose Charles C. Siegel SMG ‘48H

Brian C. Smith SMG ‘96Peter M. Steinmann GSM ‘91H

Daniel J. Wagner Sr. SMG ‘60William Wright SMG ‘44, ‘47H

Bronze Annual Giving Society($1,000-$2,499)Cynthia S. Aber SED ‘68, ‘89, SON ‘75 Jack W. Aberu

Meredith V. Agen GSM ‘08 l

Joseph Albanese GSM ‘92Mr. and Mrs. Carlos Alberini Robert D. Baldassarre CGS ‘89, CAS ‘91, GSM ‘97Jonathan A. Baron GSM ‘82Kathryn J. Barton SMG ‘84, LAW ‘90Ira M. Bauman SMG ‘80Llewellyn N. Belcourt SMG ‘53H

John L. Belsito SMG ‘82Robert R. Bench SMG ‘65Douglas J. Beyer GSM ‘00 n l

Marie J. Bibilos SMG ‘50, SED ‘60Leo R. Breitman GSM ‘65Roger Broome Mary C. Buletza SMG ‘80Bladen J. Burns SMG ‘92Paul C. Calento CGS ‘92, SMG ‘94Michael C. Campbell GSM ‘00Gerald Caporicci SMG ‘74H

Velia M. Carboni GSM ‘98Robert P. Carrigan, Jr. SMG ‘89John G. Carriker SMG ‘76James E. Carrington GSM ‘80Susan A. Casey GSM ‘05H

Kevin Patrick Caulfield GSM ‘03Mr. and Mrs. Daniel Chang Janet Faulkner Chapman GSM ‘77Chung-Yang Chen GSM ‘07H

Mr. and Mrs. Donald Chin Mr. and Mrs. Joseph R. Ciaramella Herbert T. Clark III GSM ‘63Karen M. Clark GSM ‘82, GRS ‘82Joshua W. Cleveland GSM ‘07 l

Allan W. Clough SMG ‘40

GIVING BACK


GIVING BACK


Daniel J. Coakley SMG ‘58H

Vito P. Colombo GSM ‘06 l

John R. Conant SMG ‘49Juan A. Cortes Munoz GSM ‘06 l

Albert L. Cummings SMG ‘52Suzanne Cutler SMG ‘61Kenneth J. Danila GSM ‘07Ghaleb and Rima Kaddurah DaoukThibaut de Barros Conti GSM ‘04, GRS ‘04 l

Rachel T. Demaster GSM ‘09 l

Paul G. Dionne GSM ‘09 l

Elaine Hansen D’Orio SMG ‘67 n

Frank D’Orio Jr. SMG ‘67 n

John M. Draghi SMG ‘82Lance F. Drummond SMG ‘76Erik Dubovik GSM ‘04 l

Brad Dutot ENG ‘00 l

Lisa Marie Dutot SMG ‘00, GSM ‘08 l

Wesley H. Eaton SMG ‘43Andrew W. Ellis SMG ‘06, CAS ‘06 l

John A. England SMG ‘49Jonathan H. Epstein SMG ‘89Richard A. Farrell SMG ‘54, GSM ‘63William A. Felder SMG ‘64H

Barbara J. Finder SMG ‘80H

Fred K. Foulkesu

Charlotte H. Friedman Laura M. Frizzell SMG ‘91, GSM ‘04Michael J. Fruchtman SMG ‘81John C. Fuller SMG ‘53John J. Gaffey SMG ‘51Herbert M. Gann DGE ‘53, SMG ‘55Swati Garodia GSM ‘08 l

Stephen R. Gerety GSM ‘07Lawrence Glovin SMG ‘57Manu Goel GSM ‘08 l

Richard J. Golden GSM ‘77Yossi Goldlust GSM ‘04 l

Mark A. Goldsmith Jerel T. Golub SMG ‘80Janelle E. Gooley GSM ‘05 l

Lawrence W. Gorin SMG ‘59Mr. and Mrs. Michael Greenberg Lisa M. Guertin GSM ‘04 n l

Ia Hagan COM ‘96, GSM ‘09 l

Jason Hagan GSM ‘02 l

Nubar D. Hagopian GSM ‘67George W. Haines GSM ‘67Stephen P. Hannabury GSM ‘90H

George Hansen SMG ‘41Lynn M. Hendrickson GSM ‘08 l

Ann C. Hertelendy GSM ‘06 l

Thomas T. Higgins SMG ‘73Mary Pat Hinckley GSM ‘02 n l

Ralph H. Hinckley Jr. GSM ‘97 n

Richard G. Holland Jr. SMG ‘49Yeji Hong GSM ‘09 l

Michael W. Husman SMG ‘97

Haejin In GSM ‘03 l

Roscoe E. Irving SMG ‘49H

Gerald T. Iseda GSM ‘89H

Francis X. Jacoby III GSM ‘91Mimi Jigarjian GSM ‘87Earl K. Johnson SMG ‘59H

Leonard W. Johnson GSM ‘89A. Katheryne Johnson-Fries GSM ‘09 l

David R. Jones CGS ‘84, SMG ‘86Michael L. Joseph GSM ‘83 l

M. R. Ophas Kanchanavijaya SMG ‘60, GSM ‘61Jeff S. Katten SMG ‘05 l

Robert G. Katz SMG ‘61H

David L. Kelly CGS ‘89, SMG ‘91C. Annette Kelton SMG ‘81Isaac R. Khafif SMG ‘90Ju C. Kim GSM ‘08H. Norman KnickleMary Bottella Knickle GSM ‘06 n l

