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BUS I NE S SROBERT H. SMITH SCHOOL OF BUSINESS • UNIVERSITY OF MARYLAND • FALL 2009 VOL. 10 NO.2
PLUS: Why Business Plans Are Useless ° Get China and India Right ° A Silver Lining to Layoffs
Figuring
where it fits
in business
education
Ethics
cover_aa2_Layout 1 9/8/09 6:28 AM Page 1
Can you help solve any of our Lost Alumni mysteries?
Nearly 3,000 Smith School alumni have lost contact
with us. If you know the current address, phone number
or maiden/married name of an alumnus on this list,
please send an e-mail to [email protected].
Graduates from
1960-1967
Thomas Willis BS Nancy Windham BS Donald Witheridge BS
1964 FIRST NAME LAST NAME DEGREECharles Baldwin BS Clarence Barnes BA Dennis Berlin BS Herman Bernstein MBA Thomas Bigelow BS Annetta Bloxham BS Michael Boro MBA Robert Brannen BS W. BurganDonald Byrne BS Joan Carey BS Barry Collier BS William Crisp BS Robert Deneberg BS Jack Doyle BS Matthew Dunaf BS Kennard Fedder BS Sari Feld BS Joseph Fitzgerald BS Gene Gerber BS Robert Gordon MBA Thomas GracePaul GuckenbergerBS Alan Hamer BS Maurine HayterJames Heinemann BS Mason Hopkins BS James Hull BS James Hunsicker BS Dennis Hykes MBA Bishop Kauffman BS Ronald Kludzuweit BS David Lofgren BS Thomas Marcellino BS Fred Martin BS John McAusland BS Jane McDonald BS Ronald Metzger BS William Miller BS William Miller BS Kathleen Miller BS Abbas Mirrashidi MBA Pullaiah MoparthyMichael Noble BS Edward Paddock BS Lawrence PerlingLenwood Poole BS Robert Potter BS Gerald Raftery BS William Robbins BS Richard Roe BS Barron Sacks BS Ronald Schlesinger BS David Schmidt BS John Seline BS Richard Shure BS Charles Shvanda BS Marshall Snyder BS Lawrence Stolberg BS Gerald Thompson BS Charles Upham BS Philip Velthuis BS Jerry Vesely BS William Walsh BS William Wiley BS Lem Woo BS Shelton Zuckerman BS
1965 FIRST NAME LAST NAME DEGREEWilliam Bell MBA Marion Bianchi BS George Boniface BS Earl Brees BS Arthur Brisker BS Clinton Brooke BS Maurice Cecchini BS Alexander Clattenburg BS Richard Clay BS Charles Corcoran BS Marylu Dawson BS James Delagrange BS David Diamond BS John Donaldson BS Jerry Duffey BS John Earley BS John Eby BS Thomas Ettle BS Richard Feldman BS David Fleischmann BS John Flippin BS Richard Flowers BS Alunans GaultCarolyn Gietka BS Katherine Godlove BS David Hall BS John Hamerski BS Eric Hanson BS George Hartwell MBA Tony HeadJohn HolzbergDwayne House MBA Patrick Howrigan BS Thomas JonesCarolyn JonesPaul KallzwayPaul Kay BS Robert Leatherwood BS Kenneth Marx BS Raymond Maxwell BS Louis McGraw MBA Robert McIntyre BS Isaac McKenzie BS Robert McLaughlin BS Michael McMillin BS
Thomas Melloy BS Gordon Miller BS Norman Mininberg BS Charles Moeser BS James Moore BS Jimmy Morris BS Thomas Moss BS John Otley BS Daniel Owens BS Daniel Piper BS Gary Powell BS Lawrence Powers BS Janet Reid BS Richard Riley BS David Rosenstein BS Robert Saunders BS Shadia Sawiris MA Ronald ScalesArthur Schneeweiss BS Arthur Schuettinger BS Michael Schwartz BS John Sheridan BS Albert Smith BS James Smith BS Samuel Stagg MBA Gary Stambaugh BS John Striegel BS Alvin Tucker BS Andrew Wallace BS Frank White BS Charles Wiedecker BS Michael Williams BS Samuel Wyvill BS Frank Yacone BS Gail Yano BS John Zebelean BS
1966 FIRST NAME LAST NAME DEGREEGerry Baldwin BS Byron BarnesRobert Baxter BS Charles BealSteven Bernstein BS Marvin Borgelt MBA Edwin Brooks BS Thomas Burroughs BS Charles Cathey MBA Franklin Combs BS Frederick Compy BS Robert CooperCharles Crain BS Patricia Del Sobral BS Anthony Difrancesco BS James Edingfield BS Ronald Eveson BS Benito Fernandez MBA Philip Fingado BS Eugene Fohner BS John Georgi BS C. GrayHerbert Green BS Earlen HavenDaniel Hayes BS Gerard Hewitt BS Ronald Hintze BS Carolyn Holewinski BS John Jester BS Alfred Kreckman BS Edgar Lanham BS James Lewis BS Richard Lindley BS William LovelaceHugh McAllorum BS John McDermott BS Walter McGee BS Lorraine McQueen BS James MilesJames MoberlyEdward Molesky BS Kenneth Monroe MBA Bernard Nichols BS John Obrien BS William Payne BS James Pezzaro BS Thomas Pierce BS Robert Pruitt BS William Purvis BS Janesse ReneeRichard Rosen BS Harry Russell BS John Ryerson BS John Sample BS Judith Schaffer BS Benjamin SharsMarcus Sircus BS Samuel Snider BS Oku Sparks BS Ronald Starcher BS Frederick Steele BS Barbara Thompson BS Richard Turner BS James Webb MBA Selena Werneth BS Curtis Wheeler BS Bruce Wing BS Charles Wright BS Stephen Yovanov
1967 FIRST NAME LAST NAME DEGREEGary Baldwin BS Richard Bartnik BS Edward BeanStephen Blum BS David Burnette BS David Campbell BS Dale Carter BS Valentine Cawood BS Alanna Chaney BS Joseph Chiacchio
Ronald Chilingarian MBA Maureen Clarke BS Lawrence Clarke MBA Gary Connely BS Daniel Costello BS William Courtright BS Richard CroseclaseJohn Dashiells MBA Joan Davis BS Robert Davis BS Robert Day BS Dale Dennis BS Anthony Depaul BS Gregson Dodge BS William Dunlap BS James Edelstein BS Kathryn Edwards BS David Erbe BS Alan Ezrine BS Charles Farmer BS Leroy Faust BS Charles Fava BS Paul Fink BS John Flanigan BS Paulette Flynn BS Frank Fondnazio BS William Frazier BS Gerald Gallun BS J. GnasJohn Grambo BS Edward Gramm BS Richard Groseclose BS Frederick Gross BS Danny HansenDon HathawayThomas Hieber BS Charles Holt BS Michael HordRobert HuffordEdward Johnson BS Steven Kaufman BS Ronald Klaswick BS Albert Kolkin MBA Walter Kotchin BS Robert Krakow BS William Kubat BS David Laycock BS Alexander Lloyd BS John LomasLarry Long BS David Lubinski BS Peter Magee MBA David Mann BS Nicholas Massey BS Robert McGuckin BS Samuel Mewshaw BS Andrew Michaels BS Sidney Miller BS Richard Miller BS Ronald Minnick BS Barbara Mitchell BS Raymond Monmonier BS Robert Montagne BS Daniel Moore BS Lawrence Moore BS Paul Myatt BS Lester Needle BS Vincent Nubel MA Charles Omara BS Mary Jo Parsons BS William Patterson BS Ivan Phillips BS James Pilkinton BS William Powell BS Alfreda ReedGlenn Richards BS Thomas Roberts BS David Robinson BS Douglas Rotz BS John RouseThomas Rowley BS Ronald RzeczkowskiAlan Scherr BS Susan Schwartz BS Richard Shack BS James Shelton BS Howard Simons BS Gary Singer BS Jeremy Small BS Elizabeth Smith BS Burrell Stewart BS Robert Stimac MBA Donald Streeter BS Richard Swanson BS Donald Thompson BS Stephen Tievy BS George Trakas BS Richard Tucker BS Robert Vaccarelli BS David Van Asdlen BS Gerald Voglino BS Frank Warner BS Patrick Weber BS Kenneth Weiner MBA Wayne Wildes BS William Woods BS Clifford Yarwood BS Robert Young BS
1960FIRST NAME LAST NAME DEGREEJSamuel Achtzehn BSAlgirdas Bacanckas BSJames Baker BSHerbert Bowers BSQuentin Bristow BSJerry BrittinghamRoland Broseker BSDavid Caplan BSErmine Christian MBAKenneth Clow BSDavid Daly BSRonald Deangeleis BSDavid Dehaven BSDoroteo Diaz BSWilliam Downs BSWilliam Dudley BSRobert EmmansFrank Fink BSLawrence Fitzgerald BSRobert Fredericks BSDavid Freeman BSRonald Geltman BSHarold Haas MBAThomas Hall BSJoseph Heuring BSRobert Hoffman BSArthur Horn BSRoy Hurst BSJames Jones BSNils Larsen BSPeter Lynagh BSRobert Mahoney BSDonald McCormack BSBarbara McCormickWilliam McCourt BSRobert McLeay BSAlbert Nemecek BSWilliam Newell BSMatthew Pinto BSJohn Piper BSWilliam Rathbone MBABrondell Reed BSFred RhodesDonald Roesch BSJimmie Sewell BSStanley Sherman MBAArthur Sims BSCecil Tull BSFrederick Wendehack BS
1961 FIRST NAME LAST NAME DEGREERobert Ashman BS Philip Barker BS Joel Bassan BS William Bennett BS Marvin Berlin BS Donald BixGeorge Booth BS Floyd Bridges BS Richard Brooks BS Lewis Buchanan BS Joseph BurnsCharles Callison BS John Campbell BS Robert Carr BS Jerry Dale BS Louis Erkes BS Leroy Frank BS Joseph Gard BS Richard Gladding BS Seena GoldsteinBilly Guice BS Kenneth Gunn BS Walter Horan BS Peter HoytGerald James BS John Keyes BS Helen Knox BS Wayne Lee BS James Marschall BS George McLellan BS James Oosterhous BS Edward Polivka BS Paul Roberts BS Ebbin Scott MBA Robert Shaffer BS James Smith BS J. Swanson BS Joyce Taunt BS William Theunissen BS David Thompson BS John Tieman BS Robert Warren BS Carla Wilkerson BS
1962 FIRST NAME LAST NAME DEGREEJoan Alsleben BS Clark Bailey BS Clarence Barbee BS Michael Bargteil BS Charles Bocklet BS R. Bragaw BS Christopher Burr BS Chen Chang BS John Christensen BS David Devine BS John Dunn MBA Richard Edgar BS Edward Ellis BS Harry Elwell BS Melvin Ezell BS David Goodman BS Richard Gribling MBA Clifford Habblitz BS Robert Hammette BS Diane Johnson BS Ralph Johnston BS Albert Kaiss BS Richard Kilby BS John King BS Margaret Lotz BS T. Lowe BS Philip Mangiapane BS Rex Masten BS Edward O'Loughlin BS Narendra Patel MBA Nathan Pendleton BS R. Pond BS Jack Reinhart MBA Rolf Roth BS Marianna ScovilleRoger Shepherd BS William Sherman MBA Larry Simmons BS Cathrine StewartDavid Sutton BS Lenard Taylor BS Curtis Thatcher BS Jean WaltersBarbara WoodsAnthony Zdanis BS
1963 FIRST NAME LAST NAME DEGREEKenneth Barnes BS Louis Beam BS Glenn Benson BS Gary Burkholder BS David Clark BS Robert Cleveland MBA Donald Demoreland BS Robert Disharoon BS John DonnellyCharles Doyle BS William English BS Barry Friedman BS Albert Gasser BS Barbara Gibson BS Vinod Goel MBA Stanley Gordon BS John Horchler BS Carol Jones BS John Kasten BS Monty Kemp BS Steven Kisley BS Steven Lackey BS Glen Lassise BS Dietlinde Lehnert MBA Lorraine Lesage BS William LogarEugene Masseron BS James Mathews BS William McGilvery BS Frederick McLeay BS Richard MehiJames Merrill BS Paul Michael BS Harry Miller BS Christopher Miller BS Sandra Monje BS W. OconnellBruce RhodenhiserDavid Richerson BS Bruce RodenhiserWill Roeper BS Edward SeekmanRobert Slingluff BS Joseph Steinberg BS Martin Strones BS Brian Study BS Harold Thomas BS Donald Tillemans BS Thomas Versis BS Charles WatsonMarcus Wells BS Daniel Williams BS
Looking for Lost Alumni!
3
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11
9
KNOWLEDGE TRANSFER
Layoffs: A Silver LiningLosing an employee may bring unex-pected benefits to your company.• Faculty Accolades12 Emotions and Decision-
making13 Coming Forward14 Want to spend less? Carry big
bills.• Get more Smith research in
your inbox• Top Teachers Honored at Smith
CONNECTIONS
Smith Businesses to Watch ForSpotlight: Netrino
25 60 Seconds with Liam Brown30 Former Dean William E. Mayer
Speaks at Commencement30 Campaign Profile:
Remembering Bill and MaryGray Cobey
FEATURES
2 Smith Business Online10 Smith at a Glance28 Alumni News and Notes28 Alumni Events Photo Gallery29 Terp Babies32 Last Word
Contents
REMAKINGETHICSEDUCATIONThe changing shape of the world economyis prompting b-schoolsto ask hard questionsabout what they’reteaching students about ethics.
16 WIRED FOR SOUND AlumnusChad Gillenwater takes his businessglobal, big-time.
LEADERS DIGEST U.S.
