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HarbertMagazine Spring 2017

change


change It was one way, and now it’s not. Phones had dials. There was no Internet. The sun revolved around the earth, and then it didn’t. Our consciousness of time—of a past—is what makes us aware of change. Our understanding of history tells us that change is inevitable. “The only thing that is constant is change.” The Greek philosopher Heraclitus figured that out 2,500 years ago.

We can’t avoid change, but we don’t really care for it. Business, in particular, likes stability and predictability. Regular, consistent growth is good. Incremental improvement is OK, probably because the change is small and to some degree predictable, but big change? Oh, no. We’re running for the hills. And that’s really an odd reaction for a species (homo sapiens) that has evolved and adapted and discovered and engineered and designed its way out of the cave and into the skyscraper. Someone said, “Hey, y’all, look at this,” and ate the first oyster, sailed over the horizon, and walked on the moon. None of these experimenters and explorers were afraid to take a chance. Innovative entrepreneurs who make millions from the disruptive change brought about by a new tool, a new technology, or a new way of doing business don’t hesitate to shake it up. But, as you’ll note from the articles in this issue, when corporate leaders attempt to effect change in their businesses, they fail most of the time. We’re uniquely adaptive—endowed with a spirit of inquiry; we delight in the new and profit from the novel, but resist change.


What makes us so conflicted? Apparently, it’s how we’re wired. Neuroscientists will tell you that resistance to change is involuntary. Our lifestyle may have come a long way from that prehistoric cave, but our brains haven’t. Our primitive brain—the amygdala and the limbic system—is unthinkingly reactive. We recognize a change in the environment, see a threat, and we run or bow up for a confrontation. The prefrontal cortex is where we reason and learn. But not only is our primitive brain faster than our thinking brain, it actually uses less energy. If you look at MRI scans, when the amygdala is in action, only a small part of our brain lights up—about the size of an apricot. When we’re reasoning or learning new things, about half of the brain is in action. Thinking is a whole lot more work than reacting. And altering habitual behavior, or reasoning through change, is the brain’s equivalent of hard labor. To put this degree of difficulty into perspective, doctors note that when they tell seriously ill cardiac patients —literally on pain of death—to change their diet and exercise habits or die within a year, 9 out of 10 patients ignore the advice and die.

So how do we change our involuntary reaction to change?

Neuroplasticity. When we learn something, we create a new neural pathway. At the beginning of the learning process, the prefrontal cortex does most of the work, but after the process is learned and a neural pathway grooved, we do it without thinking. The very first time you drive to work, you have to actively think about where you’re going. The hundredth time you do it, you’re on autopilot. To change habit, or to get out of a rut, make a new rut. You have to repeat new behavior. And if you receive a reward for that new behavior—that change—you’re more likely to repeat it. Remember, we’re talking about very primitive parts of our brain here, and the chemical reactions that affect them. The receipt of reward causes the release of dopamine, which produces a sense of pleasure. That positive feeling reinforces effective learning. By the way, dopamine also boosts drive, focus, and concentration, which, in turn, makes it easier to embrace the next change. That’s the science, but as any leader will tell you, negotiating change is just as much art as science. You don’t force change or order it. In fact, given our wiring, authoritative behavior will have exactly the wrong effect. Change is enticed and inspired. Therein lies the art. The features in this issue may suggest some of the art involved. That said, there have been some studies that point to a common trait among effective change leaders: humility. Freud tells us that humans advance when they cease to see themselves as the center of everything. It’s very easy for leaders, who may have become something of an expert in their own niche, to believe their expertise extends to all niches. But in today’s complex global marketplace, no one person has all the answers, and no amount of imposing behavior can change that truth. You are not the smartest person in the room. Humility sets the stage for learning, and learning opens the door to resilience and adaptability, and change. Give it a try.


Haircuts and fashion tastes have certainly changed since our foundation in 1967. We won’t ask you to break out your bell bottoms, but you’re certainly welcome to celebrate our 50th birthday with us. Join us for the ground breaking of a second business building on Friday, April 7 (2 p.m.) or for our combination birthday party/tailgate on October 7 (time TBA).


Table of Contents

HarbertMagazine FEATURES 16

20

24

Dawn Robertson

Handling Change

Mergers & Acquisitions

28

32

54

Push Here For Change

Courting Disaster

Bill Hardgrave

Conversations from the C-Suite

MORE GOOD STUFF

When your company gets acquired

Dean’s Last Word

6

Letters

10

Technology

38 Mission in Action

8

What You’re Up To

12

How We Think

41

9

What We’re Up To

36 Research

With Your Dollar

42 Alumni News

HM, Spring 2017 5


Inbox

HarbertMagazine

Harbert

Magazine Fall 2016

C

cr eativan the e spark be cap tured?

Our Fall 2016 issue focused on how we ignite and nurture the creative spark in everything from ideation and planning of a project to the spaces we occupy. We posed a question to you—what processes do you use to enable fresh ideas to flow in your workplace?

» Anthony Alford, D.O. ’02

“I sit and watch how people do/perform tasks and see how technology can make those tasks obsolete. Also, I look at common tasks, and think how adjacencies can expand those tasks.” » Lawrence A. Martin III, ’07

“Make time to read on industry new trends and developments, stay up to speed on latest and greatest in your area, and block time off on your calendar to focus on developing something new.” » Renata Gallyamova ’08

“Challenge and empower the young and newly assigned personnel because they are the most objective and unbiased. Additionally, rotate or temporarily assign personnel to other organizations to gain access to other approaches and ideas.”

Joe McAdory Editor, HCOB Communications & Marketing

Created by The Media Production Group Bruce Kuerten Director, Media Production Group at Auburn University

Media Production Group at Auburn University

“We focus on flexible work schedules to maintain a work/life balance and mix in monthly company-wide ‘happy hours,’ encouraging everyone to stop working at 3 p.m. to socialize with their coworkers.” » Brent Hexkart, ’04

“I am not a naturally creative person, so I have to make efforts to research online and lean on business colleagues for inspiration. I often have to remind myself to take the time to branch out and try a new approach to a project, and I’m learning to appreciate the creativeness of the new generation of recent college graduates!” » Amra Boucher ’03

“I love having coffee or lunch with colleagues in different departments. A lot of times that shows me an opportunity for us to collaborate, create more efficient ways of working, and helps me see things from a new perspective.” » Caitlyn Summer Stafford ’10

“I schedule several hours each week to go to our prototype shop and build new products to see how they work. In reality, nine out of ten don’t work out as well as I had hoped, but knowing what doesn’t work is extremely valuable information. The key is to make a commitment to a specific amount of time each and every week which is devoted to experimentation.” » Steve Goodson ’72

» Col. Courtney Cote ’91

In our last issue, we incorrectly identified a Harbert College faculty member. At the request of

our University of North Carolina alum friend, we offer the following correction: “Avery Abernethy is Torchmark Professor of Marketing at Auburn. We regret incorrectly listing Dr. Abernethy’s title in the last issue. We are especially glad that we did not claim Dr. Abernethy attended Dook.”

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Troy Johnson Director, HCOB Communications & Marketing

Jim Earnhardt Editor,

Here’s what you had to say: “My leadership approach has been to involve the workforce, treat all fairly, be approachable and visit all areas of the workplace, hold everyone accountable, and frequent town halls with employees for questions/ feedback. Give department leaders running room to perform at their peak and encourage innovative/critical thinking. [Be] willing to try any reasonable plan and not criticize if things don’t work out. Ask what we could do different or better, involve employees in strategic thinking/planning, constantly communicate activities and actions so employees are not in the dark or surprised.”

CREDITS

Art & Design/Production Jason Adams Jenni Hunt Tiffany Smith Illustrations Jason Adams Contributors John DiJulio Bailey Kimbell Jessamyn Saxon Larry Shaw Tiffany Smith

Auburn University Raymond J. Harbert College of Business Office of Communications 216 Lowder Hall Auburn, AL 36849 (334) 844-8847 harbert.auburn.edu cobletters@auburn.edu Auburn is an equal opportunity educational institution / employer. © 2017 Auburn University Raymond J. Harbert College of Business


Title of Section

HM, Spring 2017 7


What You’re Up To Kris Tietig (2001, finance), owner and CFO of Miracle Fruit Farm near Miami, Florida, saw his company receive national press recently for a breakthrough idea. “Through the cooperation of several cancer centers in South Florida, our new Miracle Fruit Tablets are giving chemotherapy patients a chance to taste food again with hopes they can regain their appetite,” he says. Miracle fruit, a red berry native to Ghana, has shown potential to help cancer patients since it binds the taste receptors on the tongue and enhances the ability to detect flavors.

Navy Adm. Michael Rogers (1981, information systems), director of the National Security Agency and Commander of the US Cyber Command, visited Auburn Oct. 21 and addressed a crowd at the Auburn Hotel and Dixon Conference Center. Rogers discussed cyber security, both nationally and in the private sector.

Dick Ingwersen (1970, business administration), was presented with the Walter Gilbert Award before the Oct. 1 football game vs. Louisiana-Monroe. The award is given annually to former athletes who have distinguished themselves through achievements beyond Auburn. Ingwersen is a member of the Warren Averett Tax Division, and serves on the firm’s Executive Committee.

Winston Tucker and David Brooks, both Harbert College graduates, were among the industry professionals taking part in the “Legends & Leaders” series hosted by the Office of Professional and Career Development Oct. 17–21. Tucker, business development manager at Paul, Weiss, Rifkind, Wharton & Garrison LLP, earned a management degree from the college in 1997. Brooks, a financial adviser at Merrill Lynch Wealth Management, is a 2009 graduate in finance. Other participants included Tammy Hunter, a partner at KPMG, and Janet Parker, executive vice president of corporate human resources at Regions Bank.

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Harbert College of Business alumni, faculty and staff are busy shaking it up.

Here are a few things we’ve heard:

Jeff Lynn (1985, management), was recently named workforce development director for the Alabama Community College System. He will work with community colleges and industry to develop and improve educational programs.

Share your news Send us your announcements, photos, and letters. We love to hear what you’re up to. Submissions are included as space permits. Alumni notes may be edited for length and clarity. Thank you for sending us high resolution photos.

E-mail us: cobletters@auburn.edu Follow us: harbert.auburn.edu Moved recently? Changed your email address? Update your contact information: develop.auburn.edu/update


What We’re Up To

Sean Cook, former senior partner engineer for Twitter’s mobile platform and product manager of its Fabric suite, discussed start-up culture and ideation with students in the Tiger Cage pitch competition presented by the Harbert College. Cook, an Auburn engineering alum who worked for Twitter from 2009 to 2015 in a variety of management roles, now invests in start-ups as an angel investor.

Producer James Kelley, owner and founder of Wire Road Studios in Houston, Texas, visited Harbert College on Sept. 12–13 and spoke at a campus forum and with School of Accountancy students as part of the college’s “Business of Music” series. He discussed business challenges in an ever-changing record industry. Casie Ramsier, who is pursuing a Master of Accountancy degree, helped lead Auburn’s women’s soccer team back to the NCAA Tournament last fall. Ramsier, a two-time SEC Scholar Athlete of the Year, earned Academic All-American and all-SEC honors. She finished her career as Auburn’s second all-time leading scorer with 37 goals, 13 of which were game-winners.

Auburn’s Beta Alpha Psi chapter accounting honor society, Epsilon Omicron, was recognized as “superior” nationally for a sixth consecutive year. Of the roughly 300 chapters nationally, less than half were designated as “superior.”

Recruiters from more than 80 firms met with hundreds of Harbert College students on Sept. 14 at a job fair that filled the Auburn Arena floor. Students had the opportunity to learn about potential employers and internships and possibly get a head start on their careers.

Tracy Rosser, Walmart senior vice president for transportation and logistics, made the trip from the company’s home office in Arkansas to visit Harbert College for two days in October. Rosser met with student groups, discussed the challenges of serving omni-channel customers, and spent time with faculty in the college’s Supply Chain Management Department.

James Long, an associate professor and Atlanta Alumni Fellow in the School of Accountancy, began a Fulbright fellowship this spring as a visiting scholar at Corvinus University in Budapest, Hungary. The exclusive scholarship allows Long to teach Principles of Accounting and Financial Valuation & Analysis classes, as well as lend expertise to the Hungarian business community and collaborate with international faculty.

