With a second phase of his research nearing completion, Rao sat down with McCombs communications director David Wenger to discuss new insights on measuring the value of marketing.

Read more.

Dean Thomas Gilligan interviewed Michael Dell, CEO, founder and chairman of the board of Dell, Inc., Nov. 11 as part of the VIP Distinguished Speaker Series.

Dean Gilligan began by asking Dell about his first job, which Dell said was at a Chinese restaurant when he was 12 years old. He said he left because he was recruited by a Mexican restaurant at 13 to be the assistant host.

However, he said his first real job was selling subscriptions for a small, local paper in Houston when he was 16. He figured out rather quickly that his target audiences were newlyweds and people new to the area. Given that knowledge, he used public information on marriage licenses and mortgage applications to develop a direct mail campaign for the newspaper.

As for his interest in computers, Dell said that it all started when he was in the seventh grade.

“I was in an advanced math class at my public school in Houston and my math teacher got the only [computer] terminal at Johnson Junior High School, now Johnson Middle School,” said Dell. “You type in the program, you send it off and back comes the answer. I got pretty fascinated with it. I thought it was really interesting and I started writing programs and playing around with this computer as much as I could.”

When asked who he most admired, Dell admitted that he was more likely to admire people who had certain traits, such as having overcome adversity. He talked specifically about his experiences with Harlem Academy, a school in Harlem, New York that he said has done great things with their programs in what he called “an otherwise pretty tough environment.”

Gilligan then asked Dell what he thought Dell could improve about his personal or professional style. Dell said that he tends to jump to the answer very quickly, and that he needed to work on being more understanding of the process involved. He also said that it was good to remember that there are different styles of doing things and it was important to find a way to connect those styles together. He also said that while it is important to reflect on the past to determine what could have been done better, it is not good to spend too much time in the past because you still need to look toward the future.

As for his biggest mistake, Dell said it was hard to pinpoint one instance but that the company had gone through times when it was trying to do too many things at once and had to pull back. He also said that sometimes the company had success in an area and because of that success was slow to change when the industry did. Dell noted that he doesn’t live with regrets because he is proud of where the company is today and how it helps customers thrive.

Dell said that his greatest accomplishment is seeing how the capabilities that the company provides to its customers have helped those customers thrive. He also remarked that the company helped drive the efficiency movement and helped make computers available to a much larger audience. He also said he gets excited when he sees how the company has changed the lives of its employees and employees of associated companies over the past 10 years.

A few highlights from student questions are below.

What advice can you give to students who want to start their own businesses?

Advice on Start-Ups.mp3 (1m35s,1.5MB)

How do you balance work and family life?

Balancing Work and Family.mp3 (1m29s, 1.4MB)

How would you describe your personal leadership style?

Leadership Style (1m29s, 1.3MB)

How do you communicate Dell’s corporate culture throughout all your international locations so that all employees share the same values and goals?

Communicating Corporate Culture (3m8s, 2.9MB)

Bijal Mehta (second from left), Zoe Gabbard (third from left) and Elaine Hsu (fourth from left) were the only undergraduate team to enter the competition and they beat out more than 30 MBA teams for a spot in the finals. Teams from Northwestern, MIT and Cornell joined them in the finals, hosted at Cornell University Nov. 13-14.

The Re-Source Challenge asked students for innovative solutions to boost PET recycling rates on college campuses. It was sponsored by Net Impact, Nestle Waters and GreenOps.

The teams created marketing plans that utilized the GreenOps tracking system, which scans the bar codes of recycled items and gives users points that they can redeem for items online and coupons to use right away. In addition, students were asked to include plans to sell Nestle re-source water, which is packaged with 25 percent recycled PET plastic.

The McCombs team did all of their research on campus as if they were already implementing their plan. What they found was that bringing the GreenOps systems on to campus would be extremely difficult because of the corporate branding.

“At this point we were rather disgruntled, but our sophomore team member Zoe Gabbard came up with a rather genius observation that campus is not just campus,” says Mehta. “So we looked for non-UT venues that still attract lots of students, and hence we thought of the University Co-Op.”