Charting a New CourseThe changing shape of the worldeconomy is prompting b-schools toask hard questions about what they’reteaching students about ethics.• Industry Day4 Getting citizens to make
better decisions• Advice for Directors and Board
Members5 News flash: business plans are
useless• Sustainable Smith Business
Doctoral Program Director Debra Shapiro• Alumnus Kent Baker a leading
light at American University
LEADERS DIGEST WORLDWIDE
Getting China and India Right A new book co-authored by Smithprofessor Anil Gupta and his wifeHaiyan Wang9 Business goes global for
Smith students
22
SMITH BUSINESS FALL 2009 VOL. 10 NO. 2
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SMITH BUSINESS O FALL 2009
Smith Business is published twice a year—spring and fall—by the Robert H. SmithSchool of Business at the University ofMaryland, College Park.
Smith Business welcomes input fromalumni, partners and friends on articles andbusiness issues. Please send all correspon-dence to the editor.
EDITORIAL ADVISORY BOARDG. Anandalingam, DeanKelly Brown, Assistant Dean of Developmentand Alumni RelationsRosetta Clay, Director of Alumni Programs and Special EventsKathi Dantley-Warren, Campaign Director, Office of External RelationsJudy Frels, Executive Director of Marketing CommunicationsLawrence A. Gordon, Ernst & Young Alumni Professor of Managerial AccountingN.R. Prabhala, Associate Professor of FinanceRhonda Reger, Associate Professor of Management and OrganizationRoland Rust, Distinguished University Professor; David Bruce Smith Chair in Marketing; Chair, Department of Marketing, Marguerita Chen, ’93 Financial Advisor, American Express Financial AdvisorsLoretta Downey, Empower IT, Inc.Maya Rao, MBA ’05, Associate, InvestmentBanking, Sandler O’Neill & Partners, L.P.
EDITORRebecca Winner
CONTRIBUTORSPeter L. Baird, MBA ’09Siddhartha JainAlissa Arford-Leyl JOUR ’94Timothy D. LewisCarrie Taschner JOUR ’02Rebecca Winner
DESIGNJeanette J. Nelson, University Publications
PHOTOGRAPHYAmy Taylor ENGL ’06Mike MorganJohn Consoli ARHU ’86Jeff Watts
ILLUSTRATIONJeanette J. NelsonCatherine Nichols ‘99Brian G. Payne
Robert H. Smith School of BusinessOffice of Marketing Communications3570 Van Munching HallUniversity of MarylandCollege Park, MD 20742-1815Tel: 301.405.7282Fax: 301.314.6685 http://[email protected]
Copyright ©2009 Robert H. Smith School ofBusiness. This publication is produced by theOffice of Marketing Communications.
SMITHBUSINESS nline
LearnSmith Podcastswww.rhsmith.umd.edu/podcast/
NetworkOnline registration foralumni eventswww.rhsmith.umd.edu/alumni/
RecruitHire Smith studentswww.rhsmith.umd.edu/career/
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B U S I N E S S
ROBERT H. SMITH SCHOOL OF BUSINESS • UNIVERSITY OF MARYLAND • FALL 2008 VOL. 9 NO.2
PLUS: Student-Run Investment Clubs ° 2008 Cupid’s Cup ° Lighting Africa ° The Globe-Trotters
MasterMindThe Smith School’snew dean is energeticand ambitious. And he has a plan.
B U S I N E S S
ROBERT H. SMITH SCHOOL OF BUSINESS • UNIVERSITY OF MARYLAND • FALL 2007 VOL. 8 NO. 2
Uniting behind Smith’s ambitious
$90 million capital campaign
GreatExpect
ations
PLUS: Sports Management at Smith ° Eye on Ads ° Lessons from Hollywood
1-15_26-32_aa1_Layout 1 9/2/09 1:04 PM Page 2
Brian Childs, a 2010 MBACandidate, has charted manydangerous courses in hiscareer. Before beginning thefull-time MBA program inFall 2008, Childs was a pilotworking for military subcon-tractors and humanitarian groups
in the Middle East. He picked upaviation as a hobby while studying anthropology atCalfornia State University-Chico, but soon foundit was an expensive pastime, so he decided to makeit part of his career. Childs was preparing for grad-uation when the Sept. 11 attacks devastated the jobmarket for commercial pilots. Having always want-ed to “use his position for good” and desiring towork in the developing world, he spent the nextsix years flying across some of the world’s mostdangerous territory: Iraq and Afghanistan.Childs didn’t like many of the things he saw
during his time in the battle zones. One of hismajor frustrations was the inefficient use of publicmoney by non-governmental organizations(NGOs) and government bodies. “This is publicmoney,” Childs says, “The Afghans deserved it, butit ran dry before it got to them.” He realized thatthe enormous resources being sent to help thepeople of Afghanistan and Iraq just weren’t get-ting there. “I didn’t know about money,” Childssays, “but I do know you have to manage its flowproperly, or it won’t do anything.” This providedhis first motivation to gain a further education inmanagement.Another life-changing experience led Childs to
consider a career change that included an MBAeducation. While flying over Baghdad, he saw abomb go off in a public place beneath his plane. Itproduced the largest bomb casualties in the warthus far, killing 85 people and wounding manyothers. “I’d never seen anything like that before. Itscared me—what happened there could happen
here.” Driven partly by fear, he started applying tobusiness school without a clear idea of what coursehis career would take. Childs recalls writing admis-sion essays while sitting in his plane or on a remotemilitary compound.After beginning the full-time MBA program,
Childs chose to focus on the energy industry.“Iraq and Afghanistan are destabilized because ofenergy prices. It’s been going on for so long, wesay it’s been forever.” He has chosen a career pathin alternative energy sources that will help “relaxour demand” on foreign oil, thus allowing forgreater stability, and less interference, in theMiddle East. During his first year, Childs founded an
Energy Club at Smith with fellow classmate JustinTrudel as an opportunity to create a student-learning forum about the energy industry. Theyhave had a successful launch, gaining faculty sup-port and bringing several prominent energy com-panies to campus. Childs also pursued projectsduring the first year with the aim of reducing thecarbon footprint of the university as a whole.This past summer, Childs worked for ZipCar,
the world's largest car sharing and car club service.He saw this internship as an ideal opportunity towork on two important causes: reducing gasolineconsumption and reducing carbon emissions. Everthe spokesman, Childs contends, “Reducing use ofautomobiles is the number one easiest way toeliminate carbon gas emission.”Childs, who is well known at Smith for his
wit and self-effacing humor, downplays his role asa hero or humanitarian. “What I experienced wasreal,” he says, “and maybe it will motivate othersas well.” He joins a growing group of MBA stu-dents who want to use their business experienceto create social, as well as financial value. And thatsense of purpose will surely help him chart hisflight into the next phase of life. –TL
FALL 2009 O SMITH BUSINESS
3
Smith MBA Student Helps Alternative Energy Take Off
Smith School students in theLogistics, Transportation and
Supply Chain Management
(LTSCM) Society and the Supply
Chain Club (SCC) honored Rick
D. Blasgen, president and chief
executive officer of the Council
of Supply Chain Management
Professionals (CSCMP), as the
2008 “Person of the Year.”
Every year, the groups present
the award to an influential
leader in the logistics, supply
chain or transportation indus-
tries. Blasgen accepted the
honor at a ceremony at the uni-
versity’s College Park, Md. cam-
pus on Oct. 24, 2008.
“Rick Blasgen’s dynamic
leadership has had industry-
wide impact as he has guided
the organization into the 21st
century,” said G. “Anand”
Anandalingam, dean of the
Smith School.
Smith undergraduates
engage in professional network-
ing and career development
opportunities through the
LTSCM Society, and MBA stu-
dents benefit from similar
opportunities through the SCC.
Each year the groups present
the Person of the Year Award as
part of Industry Day, which
includes a student-organized
lunch reception and afternoon
career fair for Smith logistics,
transportation and supply chain
management students.
Recruiters from more than 30
companies participated in the
fall event.
2008 INDUSTRY DAY
LEADERSDigest
1-15_26-32_aa1_- 9/3/09 8:07 AM Page 3
4
What kind of behavior should a governmentencourage in its citizens? Saving money forretirement? Recycling? Using less energy?Eating healthfully? No matter what thebehavioral goal may be, the same researchthat marketers can use to influence consumerbehavior provides powerful tools to helpgovernment influence citizen behavior.Rebecca Ratner, associate professor of
marketing, is helping policy makers developmore effective ways to get people to do whatthey should. Ratner recently led a three-daydiscussion with business executives and gov-ernment officials at the Aspen Institute, aninternational organization that fosters values-based leadership. It encourages individuals to reflect on the ideals and ideas that define a good society, and provides a venue for discussing and acting on critical issues such as climate change. Ratner helped her group learn more
about key findings in decision makingresearch that can help policy-makers influencepublic behavior. For example, research hasshown that the defaults you present people
with have a huge influence on theirchoices, because few people switchaway from a default. Marketersmight use this technique when presenting feature options or service plans on a new appliance. Knowing this, some countries
have set a default for organ donation:everyone is an organ donor unlessthey specifically opt out of the organ dona-tion program. In this case, the default can savelives and may be better for society, accordingto Ratner, whose research has largely focusedon the factors that underlie human decision-making. But it brings up some sticky issues.Chief among them: should the governmentbe in the business of influencing people’schoices? Doing so implies a value judgment—that one choice (organ donation) is betterthan another choice (not donating organs).Who makes those value judgments? Whatissues should government bring influence tobear on choices? Good questions, admits Ratner, and ones
that policy makers ponder as well. –RW
Getting Citizens to Make Better Decisions
The Directors’ Institute at theSmith School of Business is an
intensive, innovative two-day pro-
gram to address the critical issues
facing boards today. This program,
designed for board chairs, corpo-
rate directors and senior executive
officers of publicly traded compa-
nies, offers participants a frame-
work for making informed board
decisions and exercising sound
business judgment. Learn about
issues such as succession planning,
strategy, compensation, institu-
tional investor activism, financial
accounting and reporting, audit
committee practices, ethics,
litigation, D&O insurance, and
crisis management, with insight
from leading executives, corpo-
rate directors, policy-makers,
legal and financial services
experts, as well as academic
authorities from the University of
Maryland, the Directors’ Institute
(ISS/RiskMetrics-accredited, and
CLE-approval forthcoming).
Location: Washington, D.C.,
at the Ronald Reagan Building &
International Trade Center.
Program fee is $3,950 until
February 28, 2010; $4,450 after
March 1, 2010. Learn more
at www.rhsmith.umd.edu/direc-
torsinstitute/.
DIRECTORS’ INSTITUTE OFFERS ADVICE AND EDUCATION FOR DIRECTORS AND BOARD MEMBERS
SMITH BUSINESS O FALL 2009
LEADERSDigest
Educate Yourself!Interested in learning
more about the mysteri-
ous factors that affect
decision-making? Ratner
suggests reading Paradox
of Choice, by Barry
Schwartz; Predictably
Irrational, by Dan Ariely;
and Nudge: Improving
Decisions About Health,
Wealth, and Happiness by
Richard Thaler and Cass
Sunstein, which was
recently on the reading
list for the Obama
administration.
1-15_26-32_aa1_- 9/3/09 8:07 AM Page 4
Sustainable Smith Business
FALL 2009 O SMITH [email protected]
The Smith School takes sustainability seriously, andevery issue of Smith Business Magazine is produced with
an eye toward ecological responsibility.
We use paper that contains 30 percent post-consumer
recycled content. The magazine is printed using veg-
etable inks with the lowest content of volatile organic
compounds in the industry. And our printer purchases
clean wind energy, so we aren’t using scarce fossil fuels.
By using green production techniques, this issue of
the magazine saved:
You can helpkeep the maga-zine green byrecycling itwhen you’redone reading it,or by passing italong to friendsor family. –RW
51
FULL-GROWN TREES
BTU35MILLION
SOLID WASTE
3,047 POUNDS
CO2
CO2
CO2
5,667POUNDS
S
G ANS
AF
W TER
News Flash: Business Plans Are UselessPerfect your business, not your plan, say researchers.
Useless researchers.
5
Here’s something you’d never expect tohear from a business school: Don’t botherspending a lot of time on your business plan.According to recent research from DavidKirsch and Brent Goldfarb, both associate pro-fessors of management and entrepreneurship, abusiness plan has zero value as a fundraisingtool for new ventures. Entrepreneurs shouldbe perfecting their business, not spendinghours refining how their plan looks on paper.
“Spending time and energy tweaking yourbusiness plan is a waste of resources,” saidKirsch. “It’s a limited-use document that will inno way substitute for the hard work of actuallybuilding a business. You’re better off investing inyour idea, your social network, finding potentialinvestors, potential customers – the intangiblesaround your business that are going to make itmore likely you succeed. Invest your time in anyother business-building activity but working onyour business plan.”
Kirsch and Goldfarb, with Smith doctoralstudent Azi Gera, studied the business plans ofmore than 700 dot-com companies from thelate-1990s to early-2000s boom era. Kirschmaintains records from a broad sample of dot-coms in his Business Plan Archive, a historical
research and preservation project supported bythe Library of Congress’ National DigitalInformation Infrastructure PreservationProgram. The researchers compared objec-tive characteristics of each business plan –including the contents, team make-up andbusiness model – and whether the planreceived venture capital funding.
Kirsch, Goldfarb and Gera found thatthe content of the business plans doesnot predict which businesses get funded.They don’t suggest companies shouldtotally forgo a business plan. They say thedocument may be useful for organizingthoughts and details of a venture, butthey found no evidence that either thecontent or presentation of the plan influ-ences venture capital funding decisions.
So why do venture capitalists even wantbusiness plans if they don’t use them tomake funding decisions?