Peter C. Knight SMG ‘70Mr. and Mrs. John Kohli Caryl J. Kuchman SMG ‘79H

John Kynigopoulos GSM ‘89Louis E. Lataif SMG ‘61, HON ‘90Hu

Michael E. Lawsonu

David Leiphart SMG ‘90Joel D. Liffmann SMG ‘82Charson Lin GSM ‘01 l

Alfonso T. Lubrano GSM ‘73Michael A. Lukasek GSM ‘03 l

Katherine A. Martelon GSM ‘83Warren Martin SMG ‘77Nelson E. Mather III DGE ‘52, SMG ‘54H

Bonnie L. McLellan GSM ‘00 n l

Maxine E. Milstein SED ‘71, GSM ‘06 l

Stephen E. Milstein SMG ‘77James J. Moloney SMG ‘89Timothy M. Moore SMG ‘01 l

Eric D. Muller SMG ‘94 n

Lydia Schenker Muller SED ‘94David J. Nealy SMG ‘01Seth R. Newell GSM ‘07 l

Horace S. Nichols SMG ‘51Carol B. Nulman CGS ‘76, SMG ‘78Thomas E. O’Donovan, Jr. SMG ‘58Jill W. Okun SMG ‘82Joan M. Palermo SMG ‘92Jong G. Park GSM ‘98Bert W. Parmenter III GSM ‘74H

Jonathan R. Pasquale SMG ‘08 l

Lester C. Peabody SMG ‘31H

Mr. and Mrs. David Peng Mr. and Mrs. Daniel Pesch Michael T. Picone GSM ‘06Henry Calvin Place Jr. GSM ‘00H

Tara Daly Place CAS ‘93H

Kimberly Purdue GSM ‘95, GRS ’96u

Albert G. Quinzani SMG ‘42H

Vijay A. Rajendran SMG ‘00 l

Robert L. Ravelson COM ‘74Xenia S. Razinski SMG ‘05 l

Thomas L. Rich SMG ‘80Robert T. Rizk GSM ’08Seth D. Rosen SMG ‘92Sam H. Rosenwald GSM ‘78, ‘80Tammy L. Rothstein-Levine SMG ‘82H

Anthony M. Rozmanith GSM ‘07 l

Patrick V. Ryan GSM ‘00Michael A. Salingeru

Arthur D. Sanders SMG ‘74Kenneth M. Sands SMG ‘83H

Heather S. Schachter GSM ‘09 l

Daniel G. Scherman GSM ‘91Alan S. Schneier SMG ‘69H

Ronni A. Schnell SDM ‘81u

Lindsey E. Schrader GSM ‘05 l

Michael D. Schrader GSM ‘04 l

David S. Schreiber GSM ‘99Hl

Robert M. Schwartz GSM ‘84H

Alejandro Schwed GSM ‘00 l

Jay V. Senerchia SMG ‘77Richard A. Short CAS ‘76, SDM ‘82Brian E. Skiba SMG ‘80Kenneth W. Smith SMG ‘40H

Sheila T. Smith GSM ‘84Mr. and Mrs. Mazen I. Snobar Gary D. Steinberg SMG ‘83Yoshikatsu Takeda GSM ‘03 l

Alex Florian Tanguay SMG ‘02 l

Abdallah Tannous GSM ‘08Sandy E. Toochin SMG ‘66Daniel E. Towers GSM ‘06 l

Constantine Tsiros SMG ‘66Margarette N. Turla-Sesepasara GSM ‘06 l

Gaurav Uppal SMG ‘01 l

Sushil Vachaniu

Parag Vaish GSM ‘03H

James E. Vinick SMG ‘62Henry B. Wainer Steven F. Walker SMG ‘80•Adam J. Weiner GSM ‘98Robin F. West SMG ‘79David Whitney SMG ‘82Patrick S. Wilmerding GSM ‘99H

Arthur K. Wong GSM ‘03 l

H Donated to SMG last 5+ years n Donor increased gift via company match u Faculty/Staff l Past 10 year graduates are eligible for Bronze Society with $500 minimum gift.

