Dean Blog

Gary Scott was the final speaker in this year's Albers Executive Speaker Series.  Gary is a graduate of our MBA program and recently retired as President of Bombardier Commercial Aircraft after leading the development of the C series, narrow-bodied airplane.  As Gary took pains to say, Bombardier is not trying to compete in the single-aisle airplane market with Boeing and Airbus, as much as fill a gap in smaller size end of the market.

Gary joined Bombardier in 2004 as President of the New Commercial Aircraft Program and was named President of Commercial Aircraft in 2008.  He began his career with The Boeing Company in 1973, where his roles included Vice President and General Manager for the 737/757 programs and President of Flight Safety Boeing, which is the role he had when he left Boeing in 2002 to take a position with CAE, Inc., a leader in commercial aviation training.  While leading the 737/757 program, Gary oversaw Boeing's single aisle commercial airplane division through the biggest production build-up in the company's history to that point in time.

Gary's presentation was on, "Leading a Non-US Global Enterprise," and he highlighted a few advantages that US firms have when doing business in the global market.  These are things that many of us in the US take for granted, but should not!  They include a huge home based market to grow up in.  Second, we don't have to worry about exchange rate volatility in that home market, whereas companies in smaller nations are forced to expand into other currencies much earlier in their development.  When US firms do venture abroad, foreign sales are still sometimes denominated in dollars.  You can bet that Canadian firms are not pricing their exports in Canadian dollars.  Finally, export financing through an entity the size of the US Export-Import Bank is not available in most countries.  This is particularly advantageous to large scale industries such as aviation.

One advantage that US firms do not have is good people.  "They are everywhere," said Gary.  The trick is to create an organizational culture that leverages that talent.

One questioner asked how it was that someone with a business background held leadership positions that one would associate with someone from an engineering background.  Gary's response was that you should always understand your product, even if you are the finance guy!  He was not afraid to ask questions about how airplanes worked.  Additionally, he was always willing to take on a new challenge, so in the process was continually learning about the business.

Several questions were directed at doing business in China, where there are concerns about protecting intellectual property.  Gary acknowledged the challenges, but said that China is such a big market you have to be there if you are in aviation.  The key will be to find a way to establish the right partnership.  The market has confidence in Western aviation companies, and that can be a leverage point in establishing partnerships in China.

When Gary was an MBA student at SU, we required a thesis for graduation (many an MBA alum has complained to me about that over the years!).  Gary reminisced about his topic, "The Capital Crisis in the Airline Industry."  At the time, people were concerned that there would be insufficient financing for growth in the industry.  Gary argued, correctly, that there would be no capital shortage.  Things have a way of working out, he said.  What you once thought was a stretch in terms of something like production capacity, is easily exceeded a decade later. 

This perspective is what nearly four decades in the aviation industry will give you!  It was a great opportunity for our students to learn from an aviation leader!

Gary's presentation was the last chapter in this year's Albers Executive Speaker Series.  We had another good year, with some of the highlights including Howard Schultz from Starbucks, Jim Sinegal from Costco, and wireless industry legend John Stanton.  We hope to do as well in 2012-13!

The Third Annual Red Winged Leadership Award ceremony took place on May 10^th.  The award recognizes local leaders who combine leadership and business acumen to make a positive social impact on the community.  The entire process is organized by the students in our Graduate Leadership Formation Specialization (GLFS), who are guided by Professor Jennifer Marrone.  There were 24 students in the 2012 GLFS cohort.

The three finalists this year were Jocquelyn Duncan (Work it Out Seattle), Killian Noe (Recovery Café), and Dan Wall (Opportunity Knocks).  Jocquelyn is the Founder and Executive Director of Work it Out, which is a non-profit dedicated to getting high school dropouts productively re-engaged with the community.  She became increasingly alarmed at the wasted talents of young people in her community and was called to act.  In her remarks, she noted that there are 6.7 million high school dropouts in our nation, a daunting waste of talent, creativity, and energy.  She advised the audience to consider our legacy - "what will you leave behind?" she asked.

Killian Noe moved to Seattle in 1999 and surveyed the community to find an unmet need.  She concluded that there was not enough support for those recovering from addiction and mental health challenges.  The result was Recovery Café.  She advised the audience to be ready to take a risk and don't wait until you are 100% sure to launch a new initiative.