“I think VCs like the plans because theyskim them to see what people are doing — toget a sense of what entrepreneurial activity ishappening,” Goldfarb said. But an interested VCwill learn the details of a business whether it isin the plan or not. –CH
1-15_26-32_1-15_26-32 9/2/09 1:11 PM Page 5
SMITH BUSINESS O FALL 2009
LEADERSDigest
6
H. Kent Baker, MBA ’69, DBA’72, is what you might call anover-achiever. Baker is UniversityProfessor of Finance at the KogodSchool of Business at AmericanUniversity in Washington, D.C.He has earned eight degrees: fourmasters degrees, three doctoraldegrees, and CFA and CMA des-ignations. In the last 25 years, hehas been one of the most-publishedfaculty in the field of finance. Hehas authored or co-authored morethan 140 articles in top journals,and his latest book,Dividends andDividend Policy, is considered thedefinitive work in its field. He hasconsulted or done training withmore than 100 organizations inboth the public and private sec-tors. And in his spare time—hardto believe he has any!—Baker is aprofessional jazz pianist who hastoured and recorded.How does he find the time?
It helps to be an expert in timemanagement, but it also helps tolove what you do. Baker is devotedto his work. “Education is mybusiness,” says Baker. “In my professional life, my firstpriority is my studentsand then my research.Teaching and researchhave never been a burden, but always apleasure.”Baker was one of the
first students to receive adoctoral degree from theSmith School. At thetime, it was the Collegeof Business and Public
Administration, housed in TydingsHall. Baker appreciates the fact thatMaryland made an effort to keephim, back when he was consideringwhether to accept a fellowship topursue a doctoral degree at theUniversity of Wisconsin. ProfessorCharlie Taff convinced him to stayat Maryland by getting him a jobin then-Dean O’Connell’s office ashis full-time assistant. “At the timemy office was in an attic in thejournalism building,” says Baker. “Iwas very happy to move into theDean’s office and to gain first-handexperience being an educationaladministrator.”Baker has been teaching at
American University for the past34 years. He works with bothundergraduates and MBA students,and enjoys the challenge of keep-ing his material fresh and relevant.“Every day is a challenge and a
reward,” says Baker. “I’m like aneducational farmer. A farmer plantscertain seeds and sees them grow. Ienjoy planting ideas in students’minds and seeing my studentsgrow in competence and their
ability to make certainkinds of linkages. I pridemyself in being able tomake learning fun andexciting for them, aswell as relevant. Giventhe dramatic changes inthe financial landscape,some of the things Itaught several years agoare now obsolete, so Ihave to work to keep mycourses current.” –RW
Debra L. Shapiro UMD ’82, Clarice
Smith Professor of Management and
Organization, is artistic by nature— a con-
cert-level pianist, a theater enthusiast, and
an art collector. But it is in academia—and
business school at that!—that this artist
found a way to merge her varying inter-
ests into a rewarding career.
Shapiro’s initial academic interest was
psychology, following in the footsteps of
her grandfather, a renowned psychiatrist
and psychoanalyst, because she liked the
idea of helping people deal with interper-
sonal challenges. But Shapiro found her
true calling when her studies turned her
toward workplace-related challenges
involving people: “I realized I could help
managers as they dealt with employees
who are unhappy; who are unproductive;
who aren’t fully committed or engaged. It
gave me an avenue to help people in a
broad way,” says Shapiro.
It wasn’t until graduate school that
Shapiro found that she really enjoyed
teaching, too. This was a natural fit, given
Shapiro’s involvement with theater and
the tendency for great teachers to be
great performers. Her classes tend to be
lively, because Shapiro would rather have
students engaged with one another than
merely listening to a lecture: “People
learn best when they are actively engaged
in the learning process.”
Shapiro came to the Smith School
after seventeen years at the University of
North Carolina’s Kenan-Flagler Business
School, where she was the Willard J.
Graham Distinguished Professor of
Management. Shapiro teaches at all lev-
els—undergraduates, full- and part-time
MBAs, executive MBAs, custom programs,
and PhD students— and has been recog-
nized for excellence in teaching with con-
sistent top rankings and a 2008 Krowe
Teaching Award.
Shapiro also heads the Smith School’s
prestigious PhD program, recognized as
one of the best in the nation. Last year,
the Smith School committed $12 million
in additional resources to its PhD program
A Leading Light
Get in Touch!
H. Kent Baker
lives with wife
Linda and their
Himalayan cat
Brady in North
Bethesda, Md.
Contact informa-
tion for Baker
can be found in
the eAlumni
Network.
Preparing a NewGeneration of Scholars
Photo credit: Jeffrey W
atts, American University
1-15_26-32_aa1_- 9/3/09 8:14 AM Page 6
FALL 2009 O SMITH BUSINESS
7
grounds. Shapiro was recently inducted as
a Fellow of the Academy of Management
for the significant research contributions
she has made to the management field
and is a co-editor (with Barry Goldman, a
graduate of the Smith Doctoral Program)
of a forthcoming SIOP Frontiers book
titled: The Psychology of Negotiations in
the 21st Century Workplace.
With teaching, research and mentor-
ing on the docket, Shapiro’s schedule
varies from demanding to ridiculous— last
semester she taught over 200 MBA stu-
dents in addition to running the doctoral
program and maintaining multiple
research projects! But she thrives on the
challenge, says Shapiro. And through it all
she continues to teach students at all lev-
els with her unique combination of aca-
demic rigor and artistic sensibility. –KW
as a result of a gift from Robert H. Smith
’50. Shapiro, who was associate dean of
doctoral programs at the Kenan-Flagler
Business School, has been head of Smith’s
PhD program since July 2008.
“The PhD experience is a lot like an
apprenticeship,” says Shapiro. “We inten-
tionally admit a very small number of stu-
dents to maximize the quality and quanti-
ty of faculty-student interactions. There is
a depth and intensity to the program that
is unmatched in any other type of educa-
tional training. In fact, one of the reasons
I came here is because I knew the Smith
doctoral program was one of the
strongest anywhere.”
Shapiro is working to build an increas-
ingly connected intellectual community
that supports and encourages cross-func-
tional research. In the Smith School’s
informal environment, students spend a
lot of time working with faculty one-on-
one, and there is a significant amount of
joint research going on. But much of it is
concentrated within academic disciplines.
Shapiro recently began an intranet com-
munity that she hopes will ease the ability
of students and faculty to gather across,
as well as within, discipline-based areas
around shared research interests. She
believes it will help students and faculty
discover their common research interests
outside their functional silos.
Shapiro’s own research focuses on
identifying strategies including negotia-
tion, third-party interventions, and expla-
nations that help to overcome workplace-
related challenges associated with manag-
ing employee perceptions of injustice and
resistance to organizational change. This
includes unwanted or new management
initiatives, such as self-managing work-
team assignments or expatriate assign-
ments. Shapiro is particularly interested in
examining these challenges when they
involve culturally different and globally
dispersed employees, for whom talking
openly about differences may be logisti-
cally infeasible or unequally comfortable
for people of different cultural back-
Great PlacementsOne of Shapiro’s key concerns
is helping doctoral students
get placed in top business
schools around the world.
Over the past five years, 99
percent of Smith’s PhD stu-
dents have been successfully
placed immediately after they
graduate—about 95 percent
as tenure track assistant pro-
fessors at an accredited univer-
sity, and the rest as researchers
in either private or govern-
ment organizations.
Recent placements include:
ROTTMAN SCHOOL OF BUSINESS,
University of Toronto
KELLEY SCHOOL OF BUSINESS,
Indiana University
ELI BROAD COLLEGE OF BUSINESS,
Michigan State University
TERRY COLLEGE OF BUSINESS,
University of Georgia
NANYANG UNIVERSITY,
Singapore
1-15_26-32_aa1_- 9/3/09 8:14 AM Page 7
Anil Gupta, Ralph J. TyserProfessor of Strategy andOrganization, spent a lot of timelast spring traveling to promotehis new book, Getting China andIndia Right: Strategies for Leveragingthe World’s Fastest-GrowingCompanies for Global Advantage. Sodid his co-author and wife,Haiyan Wang, MBA ’95—whichtook them away from their otherjoint venture, their 7-year-oldtwin daughters, more often thanthey’d like. The book is their second
together, following the highly-regarded The Quest for GlobalDominance, now in its second edition (and whose Chinese language edition was releasedrecently in mid-May).Writing this book wasa no-brainer forthe couple.“Whilethereare
country books about China andIndia and operational books aboutthe tactics of doing business inChina or India, there wasn’t a single book that addressed botheconomies from the lens of corpo-rate strategy,” says Wang. “We were well positioned to
write this book because we bringinsider perspectives and insightsregarding both India, where I wasborn, and China, where Haiyanwas born,” says Gupta. “At thesame time, we know how west-ern businesses work, having livedin the U.S. for 20 years and con-sulted for many multinationalcompanies.”If hanging wallpaper
together can strain a relation-ship, writing a book togethermust be a real struggle.“Well, it’s 70 percentjoy, 30 percent pain,”laughs Wang. “Weare much moreopen to criti-cism, and wecriticizeeachother
without reservation or politeness.A discussion can go on frombreakfast to dinnertime! We areconstantly exchanging ideas, andwe know each other’s strengthsand flaws.”“I bring research depth,” says
Gupta. “Haiyan brings practicalbusiness experience.”“I think about how we can
make the message more readableand easy to digest,” says Wang.“Are we providing answers thataddress business questions?”Yes, say readers and reviewers
both in the U.S. and abroad. Thebook explores the commonalitiesbetween India and China inorder to help business leadersunderstand the unique challengesthat accompany any venture intothese diverse and ancient culturesthat are also the world’s twofastest-growing major economies.“India and China are different
from the west on multipledimensions—culture, language,political system,” says Gupta.“They are rich and poor at thesame time. China has the 3rdlargest economy in the world,and India the 10th, yet per capitaincome in China is one-fifteenthof the U.S. and in India aboutone-thirty-fifth of the U.S.”Most companies’ globalstrategies fall short in Indiaand China because theyhave a legacy mind-set,say Wang and Gupta.They persist in seeing the twocountries solelythrough the
lens of off-shoring and cost-reduction, but forget that theyare vast markets in their ownright, with a rapidly-growingmiddle class. By 2025, China’seconomy will very likely over-take that of the U.S.; India willbe about to overtake Japan tobecome 3rd largest economy inthe world. So there are signifi-cant opportunities for compa-nies that can develop winningstrategies for China and India.“We live in an increasingly
multi-polar world,” says Wang.“The U.S. is no longer the solegrowth engine for the worldeconomy. Companies must evolveto have a multi-polar structure aswell. As they evolve into trulyglobal enterprises, national identi-ty will become less and lessimportant. By 2020, we expect ahigh degree of convergence acrossthe leading global enterprises inmost industries, even though spe-cific companies may have theirorigins in the U.S., Europe, Japan,China, or India.”Anil Gupta, Ralph J. Tyser
Professor of Strategy andOrganization, is widely recog-nized as one of the world’s lead-ing experts on strategy and glob-alization. Haiyan Wang, MBA’95, is managing partner of ChinaIndia Institute, a research andconsulting organization. They arethe co-authors of Getting Chinaand India Right: Strategies forLeveraging the World’s Fastest-Growing Economies for GlobalAdvantage (Jossey/Bass-Wiley,2009). –RW
8
LEADERSDigest
Getting China and India RightA Smith alumna and a Smith professor have advice for companieslooking for a global edge.
Get in Touch!
Contact information for Haiyan Wang, MBA
’95, is available through the eAlumni Network.
1-15_26-32_aa1_- 9/2/09 1:23 PM Page 8
9
1, 2 A group of Smith students
toured Dubai and Abu Dhabi as
part of the course “Doing Business
in the Middle East: Islamic Finance
and the Arab World,” led by
Hassan Ibrahim, Distinguished
Tyser Teaching Fellow. A trip to the
Al Ain Oasis Desert Date Farm was
an insightful reminder of the social
impact of Dubai’s explosive
growth. Fifty years ago, the
region’s culture and lifestyle were
epitomized by the date farm’s
relaxed lifestyle, but Dubai has
since developed a complex urban
lifestyle along with its tremendous
growth in global business. Students
also visited a traditional business
with thousands of years of history
—the local camel market.
Doing Business Around the GlobeWhile the College Park campus was covered in snow and ice last winter, many Smithstudents got a taste of global business through a variety of international study trips.
3
3 “Doing Business in Brazil”
focused on small entrepre-
neurs and dynamic multina-
tional companies. Led by
Paolo Prochno, Tyser
Teaching Fellow and a native
of Brazil, students researched
specific companies in Rio de
Janeiro and Sao Paolo, visit-
ed their operations in Brazil,
and made presentations as
visiting consultants.
4, 5 “Competitive Advantage through an
India Strategy,” led by Professor Sunil Mithas,
assistant professor of decision, operations and
information technologies, took students to
meet senior management and visionaries
from global companies such as IBM, Tata
Steel, Bharti Telecom, Coca Cola India,
Infosys Technologies, Apollo Hospitals and
Avery Dennison in the cities of Mumbai, Bangalore
and Delhi. Students also visited cultural centers
such as Agra and Jaipur and participated in
some of the unique festival
celebrations that are such
an important aspect of the
Indian way of life.
6 Gurdip Bakshi, Dean’s
Professor of Finance, led
the course “Doing Business
in China.” Students toured
companies and met with
executives in Shanghai,
Hangzhou, and Suzhou,
getting an insider’s experi-
ence and advice through a
tremendously immersive
experience peppered with
practical insights from
business leaders who are
growing their businesses
in China.