Bob Cochran, senior lecturer in the School of Accountancy, won Sigma Pi’s 2016 Robert Burns Award, given to the most outstanding faculty advisor in the nation. The Harbert College’s new Freshman Focus Committee is dedicated to representing the college through various community service projects. In fall, the students worked with the Big House Foundation, a non-profit agency in Opelika, to help raise clothes and toys for foster children through a number of events.

HM, Spring 2017 9


Technology

Are you in business? Then you’re

dealing with data, data storage, and, one hopes, data archiving methods. In the last decade alone, technology has created massive transformations in the way businesses can choose to store data. Because storage technology itself is subject to market pressure, it changes. Thanks to a principle known as Moore’s Law, that change is a self-propelling cycle. Larger storage capacities at lower prices cause businesses and people to create more data. For instance, as the resolution of digital cameras increases (another Moore’s Law example) the file size of images increases, which in turn causes users to need more storage. Your business can be affected positively by these medium changes (think access to cloud storage) or negatively (data loss through poor archiving techniques, or even business obsolescence, a la Kodak). Large businesses usually have robust data archiving and retrieval systems in place, but even in your personal life, you may discover that you’ve got too many

10 HM, Spring 2017

photos to fit on your computer, or you’d like to protect important documents from hard drive failure. So where do you get started? The medium and format that you choose to preserve your data matters. Stick with standard (and non-proprietary) formats that will have support for the foreseeable future. For instance, despite the fact that new Macs ship without DVD-RW drives, optical storage is still a valid solution for archiving data. You’ll just need to purchase and maintain external disc readers if you’re a fan of iOS. Sometimes, to be future-proof, you may even look to the past. The Department of Homeland Security actually requires staffers to print out important e-mails for long-term storage, necessitating a paper filing and indexing system. Before you ignore digital storage in favor of your old filing cabinet, however, ask yourself, What is my data worth? “The cost of a good archival scheme is typically less than the cost of losing everything,”

writes David Paradice, a Harbert eminent scholar and chair of the Department of Systems and Technology. “For small companies, I recommend looking seriously at digital means of archiving data, because archiving data to paper makes the data difficult to use later.” Casey Cegielski, Woodruff Professor of Management Information Systems, agrees. “Data is unavailable for application usage in hard copy form,” he writes. “That undermines the very point of aggregation of data—to support decision making.” Keep in mind that you can be too careful in protecting your data. Encrypting your files will protect them from unauthorized access, but passwords can be lost and forgotten, which renders the encrypted data irretrievable. Unless your data absolutely must remain confidential, avoid encrypting archives.

Totally confused? Here are our recommendations for small-scale data archiving:


Technology

External backup drive

Cloud storage

How to use it:

How to use it:

Get at least two of these, and back up a copy of your important data to each of them. Turn write-protect on, then store one on-site, and put the other in a safe deposit box. Refresh the archive every couple of years.

Pros:

It’s easy to use, and hard to hack if your drives are not connected to the Internet.

Cons:

The archive is only as recent as you manually make it. Additionally, make sure you’re using these drives for backup, not external storage. Any drive can fail, so keep a duplicate of these files, whether on your desktop, or multiple external drives, for recovery.

Varies, dependent on your chosen service, but often a designated folder on your computer syncs to the cloud automatically, or on a schedule.

Pros:

Generally easy to use, unless you purposely get into the advanced options. Customer service representatives can answer questions and provide guidance. Cloud storage is the most versatile option, and can be used in a lot of ways, as long as you understand the basics.

Cons:

Cloud services usually involve a monthly fee, and can get expensive, depending on your file volume. You can only access your data as long as you have an Internet connection and your service provider stays in business. Anything in the cloud is still stored on a physical hard drive somewhere, which means there’s a slight chance it can still be lost.

Optical media

Fire-resistant document safe

How to use it:

How to use it:

Grab a stack of write-once discs and a compatible drive. Make sure you’re buying archival quality–the average re-writable CD, BluRay, or DVD uses dye-based data layers, which don’t last forever.

Pros:

Great for longer term storage of data you’re not going to revisit any time soon, like important documents or images. Correctly stored, discs are rated to last from 100 to 1,000 years.

Cons:

Needs to be recreated every few years. Requires maintaining the optical media drives. Read/write speeds are slower than backup drives, and storage capacity can be lower than that of hard drives or the cloud.

Consumer Reports recommends purchasing a safe with 30 minutes of fire protection.

Pros:

A solution to a very real risk: The National Fire Protection association says there’s a 1 in 4 chance of your experiencing a large fire in your lifetime.

Cons:

Optical storage is more sensitive than paper, so if you’re planning on storing DVDs as well as documents, you’ll need a safe whose internal temperature doesn’t exceed 120 degrees. You’ll likely shell out more for the extra protection.

HM, Spring 2017 11


More Profitable Banks Fuel Growth Campaigning for the presidency, Donald Trump pledged to repeal the 2010 Dodd-Frank Act. It has certainly become clear by now that the act is indeed in dire need of an overhaul. It has imposed far more costs on banks, but has not added to their revenue. This not only makes banks less profitable than otherwise, but also surely puts them at a distinct disadvantage with respect to competing with other less-regulated financial firms, both here and abroad. The act also created one more financial regulatory agency—the Consumer Financial Protection Bureau— headed by a single individual, unlike all the other financial regulatory agencies. This gives far too much discretionary power to a single individual. Furthermore, one more agency only adds to the already crowded field of regulators that makes it even more difficult to determine who regulates what and who is accountable when things go bad. The main purpose of the act, moreover, was to create a safer and more sound banking system as well as be sure that no big bank is “too big to fail.” Yet, I do not believe that we have put in place a regulatory regime that ensures that there will never again be another banking crisis. Interestingly enough, almost every new piece of major banking legislation creates more regulators and imposes more regulations on banks,

and the president, when enacting that legislation into law, says, “With this new law there will never be another banking crisis.” The sad fact is that about 20 years later there is another banking crisis. The laws enacted over time do not seem to prevent future crises, but rather simply add more regulators and regulations. Indeed, just a few years ago we had the worst banking crisis since the Great Depression, and what we got, not surprisingly, was another law—the Dodd-Frank Act. I also do not believe that the act puts an end to the “too big to fail” problem. What we need now is a more simplified regulatory structure—one in which we tell banks that they have to hold much more capital than currently required. Those banks that do hold more capital should be subjected to far fewer regulations. In short, when bank owners put more of their own funds at risk, they should be allowed to engage in a wider range of activities. The more capital the owners of banks have at risk, the more likely it is they will engage in safer and sounder banking practices. This will substantially lessen the likelihood that taxpayers’ dollars will be needed to bail out banks. This is common sense and does not require the 2,300 pages that make up the Dodd-Frank Act. Should President Trump get his way and repeal all or major parts of the Dodd-Frank Act, what we should find is a more profitable banking system. We should also find banks being able to lend more money to business firms and individuals that will create more jobs and further stimulate economic growth. This would be a win-win for everybody. James Barth Lowder Eminent Scholar in Finance Dr. Barth is co-author of the 2012 book Guardians of Finance: Making Regulators Work for Us.


How We Think

Regulation Threatens to Drown Local Banks

Harbert College graduate Bob Dumas, an Auburn University trustee and president and CEO of AuburnBank, comments on potential changes in capital requirements for banks and their impact on community banks:

HARBERT MAGAZINE: How have the current capital requirements affected the way AuburnBank and similar-sized banks do business?

BD: Again, it’s not the increase in capital requirements that will have the largest impact on a customer of community banks, it’s the overall blanket of regulation that comes with the full 2,300 pages of Dodd-Frank. For example, with rules coming from the CFPB such as Qualified Mortgages (QM), Ability to Repay (ATR), and TILA-RESPA Integrated Disclosures (TRID), the costs of originating a home loan have increased significantly. Ultimately, these costs get passed on to the consumer. In the case of AuburnBank and many other community banks, we never made loans without verifying income and assets. As far as close calls on creditworthy borrowers are concerned, community banks will often spend more time with a customer that may not fit in the box of the bigger banks. However, with the introduction of QM, it creates a lot more risk for a bank to serve some of these customers. Although we currently make non-QM loans, many community banks are not willing to offer non-QM loans due to the additional risk exposure.

BOB DUMAS: Community banks have always maintained higher capital ratios, so the new capital requirements in and of themselves have not had a significant impact on our capacity to lend. Now, the staff time spent calculating these ratios has increased due to the overall complexity of the rule changes. This seems unnecessary and burdensome for community banks when the actual ratios themselves were not materially impacted by the new rules. HM: How do the concerns about regulating the “too big to fail” banks relate to a bank such as AuburnBank? BD: Ultimately, ending “too big to fail” is in the best interest of taxpayers, which includes both consumers and businesses in this country. The biggest concern for community banks is getting pulled into a fight that we didn’t start. As the regulations mount, we have actually created an environment of “too small to survive.”

HM: Do recent regulations such as Dodd-Frank take proper note of the differences between banks? Do they sometimes penalize strong community banks such as AuburnBank? BD: The biggest challenge for us and other community banks is having the resources to devote to complying with all rules and regulations that have been written as a result of the DoddFrank Act. Per the Dodd-Frank Burden Tracker, which is published by the House Financial Services Committee, regulators to date have written 224 of the 400 rules that must be implemented under Dodd-Frank and these 224 rules consume 7,365 pages. Without the economies of scale of the larger banks, this increased regulation actually creates a scenario of “too small to survive” and has resulted in a wave of consolidation and reduction in the number of community banks. HM: If capital requirements are increased, what could that mean for the average customer of a community bank? Or for people whose current creditworthiness already makes them a close call for a loan?

HM: A bank has to operate profitably, so how much harder would higher capital requirements make that objective? BD: With higher capital requirements, banks big and small are not able to generate the same returns for their shareholders that they have in the past. Whether bank shareholders will permit this to continue is an unanswered question. What we do know is that there have been very few new bank charters as a result of the reduced prospect for shareholder returns. Ultimately, with reduced competition, this hurts consumers and businesses.


How We Think

Insuring Our Autonomous Future Last semester was a first for me. I actually met someone who owns a Tesla.

Credit: www.Plan59.com

Not too many of those in higher education. He was a faculty member from Georgia State who was visiting the Harbert College of Business to present a research paper. After asking him if there were any openings at Georgia State, I then peppered him with probably two dozen questions about his car. Coincidentally, I was soon thereafter asked to write a short article on the effects of self-driving cars on auto insurance. I have to confess that of all of the questions I asked this faculty member about his Tesla, an inquiry about his insurance costs wasn’t one of them. Without asking, I could do a quick calculation. With his car being valued at about 10-15 times my 2002 Ford F-150, his insurance costs were probably a bit more than mine. Given that I teach insurance within the Department of Finance, it makes sense that I would be asked about this subject. And although there’s not a real sense of urgency in determining the effects of self-driving cars on the cost of insurance, the topic is a somewhat interesting one. Quite simply, the cost of insurance reflects the losses and expenses associated with the risk

14 HM, Spring 2017

transfer. Losses are a combination of frequency and severity. Given an elimination of human error (at least with regard to driving), collision losses would be considerably fewer if all cars on the road were exclusively self-driving. Of course, that’s many years away and most of the first-generation “self-driving” cars are not fully autonomous, but self-driving only under certain conditions. Presumably, although the frequency of loss for a self-driving car is less, the severity of a loss that does occur will likely be higher, given the expense of the technology and corresponding repair costs. Even before the age of fully autonomous vehicles, there is currently available technology that is becoming more common in automobiles: warning/detection systems when approaching automobiles/pedestrians, various forms of automatic braking, adaptive cruise control (assisting you in keeping an appropriate distance between your car and others in highway traffic), lane-keeping assist (mild steering assistance when you happen to leave your designated lane), and parking assist systems. As these systems develop and become more common, the frequency of collision loss should drop considerably and collision premiums should decrease significantly. I should note that even if every car on the road is fully autonomous, there is no guarantee that all collision losses will be eliminated. There will be occasions when technology fails and losses occur. In these cases, the liability that was once borne by the driver will be shifted to the auto manufacturer. Absent legal protections being put in place for auto manufacturers, product liability claims will increase (courts/ juries are none too kind to manufacturers) and the cost of those losses will likely be passed along to the consumer in the form of higher car prices. And don’t get too excited. Even in a bestcase scenario, your auto insurance premium won’t go to zero. With a fully autonomous vehicle, you will still have the need to purchase comprehensive coverage—coverage for losses such as falling objects, hail damage, theft, etc. Insurance . . . dang, even robots can’t help you escape it! Lee Colquitt Professor and Chair Department of Finance