The team planned to sell re-source water and place the GreenOps systems at the Co-Op to take advantage of the store’s location and student foot traffic. To encourage student use the team would select five student organizations each month to partner with the project. Students who recycled with the GreenOps system could select one of those organizations to receive part of the proceeds from that recycling. The student organizations would also receive a portion of the proceeds from the re-source water sales. Finally the system would educate students on the location of on-campus recycling bins for future reference.

Mehta thinks that this honesty in how difficult it would be to gain access to campus helped them secure the grand prize.

“We were honest to Nestle and GreenOps and the other judges about weaknesses we saw in this system [and] we didn’t sugar coat how hard bringing this system to campus will be,” says Mehta. “Our honest approach was what makes me the most proud of our accomplishment.”

The team won $5,000 to implement their plan at UT as well as a trip to Connecticut to present the idea to the CEO of Nestle Waters.

Congratulations, team!

MPA student Emily Anderson, a member of the Longhorn soccer team, team was named to the 2009 ESPN The Magazine Academic All-America Women’s Soccer First Team. Anderson is the first Longhorn in program history to earn Academic All-America honors twice in a career and the second to be tabbed as a First Team honoree. The defender earned a Second Team Academic All-America nod in 2008.

The defender out of Austin, Texas, boasts a 4.00 GPA in the prestigious Accounting/MPA program in the McCombs School of Business and is no stranger to academic awards. Since starting on the Forty Acres in 2006, Anderson has picked up three First Team Academic All-Big 12 Honors, two ESPN The Magazine/CoSIDA First Team selections and an ESPN The Magazine/CoSIDA Second Team All-America honor.

On the pitch in 2009, Anderson was one of four Longhorns to start every one of UT’s 21 matches over the course of the season, and contributed one goal and one assist while helping the Longhorns hold six opponents scoreless. Over her four-year career she posted 11 goals and four assists for 26 points.

To be eligible, a student-athlete must be a varsity starter or key reserve, maintain a cumulative grade point average of 3.30 on a scale of 4.00, have reached sophomore athletic and academic standings at his/her current institution and be nominated by his/her sports information director. Since the program’s inception in 1952, CoSIDA has bestowed Academic All-America honors on more than 14,000 student-athletes in Divisions I, II, III and NAIA, covering all NCAA championship sports.

Left to right: Ty Zieman, Garrett Frank, Taylor Thompson, Aneal Tenjarla

Aneal Tenjarla, a finance senior, won the Tulane Energy Trading Competition Nov. 14 in New Orleans, triumphing over 28 students from six universities, many from MBA programs, in the competition’s final round. 

Tenjarla said the contest was a great opportunity to learn trading strategy from industry insiders in a realistic environment that felt like an energy trading firm.

“This is probably the closest thing you can get to actually trading besides committing actual value and risking actual money,” Tenjarla said. Read Tulane press release. 

Following his return, Tenjarla addressed his classmates in Ehud Ronn’s energy finance course, where he discussed the strategy of the team from McCombs, which included Ty Zieman, Taylor Thompson and Garrett Frank, in order to make it to the finals at Tulane, when it became an individual competition.

Tenjarla offered this report: “During the finals, we started with a 60-second presentation to the judges regarding our trading strategy. Then we proceeded to trade natural gas for an hour. Afterwards, we traded crude oil. Finally, we had to give another 60-second presentation explaining how closely we followed our strategy and what worked or what did not.

“Regarding my trading philosophy, from a macro perspective, I took advantage of nonfundamental-related volatility in both the natural gas and crude oil market. I did this by first developing a market view on each product. Then I used technical analysis, primarily Bollinger Bands, to buy/sell at ideal times. I answered the question of how to use the prompt month contract as a proxy for an illiquid later-dated contract by looking at the hedge ratios between the two contracts (this information was given to use). Where I stood out, however, was I looked at past three-month hedge ratios and also dynamically measured the hedge ratio using a Reuters formula. The purpose of that was to measure if there was a sustained difference between the current hedge ratio and the historical ratio.”

Congratulations to Tenjarla, who brought home a trophy and a $500 prize.

Former University of Texas at Austin President Larry Faulkner talked about leadership, decision-making and ethics with a group of students at the McCombs Leadership Forum on Oct. 29.

Faulkner believes leaders create “an environment of the possible” when they use effective decision-making skills. The ability to make quick and decisive decisions is key to creating an environment that motivates employees and defines boundaries of their working space.