1
2
6
3
4
5
1-15_26-32_aa1_- 9/2/09 1:23 PM Page 9
%
%
%
%
%
%
%
%
%
1000 AlumniALUMNI GIVING AT SMITH’S PEER SCHOOLS
MB
AU
ND
ERG
RA
DU
AT
E
PERCENTAGEWHO GIVE
2
21
17
1
15
14
28
18
13
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1000 AlumniWho Give
SMITH BUSINESS O FALL 2009
SMITH AT A GLANCE
mith in the news
ABC: World News With Charles Gibson – June2, 2009 – PETER MORICI, international busi-ness professor, talks about the Obama administra-tion’s role in bailing out U.S. automakers.
Salon – May 20, 2009 – DAVID KIRSCH,associate professor of management and entrepre-neurship, talks about the history and future of elec-tric cars.
New York Times – May 14, 2009 – Research find-ing VCs don’t use business plans to make fundingdecisions by BRENT GOLDFARB and DAVIDKIRSCH, both associate professors of managementand entrepreneurship, and doctoral student Azi Gera,is highlighted in a column that quotes Goldfarb andfeatures a photo of the trio.
NPR: Morning Edition – May 8, 2009 – PETEKYLE, the Smith Chair Professor of Finance, talksabout the stress test for banks.
Information Week – April 28, 2009 – Newresearch by assistant professor SUNIL MITHASand HANK LUCAS, chair of the decision, oper-ations and information technologies department,finds foreign IT pros working in the U.S. earn morethan their American counterparts.
BusinessWeek – April 20, 2009 – Professor ANILK. GUPTA, the Ralph J. Tyser Professor ofStrategy, and alumna HAIYAN WANG writeabout why declining exports won’t doom China’seconomy.
10
S
Alumni participation through
giving is not just a measure
of satisfaction with your
educational experience.
Rankings publications use alumni
participation as a metric in their
measurements of b-schools and
universities, and foundations and
corporations consider alumni
participation rates when making
grants. How does alumni giving
at the Smith School measure up
to our peers?
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FALL 2009 O SMITH BUSINESS
11
>>MARKETING
KnowledgeTRANSFER
“Perspective is everything,” says the com-mon wisdom, and it explains why peoplearen’t capable of making completely rationaldecisions. People perceive whether an eventis positive or negative—and categorize deci-sions as gain or loss—based on a referencepoint. Called the framing effect, this notionpredicts that people tend to avoid risk whenviewing a choice in a positive framework, butseek risks if viewing a choice through a neg-ative framework.
But according to recent Smith Schoolresearch from Brent Goldfarb, associate pro-fessor of management and entrepreneurship,and Myeong-gu Seo, assistant professor ofmanagement and organization, feelings atwork may help correct for the framing effect,allowing people to make less biased decisions.
Seo and Goldfarb incorporated aspects ofboth lab experiments and field work in theirstudy. Participants were real-life day tradersrecruited from investment clubs who received$10,000 in play money to invest. If their stockpicks did well, they were able to win up to$1,000 dollars, and even if they lost all theirplay money they still received $100 for participating in the study.
Participants experienced a range of pleas-ant and unpleasant emotions during deci-sion-making and were prompted to reportand record those emotions. “Researchersoften talk about the effect of emotions ondecision-making, but few studies have actu-ally measured emotions,” says Seo. “Instead ofspeculating, we were able to capture infor-mation that allowed us to directly measurethe impact of emotion on decision-making.”
Seo and Goldfarb found that when participants felt very happy or very sad, theframing effect was mitigated or evenreversed. When participants experiencedlarge gains and were also very happy, theywere less risk-averse or even risk-seeking.When sad participants experienced a largeloss, they became less risk-seeking.
This may be because experiencing a gainmay provide a context in which potentialgains appear more real to decision makers.Experiencing pleasant feelings at the same
time as a gain may increase the perceivedpossibility of potential gains—increasing thewillingness to take risks.
In contrast, experiencing a loss often putsindividuals in a situation where future lossesseem more real. In this case, pleasant feelingsmay increase how much value they attach toavoiding further losses, which overwhelmstheir perception of potential gains—andthus decision-makers become less willing totake risks.
When unhappy participants in the studyexperienced a large loss they became morerisk-averse, also in contrast to the type ofbehavior predicted by the framing effect.“When you’re already down, you shouldn’t becautious. You should just try for the HailMary pass to make up the loss,” says Goldfarb.“But we found that people who were experi-encing unpleasant feelings at the same time asa loss actually become more risk-averse.”
The effects of unpleasant feelings had lessof an effect on decision-making than pleas-ant feelings, Seo and Goldfarb found. Butextremely intense feelings, both pleasant andunpleasant, didn’t just correct for the framingaffect, but actually reversed it—creating a dif-ferent type of decision-making biases. In the
financial world, this helps illustrate howtraders may be misled by their intense feelingsinto mishandling their funds. Stock tradersnaturally feel happy when they experience again, and unhappy when they experience aloss. But in extreme cases, the happiness theyfeel may drive them to continue making riskydecisions, even though they should be risk-averse—fueling stock bubbles. When the eco-nomic landscape looks bleak, traders naturallytake more risks to recover from their losses,but the strong unhappiness that they alsoexperience may drive them to become morerisk-averse, exacerbating crashes or prolongingeconomic downturns.
What can managers learn about howbest to encourage more rational decisionmaking within their organizations? It maybe worthwhile to foster a broad range ofaffective experiences at work, say Seo andGoldfarb, particularly pleasant feelings. Inother words, creating a happy workplacemay result in better performance by individ-ual employees and benefit the organizationas a whole. But don’t take it too far, theycaution: experiencing extremely intensefeelings at work results in biased decision-making too. –RW
A Matter of Perspective Emotions can help correct for bias in decision-making.
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KnowledgeTRANSFER>>PERSONAL FINANCE >>PERSONAL FINANCE
SMITH BUSINESS O FALL 2009 [email protected]
Strapped for Cash Interested in learning more aboutrecent research from Smith faculty?Sign up to be notified by e-mail whenthe Research@Smith Web site is updated!
Research@Smith is a print publicationwith limited distribution, but all of itscontent is available online. You will find:
• Articles on recently published or
forthcoming research
• Podcasts
• Video interviews with faculty
• Information on upcoming thought
leadership events and conferences
To subscribe for e-mail notificationwhen Research@Smith is updated, visitwww.rhsmith.umd.edu
Economic woes got you trying to cutback on your spending? Use cash.
If you want to spend less cash, skip thetwenties and stock your wallet with hun-dred-dollar bills, says Joydeep Srivastava,professor of marketing. Srivastava co-authored recent research that found peo-ple are more likely to think twice aboutmaking a purchase when they carry onelarge denomination of cash rather thanmany smaller denominations equal to thesame amount of money.
This is because there is a greater “painof paying” associated with breaking alarge bill. “If you want to cut back onyour spending in this tight economy, keepyour cash in a few big bills vs. a numberof smaller ones,” said Srivastava. “You’ll bemore reluctant to break that hundred-
dollar bill, so you’ll end up saving it.”However, Srivastava also cautions
against the consequences of a “what thehell” effect that kicks in once self-controlhas been overcome. He conducted threestudies with co-researcher PriyaRaghubir of New York University, andfound that once consumers decide tospend money, those carrying large billsactually spent more than those with small bills.
“Unfortunately, once you break a bigbill you’re less likely to pay attention tothe total amount you spend,” he said.“You’re more likely to throw self-restraintto the wind once you’ve released theimpulse to buy.” –CH
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FALL 2009 O SMITH BUSINESS
>>MANAGEMENT
13
Many firms have have been forced to layoff valued employees this year, and watchedwith dismay as all of that knowledge, expe-rience and expertise walked out the door.But Rafael A. Corredoira, assistant professor
of management andorganization, says
that a firm thatloses an employ-ee may also reapsome unexpectedgains—knowledge
from the firm theemployee goes to.
That’s a counter-intuitive thought formany of us. Employershate to lose employees.
Even the language we use, “losing employ-ees,” pre-disposes us to think of outwardmobility as entirely bad for the organization.
But it turns out that when an employeeleaves a company, he often takes with himthe relationships he made while there—col-leagues and co-workers with whom he mayremain in contact. And the employees leftbehind learn from the new knowledge theirex-co-worker gains at his new place ofemployment.
Corredoira explored the linkagesbetween firms in the semiconductor R&Dindustry. He examined patents granted bythe U.S. Patent and Trademark Office,obtained from the National Bureau ofEconomic Research, U.S. Patents, andNational University of Singapore Patentdatabases.
Patents are a good way to track themovement of knowledge from onefirm to another. Around all codifiedknowledge there is a lot of tacit knowl-edge—information that is not written.A new firm requires not just theknowledge codified in the patent, butalso all the knowledge created whiledeveloping it, to effectively use the
patent—knowledge the inventive firm gainswhen tacit knowledge is passed informallyfrom one worker to another.
Corredoira measured how often a firmthat lost an employee used the patents of thefirm to which its former employee went. Hefound that Firm A is about 20 percent morelikely to use Firm B’s knowledge once a for-mer employee is working there. This is aboutthe same increase in the utilization of FirmB’s knowledge that Firm A would gain if ithired away one of Firm B’s employees.
How are firms that lose employees bene-fiting from the knowledge at the employee’snew firm? Ongoing relationships with for-mer co-workers are one reason; knowledgeis shared informally through social networks.But it also appears that when an employeemoves to a new firm, his former colleaguesmay be more motivated to pay attention tothe knowledge generated at that firm.
But if an employee moves to a firmwithin the same geographical region—theNew York or Washington, D.C., metro area,for example—there is less benefit to begained. Outbound mobility to a more distantregion is more likely to create a uniquechannel through which knowledge can flow.This is probably because workers in thesame industry located in the same area prob-ably already share information throughestablished social networks such as profes-sional associations. Workers in companiesthat are geographically distant don’t havethese established networks through which
knowledge can betransmitted, makingthe employee’ssocial network amore powerfulvehicle for trans-mitting knowledge.So should man-
agers be setting up for-mal alumni network-ing opportunities for
current and formeremployees? That’s notreally the answer, saysCorredoira. “Beyondthe legal issues due toconfidentiality agree-ments, it would also strainrelationships between firms,”he says. Knowledge-sharing at thislevel appears to happen informallyand organically through existing socialnetworks. But it is important thatemployers work to minimize negativefeelings toward the company when anemployee leaves to work elsewhere, whetherthat transition is voluntary or involuntary. Thatmakes it more likely that the employee’s socialnetworks will be maintained.
And employers must also be open tocapturing the information as it “trickles up”through the organization from currentemployees through their social connections.Managers must be willing to harvest thatknowledge by being receptive to new ideasand opinions coming from below them inthe ranks.
“We are in a learning economy.Everything we used to know becomes obso-lete in a matter of years. In addition, lastyear’s financial and economic events havechanged the economic and business land-scape in ways that we still are trying to makesense of. You have to adapt and find answeredto unstructured questions. That is where itbecomes very useful to have scouts aroundthe world giving you information that canhelp you learn,” says Corredoira. “Trying tosolve problems using information from yourfriends is more efficient than trying to go italone. Even across industries this knowledgecan be useful.”
So the diaspora of finance industryemployees from Wall Street to smaller finan-cial firms, or to other industries entirely, maybring useful knowledge back to Wall Street aswell—if management has ears to hear. –RW
A Silver Lining to Layoffs Losing an employee may bring unexpected benefits to your firm.
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KnowledgeTRANSFER
14
SMITH BUSINESS O FALL 2007 [email protected]
Celebrating Top TeachersSmith Recognizes Teaching Excellence with Krowe and Legg Mason Awards
>>MANAGEMENT
Smith has excellent teaching faculty, but each year theschool honors those who go above and beyond the usual standards of excellence to motivate and inspire as well as educate. Smith salutes its top teachers by recognizing themwith the Krowe Teaching Excellence Awards and the Legg-Mason Awards in Teaching Innovation. Congratulations to all 2008-2009 winners!
Krowe Teaching Excellence AwardsHenry C. Boyd, Tyser Teaching Fellow in marketing, recognized foroutstanding teaching in a large lecture section: “The first day of Prof.Boyd’s lecture blew me away, and I never missed a single lecture.”
Gary Cohen, lecturer in logistics, business and publicpolicy, recognized for informing and inspiring his students: “He gives us real-world advice and helps ussee the applications of what we’re learning.”
Michael Lawless, Tyser Teaching Fellow in management and organi-zation, recognized for providing a unique learning experience:“Professor Lawless was hands down the finest professor that Iencountered at the Smith School.”
James McKinney, Tyser Teaching Fellow in accountingand information assurance, recognized for dedication tostudents and ability to clarify difficult concepts: “Anexcellent professor. … I was very inspired by him this
semester.”
Gordon Phillips, Bank of America Professor of Finance, recognizedfor teaching a highly complex subject well: “His approachable andconversational teaching style helped to de-mystify concepts that
otherwise would have been impenetrable and intimidating.”
Rhonda Reger, associate professor of management andorganization, recognized for challenging the class: “Dr. Regeris the most organized teacher I have ever had.”
Doctoral students Jahangir Boroumand, Scott Livengood, andJie Mien also received Krowe Teaching Excellence awards.
Legg-Mason Awards in Teaching InnovationHugh Turner, Tyser Teaching Professor in logistics, businessand public policy, recognized for strong support of innova-tive approaches to learning, including inter-university casecompetitions.
Susan White, Distinguished Tyser Teaching Fellow in finance, recog-nized for teaching innovation, including development of an extensiveand resourceful student Web site.