As a top executive at Expeditors International, Dan Wall was when he enrolled in our Leadership EMBA program.  The program requires students to develop a legacy project in the workplace.  Dan developed Opportunity Knocks based on his personal experience with Expeditors, where he started working at the age of 18.  Opportunity Knocks identifies high school students who are not planning to continue their education beyond high school and offers them a part-time job with the opportunity for a full-time job if they meet Expeditors' expectations.  The program began at the Seattle headquarters but has now branched out to offices around the country and, soon, around the world.

For her work in founding Recovery Café, Killian Noe was selected as the 2012 Red Winged Leadership Award recipient.  Of course, all three finalists are winners and doing wonderful things to advance the Common Good!

The keynote speaker for the evening was Jim Sinegal, our new Senior Executive in Residence and co-founder and retired CEO of Costco Wholesale.  It was Jim's second event of the day, as earlier he spoke to students in the Marketing Club at their end of the year event.

In his remarks, Jim chose to focus on the legacy of Sol Price, founder of Price Club, who Jim considers to be his mentor.  Jim learned many things from Price, including that a business has a responsibility to the society it operates in.  The creation of jobs with good working conditions is the highest service that a business can provide to society.  Jim mentioned that the 30^th anniversary of the founding of Costco would take place this fall, and that their original business plan called for 12 warehouse locations.  Today, Costco has over 600 locations in eight countries.

We're very proud of the Red Winged Leadership Award and its effort to recognize an unheralded leader in our community!  Our students in the GLFS do an amazing amount of work to organize this event, and they are to be congratulated for their successful execution of what is becoming a Seattle University tradition!

For more information on the Red Winged Leadership Award, check out the website:

http://www.seattleu.edu/albers/redwinged/

Dan Nordstrom, CEO and owner of Outdoor Research, was the featured speaker on April 26^th for the Albers Executive Speaker Series.  His topic was "Anatomy of a Turnaround."  Nordstrom bought OR in 2003 when it was close to bankruptcy and revised the company so that today it is one of the strongest brands for high end outdoor apparel and accessories.

In 2002 he had left Nordstrom, Inc. where he had been President of Nordstrom.com, and was looking for a smaller, more entrepreneurial challenge.  He said that a mentor gave him some great advice, "Don't buy a great company, buy a company that is successful in spite of itself."  Otherwise, you will pay a lot of money and it will be difficult to make it better.  Buy something you can fix and add value to.

After acquiring OR, the first thing he did was to come and ask a lot of questions to employees and customers.  After all, there is a need to know what the business is about.

He also noted the importance of sizing up the workforce.  You need to identify who the high performers are and who are the people that will need to move on.  Or, as he quoted Jim Collins, "First who, then what."  People come first, then everything flows from that, according to Nordstrom. It is critical to identify your best people and treat them well, and at the same time to identify your lowest performers and have them move along.

An exciting point is when you get to hire new talent.  To get the people you really want, you have to have a good story and credible vision for the future.  The new employees can reinforce the need for higher levels of performance with the existing high performers, and that becomes a virtuous circle.

Culture and brand are both very important to the success of a business.  One of the problems with the existing culture at OR was that it was not customer centric and thought it knew what was best for customers.  There was not enough listening to the customer.

In the question and answer period, the following points were made:

• Weather trumps the business cycle when it comes to OR's sales.  Bad winter weather means stronger sales.

• When it comes to social responsibility and the OR supply chain, the factories of their suppliers offer excellent working conditions.  It is sub-contracting by their 20 main suppliers that they must be vigilant about.

• OR does not want to spread itself too thin.  It prefers to focus on accessories and apparel.  It is not going to do tents and sleeping bags.  They don't need new categories, there is plenty of opportunity for growth in their current categories.  So what is their next challenge??  Staying focused!

• With social media small companies can created a lot of noise.  He gave examples of that for OR.  Local events related to their product categories, in particular, are a good way to raise awareness of the brand.

• Consumers are "tribal."  They want to belong to something, so they become OR customers as opposed to the customer of a rival brand.  They develop an emotional tie to the brand story.

• He warned that it would be dangerous for OR to become a regional company.  Then, all their products would be about the rain and staying dry.  That would not have much relevance for customers in Colorado and Minnesota, where down jackets are important.  Down jackets are disastrous in the rainy Northwest!

Dan Nordstrom has guided OR back from the brink.  It was a brand that was losing relevance, and now is one of the most respected in the outdoor industry.  It was hunkered down doing accessories "it's way," and has now expanded successfully in to apparel.  He is a leader who understands the importance of people, culture, execution, and brand.  It was a great opportunity for everyone in the audience to hear from him.