How We Think

Demographics are Poor Predictors

For 16 years I have been teaching business students that using demographics is a terrible way to segment people into groups. The reason is that demographics do not predict behavior. Because you are black or white, old or young, man or woman is largely meaningless with regard to how you will act. Nevertheless, people continue to follow the lazy lead of the media and point to race, education level, gender, etc., as key drivers of political ideology and election decision-making. The DNC made this mistake in employing demographic-oriented analytics and targeting during the election. Guess what? It didn’t work. Business researchers have known this for decades. Want to know why the polls were off? Too much emphasis on demographics. These things are external to the choices people make. When you say “educated white women lost us the election” or “inner-city black men act (this way)” or “millennials don’t (do this)” you are attaching behaviors to a demographic category without showing cause. If you said, “Glenn is a white male Southerner, so he loves country music, conservative talk radio, going to church, and the past five US presidents,” you would be a million miles from correct (and I would get sick). Segmentation is a powerful thing for being effective and efficient in business. It is also a dangerous thing if used in an unethical fashion (i.e. Air Jordan shoes marketed to

inner-city youths or “Thank You For Smoking”). But this isn’t legitimate segmentation because it doesn’t show real differences. It is an oversimplification of reality to make the discussion easy to follow. It coincides perfectly with choosing to write newspapers at the third-grade level. So please note, if you are posting or protesting based on things that include one of these demographic markers, then you need to recognize that you are the racist, the bigot, the sexist. You are now part of the problem, not part of the solution. You simply cannot equate demographic characteristics to behavior. That is not inclusive. That is not an act that builds equality. For the media, it is the easiest way to define an enemy and occupy your time. Sadly, many of you have fallen for it. Ideology is changing. I hope intelligence can keep pace. Glenn Richey Raymond J. Harbert Eminent Scholar and Professor of Supply Chain Management

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C-Suite

FASHIONING

CHANGE

Dawn Robertson helped Macy’s launch its first e-commerce site, led Old Navy through a radical restructuring of its supply chain, and hatched a plan that enabled rapper-turned-entrepreneur Sean “Diddy” Combs to generate more than $400 million in annual revenue through his menswear brand.


C-Suite

Some CEOs are hired to be caretakers—to maintain what was built before them and sustain a

measured pace and trajectory. Robertson, who earned a fashion merchandising degree from Auburn, is the sort of CEO retailers turn to when they’ve grown stale and need to shake up the snow globe. She introduced new merchandise strategies during her time as CEO and president of the McRae’s department store chain, worked Down Under to reinvent large but struggling Australian retail chain Myer, reduced Old Navy’s design-to-store supply chain window by 20 weeks as its president, and negotiated exclusive licensing agreements as president of Sean John. As CEO of Stein Mart, she redirected the chain to pursue younger clientele, re-evaluate its in-store experience, and recalibrate its marketing toward the digital realm. After effecting change as a vice president, chief merchandising officer, president, and CEO in the retail sector for more than 30 years, Robertson is experiencing it in a new way. The executive is now a student, having joined the Harbert College’s online MBA program this year (more on that later). Some of her new classmates may have confused her for a faculty member during orientation last December—“They Googled me,” she says. “Even some of the faculty said, ‘Tell me again why you’re here.’”—but the move is in keeping with someone who is energized by new challenges.

HARBERT MAGAZINE: You started your career as a buyer. When did you realize that leadership would be your path?

HM: Is managing change the toughest aspect of leading a company?

DAWN ROBERTSON: I started out the day after I

of turnarounds, and they’re not for the faint of heart. Understanding change in a turnaround versus a very traditional company are very different pieces. I didn’t understand that until I did them. In a turnaround situation, it’s urgent. You can get everybody on board and help them understand they have to change now. In a company that has been around a while, managing that rate of change is critical—and understanding when too much is too much. It has been probably one of the hardest things to do in this new [retail] environment, because if you don’t change you’re not going to be around. But convincing people of that is hard because they’ve done it the same way for so long.

graduated from Auburn in the Macy’s training program in Atlanta. When I was in Atlanta, I had a senior vice president . . . he said to me, you’re going to be really successful in this business, and here are the things you need to do to get there. It began to give me the idea I could do it. I wanted to be a buyer. I went through the training program and became one. I discovered I was good at it and became a division merchandise manager. When I changed companies and moved to Connecticut, the CEO became my mentor. I became a senior VP and I was a senior VP a long time, 12 years. I had to keep anniversarying my numbers and keep doing the same job. Often, you get promoted by moving, moving, moving, moving. But when you’re in the same company and have to be better every year, it’s a lot tougher. Then I became a CEO and I didn’t know anything about being a CEO. It’s learning on the job and there’s no one to help you. I had two children, a 3-year-old and one in the fifth grade. You learn on the job and you learn from your mistakes. A really critical piece is learning from your mistakes. The biggest learnings I had were when I went abroad and ran a company in Australia [Myer Stores]. I learned what I didn’t know about leadership—a lot about listening. They’re from all over the world and think differently than we do. I thought I knew all about leadership, but I learned it’s very different. They don’t believe in hierarchy, so it’s a very even business environment. They have to believe in you. They believe in the tall poppy syndrome. If you’re too tall, they’ll cut you off at the knees. I hired a professional coach, a New Zealander, as a CEO coach. He taught me how to slow down—how to listen and understand what people were about.

DR: I think it’s the hardest thing today. I’ve done a lot

HM: When you’ve come into turnaround situations, how do you go about securing buy-in? DR: Primarily, it’s about getting the senior leadership to trust you. Once they trust you, they will follow you. You can show them the facts, where you’re going to go and how you’re going to get there, but if they don’t trust you they won’t follow you. That’s the one consistent piece. You have to understand first who’s on the team and who’s not. You find that out. You find a couple of people embedded in the team who are going to give you good feedback so you know what’s happening. From there, you begin to identify what all the issues are.

HM: You oversaw the creation of Macys.com and Bloomingdales.com—the early stages of e-commerce for both department stores. When you’re building something from scratch and there’s no point of comparison, are you in a constant test-and-learn mode? »

HM, Spring 2017 17


C-Suite

“I still believe in bricks and mortar—but it’s changing. It has to be a special customer experience and something different.”

18 HM, Spring 2017

DR: There was no one to say what was going to sell online because we didn’t know. First, we went after cosmetics. Nobody would sell with us online. Estee Lauder—we were their biggest customer and they wouldn’t sell us online. They had just launched their own online cosmetic marketplace. The division of the stores themselves were concerned with us online. Macy’s wouldn’t even let us put Macys.com on the bag because nobody had ever done it before. We picked from Macy’s East and Macy’s West assortments [of cosmetics]. That was a real success because you didn’t have to try it on. Cosmetics and denim sold well initially. If you knew you fit that brand and were a specific size, you could order that size. We tried shoes and that was not successful at first. We had to have sizes and we were pulling from a central stock. We learned a hard lesson. Men’s was easier than ladies’, which we wouldn’t have thought. They know their brand and they go to that brand. It was a test and learn, test and learn. It was a great experience because you didn’t know anything. You didn’t know what you didn’t know. We tested, we learned, we made lots of mistakes, but we changed fast and were profitable quickly.

DR: I think it’s the biggest adjustment—multi-channel.

HM: You fast forward from the late 1990s to now and think about Black Friday shopping. You can log on to your computer to avoid the crowds. Out of all of your years in retail, is e-commerce the biggest adjustment you’ve seen for companies and consumers?

HM: You mentioned that you would visit the Old Navy stores when you were CEO. Did you do that a lot? Just walk in and interact with customers and employees?

People who are winning are willing to adjust to what’s happened and people who are not winning aren’t willing to adjust to what’s happening. They’re slow to become omnichannel and bricks-and-mortar traffic is slowing. There’s traffic—and I still believe in bricks and mortar— but it’s changing. It has to be a special customer experience and something different.

HM: You say you still believe in bricks and mortar. Do you anticipate the experience will become something radically different than it is now—fewer humans and more automation? Will we see the self-checkout model of grocery stores there? DR: We do that in airports today. If you need a gift and

you’re in the airport, you can go to the kiosks and buy whatever you need. You need makeup, you need electronics, you can buy those items. It shows that it has worked, but it was a slow adapting piece. I think the experience is what will drive people into the store. It’s fun, it’s different.

DR: Yes. All of the time. Every company I’ve run. Sadly,

though, they would usually have a picture of me in the back room. So I’d get halfway through and then I’d hear, “Susie, come to the front.” Sometimes I’d get away with it.


C-Suite HM: What did you hope to learn? DR: That the store manager knew what was going on— the store manager and staff. If they knew what they were trying to do, then we were going to win. If they knew how much business they’re doing, where are they going, who is their customer, what were their customer service stores, what’s working and not working, and what they’re doing about it, we’ve won the battle. If they had no idea what we were trying to do or what the strategy was, then we had serious concerns. I did very few surprise visits, because you want people to be able to put their best foot forward and feel good about what they’ve done. We tried to celebrate them and thank them. HM: Given your extensive experience as an executive, what made you want to pursue an MBA? Why now, and why here at the Harbert College? DR: I talked about it a long time. You have to be careful

what you talk about with your friends because it will come back to haunt you. I started teaching at FIT [Fashion Institute of Technology] in New York. I teach the capstone class [at FIT], and I loved it. It was really fun, and I was doing it while running a company—I was doing a start-up in Miami. I’d fly back every Friday to teach on Saturday and then teach Monday night and fly back Tuesday at 4:30 in the morning. At the right time, I want to teach as a professor. To do that, I need an MBA. So I decided, “No time like the present.” My friends here in Auburn said, “You’re not going to go to Auburn to do your MBA?” I researched it and found out Auburn had a great program. So here I am.

At Old Navy, our team achieved great things. When I went there, the supply chain was 52 weeks. It took 52 weeks from the time you started designing a product to the floor. So we re-engineered the entire supply chain. We took it from 52 weeks to 32 weeks and fast fashion for eight. That was a massive undertaking for a $7 billion company to change every process in terms of how it did business. We rebranded the whole chain to ON and used celebrities, updated our marketing, and became a relevant company again. While leading Sean “Diddy” Combs’ business, we licensed every category—fragrance to Estee Lauder, dress shirts to PVH, apparel to Li and Fung, and an exclusive with Macy’s. Another great learning experience.

HM: You were talking about core competencies earlier. Is that something you consider to be one of your core competencies, reaching out and talking to people who are experienced and putting them on a problem? Or is it solving the problem yourself? DR: It’s much more about finding the appropriate person to solve it. Identifying what are the problems and what are the priority problems. When you become a CEO, there are a lot of challenges and opportunities. You have to prioritize which one you’re going to tackle first and what kind of value you’re going to get from that. It’s all about what kind of value you’re going to get from your activities—not just your money. How much the organization can do, their time, their attention. That’s the hardest part. Then finding people who can go and do it. What I do know is what I don’t know . . . I’ll get great people to help me. I can tell you if it’s right or wrong, but I can’t do it myself. For me, it’s very much about understanding what is wrong and what you’re going to do about it.

HM: I remember reading an article last year— “How Old Navy Got Everyone to Fall in Love with $19 Dresses”—and it referenced your efforts to revive the brand. What are you most proud of in your career? DR: I would say the thing I’m the most proud of is when I was in Australia, taking what had been a very traditional department store [Myer], turning it, and selling it for the biggest price in the history of Australia [Private equity group Newbridge Capital, part of Texas Pacific Group, bought Myer for $1.4 billion]. And keeping the company alive. It was a traditional department store and one of the biggest employers in Australia.

Dawn Robertson with Sean “Diddy” Combs at a Macy’s

event celebrating the Sean John product line.