Read the profile of Allen Krowe ’54--former fighter pilotwith the U.S. Air Force; CFO and senior vice president of IBM;vice chairman of Texaco, and also the alumnus who endowedthe Krowe Teaching Excellence Awards—online at the Smith Business Web site. –RW
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CEOs are under immense pressure todeliver on earnings performance, a pressurewhich only intensifies in difficult economictimes. So it is not surprising that so manyCEOs—up to 74 percent in one study—believe it is acceptable to manipulate theirearnings reports to achieve performancegoals. Manipulation of corporate earningsthrough income smoothing, earnings man-agement, or explicitly fraudulent behavioris more common than many would like toadmit, but it is easy to understand. It is hardto be honest when the alternative is to layoff workers or close the doors.
When discrepancies between reportand reality become apparent, some publicfirms restate their reported financialearnings voluntarily. Others are forced torestate by a law enforcement body likethe Securities and ExchangeCommission (SEC). Voluntary disclosureof wrongdoing creates an initially negativeresponse from stakeholders, often reflect-ed in a decline of the firm’s marketvalue. It can generate civil lawsuits andresult in the loss of income or positionfor corporate executives. What wouldmotivate a firm to voluntarily restate itsearnings despite the negative impact?
Recent research by two Smith Schoolprofessors, Ken G. Smith, Dean’s ChairedProfessor of Business Strategy, and KayBartol, Robert H. Smith Professor ofManagement and Organization, indicatesthat social forces may be more effectivethan sanctions in compelling firms to doright. In other words, good behavior iscatching.
Bartol and Smith examined 919 firmrestatement announcements from 845firms between 1994-2001, taken from a report issued by the U.S. GeneralAccounting Office (GAO). The publiclytraded, relatively large firms were selectedfrom the Execucomp database, whichincludes more than 2,500 past and present
members of the S&P 1,500. Firms in thedatabase restated their earnings due toaccounting irregularities that includedaggressive accounting practices, inten-tional misuse of facts, and fraud. Of theserestatements, 170 were considered to bevoluntary. Restatements due to innocentmistakes, human error or discontinuedoperations were excluded from the sample.
Firms were more likely to voluntarilyrestate earnings when their peers, industryleaders and network associates also volun-tarily came forward to restate earnings.Coming forward voluntarily can mitigatepunishment and lessen the damage to afirm’s reputation, a process that everyonein the industry can observe. Seeing peers,industry leaders and other members oftheir network weather the initial negativeimpact and emerge stronger and healthierfor it encourages other firms to alsobrave the initial negative consequencesthat accompany a voluntary disclosure ofwrongdoing.
Network connections also play animportant role. Indirect connections suchas personnel exchange, board interlocks,membership in trade associations, andshared auditors may communicate normsand values through a social context.When network members voluntarilyrestated earnings, it increased the likeli-hood that a firm in the network wouldfollow suit.
Some argue for additional or morestringent oversight, controlling firm behav-ior through stricter regulation and control.But Smith and Bartol found that formalregulatory forces actually discourage vol-untary restatements, a result the authorsfound surprising and counter-intuitive.
“If you were speeding on the freewayand saw other cars being pulled over,you’d slow down,” says Smith. But seeingother firms being prosecuted for wrong-doing doesn’t seem to inspire firms to
amend their behavior or come forwardto restate their earnings. It may be thatCEOs believe that enforcement agencieshave the wherewithal to prosecute only acertain number of wrongdoers. CEOsmay be gambling on the chance thattheir firm will not be among the smallnumber caught and prosecuted.
The authors also found that the higherthe status of a firm, the less it feels pressureto conform to industry norms or socialregulatory forces. “These companies—theEnrons of the world—may feel immuneto the negative consequences of restate-ment because of their history of successand their status in the industry,” saysSmith. So neither the fear of punishmentnor the effect of peer pressure seems toinfluence the behavior of the biggest andmost influential firms.
Bartol agrees. “Our finding, that network connections influence firmbehavior, suggests that it may be possibleto identify better connected firms in anindustry and elicit their aid in encouragingmore positive corporate citizenship,” saysBartol. “Such a direction is warrantedbecause strong regulatory sanctions donot seem to work and may even becounterproductive.” –RW
Coming Forward Industry norms are more effective than sanctionsin encouraging good corporate behavior.
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Most business practitioners you’ll meet are honest,
fair-minded and generous, but that’s not the way
business people are perceived these days.
Hollywood is a good barometer of public opinion.
Conniving schemers of the Gordon Gecko, Wall
Street high-roller variety are pop culture staples,
but recently even small business owners have been
tarred with the same brush. In the indie film
“Sunshine Cleaning,” cleaning-company-owner
Rose is surprised when her father puts a false
starting date on the side of the cleaning truck to
convince customers the company has been in
business for a long time. When Rose objects to this bold-faced lie, her father tells her cheerfully,
“But it’s just a business lie, it’s different from a life lie!”
education
Remaking
It’s revealing of the way soci-ety views business leaders:more than willing to shadepurple prose into white lies ifit will gain them a bit ofadvantage. Whether or notthis view is justified, there’s adeep distrust of all businessleaders, a conviction that any-one in a position of corporateresponsibility has to becoerced into honest andupright behavior. More andmore, an MBA is not beingviewed as a badge of honor,demonstrating knowledge andcompetence; instead it’s anearly warning sign of perni-cious greed, corruption andself-aggrandizing ambition. It is frustrating for anyonewho holds a business degreeto see the MBA being cast insuch a negative light. We hear
the same frustration frommany hard-working, ethicalSmith alumni, who now seetheir profession tarnished andworry that talented youngpeople will be turned offfrom pursuing a businesscareer.It is painful to see the
scathing indictments of cor-porate misdeeds that are nowcommon fodder in everypublication and on every TVnews show. Business schoolshave also come in for criti-cism—after all, every MBAhas a proud degree fromsomewhere. Have businessschools failed somehow toconvey basic ethics to theirstudents? What have theybeen teaching all these years?These questions are nowbeing asked by many of the
faculty and leaders in businessschools themselves. As a result of this self-
examination, many businessschool deans are beginning toacknowledge that studentsneed a more thorough, moreholistic ethics education—one which takes into accountwider issues of social value,sustainability and stewardship.What are the best businessschools going to teach aboutbusiness ethics and corporatesocial responsibility? It’s an excellent question.
But first another question:what is business ethics?
Business ethicsRedefinedIs it merely compli-ance—a checklist thatensures the business
practitioner stays outof jail? Under this defini-tion, business ethics exist toprovide a boundary for cor-porate behavior determinedon the basis of law. Manyconsulting companies defineethics this way. Their ethicsarms serve as complianceadvisories, helping companies
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meet their legal responsibilities.But thinking of ethics as a
checklist of legal responsibilitiesis no longer adequate in thepost-meltdown business world.Shrevardavan Lele, Ralph J. TyserDistinguished Teaching Fellowof decision sciences, is convincedthat business schools need tobroaden their understanding ofthe term ethics to encompass awider range of behaviors thatbenefit society. “We do our students a great disservice whenwe confuse ethics and compli-ance in their minds,” says Lele.“Compliance with Sarbanes-Oxley is not about ethics, it isabout legalities. It is about hownot to fall afoul of the law.Good law needs to have an ethical component, but for themost part our MBAs aren’tdesigning laws.”Philip Livingston ’79, senior
vice president, U.S. PracticeManagement with LexisNexis,actually helped design sections of the Sarbanes-Oxley legislationin his prior role as CEO ofFinancial Executives International,a professional association ofCFOs, controllers and treasurers.Livingston feels strong that educa-tion and a common complianceframework for management is animportant baseline for any discus-sion of ethics. Early in his careeras a CFO, Livingston found him-self in the unenviable position ofhaving to blow the whistle on avice president who was clearly in
violation of companypolicy and account-ing practices. It was adeeply uncomfortabletime for Livingston,as the VP was a per-sonal friend of thecompany’s CEO.“At some point
in a career, manymanagers find themselves asked or pressured to dosomething that fallsinto a gray area,” says Livingston.“Your antenna should go upand one should be very careful.Making the wrong decision,allowing social pressure to swayyou and then being unable toundo the damage is a commonslippery slope. Once exposed inthis age of detailed and completedatabases, you can be tainted forlife and no longer hirable. Yourlifelong investment and personalcareer assets can vanish. Peopleneed to study the rules andthink about what happens topeople's careers when theybreak the rules.”But it’s clear that when he
faced an ethical challenge, legalissues weren’t the only thing on Livingston’s mind—his conscience was also at work.Donta Wilson, MBA ’05,Battlefield Regional President ofBB&T, also described an ethicalchallenge where his consciencewas his guide. Early in his careerhe won a trip because of his
high sales performance. In review-ing the data he found that hissales had been miscalculated, sohe informed a supervisor andlost the trip.“Doing that very early on in
my career built trust with theteam I was working with, andwith my manager. That trustcreated future opportunities forme, ones I might not otherwisehave gotten as such a youngperson,” says Wilson.Everyone who works in the
business world expects to facethese kinds of issues, and theyare relatively simple to navigate.It may not be easy to act asconscience demands—simple isnot the same thing as easy—butmost people understand theright thing to do.That is the bare minimum
of ethical education a studentshould take out of businessschool: don’t break the law. Butwhat about when an action islegal? Subprime mortgages werelegal to sell and legal to buy, andthe buying and selling went onmerrily for several years beforethe weight of all that bad debtcollapsed the economy. Butmany people now believe thatlenders and sellers may have
been acting unethi-cally, even if theiractions were legal.Certainly, there isno disputing thatmany people mademoney by providingmortgages that theyknew were notgoing to perform.People can
disagree on whatethical behavior in these situations
would entail precisely becausethere is no legal boundary. Inthe presence of a regulation,there is no ethical questionabout what is right to do: theethical path is to obey the law.But when there is no legalboundary, how do you decidewhat is right?
fiRst, do no haRmThere is no formal con-sensus on what ethicalbusiness practices looklike. Professions like law andmedicine have a basic code ofethics by which all practitionersswear to abide, and doctors andlawyers risk losing their licensesif they transgress that code. Butbusiness leaders don’t have anyset ethical code on which allpractitioners agree. Socialresponsibility is not usually highup in the minds of corporateleaders when they make businessdecisions. You can’t lose yourMBA even if you’ve made yourfortune by swindling everyoneyou know.Ethics classes also don’t get
a lot of respect from students—that’s another barrier to teachingthe subject effectively. “The fieldof ethics is not really viewed as
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FALL 2009 O SMITH BUSINESS
a legitimate course of study bybusiness students. It has beenseen as something that belongsin the social sciences or human-ities department. Studentsbelieve that people can be perfectly functional businessmanagers without any formaltraining in ethics,” says Lele. “So it hasn’t been viewed in thesame way, or considered asimportant, as courses in market-ing or strategy or finance.”The Smith School, like
many other business schools, isconvinced that ethics educationmust change to be effective. Sowe are feeling our way toward anew approach.
teaching ethics:smith histoRyIf you took an ethics coursewhile at Smith, it was probablythrough the accounting andinformation assurance (AIA)department. Ethics is a naturalfit with accounting, where com-pliance issues are a key part ofthe accountant’s professional life.Business law professors in theLogistics, Business and PublicPolicy department also offered abusiness ethics course at theundergraduate level: Business,Ethics and Society, which wasopen to all students but was notrequired for anyone but generalbusiness majors. In recent yearsethics courses were enrichedwith role plays and co-curricularactivities, and in the last twoyears the Freshman Fellows program has offeredethics-relatedspeaker events.For alumni of a
certain generation,Charles Edelson, aprofessor of account-ing through the ’60s and ’70s, is theperson they think ofin connection withethics. Edelson’scommitment to
ethics and his reputation for ethical behavior was so wellknown that one student reported,“When I have a moral dilemma I think to myself, ‘What wouldProfessor Edelson do?’”For more recent alumni,
ethics at the Smith School isassociated with Stephen Loeb,Ernst & Young Alumni Professorof Accounting and BusinessEthics, who has been at theschool for 39 years, longer thanany other professor. He firsttaught ethics as part of hisaccounting courses, and later asa stand-alone elective; it is nowrequired. Under Dean WilliamE. Mayer’s tenure, Loeb helpeddevelop the ethics experientiallearning module (ELM) as partof the MBA curriculum, a signature aspect of which was a visit to prison.But the world has become
more complex—bigger, faster,stranger. And in the new infor-mation economy, the ethicalissues at hand are far more complicated. Here’s an example:studies by behavioral economistDan Ariely have shown thatpeople who wouldn’t think ofstealing a dollar bill from adrawer don’t cavil at taking aCoke from a fridge. It is easierfor humans to be honest withmoney than with the materialthings that also cost money. Andin an information economy,most transactions are symbolic.So it was easier for Wall StreetCEOs to rationalize fraudulent
behavior, likeback- datingstock options,because theywere dealing withsymbolic moneyrather than coldhard cash.It is vital that
future businessleaders learn tothink their waythrough this kind
of ethical complexity. And busi-ness schools must give them thetools to do it effectively. “Past studies have shown that
while in school students’ beliefs,and to some extent their values,move closer to those of theirprofessors, while after graduationthey shift closer to those of significant others in the workplace,” says SusanTaylor, senior asso-ciate dean andassociate dean offaculty. “That’s whyit is important thatour ethics coursesprovide studentswith structuredframeworks andmultiple exercisesto explore theirown values, see theimpact of differentmanagerial actionson a variety ofconstituencies, anddebate with othersthe appropriateactions in the faceof difficult situations.”Given the changing role of
government in business, beingsensitive to the social responsi-bility born by corporations ismore important than ever, saysGerald Suarez, associate dean ofexternal strategy and Ralph J.Tyser Teaching Fellow. “In an era of hyper-skepticism, wherepeople are questioning both therole of government and the pur-pose of the enterprise, learninghow to lead cannot be separatedfrom learning how to do theright thing. Our focus on teach-ing the methods distancedstudents from the purpose of
learning the methods—to dis-cover how the methods can beused to give back value to soci-ety,” says Suarez. And the notion of what
ethics education encompasseswill continue to change, saysRobert Krapfel, associate deanof MBA/MS programs. “What istruly forward-looking is the
notion of sustainability—includ-ing the planet as a stakeholder.We need a conceptual frameworkthat encompasses sustainability,and that is an arena where academic research is going to beimportant. We are redefiningwhat constitutes value to includesocial value. This is a reflectionof hard business realities—sustainable technologies arewhere the money is going tobe,” says Krapfel.While there is agreement
among Smith School facultythat it is time to give students astrong intellectual framework in
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ethics and corporate socialresponsibility, there isn’t consen-sus on how to achieve that goal.How can the content be maderelevant? How do we challengestudents’ thinking without dic-tating what they should believe,or what they should value?The answers will differ for
each program.
undergrads
A committee of faculty membersreviewed the undergraduatecurriculum last year and recom-mended that the school requirean ethics course for everyundergraduate student. “Webegin an exploration of ethicsthrough a required course early in the Freshman Fellowscurriculum, and are discussinghow to extend that to all of ourundergraduate students,” saysPatricia Cleveland, associatedean of undergraduate programs.