People will grant you the right to make decisions for them, he said, but only if you talk and listen to them first. You don’t have to agree with them, or incorporate their ideas into your program, but you do have to really listen to them.

Faulkner also said that after he’s made a decision but before he announces it, he makes sure he can very clearly explain to himself why he made that decision. That step is key in being prepared to handle questions about the decision.

Faulkner was president of the university from 1998-2006. He is currently president of the Houston Endowment, a private foundation serving charitable organizations and educational institutions in the Houston area.

Audio Clips

Decision-Making.mp3 (2m36s,3MB)

Consultative Leadership Style.mp3 (2m30s,3MB)

Right and Wrong.mp3 (2m30s,3MB)

James Mulva, CEO and Chairman of ConocoPhillips, was the guest of former McCombs Dean George Gau at the McCombs Leadership Forum on Oct. 8. Mulva, BBA ‘68, MBA ‘69, spoke about his 36-year career in the energy industry and his passion for it. He stressed the importance of work ethic and integrity in ConocoPhillips’ corporate culture. “It’s not enough to work hard,” he said. “The thrill is having a plan and getting it done.” Mulva said he is motivated by working with his team on creating new products and processes for the future of the company and society, noting that creating clean sustainable energy for future generations is an absolute necessity.

A few highlights –

Mulva’s CEO job is 24/7 .mp3 (1m55s, 2MB)

ConocoPhillips – An International Company Headquartered in America.mp3 (0m35s, .5MB)

Vince Lombardi – Mulva’s #1 Top Ethical Leader.mp3 (1m05s, 1MB)

Challenges of Merging Corporations.mp3 (2m17s, 2MB)

ConocoPhillips’ Role in Sustainability.mp3 (2m06s, 2MB)

Tight credit, global supplier risk, escalating energy costs, declining consumer confidence, unprecedented earnings pressure, high unemployment…oh my!

The result is a perfect storm for reducing the number of opportunities for college graduates in typical career paths. So this might be a time to consider a new direction.

What careers might flourish in these economic times?  It’s never a bad idea to follow Warren Buffett’s lead, who recently acquired Burlington Northern Railroad. Does this mean we should all be looking to get jobs at a railroad company? Not exactly. But Buffett’s purchase, in addition to signaling his confidence in the American economy, provided a boost to those who are thinking about careers in supply chain management. Buffett is betting that because of escalating energy costs there will be a shift from road to rail in the near future for business transportation. And this shift will require an increasing need for logistics professionals who can manage complex supply chain processes that will result.

Actually, supply chain professionals have been playing an increasingly important role across all businesses for at least a decade, and are now recognized as key players in developing and implementing corporate strategy. Supply chain management, long thought of as clerical, technical,  backroom functions, has emerged to be recognized as key to driving out waste, cost and inefficiencies from the point of final customer of the product or service all the way back through the system to the original suppliers.

The resulting system improvement can be directly correlated with business growth as costs decline and service improves. The most progressive companies now have a Chief Supply Officer that reports directly to the CEO. The CSO is responsible for all the cross-enterprise business processes including demand forecasting and management, order management, technology integration, warehousing and distribution, manufacturing and supplier management and procurement. Important for the integration of these disciplines is a seamless connection to sales, marketing and product design and development. Skills for supply chain leaders not only include analytical capability and process mapping, but also leadership, diversity and collaboration talents across all the business disciplines within the company and across those of the supplier and customer.

McCombs added a supply chain management program four years ago at the request of leading Austin and Texas-based companies like Frito-Lay, Texas Instruments, Dell, Advanced Micro Devices and Applied Materials. These companies recognized the emerging importance of supply chain professionals and yet understood the shortcomings in academia which taught the component skills of procurement, logistics and manufacturing but not the integration of these skills and how they relate to the overall business process. In four years, the number of supply chain undergraduates has increased fourfold, from about 25 to nearly 100 today. The supply chain concentration at the MBA level has enjoyed a similar growth.

A successful tenant of our supply chain management program is the Supply Chain Management Center of Excellence which brings together faculty, students and industry partners to enable scholarly research, facilitate the development of outstanding academic programs in supply chain management, enable real-world problem solving for our industry partners and encourage the development of future industry and academic leaders in this field.