HM, Spring 2017 19


Feature

HANDLING

Change 20 HM, Spring 2017


Feature Throughout history, the stages of human development have been characterized by technological or scientific change. The Stone Age, the Bronze Age, the Iron Age. With each technology came a different way of looking at the world—and at business. Manufacturing was substantively changed by the Industrial Revolution, and a few decades later, the way the manufacturing machines worked was substantively changed by cheap and ubiquitous electricity. At first that energy came from water, then coal and oil, then nuclear fission, and now, increasingly, from the sun and the wind. Now large economies rely not just on manufacturing, but information. Even our production lines are run by informationfed robots. Place these various ages and the technological revolutions that caused them on a timeline, and it’s clear the rate of change is changing. It’s getting faster. And faster. Most of the companies in the Fortune 500 in 1955 were not in it in 2016. So how do businesses keep pace with the increasing pace of change? Though the foundation of change management as a discipline was laid early in the 20th century, “change management” doesn’t enter the common business vernacular until the 1990s. But theorists and practitioners have certainly made up for lost time. The literature is loaded with material on how CEOs, managers, and leaders should go about implementing change. Amazon lists nearly 85,000 books on the topic, and a quick Google search yields 72 million hits. But if you look a little further, you’ll find that when businesses attempt to manage change, they fail nearly 70 percent of the time. There’s a common acknowledgement that for a business to change effectively, that change must come from the top down, and the typical response to slow or ineffective leadership is to get a new leader. It seems that change, for the most part, is not built into the DNA of companies. If it’s not in the DNA, get new DNA. Then that new leader faces the unenviable task of urging, forcing, begging his or her employees to change. And given a better-than-even chance at failure, the process just gets repeated. While Jack Welch was chairman and CEO of General Electric from 1981–2001, the company’s value rose 4,000 percent. He said it best: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” Despite inventive inventors, ingenious entrepreneurs, and adventurous venture capitalists, it may be that at some basic level, business and change don’t really go hand in hand. Of course shareholders love short-term profits, but they love stability even more. Predictable, consistent, long-term growth. And managers, for the most part, work to optimize the systems that generate that stability. They standardize to produce consistency; they make processes leaner step by step to create efficiencies; they enact procedures to ensure the alignment of mission and action. They institutionalize success. But physicists will tell you an object in motion will resist any change in its state of motion. Unless influenced by an external force, it will keep moving in a straight line at a constant velocity. It’s called inertia. Successful managers, with all the best intentions, often manage agile adaptability right out of the enterprise, leaving a company not only unprepared, but often actively resistant to change.

Stan Harris, Harbert’s associate dean for graduate studies, and Achilles Armenakis, now professor emeritus in management, conducted years of research into organizational change and practice, often in collaboration with colleague Kevin Mossholder. Their widely cited work forms the basis for Dr. Harris’ responses to points in this article.

“What about change imposed on a business? Dodd-Frank spurred change that top leadership had to accept.”

“The root of organization is organize, which implies fixedness and stability. To create a changebased culture, the competing values of stability and change must be reconciled. Often this is done in different departments, such as production and R&D.”

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Feature

“I think part of the problem is with steps 1 and 3 of Kotter’s stages: creating urgency and create a vision for change. With change we are dealing with uncertainty and our paradigms conspire against us to see things we don’t anticipate. How can I create urgency if I can’t even anticipate what the future may bring? How can I create a persuasive vision of an uncertain future? “What this means is that companies’ sense of urgency doesn’t kick in proactively; it kicks in when the reality is clear and they are already hurting. They then have to react to become healthy rather than having a motivating vision to thrive. “This also leads me to believe that the successful companies are those that are constantly testing or acquiring the future. In fact, you might say rather than react to the environmental pressures, they create the environment.”

“Higher purpose also tends to be more of a long-range focus of which the future plays a larger role than the short-term thinking proposed by finances. Contrast the investing style of Warren Buffett with others.”

22 HM, Spring 2017

In 1996, John Kotter wrote Leading Change, which has been called “simply the best single work on strategy implementation,” and which Time magazine called one of the 25 most influential business management books of all time. He sets out eight steps in the change management process. Kotter’s no slouch: two degrees from MIT, a doctorate from Harvard, chairman of an international consulting firm. You can debate the details, but chances are Kotter’s got those eight steps right. So why do change efforts still suffer a 60–70 percent failure rate? Maybe because we don’t ever get to implementing them. Maybe because change isn’t part of our DNA. In 2012, Kotter updated his work, and placed it squarely in a 21st-century context: “Any company that has made it past the start-up stage is optimized for efficiency rather than for strategic agility—the ability to capitalize on opportunities and dodge threats with speed and assurance . . . We can’t keep up with the pace of change, let alone get ahead of it. At the same time, the stakes—financial, social, environmental, political—are rising. The hierarchical structures and organizational processes we have used for decades to run and improve our enterprises are no longer up to the task of winning in this faster-moving world. In fact, they can actually thwart attempts to compete . . . Companies used to reconsider their strategies only rarely. Today any company that isn’t rethinking its direction at least every few years—as well as constantly adjusting to changing contexts—and then quickly making significant operational changes is putting itself at risk.” And the risk is great. The life expectancy of the average business is shrinking. A recent study by the Boston Consulting Group, a worldwide management consulting firm, reported that nearly 10 percent of all publicly listed companies in the US fail each year, 32 percent fail or are taken over in the first five years, and the average life span of a public company in the US is down, halved from 60 years in 1970 to less than 30 years in 2015. The study lists a number of factors for this decline, chief among them the inability to manage and keep pace with change—in short, the ability to adapt. A company’s long life span means long-term value creation. In other words, it’s good for employees, investors, and customers. So as we approach improving change management, maybe we shouldn’t look at the specific steps managers and leaders must take (apologies to Kotter), but rather ask “How do we build a business that lasts a century or more? How do we introduce change into a business’s DNA?” What’s the oldest corporation in the Americas? It started in 1650 and is still in operation today. It’s a university. Harvard. And Harvard’s not unusual. Other than the Catholic Church, universities are the longest lived institutions in the Western world. They’re often criticized as being un-businesslike, and the casual observer would never see a university as an agile responder. But there must be something in their corporate DNA that gets it right. To start off, universities have a “higher purpose.” They educate the populace, promote critical thinking, and create new knowledge. That’s pretty lofty. Many businesses, on the other hand, have financial and operational goals—businesslike goals. More money is a big carrot and getting fired a big stick, but reward and fear may not be motivating enough for enough people. It’s hard to beat a higher purpose. Admittedly, universities change gradually, if not glacially, and business must move at a faster pace, but to sell adaptability—to


Feature motivate in what may be an era of constant change—how can we define the corporate mission so that it aims at a higher goal, a lofty purpose? Research and the creation of new knowledge is a big part of a faculty member’s job. So in effect, the employees of the institution are constantly learning—learning about their particular subject, learning about what other researchers are doing, testing assumptions, and rethinking methods and practices. If a business encourages its employees to develop an awareness of the marketplace and provide for the cultivation of the skills and capabilities for success, then not only does every employee become an active agent for change, but also change becomes a natural outgrowth of work. Like corporate CEOs, university presidents must be both leaders and managers. But given tenured, unfireable employees and a model of shared governance where dissent is often open and loud, university presidents manage without the expectation of authority and lead without the expectation of unanimity. As a consequence, university presidents must operate with an inclusive mindset. So might the corporate CEO, and the corporation itself, benefit from this perspective? A clear vision, a well-thought-out path toward that vision, and an approach that creates an environment where voices can be heard can give employees an active role in corporate change and bolster the odds of success.

“One might argue that universities are the most risk-averse and anti-change institutions. It is hard to change when positions of power and influence are challenged. If marketing runs the company, it is hard to become more quality-focused.”

Kotter’s Model Kotter’s8 8Step Step Model

1. CREATE A SENSE OF URGENCY Help others see the need for change through a bold, aspirational opportunity statement that communicates the importance of acting immediately.

Kotter’s Eight Step Model

2. BUILD A GUIDING COALITION A volunteer army needs a coalition of effective people— born of its own ranks—to guide it, coordinate it, and communicate its activities.

1

CREATE

1

Sense of Urgency

8

CREATE

INSTITUTE

Sense of Urgency

Change

8

2

Guiding Coalition

2

BUILD

INSTITUTE

7

Change

Acceleration

7

SUSTAIN Acceleration

Guiding Coalition 3

THE BIG OPPORTUNITY

SUSTAIN

6

Short Term Wins

6

GENERATE Short Term Wins

FORM

THE BIG OPPORTUNITY

GENERATE

3. FORM A STRATEGIC VISION AND INITIATIVES Clarify how the future will be different from the past and how you can make that future a reality through initiatives linked directly to the vision.

BUILD

Strategic Vision & Initiatives

3

FORM

Strategic Vision & Initiatives

4

ENLIST

5

ENABLE Action by Removing Barriers

5

ENABLE

Volunteer Army

4

ENLIST Volunteer Army

Action by Removing Barriers

Source: http://www.kotterinternational.com/the-8-step-process-for-leading-change/

4. ENLIST A VOLUNTEER ARMY Large-scale change can only occur when massive numbers of people rally around a common opportunity. They must be bought-in and urgent to drive change—moving in the same direction. 5. ENABLE ACTION BY REMOVING BARRIERS Removing barriers such as inefficient processes and hierarchies provides the freedom necessary to work across silos and generate real impact. 6. GENERATE SHORT-TERM WINS Wins are the molecules of results. They must be recognized, collected, and communicated—early and often—to track progress and energize volunteers to persist. 7. SUSTAIN ACCELERATION Press harder after the first successes. Your increasing credibility can improve systems, structures and policies. Be relentless with initating change after change until the vision is a reality. 8. INSTITUTE CHANGE Articulate the connections between the new behaviors and organizational success, making sure they continue until they become strong enough to replace old habits.

HM, Spring 2017 23


Feature

MERGERS &

24 HM, Spring 2017


Feature

ACQUISITIONS When your company is acquired A business cannot undergo a greater seismic change than when it is sold or merged with another one. A new boss is in town. Employees fear for their jobs. Clients fear doing business with new faces. New managers have to instill new corporate values to workers used to doing things “the old way.” “It’s about the people. It’s about the people. It’s about the people,” says Larry Stoddard, CEO at RelaDyne, a leading distributor of oils, lubricants and fuels, and a 1981 Harbert College marketing graduate. “It’s not about trucks and warehouses. It’s about relationships.” RelaDyne, located in Cincinnati, has made 18 acquisitions in the past three years—many former family-owned businesses. “When you do an acquisition, there are two constituencies that you care about most—your customers and your associates,” Stoddard says. “That’s who you have to protect. You are buying a business with an income stream. If you disrupt any of those constituencies, the whole income stream gets disrupted.” Some mergers and acquisitions are multi-billion-dollar deals that bring together two giants. Take AT&T-DirecTV, for example. When AT&T purchased the satellite provider for $48.5 billion in 2015, it merged telecommunications with living room entertainment. AT&T didn’t stop there. It purchased Time Warner for $85.4 billion in 2016—the largest deal of the year. Whether your deal is multi-billion, or a parent company purchasing a long-time family business, one of the first steps the acquiring company must take is to stabilize the environment.

“Usually, there is a fear factor,” says Darryl Rosser, a 1973 industrial management graduate and private equity veteran who is currently executive chairman of the board at Camino Modular Building Systems in Toronto, Canada. “There is initial fear in the process because the questions that go into the people that were acquired are, ‘Is our facility going to be closed?’ And from the manager’s perspective, ‘Will positions be eliminated?’ “That’s where you want to be as open with them in communications as you possibly can. If you have examples of other acquisitions and you are able to share them: ‘Look, here are some successes and here’s why we acquired your company, and here’s why we think you guys have tremendous skills and assets that complement what we do.’ Try to reassure them. But be careful that you don’t overstate, ‘Nothing is going to change. Nobody is going to lose their jobs.’ If you go that route, and then you make changes and people do lose their jobs, then you lose credibility.” Rosser is no stranger to acquisitions. The “free agent” executive for private equity firms was CEO of Nudo Products, a supplier of decorative floor, wall, and ceiling panels, and helped the company increase by $115 million in value before selling in 2015.