“We are challenged to find moreways to actively involve studentsin the learning process and pro-vide them with avenues forreflection and collaboration, as akey aspect of their intellectualand professional development.”Ethics-related co-curricular
activities last year included severalethics speakers, including BB&TChairman and immediate pastCEO John Allison, and a well-attended Symposium on SocialEntrepreneurship sponsored bythe Smith School’s new Centerfor Social Value Creation.
mBa
Three years ago, the schoolbegan to require an ethicscourse as part of the core curriculum. “Content-rich” wasthe watchword. “Lots of classes,lots of content, lots of deliver-ables,” says Lele.The course consists of 14
sessions. Students first develop aframework for moral reasoning,followed by 10 weeks of casestudies that considered differentstakeholder groups—not justinvestors and customers, but alsoemployees, communities, theenvironment, the internationalcommunity, and more.While this core course is
rooted in traditional corporatesocial responsibility, RachelleSampson, assistant professor oflogistics, business and public pol-icy, teaches an MBA elective thatis even more forward-looking—challenging students to considerissues of sustainability and re-
think what constitutes value. “Inthe context of sustainability, toachieve change, it’s not enoughto tell people to do the rightthing; we have to make a business case for doing the right thing,” says Sampson. Shebelieves re-thinking businessmodels can provide a potentfinancial incentive for companiesto support sustainability andstewardship. “There are real benefits to companies in termsof profits. But it can also have apositive effect on a company’sworkforce—greater productivity,lower turnover—when employ-ees feel that their work hassocial value or that their companyis socially responsible.”
executive mBa (emBa)
The Smith School EMBAcurriculum is geared around asystems perspective, and execu-tives learn that all stakeholdersare part of the system. Ethicalconsiderations are addressedthroughout the program duringmastery sessions, which takeplace between regular courses.Executives appreciate hearing
from other executives, so theprogram brings in speakers suchas former Southwest AirlinesChairman and immediate pastCEO Jim Parker, author of DoThe Right Thing. Parker spoke toa large group of EMBA, MBAand undergraduate students lastspring about the importance ofprincipled leadership and how
SMITH BUSINESS O FALL 2009 [email protected]
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FALL 2009 O SMITH BUSINESS
that has worked for Southwest.“Southwest does right by
its people, and that is the rightthing to do but it is also thesmart thing to do. It’s smart fortheir business,” says Robert M.Sheehan, Jr., academic directorof the EMBA program.
Phd
For PhD students, says DebraShapiro, Clarice Smith Professorof Management and Organizationand director of the doctoral pro-gram, academic integrity mattersmore than anything else. Everypiece of research a student pub-lishes must be above reproach.“Nothing will kill a career
faster than misreporting orinflating data,” says Shapiro.“There’s no coming back fromthat.” Because the relationshipsbetween students and facultyadvisors is so close, most discus-sions of ethics and integrity takeplace in the context of one-on-one mentoring relationships.
Vision foR ethicseducation at smithHowever they will be teachingthe content, Smith faculty sharea common hope: that studentswill learn to approach ethics andcorporate social responsibilitynot from a negative filter butfrom a positive one. Rather thanjust trying to figure out how tostay out of jail, Smith students willchoose to use their prodigioustalents for the betterment ofsociety, in their own backyard
and across the globe.“Why are we here? The
Smith School doesn’t exist toteach people how to makemoney,” says Sheehan. “It existsto teach people how to createvalue—for customers, commu-nities, employees—for allstakeholders, in a way that isprofitable and sustainable overthe long term.”Doing that effectively
will require a different, moredemanding form of leadership,says Wilson: “This wasn’t reallypart of business curriculum inthe past. If you want to reshapethe way people see ethics, youneed to reshape the way youteach leadership—to focus on abigger call and a bigger purpose.You have to make a profit, butthat can’t be the reason why youdo what you’re doing.”And that is part of what must
change about business education,says Dean Anand. Businessschools need to develop a philos-ophy about their role in society, asense of purpose and identity thatgoes beyond “making money” to“making a better world.” It is time for a new paradigm
for ethics education, andthe Smith School can’tafford to be behind thecurve. Because unlikemany other disciplines,business schools graduatepeople who have animmediate, profound,lasting effect on otherpeople’s jobs—and thus
their lives. Business schoolalumni have the power to usetheir training, their skills andtheir ambition to create a betterworld. If they leave the SmithSchool determined only to cre-ate a better world forthemselves, we have failed inour responsibility to inspire andequip them.At its best, the Smith
School’s ethics programs willfunction as an articulation ofour shared ideals, and challengestudents to think seriously aboutsome important questions: Whatkind of world do we want tolive in? What kinds of compa-nies do we want to do businesswith? And what kind of peopledo we want to be?
21
Don’t miss Dean
Anand’s take on
the notion of
ethics and edu-
cation—see his
Last Word, on
page 32, for his
opinion.
Interested in sharing the stories of how you’ve
met and faced ethical challenges throughout
your career? The Smith School brings in
alumni to speak with and mentor students as
part of its ethics program, and we’d love to
hear from you. For more information on how
you can help, call 301.405.4900, or send
e-mail to [email protected].
Tell us what you think about this arti-
cle, share a story from your career,
or give us your view on ethics and
corporate social responsibility on
our companion Web site, Smith
Business Online. Your remarks may
be used in the spring 2010 issue
of Smith Business magazine.
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SMITH BUSINESS O FALL 2009 [email protected]
22
Chad Gillenwater ’72Takes His Business Global,
Big Time
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Around 70 million people attended an eventwired for sound by alumnus ChadGillenwater’s company last year. If you vis-ited Nationals Stadium, or Oriole Park atCamden Yards, or Yankees Stadium, or anymajor casino in Las Vegas, you were proba-bly one of them.Chad Gillenwater ’72 is vice chairman of
AVI-SPL, a leading provider of audio-visualtechnology, and was founder and presidentof SPL. His company is big-time now, but hisentrepreneurial journey began when he wasan undergraduate at the Smith School.Gillenwater, liked many of us, worked his
way through college. His primary jobinvolved convincing restaurants to acceptcredit cards as a means of payment—not soeasy to do in the late 1960s, when creditcards were still a relatively new and untriedtechnology. While doing that, he noticed
that the restaurants he was wooing neededsoft-shell crabs, and Gillenwater had connec-tions with fishermen on Smith Island. So hestarted buying soft-shells for 50 cents each,trucking them into the District, and sellingthem to high-end restaurants for $1. It washis first business, and he never got over thethrill of creating a new enterprise out of hisown wits and hard work.It would be a while before Gillenwater
launched his own company again. Heworked for a number of years as CFO ofDynArabia, a subsidiary of DyneCorp, in theMiddle East; the organization built hospitals,phone systems, and media support. Gillenwaterwas based in Riyadh, Saudi Arabia, but spent agreat deal of time traveling—so much that hisinfant son’s pediatrician suggested putting apicture of Gillenwater in the baby’s bed sohe would recognize his father’s face. That
was when Gillenwater decided to comehome to the U.S. He found a new homewith Maryland Sound, a company that supplied speakers and sound equipment toentertainers. A few years later Gillenwatertook the knowledge about audio-visual technology gained from the rock-and-rollworld, combined it with his expertise fromthe world of construction, and struck out on his own, forming SPL in 1992 with acouple friends.
SMITH BUSINESS O FALL 2009
Supporting Entrepreneurship in MarylandUniversities can serve as engines for economic growth, as evidenced by thestrong partnerships between Silicon Valley and its regional universities. Just lookat the way Stanford influenced the development of the electronics industry.Here in the mid-Atlantic region, the Smith School’s Dingman Center for
Entrepreneurship is leading the university’s charge to grow and support entrepre-neurial activity. The Dingman Center is working to help the university achieve oneof its crucial goals: to increase the number of ventures created from the universitycommunity, with an aim to launch 100 startups in the next 15 years.“The university has over $400 million of annual sponsored research, and there
are many opportunities to create businesses from that research,” says Asher Epstein,managing director of the Dingman Center for Entrepreneurship. “But professors whodevelop technology often don’t have the skill set to develop it for commercialization.”The Dingman Center has partnered with the A. James Clark School of Engineering
MTech Program and the Office of Technology Commercialization (OTC) to create theTech Transfer Program. Its key differentiator is a quarterly review process driven by thecommercial sector and including technical experts, venture capitalists, entrepreneurs,key members of MTech and OTC, Epstein, and the Dingman Entrepreneurs-in-Residence.Smith MBA students assist with technology commercialization from its earliest stages.Another big challenge for technology commercialization, as for any start-up, is fund-
ing. The Dingman Center’s Capital Access Network fills a critical gap in the early stages inthe region’s entrepreneurial ecosystem by helping start-up companies connect withactive, accredited private equity and regional angel investors to pitch for capital.
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FALL 2009 O SMITH BUSINESS
And you know how most start-ups startsmall? Gillenwater started big. SPL beganwiring large projects in amusement parksowned by Universal Studios and the WaltDisney Corp. and moved on to even largerprojects—stadiums and casinos.In 1998, Gillenwater sold the company.
The infusion of cash allowed Gillenwater toexpand nationally, and to begin offeringservices to Fortune 500 companies andother corporate clients. It was a fast ridefrom startup to the world’s biggest providerof audio-visual technology, but Gillenwater isquick to point out how much work wasinvested into the project from the get-go.“When we started this company I would
stay up and do an income statement everynight,” said Gillenwater. “We knew wherewe were, what our cash flow was—we werevery plan-oriented. That was important inkeeping everybody focused and having aclear vision on where we were going, andwhat the process was for getting there.”Entering the private equity world had its
own trials and complications. “When you’rein a private equity situation, there is moreshort-term thinking, more emphasis on tar-gets both realistic and unrealistic,” saysGillenwater. “Everything is more focused onan exit plan, instead of the continuity ofownership that comes with a privatelyowned company. You’re always focused onthe financial impact of your actions.”Gillenwater learned how to manage both
expectations and his employees. Today AVI-SPL has 1,500 employees in 40 U.S. offices,and locations or staff in 70 other countriesaround the world. The management of hisinternational employees has been teachingGillenwater lessons about working acrosscultures with virtual teams.The biggest obstacles he faces now are
common for many companies expandingglobally. “Communication, culture and theability to have everyone on the same pageat the same time,” says Gillenwater. “Whenyou’re doing a system with five or six loca-tions that have to work together via video-conference, the key is understanding the
method and the process of communicationdirected toward the objectives you’re tryingto achieve.”So are entrepreneurs like Gillenwater born,
or made? In Gillenwater’s case, it may be alittle of both. He obviously came hard-wiredwith plenty of drive and determination, buthe credits the business school with teachinghim how to “plan your work and work yourplan,” a piece of advice that had a hugeimpact on the development of his career.Gillenwater believes the most importantvalue the Smith School is inculcating intoday’s budding entrepreneurs is creativity.His daughter graduated from the SmithSchool recently, and Gillenwater was beyondimpressed with the education she receivedand the ambition and enthusiasm of herclassmates.“If you look around and talk to these kids,
they get it,” Gillenwater said. “I see a lot ofprograms in the business school that arereally geared toward teaching kids how to becreative. They’re having fun, they’re enjoyingbecoming entrepreneurs. That’s important.An entrepreneur’s life is so tough that youhave to really like it to stick with it.”
Get in Touch! Gillenwater lives in
Ellicott City, Md., with his wife
Mary Ellen. He has three children,
Chad, Lindsay and Heather, and
two grandchildren, Max and Lexie.
Contact information is available
through the eAlumni Network.
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SMITH BUSINESS O FALL 2009SMITH BUSINESS O FALL 2009SMITH BUSINESS O FALL 2009
26
SPOTLIGHT:NETRINOZero Bugs…Period.
When someone asks Michael Barr,MBA ’06, what he does for a living, hetells them, “I’m an embedded systemsexpert—whatever that means.” Barr isthe owner and founder of Netrino,which was recently named Baltimore’ssecond-fastest growing company by theBaltimore Business Journal. Barr knowsexactly what embedded systems are:“they are computers, hidden away insidea product.”
Barr says his classic example of anembedded system is a microwave oven,with its own internal computer andsoftware. This example has becomesomewhat archaic, however, as customersbecome more tech-savvy and betterunderstand the computing componentsof their products. In the digital age, ourlives are increasingly dependent onembedded systems in products likepacemakers and antilock brake systems.So Barr and his company aren’t just put-ting computers into products: they’re putting perfect computers intoproducts. “Zero bugs…period” is the watchword for all Netrino’sservices.