BY ALISSA MARIELLO

There’s just something so satisfying about overcoming a challenge. And it wasn’t any different for Shannon

Varney (SMG ‘05), founder of a nonprofit program called Veterans Up and Running. Laid off from Goldman Sachs in the fall of 2008, Shannon was frustrated by his untimely unemployment and a difficult job search. But he found satisfaction in the structure of training for the Boston Marathon, which he’d run three times before. This time, though, he realized that the discipline of a distance running program could help others facing similar frustrations in their own lives. “When you’ve never run 15 miles before, you spend the rest of the day feeling like you need a hip replacement. But the accomplishment of finishing what you started out to do is what keeps you coming back. It keeps you motivated to fight through the pain you meet along the way,” says Shannon. The idea of starting a nonprofit for veterans based on this feeling of accomplishment wasn’t at all like the investment management he learned from Professor Scott Stewart during his undergraduate days at Boston University, or the financial analysis he did at Goldman Sachs, though Varney credits both for preparing him for his new venture. “At Goldman Sachs I had two mentors who were both Naval Academy grads who went on to become officers in the Marines. Through them I became enamored of the military culture. Although I had never served, I really

admired the type of people they were. They inspired me to become serious about creating a running program for a population in need.” From the beginning, it was homeless veterans Varney focused on. “From my initial dealings with the homeless veteran community, it soon became apparent that a lot of these guys are going through the most difficult time of their lives, often turning to drugs and alcohol to deal with issues like post-traumatic stress disorder, and eventually ending up homeless. But they’re still proud of serving their country and associate their time in the military with better times when they were good teammates and good leaders. At Veterans Up and Running, we try to reintroduce the same level of structure and discipline that was part of their military experience. By providing this type of environment and adding positive reinforcement, we work to help homeless Veterans successfully reintegrate back into their civilian lives.” For that reason, Shannon’s running program mirrors veterans’ experience with basic training. It helps them become healthier both physically and mentally by getting them active and building their self-esteem. But Shannon doesn’t just teach; he leads by example as well. He trains with the veterans three times a week and runs competitive road races right alongside them. The homeless veterans who choose to join Shannon’s program also earn the chance to earn scholarships from the

Veterans Up and Running.Shannon Varney, SMG ’05.

ALUMNI PROFILE


“Veterans Up and Running focuses on motivating veterans who live in shelters to improve their situtations and helps them to build the confidence to do so.”

organization. In the first stage of the program, participants are asked to train for a minimum of two months and show up for training at least 85% of the time. At that point, they are asked to identify a specific race to run. Once they’ve finished, they become eligible for grants and scholarships for vocational training and professional certificate programs. One major success story since the organization’s founding in March 2008 is AJ Jenkins. A 50-year-old homeless veteran, Jenkins participated in the group’s first race event this past summer. He received a medal at the finish line and was excited to tell his kids he was featured on the front page of Spare Change magazine. Recently, Jenkins, a team leader in Veterans Up and Running, accepted a job offer he found through the organization and is on the road to independence. As far as his business model goes, Shannon purposely doesn’t provide shelter or food to the veterans he serves. Veterans Up and Running focuses on motivating veterans who live in shelters to improve their situations and helps them build up the confidence to do so. It also encourages them to take responsibility for their decisions while also

acknowledging that they can change. “I break my job into two parts. The first part is the business side, including capitalizing the organization, setting up sponsors and donors, and managing the volunteer personnel. The second part is managing the core programming, which the guys are ultimately participating in, such as building the principles of what the program is going to be about, keeping people engaged, and teaching some things along the way.” Veterans Up and Running has come a long way in a short amount of time. Having made the organization his full-time job, Shannon hopes to expand the program, and already has interest from similar groups around the country for partnerships or mergers. “In the future, I want to leverage the experience I’ve gained here and use it to start something else, whatever that may be,” says Shannon.

ALUMNI PROFILE


BY ALISSA MARIELLO

Nao Valentino (SMG ‘04) came from New York City to Boston University School of Management as an

undergraduate in 2000. She graduated four years later summa cum laude after an active career at the School that included volunteering as a Dean’s Host and LOCK tutor, and working as a teaching assistant. After graduation she crossed the Charles River to Harvard University and earned a master’s degree in public policy, simultaneously working for the government of Dubai. At the same time, she created a social entrepreneurial venture in Afghanistan to help female entrepreneurs start businesses—a project that won the Pitch For Change competition at Harvard Business School’s Social Enterprise Conference in 2006. After working at a consulting firm in Washington, DC, Nao headed back to Dubai to establish an Entrepreneurship Center at the Dubai Women’s College in a joint venture between the United Arab Emirate’s (UAE) Ministry of Higher Education and the Mohammed Bin Rashid Foundation.

B&L: Why did you choose SMG? Nao: Compared to other institutions, SMG was the only accredited program that guaranteed students world-class, tangible skills upon graduation, and this was the major draw for me. Also, a very influential mentor of mine, Mr. Glenn Brooks, SMG ‘85, was a testament to the quality citizens the School produces. Surpassing its promise, SMG more than prepared me for what was to come after graduation. When and how did you develop interests in social change and business? The relationship between public service and private enterprise has always been of interest to me, but my interest grew stronger as SMG opened my eyes to the extent to which the two sectors are interdependent. At Harvard’s John F. Kennedy School of Government, my SMG education helped me bring the business perspective to policy discussions in the graduate classroom and better understand just how business impacts the public sector, and vice versa.