HM, Spring 2017 25


Feature The name of the game for private equity groups isn’t to make a better product by acquiring another company. It’s to purchase a company, exponentially increase its value, then sell it for a profit—much like flipping houses. “But when you acquire, you must make changes fairly quickly,” he says. “You’re changing the environment. You’re showing a lot of positive signs to them. ‘Hey, we’re going in. We’re painting the walls. We’re changing the carpet. We’re making sure we look like a company with a future.’ That is motivating to a lot of people. The people that get really excited about that—they are going to be on board, and that’s when you find out which ones aren’t at that stage. Then you have to respond as quickly as possible.” Stoddard says the best way for acquired employees to retain employment is to “stay valuable to the overall structure and scope.” “Be involved in the day-to-day level of customers,” he suggests. “Think about this, if we go into a town and you’ve been dealing with Jimmy and Joe and Sally and Cindy for the past 15 years, do you think I’m going to get rid of them? If I do, the first thing that’s going to happen is that customer will quit doing business with us.” Stoddard wants to make sure acquired employees “remain calm,” and are reassured that they are assets. “The first thing we do is walk in and say, ‘If you weren’t worried about your job yesterday, you don’t need to be worried about it tomorrow. We’re not coming in here to cut a bunch of jobs. We’re looking for high-quality people looking for an opportunity,’” he says. “The reality is . . . not everybody is going to make it because just think about the type of people who like to work for local family-run companies. They don’t always possess the skill sets and capabilities of working for a company that’s more of a high-risk, high-return. Some people will select out (quit) after they learn our culture and what we expect.” There’s a new logo. New management. New rules . . . a new culture. Lou Bifano, a lecturer in management at the Harbert College and former vice president of business development for IBM’s Cloud and Smarter Infrastructure Division, was responsible for coordinating 25 software-related acquisitions in the past 15 years. Bifano says employees his company acquired didn’t always have to adapt to new rules overnight. “This wasn’t an area where we expected the acquired company to come into ours and operate under the assumption where everything was going to be done our way right now,” Bifano says. “We tried to get both sets of people to believe and understand that we didn’t have a monopoly on good ideas and better ways to do things. We hoped that people joining us would speak up and talk about how they thought we could do things better or differently. “But it is important for people to adapt within a reasonable amount of time. Really key people in management and up and down the acquired organization, we tried to put retention bonuses in place that were

26 HM, Spring 2017

back-end loaded that gave them a period of time where they could understand our culture and how we did business and how they fit into that. It doesn’t happen overnight. You talk the talk, but then you have to demonstrate that you’re walking the walk.” Bifano suggested assigning “buddies” to acquired employees to help train and have “positive influences” moving forward. Once the employees have bought into the changes, what about a company’s source of capital—its customers? “Customers of the merged company are always very nervous,” Bifano says. “‘Why did you do this acquisition?’ ‘Are the people going to change?’ ‘What’s going to happen to the company’s executives?’ “You’ve got to get out there and be proactive in talking to them. You pay all of this money for a company and then you encounter people who think you are going to throw the business away. Why would we spend sometimes hundreds of millions of dollars to make an acquisition and destroy the value of that company?” Stoddard notes that his company’s greatest competitors aren’t found on the stock market or in a high-rise corporate office in New York. It’s locals. That’s why face time—not the app, but human interaction—fostering relationships and trust over time is essential. “There are a lot of long-term business relationships that are impacted on where customers buy the products we sell,” says Stoddard, whose company has 52 distribution centers in the US. “Because that matters in our industry, the local people matter. You’ve got to calm everybody down. ‘Jimmy and Sallie and Cindy and Sue are still here. They are going to answer the phone the same way they always have.’ “Another thing—you’ve got to control the message to your customers. The minute you do this [acquisition], a competitor will come in and tell your customers what they want to hear—not what the truth is. You’ve got to be active in seeing key customers and telling them specifically what’s happened and what’s going to happen so there is no disruption of service and there is no concern.” Acquisitions shouldn’t just be made—they must be carefully thought out. “We would put together a five-year business plan for how we thought the acquisition would play out inside the company in terms of performance in the


Feature market, retention of people, innovation going forward,” Bifano says. “Then we would measure ourselves on a quarterly basis and report back to the CFO how we were doing and what changes we were going to be making. We always measured ourselves against that base plan so we would have some indication of how our process worked and how successful we were against our original plan.” Buying companies can’t come into a deal with the same cookie-cutter strategy every time. “This is like a custom house,” Stoddard explains. “Every acquisition is unique. You need to look at the strengths and of each acquisition and develop an execution plan that accentuates the strengths of the organization that you are acquiring. People who think they know how to do it and they do it the same way every time—that’s a bad formula and it’s a formula for failure.” Fifty to 85 percent of mergers and acquisitions fail, according to a 2016 report by the International Journal of Innovation and Supplied Sciences. The report defines failure as “whatever the companies had in mind that caused them to merge in the first place doesn’t work out that way in the end” and/or “shareholders suffer because operating results deteriorate instead of improve.” Some purchasing companies create “self-inflicted failures,” Bifano says. “You should always do your due diligence and understand the strategy for the company that you are acquiring. You should understand the technology, understand the quality of people, their culture and then compare it to yours. “Very few acquisitions go exactly as mapped out. There are usually bumps in the road. How you, your people, and the people from the acquired company adapt to change really makes all the difference in the world.”

“Every acquisition is unique. You need to look at the strengths and of each acquisition and develop an execution plan that accentuates the strengths of the organization that you are acquiring.”

HM, Spring 2017 27


Feature

PUSH HERE FOR

CHANGE

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“False confidence will kill you, and not enough confidence will kill you,” says Sean Cook, an Auburn alum who was the 52nd employee hired by Twitter. Cook learned those two cautionary lessons about disruptive change during his time as an engineer and product manager at Twitter. Both came at the expense of one company and one well-known product. In 2011, Cook and Twitter CEO Dick Costolo watched and waited as visitors from Research in Motion filed into a conference room and took their places at the far end of the table. One of the men had a briefcase handcuffed to his arm. The company, maker of the BlackBerry, was fighting to survive in a market it had dominated. Apple’s swipe-screen iPhone—the three-in-one iPod, mobile Internet communicator, and cell phone—was poised to overtake its smart phone competitor. Cook saw the protector of the briefcase’s shoulders sag a bit as he put his cargo on the table and opened it. “Well, here’s what we’ve got,” the man said quietly, revealing a small device that represented BlackBerry’s answer to the iPhone. A few years earlier, Research in Motion co-CEO Jim Balsillie suggested that the iPhone wasn’t much of a threat: “It had rapid battery drain and a lousy keyboard.” His partner Mike Lazaridis concurred: “Try typing a web key on a touchscreen on an Apple iPhone, that’s a real challenge. You cannot see what you type.” Now here they were, playing catch-up and asking Twitter executives to invest time, money, and personnel into developing their social media platform for the BlackBerry Ocean. Team Twitter said thanks, but no thanks. “It was so clear he didn’t believe in it and wasn’t behind it,” Cook says. “If he doesn’t believe in it, the rest of the company doesn’t believe in it. We got up and walked out of the meeting and said, ‘We won’t do a thing for it.’” Within a year, the iPhone had overtaken BlackBerry in market share, and the device delivered by handcuffed briefcase had fallen off the market. The company’s stock plummeted 87 points over a three-year period as false confidence gave way to no confidence. Finally, in September 2016, BlackBerry’s handheld division became a casualty of a device introduced nearly a decade ago. It was the end result of Research in Motion’s failure to adequately account for disruptive change introduced by a competitor—a computer company that identified ways to become something else. The lesson? Don’t assume that the primacy you enjoy in the marketplace now will last. If you’re not willing to change your game periodically, you may lose the long game. “BlackBerry failed to adapt early,” says Harbert College associate professor of management Garry Adams. “What is Apple now? They’ve been able to move into new industries and marketplaces. They’ve been good at reinventing themselves and expanding into new marketplaces while keeping their foothold in their existing markets.” Coined by Harvard professor Clayton Christensen, the term “disruptive innovation” describes the manner in which a product or

service progresses from those early, tentative steps at the bottom of the market to a relentless upward trajectory that eventually displaces more established rivals. Tablets replace personal computers, which replaced mini-computers and mainframes. Cell phones supplant land lines and pay phone booths. Wikipedia and Google searches free up bookshelf space once occupied by hardcover encyclopedia sets. If it all sounds a bit Darwinian—well, it is. In his 1859 work On the Origin of Species, naturalist Charles Darwin described a process by which organisms change over time through changes to genetic traits. These changes enable an organism to acclimate to its environment (which undergoes changes of its own) and enhance chances for survival. There may be a gain of a new feature or the loss of an ancestral feature. A 2012 study by management consulting firm Innosight provides an overview of “adapt or die” in a business “Don’t assume that the setting. The firm found that primacy you enjoy in the the 61-year average tenure marketplace now will that existed for S&P 500 last. If you’re not willing companies in 1958 had fallen to change your game to 25 years in 1980 and 18 periodically, you may lose years at the time of the study’s the long game.” completion. If that churn rate continues at that pace, then 75 percent of the S&P 500 will be displaced by 2027. In 2010 and 2011, longtime stalwarts like Kodak, Radio Shack, and the New York Times were replaced by the likes of Netflix, Salesforce, and Juniper Networks. If you don’t change your game, your competition will potentially rewrite the rules. When a competitor introduces a product or service with the potential to alter the competitive landscape, a company may face a fight-or-flight scenario. As Cook suggests, if companies are caught flat-footed by a disruption in the marketplace, they often have themselves to blame. BlackBerry didn’t get blindsided by the iPhone. Apple launched Project Purple 2, its touch screen initiative, in 2005 and committed $150 million over a 30-month period that ended with the iPhone rollout. BlackBerry doubled down on what it had been doing and didn’t attempt its first real counter-punch until 2011. By then, it was already sporting a black eye and bloodied nose. As Christensen and Harvard Business Review co-authors Michael Raynor and Rory McDonald remind us, “Different types of innovations require different strategic approaches.” The emergence of e-commerce giant Amazon, for example, has forced retailers to re-examine supply chain processes and increase investments in omnichannel presences. “A lot of times companies get into the idea of ‘follow the leader’ and benchmarking things that are going to help them catch the leader,” says Adams. “But if you start out behind, you’re always going to be behind because you’re trying to catch up with where they are and not where they’re going. A lot of companies fall into those traps.”


It’s not easy to create disruptions or to confront the change they set in motion. Stanford researchers described a “first mover advantage” in the late 1980s, but there’s a danger in being the company that introduces a new product, process, or platform. An old adage reinforces the point: “It is easy to identify the pioneers. They’re the ones with the arrows in their backs.” A larger company may have the resources to fend off an aspiring game-changer who pushes too far, too fast. A decade after the Stanford study, Peter Golder and Gerard Tellis reported a 47 percent failure rate for first movers but a mere 8 percent failure rate for “fast followers” who demonstrate a deeper understanding of the market where change is introduced. How do you avoid getting left in the dust? Be observant, for one. Keep a close eye on your competition and engage in periodic evaluations of your own products and processes. “You have to have a constant understanding of what your competitors are doing, what you’re doing, where you’re moving—both that external and internal eye of the marketplace,” Adams says. In the article “Meeting the challenge of disruptive change,” Christensen and co-author Michael Overdorf say that companies’ capacities to adjust to disruptive change are affected by their values, resources, and processes. Values represent a crucial factor in determining what an organization can or can’t do. For executives, the decisions frequently revolve around whether or not to invest in new products, services, or processes. But values also cascade down from the C-suite, affecting on-the-spot decisions of middle managers, salespeople and so on. When executives and managers evaluate resources, they should be considering human and monetary capital and technology, as well as company brands, product designs, and relationships with customers and other key stakeholders. AIG offers one example of how resource analysis relates to internal and external change. The insurance company serves more than 88 million customers whose lives could be changed in an instant by fires, hurricanes, tornadoes, and other calamities. In 2012, a self-study led to the creation of a “science team” as a means of gaining a competitive advantage in a marketplace long reliant on individual expert judgment. The team, which grew within two years to 130 employees from various management and scientific backgrounds, focuses on analytics as a catalyst for evidence-based decision making. Harbert College graduate Murli Buluswar, the company’s chief science officer, credits the internal change to “imagination” winning out over “inertia.”

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One of the critical goals of the move was to avoid being surprised by changes in the market. “The power of fear is quite tremendous in evolving oneself to think and act differently and to ask questions today that we weren’t asking about our roles before,” Buluswar says. That self-study and commitment of new resources also brought about a change in processes. To embrace or effect change, you must be willing to examine what Christensen and Overdorf described as “patterns of interaction, coordination, communication, and decision making” that convert resources into deliverables of heightened worth. Some processes are clearly defined and documented, while others are informal routines that take shape over time. To understand how much attention to process matters, think about Amazon and the struggle more traditional retailers have faced in responding to changes they’ve introduced. As Brian Gibson, Harbert College’s Wilson Family Professor of Supply Chain Management, notes, the idea of omnichannel retail has been around for 20 years. But Amazon has continually adjusted, not only expanding the line of products it delivers, but the channels over which it connects with consumers. They have remained in a lead position, in part, because the companies chasing them haven’t been able to clone their secret sauce—a welloiled procurement and supply chain operation. Changing your processes may be a painful but necessary exercise. Gibson says executives must be willing to make hard decisions about whether they (A) “have the right strategy” or (B) “the right people developing the strategy.” “Sometimes refocusing—making those major shifts in strategy or process—is hard to do with the existing people who built them,” he says. “You want to bring people in with a fresh set of eyes to say, ‘We need to blow this up and start over again.’”