Netrino’s first phase began in 1999, when Barr broke away fromthe engineering consulting firm where he was working and began hisown business. He had already written the industry’s first book onprogramming for embedded systems. During Netrino’s first phase,where Barr was the sole employee, he consulted with clients whileconcurrently serving as editor-in-chief for an industry publication forseveral years. “After six years,” Barr says, “Netrino had grown largerthan my ability to grow it.” He chose to come to business school tolearn how to scale up services and be an efficient manager ofemployees.
After graduating from EMBA Cohort 5, Barr launched “Netrino2” in January 2007, now with a complete business plan and a conceptof how to grow the company. “My Executive MBA provided mewith a specialization in generalizing,” says Barr. “Every day, I amdoing or managing different parts of the business. As an entrepreneur,I have to know all of these things.”
Netrino, which currently has ten employees, is housed in theHoward County Technology Incubator, where the company isallowed flexibility as it grows. The firm sells expertise and time infour major areas: training, consulting, product development, andexpert witness.
How did a computer engineer get to be in the court room? “Itstarted inadvertently during the Netrino 1 phase,” Barr explains. “Ireceived a phone call from a lawyer. He asked, ‘Do you know anyonewho could be an expert witness on embedded systems?’ I said, ‘Yes.Me’.” Since then, Netrino has been involved in over 25,000 productlawsuits, examining over 125 embedded system devices.
But, at the core, Barr is focused on teaching others his zero bugmethodology. “The biggest challenge facing the embedded systemsindustry,” says Barr, “is a lack of qualified people who really under-stand embedded systems and the unique challenges. You get someonewho doesn’t understand what they’re doing and makes an early poordesign decision—that can have long-range impacts on the product.”He shares his knowledge and best practices with individual engineersat public trainings and consults with large engineering companies,helping all of them to change their software development process byimplementing “overlapping layers of easy-to-do things.”
What keeps an embedded systems expert awake at night? ForBarr, it’s concerns over the safety of medical equipment and automo-bile control systems. He recounts incidents of pacemakers with defec-tive software, requiring patients to undergo another surgery to installupdated software. In products with such critical embedded systems,there is high risk and the potential for disastrous results. “I could helpto change that,” says Barr. –TL
ConnectionsSMITH BUSINESSES
to Watch For
1-15_26-32_aa1_- 9/3/09 8:22 AM Page 26
Liam Brown, MBA ’05 , executive vicepresident of development for MarriottCorp., came to the U.S. in 1989 for afriend’s wedding, intending to returnhome to Ireland in a few days. But he waswooed away from his homeland by a jobopportunity with Appleton Inns, a smallhotel chain that was purchased byMarriott shortly thereafter. Over the nexttwenty years he found himself firmlyentrenched in both the country andMarriott. Earning his executive MBA(EMBA) at the Smith School helped himmove to the next level in the organiza-tion, says Brown. At the time he began his EMBA, Brown
was running the Fairfield Inn and Suitesbrand for Marriott, which was challengingin all areas—growth, performance andguest satisfaction. Brown’s EMBA classesprovided a framework for setting strategyand direction that he found helpful inaddressing the problems with the Fairfieldbrand. It helped him consider the ques-tion: Are you working on the right prob-lems or not? It was a challenge to identify the
“right” problems. It was also a challengeto make changes, because the Fairfieldhotels were all franchise-owned. Brownended up cutting 20% of the hotels fromthe Fairfield system in order to rejuvenatethe brand. “A brand is only as good as itsweakest link,” said Brown. “If the brand isweak, you don’t have the ability to createconfidence in your franchise owners. Thecore of the brand was financially sound. Imade sure we had a value proposition thatworked for our guests, an investor valueproposition that worked for franchise own-ers, and a brand we could be proud ofunder the Marriott umbrella.”It took four years to turn the Fairfield
brand around. By the end of that fouryears Brown had more than replacedevery hotel originally removed from thesystem, and Fairfield was the number onebrand in the Marriott pipeline. It had dou-bled profit contribution to MarriottInternational, gone from last place to sec-
ond place in customer satisfaction num-bers and had enjoyed 40 consecutivemonths of market share growth. During that time, says Brown, “The
most valuable thing about the EMBAexperience was the ability to come to theCollege Park campus every other weekendand sharpen the saw. Every weekendhelped crystallize and shape my ownthinking. Very challenging though; thefirst three months I thought I was going todie. But it’s amazing what you can getused to.”Brown found his EMBA classmates to
be as valuable a resource as the facultyteaching his classes. “There was a greatgroup of guys there you could talk toabout problems, and they were all butone in businesses unrelated to hospitality,”says Brown. “It was a great experience tosee the commonalities across all business-es, but also the many different ways peo-ple dealt with problems.” –RW
MORE SMITH ALUMNIBUSINESSES
STS IntrnationalDave Morgan, MBA ’08, always
planned on a career in medicine,
and he eventually got it, as part of
his family business. In 1993, when
Morgan was deciding between a
career in academia or medical
practice, his father offered him
another option: going into the
defense contracting business. One
of the lines of business would
include medical simulations and
training modules. Sensing a good
opportunity, Morgan joined his
father, an Army veteran, and brother
as the founders of STS International,
a contractor offering integrated solu-
tions for military and other clients.
Morgan, who earned a BS in
Physiology from the University of
Maryland, came back to College
Park to be part of the seventh
Executive MBA cohort at the Smith
School. “We already were imple-
menting concepts of disruptive tech-
nologies and blue ocean strategy,”
he says, “But we didn’t know their
names. In the EMBA program, I
learned the names, as well as best
practices, of those frameworks.”
Morgan was also pleased with the
opportunity to meet with other
students working on military con-
tracts to “understand different points
of view of the same problems, in a
noncompetitive way.”
Morgan has given up the med-
ical school plans, but has helped
STS International grow its integrated
VITA medical training systems, which
have reached 15,000 students,
mostly combat medics, across the
world. “We have people from the
company in Iraq and Afghanistan,”
he says, “who are serving the
country on the front. We make
their lives easier.” –TL
27
60 SECONDS WITH…Liam Brown ’81
Get in Touch! Liam
is married to Lillian
and has two chil-
dren, Patrick and
Ciara. He lives in
Darnestown,
Md. Contact
information is
available through
the eAlumni
1-15_26-32_aa1_- 9/3/09 12:35 PM Page 27
SMITH BUSINESS O FALL 2009
28
Connections
’50sWilliam F. Andrews ’53 has servedas chairman of Katy Industries,Inc., a manufacturer of mainte-nance and electrical products,since October 2001, and as chair-man of the Singer SewingCompany, a manufacturer ofsewing machines, since 2004.
George Q. Conover ’50 hasserved as a director of WSBHoldings, Inc. since August 17,1989, and previously served as adirector of WSB since its formationin January 2008. Since March2008, he has served as productdevelopment manager for FinancialFreedom, a reverse mortgagelender, which is a subsidiary ofIndyMac. Prior to that, Conoverwas the CEO of InternationalMortgage Company for 25 years.
’60sDaniel R. Hawbaker ’66 is theexecutive vice president of opera-tions and chief operating officer ofExtra Space Storage Inc.
Edward T. Tokar ’69 is a directorat Beacon Trust Company. Tokarpreviously served as chief executiveofficer of Allied CapitalManagement, LLC, and as vicepresident-investments of HoneywellInternational, Inc. Tokar also servesas a director of Teton Advisors, Inc.
’70sSam R. Boone, Jr. ’76 has beenone of the regional executive vicepresidents at Brown and Brown,Inc., since January 2009 and servesin other high-level executive officerpositions for several of the firm’ssubsidiaries.
Frederick J. Boos ’76 has been theexecutive vice president and co-chief investment officer of ACMsince September 2007. Prior tojoining ACM, Boos was an execu-tive vice president and director ofAsset Liability and CapitalManagement for MBNA Americafrom 2003 to 2006.
Karl Haas ’73 is the executive vicepresident of operations and chiefoperating officer of Extra SpaceStorage Inc.
Don Klein ’74, is the president ofChesmar Homes and has beenrecently named 2008 Builder ofthe Year by the Greater HoustonBuilders Association.
George W. Sarbacher III ’71 isthe executive vice president andchief financial officer at PayrollNetwork.
Victor Schmitt, MBA ’72, is aventure partner at Bay CityCapital. He also serves on theboard of directors of a number ofdevelopment-stage biotech com-panies.
’80sOmar S. Anwar ’80 has been theCEO of Rio Tinto Indonesia sinceAugust 2008. He is also the deputydirector at PT Pertamina (Persero).
Dave Borsos, MBA ’86, is a con-sultant at AES Climate Solutions.He is also the owner of DJBEnterprises, a company that investsin commercial real estate and pro-vides consulting services for newbusiness lines and project analysisin real estate, securitization andrenewable energy.
Tom Burke ’87 is a softwaredevelopment director at PartnersInternational. Burke has publisheda book on pro beach volleyball:Order on the Court.
Michael H. Comer ’89 is the seniorvice president and chief accountingofficer for First Potomac RealtyTrust.
Chuck Crandall ’86 is the vicepresident of government servicesfor Mind Over Machines.
Beverly Eichel ’80 is the vice presi-dent of Finance & Administrationand chief financial officer for HirschInternational Corp. Prior to joiningthe Hirsch International Group,Eichel was the executive vice presi-dent and chief financial officer ofDonnkenny, Inc. from October1998 to June 2001.
Susan Eikenberg ’84 is the directorof commercial market solutions of
Mind Over Machines.
Jeffrey J. Fessler, ’85, marriedJennifer Paige Guterman, an execu-tive recruiter at Sales Consultants ofHudson County, in Hoboken, N.J.Fessler has served as the presidentand director of MondoManagement Corp. since its incep-tion. Fessler has also been a mem-ber of Sichenzia Ross FriedmanFerence LLP, a New York City-basedlaw firm, since November 2004.
Jim Flyzik ’75, MBA ’82, is thepresident of the Flyzik Group, acompany specializing in strategicbusiness consulting, performancebased contracting consulting andtraining and thought leadershipmedia events. Flyzik also serves asthe chairman of the InformationTechnology Association of AmericaCommittee on Homeland Security,in addition to hosting the FederalExecutive Forum, a monthly radioprogram, on WFED 1050 AM andwww.federalnewsradio.com.
Corey J. Gottlieb ’85 is the presi-dent of EcoMedia LLC., a leadingenvironmental media company.Previously Gottlieb served as chiefoperating officer of NationalArbitration and Mediation Inc.
Robert Greenberg, MBA ’80, isthe chief information officer andvice president for AGCOCorporation, a global manufacturerand distributor of agriculturalequipment. Greenberg has alsoserved as a member of Active
Alumni Notes
Alumni Events Photo GalleryMany more events are coming your way this fall! Get the latest
news on upcoming events at www.rhsmith.umd.edu/alumni/, or
call 301-405-5777.
Undergraduate Awards
Banquet May 2009
Christopher "Fox" Troilo
'07, and wife Jill.
Matt Bridge '03 and
Chris Ade '03 (left).
1-15_26-32_aa1_- 9/3/09 8:26 AM Page 28
FALL 2009 O SMITH BUSINESS
29
Terp Babies
Doctoral Awards Banquet
May 2009
Ritu Agarwal and Dean
Anand with PhD alumnus
Zhi-Long Chen at the
Doctoral Awards
Banquet.
Left: Kweti Nyindem, son
of Achu Nyindem
'98, MBA '04
Right: Barrett
Gregan, son of
Christina Rizzoni
Gregan '97 and
Kevin Gregan ‘99
SEND US A PHOTO OF YOUR TERP BABY!
E-MAIL EDITOR@ RHSMITH.UMD.EDU, OR SEND
BY MAIL TO: EDITOR, 3570D VAN MUNCHING HALL,
UNIVERSITY OF MARYLAND, 20742-1815. PLEASE INCLUDE
BABY’S NAME, YOUR NAME AND GRADUATION YEAR, AND
RELATIONSHIP TO BABY (PARENT, GRANDPARENT, ETC.).
Power, Inc.’s board of directors sinceMarch 2009.
Mary E. Gross ’82 was elected tothe board of Unity Bankcorp, Inc. inMarch 2009. Gross is a partner andfounder of Human Edge Resources,LLC, a management and humanresources consulting firm.
Daniel Rosen ’82, MBA ’84, hasbeen promoted to the position ofmanaging vice president, fundingand analytics, in the corporate treasury division of Capital OneFinancial Corporation.
Rajeev Mehta ’87 is the chief oper-ating officer of Global ClientServices and is responsible for thecompany’s sales, business, develop-ment, and client relationship man-agement organizations.
Joseph B. Rosenberg ’81 is thecounsel to the firm for Sahn Ward &Baker PLLC. Rosenberg was previ-ously associated with Mudge RoseGuthrie Alexander & Ferdon and apartner at Herzfeld & Rubin, twoprominent national firms.
Daniel J. Schrider ’87 has beenappointed president and chief executive officer of Sandy SpringBancorp, Inc., the parent companyof Sandy Spring Bank.
Gary Smith ’87 has been appointedchief information officer for IgniteMedia Solutions, LLC.
David Stern ’89 has joined ACMoore as chief financial officer.
Josefina Padlan Simpson ’84 hasreturned to her alma mater as thedirector of alumni relations at theJames A. Clark School ofEngineering.
’90sAndrew P. Bauer ’97 is the directorfor client service at Turner InvestmentPartners.
Rex Blankinship, PhD ’91, is thepresident of Blankinship Funds, Inc.Blankinship is also a member of theAmerican Institute of Certified PublicAccountants and the VirginiaSociety of CPAs.