How would you explain the relationship between business and social change? Public problems cannot be solved in a vacuum by governments alone. Inviting private enterprise to participate in tackling some of the greatest issues facing humanity today is a win-win solution, and social entrepreneurs are increasingly harnessing the power of business resources, know-how, and innovation to improve lives all over the globe. Why did you choose to work for the Dubai government? I was eager to find a role that allowed me to employ private enterprise to achieve public gains. In managing the Mohammed bin Rashid Al Maktoum Entrepreneurship Center in conjunction with the UAE’s Higher Colleges of Technology, I contribute to the social and economic development of the UAE and the Middle East/North African region by assisting budding entrepreneurs to launch commercial and non-profit ventures. These small enterprises are in essence the engines fueling growth in a region plagued with a number of economic and social problems, especially extreme unemployment of the large youth population. Helping entrepreneurs succeed involves not only consulting with them to navigate the ins and outs of business licensing, start-up management, financing, and feasibility studies, it also involves advocating for small business-friendly public policy and legislation, forging relationships within the business and government communities, and creating opportunities. How did your time at SMG help prepare you for your future career plans? The skills I learned and the mentorship I received during my time at the School have proven invaluable in any role, inside or outside of the business community. I had many influential mentors during my time at the school, in particular Dr. David Weil, who continues to support me to this day. I walked out of SMG with the tangible and critical thinking skills necessary to successfully navigate any situation.

A Policy of Unity.Nao Valentino, SMG ’04.

“The skills I learned and the mentorship I received during my time at the School have proven invaluable in any role inside and outside of the business community.”

ALUMNI PROFILE


PAPARAZZI


TAKE US OUT TO THE BALLGAMEJason (GSM ’02) and Ia Hagan (GSM ’09) attend a Red Sox game sponsored by SMG with fellow alumni this past summer.

COHORT DINNER

From left to right, students in Cohort D (GSM ’11): Fang-Ting (Frances) Lee, Yi-Chia Su, Lorin Kagehiro, and Bridget Huttenlocher.

2009 ALUMNI AWARDS CEREMONYCurrent MBA students Kevin Delaney, Ajay Mehta, and Laura Plattner network with SMG alums.

Abdallah Tannous (GSM ’08) and Kimberly Mangino (GSM ’08) reconnect with Peter Russo, director of Entrepreneurship Programs and executive-in-residence.

ALUMNI NETWORKING LUNCHSarah Cunningham Christensen (GSM ’04), Austin Rowan (GSM ’04), and Jose Carrillo (GSM ’01) meet with fellow alums and current students at a recent Alumni Networking Lunch.

SCHOOL OF MANAGEMENT

David E. Cherny (SMG ’78) was selected for inclusion in the Woodward White, Inc. publication “The Best Lawyers in America, 2009.” Cherny was selected for inclusion in both the fields of family law and appellate law. In addition, he has also been selected for inclusion in the 2009 edition of “Boston’s Best Lawyers” in the fields of family law and appellate law. Cherny is a partner in the Boston law firm Atwood & Cherny, P.C., where he concentrates his practice in the area of complex matrimonial and family law litigation at the trial and appellate court levels. You can email him at [email protected].

Frank Michael Toperzer (SMG ’78) of Olney, MD, is president of Drums Unlimited Rentals in College Park, MD, near Washington, DC. He has received the 2009 Jeffery Butland Michigan Family-Owned Small Business of the Year Award by the US Small Business Administration’s Washington Metropolitan Area District Office.

Diogo Correia Moreira-Rato (SMG ’82) has been appointed international vice president at Johnson & Johnson for Europe, Middle East, and Africa. Diogo now resides in Madrid, Spain and is responsible for the medical devices and diagnostics business in Iberia, Benelux, Austria, Switzerland, Middle East, Turkey, Egypt, and Africa. You can email him at [email protected].

Neal Golub (SMG ’92) of Far Hills, NJ, recently transferred from the area of SOX compliance to internal audit management with Everest Reinsurance in Liberty Corner, NJ. He is a licensed CPA in NJ as well as a certified fraud examiner. Neal has been with Everest since January 2007. Email him at [email protected].

Matthew Pinz (SMG ’94) of New York, NY, started PCM, a hedge fund for Asian and emerging market equities, with a focus on relative value and arbitrage strategies.

Peter Crowe (SMG ’95) of Exton, Pa., recently joined the board of directors of The Birth Center, a medical facility in Bryn

CLASSNOTES

34 Builders & Leadears

Best Team’s Bestseller.Scott Weighart (CAS ’85, GSM ’88) signed copies of his new book about the 2009 national champion BU Terriers men’s hockey team at the 2009 men’s home opener against Michigan, which BU won. Burn The Boats: A Seven-Championship Season for Boston University Hockey, which chronicles the NCAAs, the Beanpot, and much more, is his sixth book. Writing for US College Hockey Online, Weighart has covered Boston University hockey for over a decade. He is senior coordinator of cooperative education at Northeastern University College of Business Administration. Learn more at www.buhockeybook.com.

GRADUATE SCHOOL OF MANAGEMENT

Michael Dana Rosen (SMG ’86, GSM ‘89, LAW ’92) joined the Boston law firm Ruberto, Israel & Weiner in August 2009. He represents developers regarding the acquisition, development, sale, leasing, and financing of complex residential and commercial real estate projects, and has represented both borrowers and lenders in complex real estate financing transactions. He has also appeared before zoning and planning boards regarding a variety of residential and commercial matters.