Sometimes refocusing—making those major shifts in strategy or process—is hard to do with the existing people who built them,” Gibson says. “You want to bring people in with a fresh set of eyes to say, ‘We need to blow this up and start over again.’”


Feature

COURTING DISASTER 32 HM, Spring 2017


Feature

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ou’ve heard the impressive stories about large companies saving themselves. Steve Jobs’ return to a struggling Apple in the late ‘90s drove the company to massive technological innovation, which produced a sleek, modern product for consumers. Marvel, the comic book company recently purchased by Disney, managed to survive by shifting its characters to new mediums like film. Captain America, Iron Man, and the other Avengers are so well known now that it’s difficult to imagine Marvel in a less successful situation. Research suggests that some of the major threats to struggling companies are: failure to communicate internally, management’s inability to understand specific business knowledge, and failure to read shifts in the market. While other problems such as no workforce goals or no new customers made the list, these top issues are especially worrisome because they are difficult to identify until it is too late. “In a perfect world,” Derek Meek, chair of the Chapter Presidents’ Council of the Global Turnaround Management Association, states, “companies are always mindful of major pitfalls.” However, Meek explains that differences in theory and practice show that people will focus on the positive rather than the potentially damaging negatives. Or, as Meek warns, executives know exactly what is going wrong but fail to address the problem: “They expend precious resources until, after the problem has exponentially grown, there is too little time to effectuate the wholesale changes necessary to correct course.” Other managers see an issue and correct it, hoping it’s only a broken part in a larger, functioning machine. This pick-andchoose process is a short-term answer to a company’s immediate problems. This method can help companies navigate fluctuations in the market, yet the habit of making small changes can be a dangerous rut to fall into for struggling businesses. It prevents managers from seeing larger, more systemically damaging problems, such as bad internal communication. If a roof is leaking and ready to collapse, putting new shingles on or setting a piece of wood over a hole won’t stop the roof from collapsing. Something may be wrong with the whole roof, and the only way to fix

it is to tear more holes or replace the roof entirely. Even worse, it’s not the roof that’s the problem, but you believe it is. You waste effort in one area and ignore the other that needs your help. While you’re watching water drip from the ceiling, the floor is about to give way beneath you. To correct this myopic viewpoint, Brian Connelly, a professor in Auburn University’s Department of Management, suggests a first step for managers to take in an intimidating evaluation process: “First, they should look internally. Understand what it is they are good at, but also where they need to improve.” For this to succeed, management must be realistic and honest when evaluating the company.

subscribers away and corrected the mistake before it was too late. More often, failing companies miss issues because they are too close to the system to see the problem. Think back to the house: you’re staring at the roof, but a stranger unfamiliar with your home would immediately notice the weak floorboards. Companies find that their process works for so long that the idea that it would fail now is laughable. Connelly calls this the fundamental attribution error, which is “a cognitive bias where we tend to ascribe successes to our ability, virtue, and hard work, but then we ascribe failures to external factors and uncontrollable circumstances.” Management believes that their actions are correct, but unfavorable environmental factors prevent their actions from succeeding. When things go wrong, Connelly explains, “They assume it is some external circumstance, when in fact it may be because they are taking the wrong approach.” Misled by their own bias, management may realize too late that their actions are what need to change. If the issue continues to grow or becomes overwhelming, the next step is to ask for outside help. “Many executives, understandably, feel an intense loyalty to their equity and employees, and a corresponding duty to single-handedly steer a company away from a precipice,” Meek explains. “For them to admit they need help is to admit personal and professional defeat, and they wait far too long to ask for that help, hoping the situation will miraculously improve. Admitting there is a problem and seeking guidance from people with experience is not a sign of weakness, but rather a sign of strength and leadership.” The common theme among large brands such as Apple or Marvel returning from the brink is their willingness to embrace major change. In theory, the desire to change is easy, but when you don’t know where the problem is, it’s difficult to help yourself and avoid wasting time and effort. New outside perspectives and honest personal evaluations can identify most company pressure points and lead to the company’s survival.

Focusing on one issue, you’ve possibly neglected a total calamity. Studies on turnaround companies and the experts who help save them suggest a “blank slate” state of mind when evaluating a company’s problems. This tabula rasa approach forces companies to face the dogmatic patterns that can damage their business and helps them evaluate their resources for future profit. Then, Connelly says to turn to others: key stakeholders, employees, customers, and suppliers, those who can “uncover problems that might otherwise go unnoticed.” Only after understanding your company and its strengths and weaknesses do you turn to external circumstances such as competition. Netflix recovered from a terrifying drop in subscribers and stock after modifying how customers streamed shows and ordered DVDs. The company assumed there would be no backlash from changing services and prices, but after watching subscribers flee, it returned to its original service and shifted focus to increasing viewership through original shows. Now, House of Cards and Stranger Things are proof of Netflix’s growth as a provider and producer of shows and films. Not all companies identify their problems so quickly, nor are issues often so obvious. Netflix knew what drew

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FOUR PILLARS OF CHANGE Even though the challenges of change confront every business, most attempts at corporate transformation continue to fail, notes Dr. Bill Schaninger, a senior partner with the global consulting firm McKinsey & Company. He believes the rate of successful response to change is actually getting lower. There are multiple reasons for that, according to Schaninger, who holds a PhD and a master’s degree from Harbert College. “Managerial time and attention is fragmented,” he says, and managers—who may have experienced the pressure of previous attempts to deal with change—can feel overwhelmed. A shifting workforce is also a factor. Employees change jobs more often, Schaninger says, as few enter the workplace with the expectation of spending their entire careers with an employer. Although “intellectually they get it” in understanding workforce issues, Schaninger says managers often still expect strong employee loyalty even if the company is doing little to foster it. The employer-employee relationship becomes purely economic. “We’ve taken away the blanket of security, but we still expect people to go above and beyond,” he says.

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Oversimplification of issues is another factor. Employers and employees alike often want one simple course of action. “We’ve allowed ourselves to become a sound-bite nation,” Schaninger says. However, there is a proven framework for successfully addressing large-scale organizational change. In a recent article, Schaninger and McKinsey colleague Tessa Basford cite four critical actions: • Fostering understanding and conviction • Reinforcing changes through formal mechanisms • Developing talent and skills • Role modeling Collectively, these are called the “influence model.” Companies that use all the components of the model dramatically improve their odds of success. A McKinsey survey of successful transformations found that they were eight times as likely to have used all four actions rather than only one. Fostering understanding and conviction

Research indicates that people seek congruence between their beliefs and their actions, Schaninger notes, so believing in the “why” behind a proposed change is important in altering behavior. Creating that understanding requires effective and credible communication. “Executives do communicate the ‘why,’ but the rationale


“We’ve taken away the blanket of security, but we still expect people to go above and beyond.”

behind it is almost exclusively about what’s in it for the company,” he says. “Employees need more—it’s good for society, it’s good for me—along with being good for the company.” The “false-consensus effect” can come into play here. People often overestimate the extent to which their attitudes and opinions are shared, and pressures can prompt a rush to a perceived consensus that doesn’t really exist. “This can lead to more sub-optimal decisions and not fully understanding the risks involved in what you’re trying to do,” Schaninger says. A better approach, he says, is to have people play the roles of clients and other stakeholders. This can lead to livelier debate and makes the process “more about the implications of the decision than the decision itself.” Reinforcing changes through formal mechanisms

Reinforcement remains an important management tool, but it is easy to assume money is always the best reinforcement. It is the easiest reinforcement to offer, Schaninger notes, but often not the best. As compensation levels rise, the motivational value of money typically falls. Purpose and collaboration can be more effective motivational devices.

Developing talent and skills

When trying to develop talent and skills, companies should be mindful of the value of instilling a sense of control and competency in their employees. Research into expectancy theory indicates that people are more motivated to achieve goals if they believe that extra effort on their part will increase their performance. Role modeling

Role modeling can be beneficial in trying to produce corporate transformations, but it doesn’t have to be carried out solely by top management. In fact, it may be more effective if it isn’t. Role modeling by top executives is “overrated,” Schaninger says, and companies should instead look at “those who control the water cooler, the influencers of opinion in the company.” There are early signs that efforts to bring about change are not working, Schaninger says. Managers should be attuned to signs such as the extent to which individuals are responding with focused activity. If no one is doing such activity—meeting deadlines and otherwise following prescribed steps—the plan isn’t going well. The same is true “if the only people working on it are the people who are available” and not those who need to be working on it. Each of the components of the influence model is valuable in itself, but the four together are a powerful combination for success in organizational change. As Schaninger and Basford write, “While these priorities sound like common sense, it’s easy to miss one or more of them in the maelstrom of activity that often accompanies significant changes in organizational direction.”

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Research

Helpfulness Helps Bottom Line It’s been a long day, you’re ridiculously hungry, and you can’t wait to sink your teeth into some waffle fries. You pull into the drive-thru and a familiar sound chirps through the speaker. “It’s a great day at Chick-fil-A! It will be my pleasure to serve you!” You spent the majority of your afternoon serving others. Suddenly, something as simple as a friendly voice that desires to serve you makes you feel welcome, appreciated, and valued. Just like that, your day gets better. Grocery shopping can be difficult, especially when your arms are already full, you’re tired, or you’ve got three adventurous toddlers pulling at your legs. You make it through the checkout aisle at Publix, your cart is full, you’ve got a sore foot, and an employee smiles and says, “Would you like for me to take these grocery bags to the car for you?”

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You didn’t ask for help. Valet grocery service was flat-out offered. You are taken care of, appreciated, and you want to go back. Chick-fil-A and Publix are masters of the art of consumer gratitude. “Gratitude is contagious and it has the pay-it-forward effect,” says Dora Bock, associate professor of marketing at Harbert College. “When somebody feels another has been grateful, they want to reciprocate. Firms need to provide to customers the opportunities to reciprocate.” Her co-authored paper, “Gratitude in service encounters: implications for building loyalty,” surveyed 900 consumers and confirmed a theme of reciprocity— “‘informants’ desire to benefit their benefactor.” “You’re encouraging positive employee behaviors to make customers feel appreciated. It’s not going to hurt your bottom line. It’s going to improve it.” “I think it is the best way to do business because it creates a mutually beneficial, long-term relationship,” says Andrew Barnes, who became a Chick-fil-A franchisee in 1992 and earned his MBA from Harbert College in 1997. “I think it is strategic. Founder Truett Cathy probably said it best, ‘He who serves best, profits most.’” “We believe that there are three ways to differentiate: service, quality and price,” Publix President Todd Jones told Forbes magazine. “We make service our number one, then quality and then price.” “Being nice” is also cost-free advertising. “It’s much more expensive, from a firm’s perspective, to try and gain new customers rather than satisfy and keep your current customers happy,” Bock says. “Financially, a firm is much better off retaining and using its current customer base. Think about word of mouth. If your current customers tell other customers that . . . the snowball effect can really help a business grow.” Bock and her co-authors also examined the difference between consumer gratitude and consumer satisfaction, which often go hand-in-hand. “Satisfaction is when the product you purchased met your expectations,” she says. “Gratitude is ‘they made me feel good about being there.’ We found that gratitude affects loyalty just as much as satisfaction does—if not more.” And loyalty affects the bottom line. Not only was Publix rated “Highest in Customer Satisfaction” for five consecutive years by J.D. Power & Associates, but Publix’s net earnings for 2016’s first three quarters eclipsed $421 million (compared to $412 million in 2015), making it safely among the nation’s most profitable grocery chains.