Supply chain management may well be the hot career path of the next 20 years, and McCombs is well positioned to educate the best in the world.

Thank you, “Oracle.”

By Robert Prentice, professor of business law at the McCombs School of Business

Any sensible person would rather be happy than rich, although many people often confuse the two—business students among them. Those who choose to attend business school on the assumption that an M.B.A. will help them change jobs, make more money, and therefore be happier are very likely misinformed.

Everyone needs enough money to satisfy basic needs, but those are easily met in the salary range that most people occupy before they earn M.B.A. degrees. Studies show that once basic needs are met, more money generates little, if any, additional happiness. Business schools and their students should take a cue from recent research in hedonic psychology—the science of happiness—that suggests a reorientation of purpose rather than a pursuit of more monetary wealth.

For example, Jonathan Haidt, an associate professor of social psychology at the University of Virginia, has found that people who strive primarily for achievement and wealth are less happy, on average, than those whose efforts focus on relationships and intimacy, religion and spirituality, and “generativity”—that is, leaving a legacy and contributing something to society. Haidt’s research, as reported in his book The Happiness Hypothesis and elsewhere, indicates that a devotion to helping others is an important path to a meaningful, satisfying life. Spending money on others increases the happiness of most of us more than spending money on ourselves does. When we act kindly toward others, rather than selfishly, reward centers of the brain, where dopamine receptors are located, light up like Christmas trees.

Other studies indicate that people who act ethically tend to be happier than those who do not, suggesting that we are evolutionarily designed to derive pleasure from receiving the approval of others and from doing the “right” thing. Brain scans indicate that when we act consistently with social norms, primary reward centers in the brain are again activated.

People with a strong moral sense even tend to be more prosperous than others, according to Richard Layard, an economist at the London School of Economics and Political Science, in his 2005 book, Happiness: Lessons From a New Science. It seems that doing the right thing is its own reward in more ways than one.

Perhaps, then, business schools should be judged by the happiness they generate for their graduates.

Unfortunately, M.B.A. programs are currently ranked—by U.S. News, BusinessWeek, and other unduly influential publications—using criteria that prominently include starting salaries for graduates and salary differentials pre- and post-business school. Rankings have such an important impact on M.B.A. programs in their intense competition for students, faculty members, and resources that it is unsurprising that the schools often try to game them—say, by admitting students not because they are the strongest applicants, but because they are interested in finance and consulting, which have historically been the highest-salaried jobs.

I propose that short-term measures of starting salaries or salary differentials be replaced in the rankings by those of long-term happiness. U.S. News and its ilk could survey the happiness of applicants and compare it with their happiness levels five, 10, and 20 years after graduation. Bruno Frey, an economist at the University of Zurich, notes that psychologists have learned how to measure happiness, and that “ways of measuring experienced utility are continually being improved.” Those methods range from brain imaging to simple subjective surveys. The different measures correlate well with one another, indicating that the simple surveys, subjected to various reliability studies, should suffice.

Measuring happiness would encourage business schools to focus less on training students for the highest-paying jobs and more on preparing them for careers they will find satisfying in the long term. Surely high pay correlates with types of work that many students would enjoy. True, many will still aspire to be consultants, or financial titans who make the big bucks while working long hours under extreme pressure. But business schools should teach students that people are often poor judges of what will make them happy, and that if they think the answer is money, they are probably mistaken. Schools must convince students of the simple but lasting pleasures of relationships with family and friends and of serving others, contributing to the common good, and leading a moral life.

Students must be given the skills to follow their passions and not just to chase the almighty dollar. M.B.A. programs will always need to offer courses in how to invent, package, and market the latest forms of complex financial instruments. But if business schools truly want to serve their students well, they will offer more courses on how to market and finance nongovernmental organizations, how to manage profit and nonprofit organizations legally and ethically, even how to lead a meaningful life.

Today administrators of business schools are disappointed when a graduate chooses a $60,000-a-year CFO position at a local charity over a $120,000-a-year job on Wall Street—a decision that hurts the school in the rankings, although it may well increase the graduate’s long-term happiness. Valuing happiness above income would align those two goals—securing a strong institutional reputation and creating a meaningful life—and more fully measure the value that M.B.A. programs are truly adding to their students’ lives.