Kevin Vest (GSM ‘02) has recently been appointed to deputy director for Clinical Affairs and Administration at Yale Cancer Center. While at Massacusetts General Hospital, he also lectured at Boston University in the doctorate of physical therapy program. Kevin began his career in patient care as a physical therapist at the University of Virginia Health Sciences Center.

Mawr, Pa. He works in risk management and insurance with the Horst Group in Lancaster, Pa. You can reach him at [email protected].

Ruben Ramirez (SMG ’98) of Hoboken, NJ, was elected to the board of directors of The Trevor Project, a national nonprofit organization focused on crisis and suicide prevention efforts among gay youth. Ramirez is an award-winning reporter/producer covering national and international business and financial news for Reuters Television, based out of New York City.

Wendy Bishop (SMG ’00) and her husband Brad Bishop of East Brunswick, NJ, announce the birth of their first child, Madeleine, on May 2, 2009. You can email Wendy at [email protected].

Chris Baldwin (SMG ’01) of Seattle, Wash., graduated in June with an MBA from the University of Washington. He works as a program manager for Microsoft where he has been since 2005. Email him at [email protected].

Michael Cheung (SMG ’01) of Township of Washington, NJ, and Taddown (May) Upiya (SMG ’98) of Pearl River, NY, were married on April 24, 2009. Attending the wedding were Gemma Alquero (SAR ’02), Aimee Buenviaje (CAS ’01), Robert De Gracia (CAS ’99), Celeste

Fernandez (CAS ’00), Gina Dapul (CAS ’01), Michael McDonald (CFA ‘02), Januel Nalupta (CAS ’01), Lynn Formanes (SAR ’01), Tina Rodgriguez (SAR ’00), Jeff Ramos (CAS ’02), Meryll Biala (CAS ’02), Sunny Sopapunta (CAS ’00), Conrado Soria (CAS ‘01), Nicole Torrecampo (CAS ’02), Jackson Tse (SMG ’02), Angelica Ybanez (CAS ‘01), and Larry Yang (GRS ’99). Michael and May live in New York City. Michael has a law degree and manages the R&B group

AHMIR. May works for Sony Music. Friends can contact Michael or May at [email protected].

Natasha DaSilva (CGS ’01, SMG ’03) and James Rowan (CGS ’01, SMG ’03) were married on September 13, 2008, in New York, NY. In attendance were Allison Berkowitz (CAS ’03), Daniel Chanin (COM ’03), Brigitte Gavin (SMG ’03), Meagan McCrystle (COM ’03), Katie (Chay) Maliel (SED ’03), Jake Maliel (SMG ‘03), Jake Wasserman (ENG ’03), Teri King (CAS ’03), Chester Van Dellen (CAS ’03, CAS ’04), Kevin Schmidt (CAS ’03), Raj Parekh (SMG ‘03), Beth (Canning) Lupo (CAS ’03), Kate McCarthy (SMG ’03), Teri King (CAS ’03), and Roman Bohdanowycz (CAS ’03). Natasha works in human resources at Colgate-Palmolive and James works in project management at Penguin Group.

CLASSNOTES


Kids Bored? Click Here.Ryan Steele, SMG ’00, shown with his wife Mary Rose (CAS ’00, SED ’04) and son Dylan, has launched a new business called CrazyKidsUSA.com, a website focused on helping parents/caregivers answer the question “What will I do with my kids today?” Ryan and his wife have been running a similar site in Chicago for over a year and found success with it, so they have expanded the idea to Boston, with perhaps more cities to come. “We provide listings of local venues, events, books, toys, and movies, and allow site members to comment and share their experiences,” says Steele. “We’re also working on an iPhone application that will allow parents find places to go with their families. “This summer, I brought on three SMG rising juniors as interns (Philip Rapp, Andrea Chong, and Farrah Ahamad) to help with several aspects of the site. One of them focused on developing our strategy for social networks, another focused on advertising and partnerships with local businesses, and the third helped with coming up with new promotional concepts for the business.” Steele is still working full-time at a firm he helped found in 2004 called AmberLeaf, a CRM/Business Intelligence consultancy and living in Millbury, Mass.

CLASSNOTES


Greetings Fellow Alumni,

It seems like summer just ended, but your alumni board is back to work on projects loaded with a great group of volunteers and a positive “can do” attitude.

Our last board meeting, on September 15, got us off to a great start. The Alumni Network Committee, chaired by Alex Tanguay (SMG ’02), planned a full schedule including a beer dinner on November 19, the SMG/GSM Quarterly lunch on December 11, and an after-hours networking event in February 2010. They have several other interesting and educational ideas on the drawing board as well. Check the School website for details.

The Awards and Reunions Committee, chaired by RJ Donofrio (SMG ’92), finished picking our latest distinguished award recipients this summer so are now just starting the process over again. If you would like to nominate a worthy candidate send your recommendations to RJ or Jennifer Tobin in Development & Alumni Relations. Meredith Chaupham (ENG ’99, GSM ’02) is leading the Scholarship and Development Committee, dedicated to raising funds for our own scholarship as well as the Annual Fund.