Research

Flippers Face Dicey Future

Television’s Property Brothers make it look easy. So do Chip and Joanna Gaines of HGTV Fixer Upper fame. But flipping property requires much more than buying low and selling high. It’s what happens in between that makes all the difference. “To be a professional [house] flipper, you need to have an extensive knowledge of the local market, you need to have construction expertise, and you need to have expertise in real estate sales as well,” says Steve Swidler, J. Stanley Mackin Professor in Finance at Harbert College. But perhaps the most important tool is evaluating what should, or should not, be flipped. “Flippers must be good at identifying undervalued homes and purchasing them,” says Swidler, who co-authored “An Empirical Analysis of Residential Property Flipping,” published by The Journal of Real Estate Finance and Economics. “But there gets to be a point where—if everyone is doing this activity—then it will be more and more difficult to identify the so-called undervalued homes, and the flipping profits will start going away.” Swidler notes that identifying undervalued properties is like rolling dice. “You can think of this as a lot like bidding on stocks and finding the undervalued company. Professional flippers rely on experience to tell them which homes are priced to sell, which are priced too high, and

which might be bargains. If experience is the key, then trying to explain which homes are undervalued is a bit like trying to explain which pitches batters swing at and which pitches they don’t. “Hopefully, you find a gem in the rough and make the right purchase.” According to a web article published last June by RealtyTrac, home flipping increased by 20 percent in the first quarter of 2016—a two-year high. In fact, 6.6 percent of single-family homes sold in the first quarter of 2016 were flips. “Home flipping has been gaining steam for the last year and a half, thanks to falling interest rates and a dearth of housing inventory for flippers to compete against,” Daren Blomquist, senior vice president of RealtyTrac, says in the article. “While responsible home flipping is helpful for a housing market, excessive and irresponsible flipping activity can contribute to a home price pressure cooker that overheats a housing market, and we are starting to see evidence of that pressure cooker environment in a handful of markets.” Flippers aren’t restoring property for their own entertainment. Turning a profit is the motivation. But Swidler points out that flippers should weigh the risks. A flipper can invest time and financial resources into a home, but the longer the property remains unsold, the less of a flip or even more of a financial loss it becomes. “The flipper can set a high listing price, but that will take longer to sell,” Swidler says. “If it’s on the market too long, the flipper will be forced to lower the asking price. Time is money. The bottom line: the flipper wants to sell as soon as possible at a good price.

“In our study, we considered anything less than two years between transactions as a flip as that’s when tax rules change for capital gains purposes.” Swidler, who notes that sales in some markets are stronger than others, said there was no guarantee that once a property is rehabilitated and put on the market that a flipper will get the selling price desired to turn a profit. “One should never begrudge some fair rate of return to a business individual, recognizing the fact that he or she is taking on some risks and is just being compensated for those risks,” he adds. Flippers can sometimes face unanticipated problems such as contractor/material delays or issues with building permits, higher than anticipated taxes charged to the sale, and difficulty reselling the property even after it has been restored. Though flipping has increased in volume, it has not increased in profit. RealtyTrac reported that in 28 percent of national flips during the first quarter of 2016, the gross profit was less than 20 percent of the original purchase price. “The real issue going forward is going to be where interest rates are,” Swidler says. “If they remain at these historical lows of 3.5 to 4 percent, then I think the housing market will continue with a fair amount of traction, especially if the economy percolates along at some reasonable level. Historically, any time interest rates start going up in any dramatic fashion, the housing market begins to cool off.”

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Mission in Action

Capstone: Fresh Eyes, Fresh Ideas Kelly Schmidt had been here before. She once stood before corporate representatives and offered solutions to real business problems. But a year removed from her 2015 capstone project experience, Schmidt was a corporate judge herself—watching teams of MBA students provide their own ideas and expertise. The tables had turned. “It’s weird being on the other side,” says Schmidt, who earned her MBA from Harbert College in 2015 and is the manager of talent acquisition at Yum! Brands [Taco Bell, KFC and Pizza Hut]. “Having gone through the program a year ago and now judging this year . . . there were a lot of things that made me think, ‘Why didn’t I do that?’ or ‘I wish the students today would have done this.’” Schmidt and representatives of seven other firms from a variety of business disciplines brought a number of corporate issues before teams of MBA students last August. Students used the fall semester to prepare lengthy written reports before making final presentations on December 2 before corporate panelists. Officially, the class, taught by management professor Peter Stanwick, is called “Integrated Business Project Case Analysis.” But students—resident and non-resident—know it as “the capstone project.” It may be a team project, but there’s plenty of classwork involved, too. “The students are assigned to read three business-related articles for each class and the class starts with the discussion of these articles,”

says Stanwick. “Based on the content of these articles, I try to incorporate the decision-making process of the managers to help the students understand how the clients are making their decisions. The students also enhance their ability to present and defend their point of view during the discussions in class.” Gary Page, instructor and executive-in-residence at Harbert College, who identifies and recruits companies for the capstone project, says that “Students are expected to deliver the companies value, identify where they can save cost, and increase efficiencies. Students benefit from a real-world experience. That’s the underlying objective.” In the fall of 2015, Schmidt’s MBA team was asked by Baptist Health to develop a physician and medical services strategy for recruiting and retaining physicians to the Montgomery area. For Schmidt, who was a director of human resources at the National Football League before joining Yum! Brands in 2013, the project was a fit. “It was really good for me to get into another business to look at best practices, see what worked and what didn’t work from a thirdparty perspective,” says Schmidt, who earned an undergraduate degree from Auburn in aviation management. But last fall as an industry representative, hearing ideas from students, rather than giving them, was an added benefit. Students were asked to develop an external employment branding strategy as a means of attracting top talent.

“It’s an incredible value for us to come in and, for a nominal fee, be able to get a lot of minds on a project that’s important to us. Because we don’t have the internal resources to do it, it really helps us to have millennials who are a lot of times our target to look at a problem from an outside perspective and give us new perspectives on how we can do things differently. “Having people in the class who are experts in finance, human resources, and operations was really advantageous to us because those are the positions that we are recruiting for. We wanted a broad variety of perspectives. Some [suggestions] are such low-hanging fruit that I can implement tomorrow. A lot of them were just, ‘oh, duh.’ My team and I had been looking at the same thing over and over again. Sometimes you forget that the low-hanging fruit is there and you can make an immediate change to have a huge result.”

Kelly Schmidt (top right) who earned her MBA at Auburn, identifies talent to quench the appetite of Yum! Brands. Students and faculty (left) enjoy a recent capstone project ceremony. 38 HM, Spring 2017


Mission In Action

Winners Show New Perspectives: MBA teams offered recommendations in helping a variety of industry clients achieve their stated objectives.

Jordan-Hare Stadium Concessions Objective: Improve concessions productivity and efficiency while maintaining best-in-class customer service. Winning team recommendations (Barr Younker, Kevin Behrens, Jeff Christensen, Samuel Binenfeld, and Neil Restaino): Implementation of solo beverage stands, separate lines for season ticket-holders, an online ordering app, replacing fundraising workers at concessions with professionals and an on-site kitchen space. Wellness Kitchen on South Donahue Objective: Find the optimal daily service population that takes into account profitability, quality, service level, and customer experience. Winning team recommendations (Daniel Bevers, Paula de Man, Jonathan Fowler, and Casey Lambert): Multiple ideas here include reconsidering athlete dining preferences by offering simpler items for breakfast and lunch, repurposing the often unused patio area, using better visual displays of food stations to speed consumer flow, and increasing walk-in prices. Auburn Chamber of Commerce Objective: With the trend moving toward young business owners, the Chamber is looking for means to get them more involved. Winning team recommendations (Cara Brenner, Lakin Eddy, Stephen Gowland, and Jessi Pitts): Implementation of a Young Professionals program tailored to their young professionals’ needs; opening the channels of communication via a mobile app, social media, and improved web site; continuous interaction with Chamber members; and a campaign throughout 2017 that markets the Chamber through events, advertising, and social media, among other ideas. Still Serving Veterans Objective: Determine SSV’s operating model for the future and identify proposed models’ organizational structure, infrastructure, capabilities, etc.; determine the best target mix of funds types (donations, grants, contracts, etc.), sources of funds and the marketing approach to obtain them; determine how SSV will differentiate itself as “different, better and special;” and optimize its social networking. Winning team recommendations (Chris Hilton, Johnathan Roof, Joe Shamon, and Dustin Werden): Create an employment process that leads veterans from initial pre-employment contact to post-employment check-ins; go completely digital; enhance marketing strategy via social media and print/digital advertising to increase brand awareness, among other ideas.

East Alabama Medical Center Objective: Analyze the need for a free-standing ER in Auburn and whether or not it would be financially feasible for EAMC to pursue the project. Winning team recommendations: (Joseph Battles, Dylan Davison, Lacey Kent, Susan Orth, and Tyler Reynolds): Establishment a free-standing ER in Auburn, but in conjunction with renovating the current ER at EAMC. It should also use aggressive measures to attract top personnel. Yum! Brands Objective: Develop and recommend an external employment branding strategy for Yum! Brand’s corporate office and not individual brands (KFC, Taco Bell and Pizza Hut) based upon the Internal Employee Value Proposition, employee feedback and company culture. Winning team recommendations (Jonas Broccard, David Jeffrey, Nicholas Hays, Wes Thacker, and Bing Zhao): Utilize Jibe (a candidate experience and recruiting software) for the company’s career space employment marketing platform, giving Yum! Brands the flexibility in how candidates apply for positions; leverage technology (vendors such as Great Hires or Calendly) to improve candidate experience, among other ideas. Ardgowan Estate Objective: This 600-year-old estate and castle in England is opening its doors to the public as a resort. But questions must be answered. A feasibility and business plan must be conducted, cultural considerations and legal issues must be explored, and growth strategies must be discussed. Winning team recommendations (Blake Bolt, Matthew Kozub, Sean Mattheis, and Kacey Neely): Form partnerships with companies that specialize in organizing corporate retreats and events; consider other Wi-Fi options; capitalize on the Estate’s Distillery by marketing to national and international audiences. Auburn LAUNCH Innovation Grants Program Objective: Assess the market and develop a marketing and business plan for commercialization of low-cost fringing field hay bale status sensors in printed circuit board technology. Winning team recommendations (Rob Brooks, Chris Parker, Chuck Speaks, and Stephanie Thomas): More field testing is needed; develop the product for broad applicability; commoditize the suppliers; manufacture the product for scale; identify applicable adjacent markets; and optimize supply chain for mass distribution.

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Mission In Action

PROGRAM CHAMPIONS Just hours after walking across the Beard-Eaves-Memorial Coliseum stage in 2004 and accepting a master’s degree in finance, Mandy Harrelson broke down in tears.

“I had no idea what I wanted to do with my degrees,” says Harrelson, who also earned an undergraduate degree in mathematics. “I worked several jobs in school, so my time was spent focusing on that and studying. I never stopped to breathe and figure out what my ideal job would be. Unfortunately, I did not take advantage of [career] resources on campus. “My personal experience—and it not happening to our students—is what drives me today.” Harrelson (finance), pictured third from left, is one of six Harbert College Program Champions, multi-purpose positions created before the Fall 2016 semester that are focused on connecting students and industry leaders. They are the bridge between the academic and business worlds. They are allies, mentors, even cheerleaders— offering students that important nudge of reassurance. They are evangelists for their respective programs within the college, and help connect their programs and its students to industry. Other Program Champions (shown above, left to right) include Colby Lakas (accounting), Emory Serviss (marketing), Frank Oprandy (graduate level students), Jillian Miles (management), and Marcia Gibson (supply chain management). Although the Program Champions name was not used before Serviss, Miles, and Harrelson began their service last year, Oprandy, Gibson, and Lakas had filled similar roles for several years. Norman Godwin, associate dean for academic affairs, noted that the School of Accountancy and the Supply Chain Management program had already made similar 40 HM, Spring 2017

progress connecting students and industry. “The dean said, ‘I want you to replicate what was done in accounting and supply chain management across the college,’” Godwin says. “We said, ‘Let’s see if we can build on this.’” “I am like a marriage broker,” says Gibson, coordinator of the Supply Chain Management Professional Experience Program. “My job is about getting to know my students— their skills, abilities and desires, and getting them in front of the best employers that suit their needs. Employers always say, ‘Get me your best students!’ Well, my best students for Company A may not be my best students for Company B. I have to know what I call the company’s sweet spot. Once I figure out the magic formula that works for a company, it is easier to find the right students who can be successful hires for them.” Lakas, assistant director of the School of Accountancy’s graduate programs, likened program champions to “the missing link in a very well-rounded education.” “We are a direct connection to the professional world. While the other faculty are tasked with teaching the technical skills, our role is to provide the element of professionalism also desired by employers. “I like to jokingly call myself a life coach. While my students do primarily seek professional advice, sometimes it turns into a more personal discussion than just how they can land their dream internship. What happens in the classroom has a huge impact on the internship prospects they have, and we often end up talking about study habits and time management just as much as resumés and interviews.” Harrelson urged students to take advantage of the opportunities they have with program champions. “Thankfully, I found my way to Northwestern Mutual [as a financial advisor] and it was a perfect fit, but it would have been so nice to have figured that out before graduation.”