Our next speaker is on May 14^th, when Gary Scott, who recently retired as President of Bombardier Commercial Aircraft, will be visiting.  Gary earned his MBA at SU and his topic is, "Leading a Non US Global Enterprise."  It will be from 5:30 to 6:30 PM in Pigott Auditorium.

Ethics in the Business World was held on April 17^th.  Throughout the day, professionals from the business community visited 55 Albers classes (undergraduate and graduate) to discuss ethical challenges they have faced in their career and how they resolved them.  The 55 classes were visited by 39 different professionals, meaning a few people visited more than one class.  Only one class was unable to participate.

We had some excellent visitors participating in the program.  Speakers included Jim Sinegal (former CEO of Costco Wholesale and Senior Executive in Residence for the Albers School), Gary Scott (former President of Bombardier Airplanes), Brian Webster (CEO of Physio-Control), and Robbie Bach (former President of Microsoft Games and Devices).  Gary gets the prize for visiting the most classes - four!!

The concept of Ethics in the Business World was proposed to us by the advisory board of the Center for Business Ethics.  Their thought was to have business leaders come to classes to expose students to some of the ethical dilemmas they are sure to face in their careers.  They thought that many classes might participate, but we challenged ourselves to have ALL classes meeting on that day to participate.  We got about as close to that as you can! 

We also envisioned complementary activities throughout the day, so from that grew an alumni event in the morning featuring Professor Marc Cohen (Assistant Professor of Business Ethics), and Stan McNaughton (CEO of PEMCO insurance, who also spoke to a class later in the morning).  We collaborated with the College of Science and Engineering so that they would schedule their Boeing panel discussion on engineering ethics to take place on the same day.  Undergraduate students starting a campus chapter of Net Impact organized a panel discussion at the end of the day on socially responsible investing.  Net Impact is a non-profit that encourages business students to see business as means for social good.  The bottom line should be about more than profits, but also people and the planet.

As you might imagine, with classes meeting throughout the day, the event was something of a logistical nightmare.  How to match all the speakers with all the classes??  No worries there.  Aaron Hayden, the graduate assistant for John Dienhart, our Frank Shrontz Chair of Business Ethics, was able to put that all together, including getting all the necessary parking passes (mid day visitor parking is something of a challenge!).  Aaron managed all the details and entertained our guests throughout the day.  It is not easy to get people to come in during the middle of the workday when some classes were meeting, but we managed to do it, thanks to the commitment of many of the volunteers.

Ethics in the Business World makes a statement to our students. It reinforces for them the importance of ethical business practice and alerts them that doing the right thing is not always easy.  Nevertheless, one must hold to one's core values and recognize the importance of ethical business practice both for long run professional success and the effective functioning of our market economy.

Many thanks to all the business leaders who participated in Ethics in the Business World!  It was a very successful event, and we plan to do it every year.  The students were the beneficiaries of the collective wisdom of our 39 volunteers.  I want to thank the faculty who surrendered some of their valuable class time to participate in this event.  It is another demonstration of their alignment with and commitment to the SU and Albers mission!

Howard Schultz, Chairman and CEO of Starbucks Coffee, spoke on April 10^th as part of the Albers Executive Speaker Series.  Howard has been in the news a lot lately because of both Starbucks' recent success as well as for his political commentary.

Pigott Auditorium was packed.  Every seat was filled.  I wish we had more seats, because there were at least another 100 people who wanted to participate.  If people left early, we ushered someone in to fill that seat.  I've heard from many of you who we were unable to accommodate, so I am going to put a little more detail into this than I otherwise might!

Howard started off with a video about the Great Recession and Starbucks' response to raise funding for loans to small businesses.  The company decided that job creation was the most important thing needed, and small business was the best opportunity for that.  With access to credit for small businesses in short supply, the company started a campaign to raise funding for small business loans.  Howard is really proud of that video, by the way.  I was hoping the video was on the company website so that those who could not attend could see it, but it is not.  They suggested that people watch the video of their recent annual meeting, which has many of the same themes. 

In his opening remarks, Howard talked about his efforts to fight back against political gridlock in Washington, DC.  If things were working well, Starbucks would not need to be launching the campaign to boost small business.  He noted that 154 CEOs had joined him in protest by holding back political campaign contributions.

Another concern he has is the fraying of the social safety net.  With rising stress on state budgets, he thinks there is little doubt we will see further deterioration as states are forced to cut back their programs (Washington state is shaping up to be a prime example of this).