Last, Claire Malaguti (SMG ’78) is leading the Membership and Outreach committee. They added six new members to the board recently. I would like to congratulate and welcome Laura Alspaugh (GSM ’87), Laura Appleton (GSM ’81), Liberty Davis (GSM ’08), Bonnie McLellan (GSM ’00), Paul Rittenberg (SMG ’04), and Kristin Sparks (SMG ’06), for their election and commitment.

If you want to get involved on the board, please let me or any other committee chair know. See you around campus soon.

Connell Tarr, President SMG Alumni Board

Amie Valpone (SMG ’05) of Manhattan, NY, has received her nutrition certification from SUNY Purchase of New York. Amie writes a blog about nutrition called The Healthy Apple (www.thehealthyapple.wordpress.com), which features recipes, nutrition advice, and health food product reviews. You can reach Amie at [email protected].

Jim Boynton (SMG ’07) of Needham, Mass., is an insurance agent. After three years at a boutique financial firm in Boston as a financial advisor, Jim has joined forces with his family’s commercial insurance specialty firm, Boynton Insurance. Email him at [email protected].

Lindsey Chaney (SMG ’07) of Stamford, Conn., is finishing up with General Electric’s two-year Financial Management Program in January 2010. Her current position is as financial analyst within GE Capital’s real estate business. You can e-mail her at [email protected].

Abraham Kim (SMG ’05) and Ashley (Jung) Kim (SMG ’04) of Fort Lee, NJ, were married on May 30, 2009. The wedding party included Sam Kim (CAS ’05), Kimberly Chan (CAS ’04), Jillian Ng (SAR ’04), Victoria Loo (CAS ’05), Judy Kim (CAS ’05), and the bride’s sister Allison Jung (SAR ’11). Abraham is an associate pastor at Metro Community Church in Englewood. Ashley is an associate finance manager at Unilever in Englewood Cliffs, NJ. She is also the associate director of the children’s program at the Church.

One day.One BU community.A million ways to make a difference.

Join us. Sign up today at www.bu.edu/dayofservice

GREEN PAGES CONT.


(Continued from page 7.)

The new “killer app” for the Internet?On October 27, President Obama announced a firm national commitment to develop smart grid technologies, and committed new funds to do so. The US Federal stimulus package had already allocated $11 billion for smart grid implementation. “It’s not much,” says Kulatilaka, “and it’s mostly in smart meters that tell you real prices and real consumption in real time.” The data from these smart meters need to be analyzed and presented to consumers and fed to smart appliances. So it follows that the new players in the power distribution field are names like IBM, Cisco, Google, Microsoft, and startups like Enernoc. In two conferences convened on campus this past May, representatives from businesses, government, and utilities met to discuss the smart grid. The title of the first conference says it all: Disrupting the Status Quo in Electric Energy Management. “As we discussed, the existing power distribution network is pipes, trucks, hardware, wires, and utility companies. The new network will be controlled by data-sharing via the web. Power is the new ‘killer app’ for the Internet.”

The Longer-Term Reward.Aside from the obvious benefit of reducing greenhouse gas emissions, there’s another long-term reward to the smart grid initiative: energy independence. Today, US industries are leaders in several areas of IT. At the same time, we are the world’s most disproportionate users of energy per person. So either we continue to aggressively innovate, research, and develop, or we end up paying for technology and power from somewhere else, merely replacing the foreign oil addiction we’re in now. To that point, others have also framed the need for alternative energy as a national security imperative. Both are strong arguments for eliminating dependence on others.

Key Areas of Exploration.The multi-faceted CEESI smart grid effort is jointly spear-headed by Kulatilaka, Professor Michael Caramanis of the College of Engineering, and Professor Robert Kaufmann of the College of Arts and Sciences. “Our strength is not in one specific area,” says Kulatilaka. “Instead we’ve knit together the initiatives, the technologies, the markets and policies, and the business opportunities they together pose. The smart grid project allows us to study all of this, and at the School of Management, we’ll focus on the business aspects.” From SMG, participating faculty include C.B. Bhattacharya, John Henderson, Nitin Joglekar, Paul McManus, Marshall Van Alstyne, and David Weil. They’re looking at business models, financing options, operational issues, entrepreneurial opportunities, and more.

Kulatilaka’s own work in this venture involves designing contracts and financing structures for clean energy technologies. “Take, for instance,” he says, “the installation of rooftop solar panels, which would meet all or part of your personal electricity needs for several decades. The upfront cost can be $30,000–$50,000 and a ‘budget buster’ for most homeowners. But what if an intermediary bought, installed, and maintained the panels on your roof and you’d enter into an agreement to purchase the power from the panels at a pre-arranged price schedule? Not only would you have green power but you would dampen the uncertainty of future energy prices. The intermediary could pool power purchase contracts from many homes and use the pool as collateral to raise the necessary funds through financial institutions or debt markets. “My research explores various ways to structure these contracts, develop models to value them, and evaluate their risk characteristics. I’m also looking beyond solar power to a variety of other distributed energy resources, including smart loads, storage, and energy efficiency investments.” Kulatilaka is hopeful that bringing so many minds to bear on the problem from so many angles may lead to tangible solutions sooner than later. “This concentration of energy scholars at BU,” smiles Kulatilaka, “is a pretty impressive smart grid itself.” Learn more about the smart grid and numerous other green initiatives on the Boston University campus at bu.edu/energy. And visit Builders & Leaders at www.bu.edu/builders-leaders as we update this story in the coming months.