Joseph A. Ferrara, MBA ’94, hasassumed the additional role ofchairman of the board forTollgrade Communications, Inc. Heis the president and chief executiveofficer and a current member ofthe Tollgrade Board.
David Fike ’91 is the regional vicepresident and publisher for theAmerican Consolidated Media-Chesapeake Region which includes17 publications in Maryland andDelaware with two communitydailies, a variety of weekly andmonthly publications, and twocommercial printing plants.
John Giere, MBA ’98, has joinedMedis Technologies Ltd. as chiefcommercialization officer. Giere wasthe chief marketing officer atAlcatel-Lucent.
Eric S. Lodge ’96 is a managingdirector with High Street Partners,
Inc., an international business con-sulting firm headquartered inAnnapolis, Maryland. Lodge hasalso served as a director of WSBHoldings, Inc. since November2003 and a director of WSB sinceits formation in January 2008.
Laura Mooney, MBA ’98, is thevice president of corporate commu-nications for Metastorm.
Andrew R. Siegel, MBA ’98, is thedirector at TechTeam Global, Inc.and serves as a member of thecompany’s audit committee.
David Terk ’94 is the chief financialofficer of Titan USA.
’00sStephen Acott ’00 is the chiefoperating officer of Shadow Room.
Anna Bakalova, MBA/MS ’05, isthe manager, strategy at AESCorporation.
Swaptak Das ’00 is the presidentand chief executive officer at DasEnterprise, Inc., a holding companyfor SolarConnect, AbsoluteAddictionand Shadow Room.
Alex Depetris ‘02 joined DeutscheBank AG in June 2008 and serves asa vice president in the GlobalMarkets Investment Products Group.
Dan Fullem ‘00 is a seniorfinancial analyst at AESCorporation.
Ryan Guthrie, MBA ’03, formerchief of staff for Congressman BaronP. Hill, has joined The BockornyGroup, one of DC’s leading govern-ment affairs consulting firm as a vicepresident.
Naomi Horak ’08 is the marketingand operations manager for StarfishRetention Solutions. She trains col-leagues on company software, andhow to develop targeted emailcampaigns, webinars, direct mail-ings, and other collateral.
Rajesh Rai, MBA ’01, is co-founderand a partner at New MarketsVenture Partners. Rai also serves as aboard observer for FortiusOne,Artifact Software and InnovativeBiosensors and on the advisoryboards of Arctern and M-Spectrum.
Darryl R. Oliver, MBA ’02, is anequity research analyst at Brown,currently covering the consumerstaples sector. He is also a memberof the National Association of RealEstate Investments Trusts.
Sung W. Park, MBA ’06, is an equi-ty research analyst at Brown. He isalso a contributing research analystfor the Fund.
Ryan Taibel, MBA ’04, has beenappointed senior business develop-ment manager at the Frost &Sullivan consulting company in theSydney office to provide a boost tothe company’s analyst and consult-
ing capabilities in the Australianand New Zealand markets.
Cupid's Cup
April 2009
Asher Epstein with Kevin
Plank '97 and BOV member
Donta Wilson, EMBA '05, at
the Cupid's Cup Business
Competition & BB&T
Invitational.
1-15_26-32_aa1_- 9/2/09 1:48 PM Page 29
Connections
30
SMITH BUSINESS O FALL 2009 [email protected]
Ask for more responsibility.Want to stand out? Ask for more work. Asking for additional tasksgives you a chance to showcase skills that may not be noticeablein your current position. Tackling a new project can demonstrateyour managerial skills. Willingly and happily taking on newassignments that may result from downsizing, even if they areoutside your normal job assignments, will show your commit-ment to the team. Of course, you need to be able to handle anynew tasks you take on. But asking for additional responsibilitiescan help you create the job you want, and prove your value toyour boss and co-workers.
Be present for every company event. Don’t just attend the things you need to attend—go to every-thing. Make your face a regular and consistent part of the com-pany landscape. Though a particular meeting or event may notimmediately relate to your job, it shows your interest in the com-pany and your willingness to be a team player.
Cheer on your colleagues.Speaking of team players, there’s nothing like acknowledging aco-worker’s contribution to show that you understand and valuethe role that your colleagues play in the company’s success. Getin the habit of thanking others for their hard work and congratu-lating those who’ve had a significant accomplishment. Do it evenif you don’t feel like your work is being properly acknowledged.
Develop a positive attitude. Gossip, complaining and negativity are all career-killers. Peoplewho aren’t supportive of their company’s leadership are neverinvited to be a part of that leadership. Your reputation is yours tocreate—so be known as a trustworthy, reliable, consistentlyencouraging person. If you’ve got a reputation that doesn’t shineright now, it’s never too late to turn your attitude around.
Evaluate yourself.Here’s where honest opinions from others can be invaluable. Askyour manager for an assessment of your strengths and weakness-es outside of your normal review period. Then focus on an areaof strength in which you can do a little more, and an area ofdevelopment where you can improve. Get advice from a mentoror an inspirational peer. Make a plan for shoring up this weakpoint, and stick to it. You might be surprised at how much of adifference this can make in your day-to-day work performanceand long-term career.
The Smith School is prepared to help you manage and accelerate your career. Contact Sharon Strange-Lewis,Director of Alumni Career Services, with inquiries and sug-gestions regarding alumni career resources at 301-405-9285or [email protected]. Or visit the Web site atwww.rhsmith.umd.edu/career/alumni.
The ABC’s of Job Security THESE DAYS, MOST OF US ARE A LITTLE CONCERNED ABOUT JOB
SECURITY. MAKE YOURSELF TOO VALUABLE TO LET GO WITH THESE TIPS.
In a lively ceremony on May 22,2009 at the Comcast Center, fourPhDs, 100 executive MBAs, 300MBA/MS, and 825 undergradu-ates graduated with businessdegrees from the Robert H. SmithSchool of Business. Former SmithSchool Dean William E. Mayer’66, MBA ’67, delivered thekeynote address as thousands offriends and family members gath-ered to cheer on the newest SmithTerp alumni.Bill Mayer, senior partner of Park
Avenue Equity Partners and chairmanemeritus of the Aspen Institute, came to theUniversity of Maryland for his undergradu-ate business degree and then his MBA after
serving as a first lieutenant inthe United States Air Force.After graduating, he began hiscareer at the First BostonCorporation, now Credit Suisse,and during his 23 years with thecompany progressed from associ-ate to president and chief execu-tive officer. He served as deanand a faculty member of theSmith School from 1992-97. Mayer is widely influential
and deeply respected in the world offinance, and also at the University ofMaryland. He serves as co-chair of GreatExpectations: the Campaign for Maryland,which is raising $1 billion dollars to ensurethe university’s future. He has served as
chairman of the university’s Board ofTrustees and is currently on its executivecommittee. “I’ve been fascinated with the concept of
leadership for a really long time,” said Mayerin his commencement address. He presented two homework lessons to
graduates: (1) find your unique gift, and (2)think back to when you really needed to“figure it out” all by yourself.Understanding who you are and what
makes you unique and different is vital tobecoming a sustainable leader, said Mayer:“All of us have a special distinctive gift andit is important to identify it because itshould be used in everything we do.”
Photo credit: James Kegley
YOUR CAREER
Former Dean Bill Mayer ’66, MBA ’67, Speaks at Commencement
1-15_26-32_aa1_- 9/3/09 7:58 AM Page 30
Talking to Julia Cobey Gluck ’62 and Betty CobeyJoseph ’65 about their parents, William WilfredCobey ’30 and Mary Gray (Munroe) Cobey, is likepeering through a window into the history of theUniversity of Maryland.Bill, a career Marylander, worked as the University of
Maryland cashier from 1931 until 1948. He became graduatemanager of the athletic office during the years when the Terps’football team was bringing home national championships, andtook over the reins as athletic director from Jim Tatum, where hecapped off his career. Back in those days athletic directors dideverything, from arranging team schedules to selling tickets. Infact, the whole family got involved, says Betty, helping out theirfather in the office.Mary Gray was a homemaker, as was expected of women of
her generation. She managed her six children and hosted fre-quent parties for the athletic department and the Terrapin Club,of which she and Bill were early members. Curly Bird, JimKehoe, Jack Faber, the Elkins and other iconic Maryland figureswere frequent visitors to the Cobey home. But Mary Gray was also a philanthropist. Her father had
made some smart investments with Coca-Cola, leaving her a sig-nificant sum. Mary Gray managed the finances, and the familylived comfortably but without extravagance. That moderation,along with Mary Gray’s savvy investments over the years, allowedher to devote her sizeable fortune to the caus-es and places that meant the most to her. In another time, Mary Gray might
have turned her prodigious intellectto finance, say her daughters. “Mymother would have been awonderful CEO. She reallyunderstood how to invest,” saysdaughter Julia. “But shewas a philanthropist. Shegave so wisely to somany things.”Among those
were the Universityof Maryland-BaltimoreMedical School, theUniversity of MarylandAlumni Association, andher alma mater, WesleyanCollege in Macon, Ga.Mary Gray was a
champion of education because she valued learningso highly.“She was a ferocious reader, able to absorb so
much information,” says Betty. “Every table in ourhouse had a pile of books. She loved books so muchthat for her 90th birthday, everyone in the family gave
her a book.”That was a lot of books, because by the time of her death
Mary Gray’s family had grown to include six children, 19 grand-children and 34 great-grandchildren. Mary Gray wanted both tocreate a legacy in her husband’s name at the Smith School andbenefit her family. So she worked with the Smith School to cre-ate the Cobey Lead Trust, one of just two lead trusts ever givento the university. Charitable lead trusts provide an annual income to the univer-
sity during the trust’s term, and then the assets revert back thedonor or the donor’s heirs. Mary Gray’s gift benefits the SmithSchool by designating a scholarship to a graduate student who wasan athlete. Her children, grandchildren and great-grandchildrenwill receive the remaining trust assets at the end of its term. As abonus, Mary Gray’s family will pay reduced gift and estate taxes.Mary Gray’s daughters aren’t surprised that even in her estate plan,Mary Gray was working out the smartest way to benefit both thepeople she loved and the school that had meant so much to her
husband and their family.Bill passed away in 1998,
and Mary Gray passed awayin 2005, but their memory isalive all around the university,from the photo of Bill inthe Comcast Center tothe Cobey Lead Trust—an extraordinarilygenerous legacy froma family that has hadsuch a positive impacton the university.
FALL 2009 O SMITH [email protected]
31
Remembering William W. andMary Gray (Munroe) Cobey
Get in Touch! Contact
information for Julia
Cobey Gluck and Betty
Cobey Joseph is avail-
able through the
eAlumni Network.FIVE OF THE SIX COBEY CHILDREN
SHOW THEIR TERP PRIDE.
1-15_26-32_aa1_- 9/3/09 7:51 AM Page 31
SMITH BUSINESS O FALL 2009
32
Last Word
What lessons have we learned from the financial crisis?One unfortunate lesson is that in a completely unfetteredfree market—produced, for example, when the creationof financial instruments outpaced regulation in the deriv-atives market—the norm that governed behavior wasgreed and narrow personal ambition. Business schoolsneed to accept a measure of accountability for failing toproduce leaders who were able to balance personal finan-cial gain with the good of their company’s stakeholdersand society at large.
Business leaders must operate under the most strin-gent ethical standards, but also recognize that they have aresponsibility to society. They must understand that theyare working in an increasingly diverse environment:diverse in terms of global impact, varying ethnicities andcultures, income levels, even outlook and thought. Andbusiness leaders must recognize that they have the powerto do good in society using the business principles theywere taught in school, especially in environments thatare resource-challenged.
In the recent past, we taught students that increasingshareholder value was their main responsibility. Thenotion of paying attention to the impact of their deci-sions on other stakeholders in the system, employees,creditors, customers, and, of course the planet, has beendownplayed. It is a viewpoint that equates success withshort-term, quarter-by-quarter profits. For most man-agers, the way to succeed in their companies was toenhance their own private wealth, which was often tiedto the share price.
But more and more, the good of society and thegood of businesses are becoming aligned. It is theresponsibility of business schools to help students makethis important paradigm shift.
Often, what is best for society is also profitable. Somecompany was the first to offer maternity leave. At thetime, this would have been a shocking move. Maternityleave was good for business, because it helped companiesattract and retain valued female employees. Butit was also good for society—better for chil-dren and families.
Doing what is best for society is not prof-itable in every case, but we must teach studentsthat ethics, sustainability and social value arealways part of the equation when makingdecisions. Not everything can be quantified.There are no metrics for decency. But it iswhat society expects of us, and our customershave the ability to discover whether or not weare holding up our end of the social contract.Consumers are interacting with each otherthrough social networking technologies, and they aredemanding more transparency and social responsibilityfrom the companies to whom they give their business.
The Smith School is committed to challenging ourstudents to place ethics and corporate social responsibilityfront-and-center when they become executives afterreceiving their degree from us. Being an ethical businessleader is not merely complying with the law; it shouldencompass a wider range of behaviors that benefit society.We need to teach ethics from the ground up rather thanmerely focus on how to follow business law or complywith regulations. At the Smith School, we have decidedto expand faculty hiring to include those who havedegrees in ethics and social value, to help us challengeour students to be greater global citizens.
Business schools need to be aggressive in reclaimingour reputation. Business-as-usual is not good enough. Inaddition to rigorous principles and methods for manag-ing companies, we also need to teach students that theyhave a responsibility to contribute to society at large,and give them the tools to do so.
G. ANANDALINGAM, DEAN
Business schools
need to be
aggressive in
reclaiming our
reputation.
1-15_26-32_aa1_- 9/3/09 9:31 AM Page 32
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