He switched gears and started talking about developments at Starbucks.  He noted that a business is not going to be successful for the long term if it just focuses on maximizing profits for shareholders.  It must give highest priority to its employees, second comes customers, and shareholders are third.  

He also noted that Starbucks had an important set of values that were part of the culture and retaining those was critical to success.  For example, he told a story of a large institutional shareholder coming to him in the midst of the Great Recession and suggesting it would be a good time to dump the employee health coverage plan to boost profitability.  Howard said, "He didn't get it."  Taking away health care would destroy the trust the company had built up with employees.

He recounted his returning to the CEO role.  It was right at the beginning of the Great Recession.  The company had strayed from its roots, and its problems included it was a coffee company that actually was not making good coffee anymore!  Could something be more fundamental??  He talked about dramatic steps he took, such as shutting down for a day to retrain on coffee making, or holding a $33 million company meeting in New Orleans to get key leaders from across the company back on the same page.  While spoofed at the time, subsequent results speak for themselves.

He spoke of some of the key to success.  These included loving what you do.  You need to enjoy what you are doing to be successful at it.  Second, surround yourself with talented people who complement your skill set and share your values.  A third key is to share success.  Give plenty of credit to others for their contribution to the success of the enterprise.

He closed with an uplifting message.  He was not born into privileged circumstances.  He has come a long way from humble beginnings.  He grew up in the projects.  He did not attend Harvard, Yale, or Stanford.  One of the keys was to dream big dreams and not let others discourage you from achieving them.  His life story is the American Dream.  "Dream big dreams and then dream even bigger dreams," he said!

It was then time for the Q&A, starting with questions from our panelists, which included alum Jody Hall (owner of Cupcake Royale), undergraduate student Arielle Newcomb, and MBA student Michael Wang. 

There were interesting ties in their background that might have made one think we knew that when we put them on the panel.  Jody started working at a Starbucks in 1988 when she was still a student at SU in order to get money for Christmas presents.  At that time, there were only about 30 stores (compared to over 17,000 today).  She ended up working at Starbucks for eleven years (her last role was head of marketing for music and entertainment), and you can see the influence of Starbucks on her business (health benefits for employees, giving back to the community, etc…).  For Arielle, her first job was as a Starbucks barista in Redmond, WA in 2007!  Truth be told, we did not learn all that until after they agreed to be panelists!  Nothing on Michael and Starbucks that we could uncover, though.

In the Q&A, he made a few interesting points:

• Regarding China, they have found that it is important that the leadership team needs to be Chinese, not ex-pats.  They know the culture and the politics.
• Regarding India, they greatly admire Tata and what the company stands for.  They decided that they wanted to be partners with Tata and pursued that goal.
• One question asked about all the new beverage products (juices, sports drink, etc…) that the company is planning, and whether Starbucks would remain a coffee company.  Howard responded that the core competency of the company for over four decades was coffee.  That was not going to change, BUT, it is important to retain the entrepreneurial spirit of the company, and from time to time they need to experiment with new products.
• One question asked him to reflect on what would have happened to the company if he had not returned as CEO in 2008.  He responded that he was well positioned to return.  He understood the company and its heritage.  If someone was hired from the outside, they would not have had that understanding and by the time they did, it may have been too late.
• He noted that there had been two important shifts in employees and customers in the last few years that all businesses have had to address.  Customers are much better informed about companies, including the company's values and culture.  Customers want to support companies with values similar to their own.  Regarding employees, many employees had a previous employer with a dysfunctional culture.  They arrive with a certain amount of cynicism and distrust.  It is critical to demonstrate to them in the first 45-60 days that they are valued and that the firm has a mission they can embrace.  A company that can do these things has a significant competitive advantage.
• The final question brought him back to the political scene.  He illustrated the problem by recalling how President Truman sold the Marshall Plan to the nation and both political parties.  He asked if such a thing would be possible today.  The answer is no.  Our political debates are dominated by the extremes on the Right and the Left.  The much larger middle is going unheard.  We need to get back to the middle and not be held hostage by ideology and partisanship.

Regarding the turnout, I have had a number of people imply their disappointment about not getting into Pigott Auditorium.  We were hoping for a strong turnout, but it was definitely larger than we had anticipated.  Maybe we would have done a few things differently, but someone was sure to be left out. 