(Continued from page 13.) everywhere. But there’s another benefit, too: If you want to enter a new market, employing a native in that region could be very beneficial to understanding the market’s culture, tolerances, and preferences, and could therefore have a significant impact on your chances for success there. Another benefit is taking advantage of all hours of the day by having employees in every time zone. Even more importantly, you can access the expertise of a spectrum of people. A distributed staff translates to a wider and more diverse network, and as it expands, your chances of finding the answer you need expands, too. “One of the things we’re seeing is that teams can effectively use technology to create a platform for questions and answers, for ways of reaching out. It matches seekers of solutions and solvers of solutions,” says Curley. Venkatraman calls it the “economy of expertise.” “We need to design organizations that can tap into these economies of expertise irrespective of their physical locations,” says Venkatraman. “Then we can think about the structure that allows for querying where the expertise is within the company, allowing the experts to contribute to the discussion, and finally bringing them all together to solve the problem.”

A New Kind of Managing.There are clearly some tangible advantages to global work outside of the obvious labor cost efficiencies. But there are also some drawbacks to consider as well. For one thing, leadership is different. “The nature of leadership is going to have to dramatically change in the kind of organization that’s linked together by this massive network,” says Professor Lloyd Baird, chair of the Organizational Behavior Department, who focuses on global leadership work. “You’re linked to multiple partners, and they may be located in a lot of different places geographically. So how do you keep a network together over which you have no direct control? That’s a different skill set than leading an organization for which you control all the resources.

“You’re going to have to be really good at influencing people over whom you have no authority. The softer negotiation skills become critically important so that you can maintain those kinds of relationships over time.” Another hurdle is how scattered employees share information. It’s one thing to take advantage of being able to “follow the sun” by passing work off across time zones, says Curley, but yet another to make sure that the employee who takes over understands what’s been done and what remains. The handoff is challenging and needs to be managed, she says. “You have a narrow window when you can both talk to each other. That puts some stress on real-time communication.”

So What Should Companies Do?According to IGW, it’s essential for companies to change their perspective from firm-centric to network-centric, and to understand all aspects of that new world order. Many companies know they should become more global, but the ways they go about doing so are often superficial. For example, a company might understand that it makes sense to have some employees in India, but are they actually initiating a global strategy that takes advantage of that, or are they just placing a few employees in another country and leaving them to their own devices? A connected, global marketplace exists whether companies take advantage of it or not, and the ones that don’t will lose out. “Companies have to sense all aspects of their environment,” says Baird. “And they have to have the capability of responding and adjusting as those things change. They’ve got to know what they do well, and how they can change that as their business environment adjusts.” “As companies and the markets they serve become more global, business operation must go that way too,” adds Henderson. “Companies need to move away from a 20th-century shared service organization model and ask, ‘How do we actually leverage global infrastructure, connectivity, and intelligence to think about business operations in new and different ways?’ And then they need to figure out how to leverage expertise and capacity in that global network.”

FEATURE CONT.


“Companies have to sense all aspects of their environment.” –Lloyd Baird

BY LOUIS E. LATAIF, ALLEN QUESTROM PROFESSOR AND DEAN

In this deepest recession in 75 years, the airways and print media are rife with expert opinion about “how we got here.” A key point is being missed. There are accusations of capitalism run amok; there are spirited defenses

of capitalism; there are opinions that Washington pressures brought on this malaise; and there are voices arguing that only Washington (more rigorous regulation) will prevent future calamities. We hear that new levels of greed and perverse compensation incentives drove us to this abyss. And there are those arguing that there is no more greed today than ever and that any recovery will depend on free-market innovation and entrepreneurism. There’s some truth in each position. What is surprising is that no one is discussing the systemic change at the heart of today’s corporate behavior, namely the changed voice of the shareholders. Twenty years ago, more than half (54%) of the publicly held stock of the top 1,000 US corporations was in the hands of individuals. So less than half was in the hands of institutional investors—pension funds and mutual funds primarily. But every year since, the proportion of stock held by institutions has increased. By 2007, it had grown to an astounding 76.4% of all shares outstanding. According to the Conference Board, total institutional investor assets rose from $2.7 trillion in l980 to $27.1 trillion in 2006. For many of the largest US corporations, as few as 10 institutions control between 25% and 50% of all the stock outstanding.

The Unaddressed Root Cause.

DEAN’S COMMENTARY


For many of the largest US corporations, as few

as 10 institutions control between 25% and 50% of all the stock outstanding.