What I was struck by was the number of undergraduate students in the audience.  Past experience is they don't turn out for the speaker series, but they were here for Howard Schultz.  I was glad to see them, and hope they can take advantage of future speakers. This does suggest that Howard has captured the imagination of this group of students and the generation they represent.  He has "rock star" status.  He could use this to assert a positive influence over them!  It is an opportunity that very few people have, and it will not last forever.  That is something for him to think about!

Next up is Dan Nordstrom, CEO of Outdoor Research, on April 26^th.  Come learn about how Dan revived this iconic outdoor equipment brand!

An article appeared in the April 5^th edition of the Wall Street Journal - "Wealth or Waste?  Rethinking theValue of a Business Major."  The article claims "faculty members, school administrators, and corporate recruiters are questioning the value of a business degree at the undergraduate level."

Where are these faculty, administrators, and recruiters?? I have yet to run into them!  The article says the biggest complaint is that "undergraduate (business) degrees focus too much on the nuts and bolts of finance and accounting and don't develop enough critical thinking and problems solving skills…"

Message to Melissa Korn, the writer, and all the faculty,administrators, and recruiters that she apparently knows that I don't - not all undergraduate business programs are alike!!

Let's take the business program at Seattle University and other Jesuit schools like us.  Our business students take the same university core curriculum that other students on campus take.  That means the same history, philosophy, theology,science classes that psychology, political science, and math majors are supposed to take.  This means 60 of the 180 credit hours required for graduation, excluding the economics and statistics and business ethics courses they take that are offered in the business school.

So, to the extent you think that critical thinking and problem solving skills are only gained outside the business curriculum, Albers students are covered.  But, I am not willing to admit that the business curriculum does not contribute to these skills.  Quite to the contrary!  Our students see plenty of real world projects, case studies, and writing assignments in business courses that, among other things, develop their critical thinking and problem solving capabilities.

The author says schools are "taking the hint," and responding accordingly.  For example, George Washington University is turning to their psychology and philosophy departments to teach business ethics.  Um, excuse me, but the Albers School has three business ethics professors with PhD's in philosophy.   We love our colleagues in psychology and philosophy, but we don't need to run to them for help to teach business ethics, nor do we need to add a business ethics course to our curriculum - it's already there.

Ironically, in the April 5^th edition of our student newspaper, The Spectator, there was an article about the current job market for students.  A main point of the article was that the good news about the job market is misleading, because it is business (and engineering) students who are getting all the job offers! 

This is the ultimate test!  What does the market want?  Right now the market is saying it wants to hire talented and well-prepared students from the Albers School! If you check out the Albers Placement Center, you will see that there are many companies interested in our students.  If our students lacked critical thinking and problem solving skills, the Albers Placement Center would be very quiet right now.

I can't speak to what happens in every business school, but it is time for the Wall Street Journal, the Chronicle of Higher Education, and other "experts" to stop treating undergraduate business education as a flawed homogenous experience.

On March 25^th we held the 10^th annual alumni crab feed.  The event was started by the Albers Alumni Board and has become an annual traditional.  It was the first event organized by the board, and over the years there have been more than 3,000 attendees and nearly $80,000 has been raised for scholarships for Albers students.

 Although raising money for student scholarships is the cause, the main reason for launching the event was friend-raising and getting alumni back to campus.  In 2002, our connections with our alumni were not where we wanted them to be and the alumni board came up with the idea of the crab feed.  Since the university did not have much in the way of alumni staff, in addition to coming up with the idea, the alumni board was required to EXECUTE the event, as well!  They stepped up to the plate and the rest is history!

This year's alumni board Crab Feed Committee was chaired by Heather Hutson, and the committee worked closely with Rob Bourke on our staff to put the event together.  Several staff from the University Advancement Office also helped with the event, but the work of our alums was critical to its success.

 I had a number of people comment that they thought this year's silent auction was the best so far.  Unfortunately, I did not have time to peruse the items, as I was too busy talking to people.  And my wife managed to come away with only one item!  People also said it was the best crab we have ever served, but I hear that every year, which I take to mean we serve good crab every year!

We try not to burden the crowd with long speeches from university administrators.  Fr. Sundborg was able to attend and he gave a well received and relatively short greeting to the crowd.  I, too, keep it short and just do some of the many "thank you's!" that need to be done.  Eddie Pasatiempo, a member of my advisory board, was there, and sent this picture courtesy of his iPhone:

This year we had over 250 people in attendance, including women's basketball coach, Joan Bonvicini, fresh off the team's successful run through the Women's Basketball Invitation Tournament, making it to the semi-final round.  We also raised more than $10,000 for scholarships for Albers students!  That is a great cause, of course!