DEAN’S COMMENTARY


So what do sophisticated institutional fund managers want on behalf of their investors? Increasing fund values. Fund values increase when the prices of stocks increase. Hence, the obsession with short-term, quarterly results, the pressure to “leverage balance sheets” (i.e. maximize debt), and the desire to have every company “for sale” at all times because of the stock price premiums associated with mergers and acquisitions. Institutional investors actively discourage staggered boards or poison pills—once thought to protect shareholders against unwanted takeovers. But because every firm must now be for sale, institutions almost unanimously vote against these take-over defenses. Knowledgeable institutional investors, controlling large blocks of stock, command the attention of CEOs. Institutions encourage debt over equity because debt is more tax-efficient. (Our federal tax code promotes debt because the price of debt, namely interest, is tax deductible. But the price of equity, namely dividends, is taxed twice—once to the company and again to the shareholder.) So the pressure from the owners over the past decade to “increase shareholder value” has created an obsessive short-term, risk-taking focus. We’ve all witnessed the immediate impact of quarterly results on stock values. The short-term pressures have shrunk average CEO tenure by half over the past decade (increasing the risk associated with the position and putting upward pressure on executive compensation). Everyone, including corporate executives, responds to how they are measured and rewarded by their superiors. In the case of senior management, the “superiors” who set expectations are the institutional shareholders. Given that the concentration of stock ownership within institutions will continue, what can be done to ameliorate short-termism? Very simply, modify the tax code. If the federal tax code encouraged dividends, dividends would be paid. The “Bush Tax Cut,” which reduced dividend taxation to the 15% capital gains rate, will expire in 2010. Consequently, an estimated 80% of corporations have refused to entertain new dividend policies that would soon become tax inefficient again. But if that tax provision were made permanent, encouraging the payment of dividends, there would be multiple economic benefits. Since dividends derive from strong balance sheets, not from individual quarterly results, companies could focus more on creating long-term stability and growth through capital investment and R & D. The longer-term focus would increase our global competitiveness, would have a dampening effect on executive compensation, and would make jobs more secure. The dividend stream would anchor stock prices to a concrete value and would moderate stock price volatility—volatility magnified when share values have no anchor. That moderation in stock price volatility would benefit the two-thirds of US households whose savings are entrusted to institutional investors. It would not be a sop to the “top 1%”; as I’ve written before, it would benefit the “bottom 99%”—those most victimized by share price volatility. Sophisticated institutional shareholders would then focus more on the strength of balance sheets (i.e. the health of the company) over quarterly profit and loss. That longer-term focus would change corporate behavior and enormously benefit the fundamental health of the US economy.

Since dividends derive from strong balance sheets, not from individual quarterly results, companies could focus more on creating long-term stability and growth through capital investment and R & D.

THE LAST WORD

Joanna Alberti (SMG ’03)

The greatest truth in management is: the party’s only as good as the host.

My first job was: a window artist and cashier at Wegmans food market.

The last book I read was: What the Dog Saw by Malcolm Gladwell.

The moment I knew I didn’t know it all was when: I attended freshman orientation at Boston University.

My last meal would be: a liquid diet consisting of the finest red wine.

If a film were made of my life, I’d be played by: Natalie Portman.

Ambition is: never giving up.

My favorite place to go on holiday is: anywhere that my Blackberry can’t pick up a signal.

When I was 10, I wanted to be: Walt Disney’s apprentice.

Most people don’t know that: I can’t wink both eyes.

Every day, I make time to: journal my ideas.

Running a successful organization takes: acknowledging your competencies and hiring out the rest.

The soundtrack of my life includes: “My Wish” by Rascal Flatts.

Nothing tells more about a person than: their work ethic.

My guilty pleasure is: belting out a pop song while driving.

If I could change one thing about the world, it would be: creating equal financing opportunities for small and large businesses.

I’m happiest when: I’ve just finished a long week and it’s time to go out and play.

What’s changed most in business is: social networking.

The wisest investment I ever made was: in myself.

Joanna Alberti (SMG ’03) founded a company called philoSophie’s based on an illustrated character named Sophie. She designs gifts, stationary, housewares, and apparel using Sophie in association with inspirational messages. Alberti was named one of the “top five entrepreneurs under 25” by BusinessWeek in 2005 and was featured in a CNN segment called “Young People Who Rock.” We’re honored to give her the last word.

Distinguished Alumni.During Reunion Weekend 2009, we honored four alumni with the School of Management Alumni Award for Distinguished Service. Honorees, from left, Louis Volpe (GSM ’78), managing general partner at Kodiak Venture Partners; Sue Vogt (GSM ’82), president and CEO of SeraCare Life Sciences; William H. Kremer (SMG ’86), co-founder and managing partner of CrossHarbor Capital Partners; Stephen Richards (SMG ’77), chief operating officer and chief financial officer of The Princeton Review; and Dean Lataif, host. Each was introduced by a former Alumni Award winner; Charles Lax (SMG ‘82), Suzanne Cutler (SMG ’61), Deborah Dawson (GSM ’82), and Frank D’Orio (SMG ’67), respectively.

Fusing the Art, Science, and Technology of Business.®

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The Index. Page 9

Giving Back. Page 27

Classnotes. Page 34

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