With Your Dollar

What is

PLANNED GIVING? Planned giving helps you integrate personal, financial, and estate preparation in a way that benefits you, your family, and your charitable organization. HOW DOES IT WORK? Bequests Name an organization as beneficiary of your will or trust and earn an estate tax charitable deduction. Charitable Gift Annuity Transfer cash or appreciated property to an organization in exchange for the promise of making fixed payments (with rates based on your age) for the rest of your life. Your benefits include a charitable tax deduction, fixed payments for life, possible tax-free payments, and a partial bypass of capital gains tax. Charitable Remainder Trust Transfer cash or property to fund a “lead trust” that makes a gift to an organization or charity for a number of years. You receive a charitable deduction for the gift and your family receives the remainder at substantial tax savings. Life Estate Reserved You donate property to an organization, but retain the right to use the property for your life. Benefits include a charitable tax deduction and lifetime use of the property. Bargain Sale An organization or charity purchases your property for less than fair market value. You receive the cash and a charitable deduction for the difference between the market value and purchase price. Benefits include cash from the sale, a charitable tax deduction, and partial bypass of capital gain. Source: Crescendo Interactive, Inc.

Gifts That Give Back Cheryl Casey remembers hearing her fellow Auburn University graduates discuss giving back to their alma mater at an alumni function. “People were complaining that they don’t give because they don’t know where their money goes,” says Casey, a 1983 Auburn alumna. She stood up and spoke up. “The truth of it is you can tell Auburn what you want them to do with your money.” Last summer, she went so far as to name the Harbert College in her will. Her $1.7 million planned gift pushed the college over its $100 million comprehensive campaign goal and will enable the college to address future needs identified by the dean. “I have no heirs, no children,” says Casey, a former senior vice president for Dreyfus Investments. “Auburn has become my child.” Casey became involved as a donor and a member of the college’s advisory council after her step-daughter, Megan Kneeley, began studying business at Auburn. Casey initially became involved as a member of the college’s alumni advisory council and eventually decided to endow a scholarship. Being able to meet the initial scholarship recipient face-to-face at an annual recognition solidified her desire to support the college with a planned gift. Casey says she structured the gift for the purpose of helping the college address its most pressing needs in 40 to 50 years. “We don’t know what the priorities are going to be then or what programs will need help the most,” she says. “The cool thing for me is that I’m not just giving funds,” Casey says. “That money lives. It breathes, it walks and talks and texts me still. I’m still in touch with [the first scholarship recipient]. She has a great job at Under Armour. That makes the money live.”

Cheryl Casey and husband Bob Kneeley visit the Shareholder’s Club tent.

A Lifetime Bond Like many recent college graduates, Will Clarke appreciates the opportunities created by his educational experience. And, like many of his 20-something peers, the timing wasn’t ideal for him to write a check for a “couple thousand dollars” to his alma mater. The 2015 marketing graduate identified another meaningful way to support Auburn. He named the Harbert College of Business as a beneficiary on a life insurance policy. When he began crunching the numbers on premiums, he decided that an insurance gift offered a low-cost way of helping future generations of Auburn business students. “It’s an inexpensive way to give back and it gets people in the mindset,” says Clarke, a sales development representative for Atlanta-based SalesLoft. Clarke began thinking about how he could help future Harbert College students after taking a job with an insurance agency after graduation. “I have a policy through work,” he says. “I took care of my mom, dad, and brother but still had a pretty good amount left over on it.” His mother encouraged him to “think about giving to Auburn.” Clarke named the Harbert College as his remaining beneficiary. “They gave me so much for four years,” he says. “My mom and aunt and uncles went [to Auburn], and it’s a lifetime bond. “It’s a good thing to get in the habit of giving back.”

It’s up to each of us Get involved by contacting the Office of Advancement at 334.844.1387 HM, Spring 2017 41


Alumni News

As we prepare to celebrate our 50th birthday as a college in 2017, we can’t help but think about how much we’ve changed over the years. We know you have too, since your days as a business student. You’ve earned promotions, and made a move or two. You got married and raised a beautiful family. And now, perhaps, you’re enjoying grandchildren. We want to celebrate how far you’ve come. Share your stories and send your highresolution photos (300 pixels-per-inch) to cobalumnews@auburn.edu. And if you’re feeling as nostalgic as we are, please feel free to include a photo of yourself from your time as an Auburn student.

1950s John C. Flournoy Sr. (’59, business administration) retired from the US Air Force in 1988 after 34 years as a pilot. He was the site and training manager for the USAF flight simulators at Kirtland Air Force Base in New Mexico from 1988-1998. He later worked for the Air Force Research Lab and Air Force Safety Center at Kirtland, as well as the National Missile Defense Program at Schriver Air Force Base in Colorado. His hobbies include attending reunions, traveling, “spoiling grandkids and great grandkids,” fishing, and visiting Auburn in the fall for football games. Lee Thames (’58, transportation) is retired from CSX Transportation and living in Jacksonville, Florida. When he graduated from Auburn, his business degree led to a first job with L&N Railroad as a sales trainee. He worked in Montgomery, Pensacola, Cincinnati, Tulsa, Atlanta, and Jacksonville. He retired as CSX’s director of sales for the Southeast. Hobbies include enjoying his private library of more than 350 volumes. 42 HM, Spring 2017

J. Ray Warren

(’58, economics) serves as a community volunteer in Montgomery, Alabama. He serves as an AARP Alabama volunteer after having served as state president of the organization and has been a member of the board of directors for the Alabama Military Support Foundation. He is also past president of the Montgomery Area Chapter of the Military Officers Association. A veteran of the US Army, he worked for State Farm from 1964-1991 as a claim representative and claim superintendent before becoming an attorney. He also served as a claims manager for the State of Alabama’s Department of Finance and Division of Risk Management.

1960s Ramon Griffin

(’62, business) serves as an associate professor of finance at Metropolitan State University of Denver in Colorado. He teaches courses in real estate practice and law, personal money management, and financial planning.

John Reichley (’62, business administration) retired after 41 years of active duty and civilian employment in the US Army. He is a fellow in the Company of Military Historians and serves on the Presidents Council for the World War I Museum and Memorial in Kansas City, Missouri. He was named Citizen of the Year in Leavenworth, Kansas, and is the only person to ever hold all six offices in the Fort Leavenworth Historical Society. He and his wife, Judy, a 1963 Auburn alumna, have been married for more than 52 years. John jokes that he’s “sort of getting used to her.” Walter Thompson (’64, business administration) is retired after 32 years with the FDIC, 10 years with CPA firms and four years with Habitat for Humanity. He served as FDIC regional director in Minneapolis and as FDIC deputy regional director in San Francisco during his career. He has visited all 50 states and taken five trips to Europe. Hobbies include golf and volunteerism. Freeman F. Walton (’66, accounting) retired in 2013 as vice president and chief financial officer for PowerSouth Energy Cooperative in Andalusia, Alabama. During his time in that role, he directed financing that almost doubled its electrical plant generating and other assets to $1.9 billion.


Maldonado-Bear uses mother's example to educate at Stanford, NYU As a child, RITA MALDONADO-BEAR marveled at her mother’s ability to educate grammar schoolchildren in her hometown of Vega Alta, Puerto Rico. “She (Marina Davila de Maldonado) created a singularly successful program for students through the first, second and third grades,” Rita explains. “This model was extremely successful and she never had to fail any student.”

Even Puerto Rico’s Secretary of Education and fellow officials visited classrooms to observe Marina Davila de Maldonado’s methodology. Young Rita considered teaching to be her dream job and earned a business degree from Auburn in 1960. She followed in her mother’s footsteps and ultimately brought her own innovative strategies into the classroom as visiting professor of finance at Stanford University and as associate and then full professor of finance and economics at the Stern School of Business at New York University for 30 years. “Most enriching to me was making economics and finance interesting and easy to understand for the students,” says Maldonado-Bear. “My reward was observing how quickly they learned and enjoyed it.” She agrees that business education has dramatically changed over the years. “It has become very specialized, almost as much as the medical profession,” she says. “It is hard to find a generalist trained in the interrelationship between economics and finance and the role they can play in the creation of wealth and betterment of society, in general.

Most are specialists in areas such as mergers and acquisitions, stock pricing, equity funds creation, and economic behavior with insufficient concern for the very society within which their activities take place.” Maldonado-Bear, now professor emeritus at Stern, retired from full-time teaching work in 2003. She also spent her last nine years as Stern Senator to the New York University Senate and the Senate Faculty Council, helped originate Stern’s Capstone course, “The International Business Study Project,” involving research projects focused on overseas companies. It also included one-week, on-site visits to companies in China, Italy, Mexico, Japan and Sweden. She also created “Women at the Top,” a program designed for second-year graduate students who had the opportunity to learn from women executives, either corporate or government. Both revolutionary courses ran into a common obstacle: September 11, 2001. “The president of the university stopped all travel by students to any foreign country,” she explained. “Classes had to be changed initially since none of the women executives scheduled to be involved could travel and the Graduate School of Business was temporarily closed. “I was on the George Washington Bridge heading to Manhattan and NYU on the very morning the attack took place. The entire NYU community was deeply affected. We had graduates of the business school who perished in the Towers that day.”

She has authored, or co-authored, a handful of books, including Free Markets, Finance, Ethics and Law, and the article, The Security Industry and the Law. A long-time listee in Who’s Who in America, Professor Maldonado-Bear took her greatest economic inspiration from one of Auburn University’s own, the late professor Dr. Raymond Ritland, who taught economics at Auburn for 35 years. “He was a Keynesian economist who introduced me to the Keynesian model framework for the economy developed by John Maynard Keynes, the famous British economist of the 1930s,” Maldonado-Bear says. “That model was used by Franklin D. Roosevelt to get the US out of the recession.” And just how did Rita, a former flamenco dancer, find her way from the small coastal city of Vega Alta, PR to the plains of Alabama and later to New York City? “At 18, my father sent me to Auburn University where he had a business relationship with the Agricultural Department” she says. “That relationship caused my family to send my older brother, Victor, a collegiate wrestling champion, to study engineering at Auburn, and three years later I was enrolled.” The jump to New York came after working as an economist for the government of Puerto Rico to pursue a PhD in finance and economics at the then Graduate School of Business of New York University. Today, she lives with her husband, Larry, in Newton, Massachusetts, a suburb of Boston, and remains very active. “We work out three times per week!” she says.

Above left: Rita Maldonado-Bear. Above: Rita enjoying Chewacla State Park as a student. HM, Spring 2017 43


1970s

William D. “Bill” DeBardeleben Jr. Donny R. Jones (’75, accounting) just earned

(’67, business administration) is pastor at The Church of Jesus Our Shepherd in Norcross, Georgia. He was ordained as a priest in the Anglican Church of North America in 2011. Timothy A. Barton (’78, accounting; ’79, MBA) In 2012, he completed his goal of visiting is vice president of finance for Travelink, every state capital with a trip to Honolulu, American Express Travel in Nashville, Hawaii. Tennessee. Travelink is one of only 10 Centurion level American Express Travel ap- Col. Wayne Dillingham (’75, business adminispointed travel agencies. He was recently tration) is retired from the US Air Force, selected as a finalist for the 2016 Chief Fi- but now works for Middle Tennessee State nancial Officer of the Year award in the pri- University in an administrative role. After vate company category, presented by the graduating from Auburn, he served five Nashville Business Journal. years in the US Marine Corps, flying as a bombardier and navigator in the A-6 InWilliam Blackburn (’75, market- truder. He completed law school at the Uniing) is a truck driver for the versity of Tennessee, practiced with a firm full-service custom pallet in Houston, then returned to active miliproducers and distributors tary service as a judge advocate in the Air Chattahoochee Pallets, lo- Force for 20 years. After retirement from cated in Columbus, Georgia. the Air Force, he served as an assistant counsel general for the FBI for five years. William Gerald (Gerry) Chalker (’71, business administration) is retired and living in Shalimar, Florida. He spent his entire career in the financial industry, most recently working with TSA Consulting Group in Fort Walton Beach, Florida.

Jim Corman (’74, finance) serves as an instructor in Auburn University’s Raymond J. Harbert College of Business and as managing partner at AIM Group, the largest angel investor network in the Southeast. He just began his 10th year of teaching entrepreneurship courses part-time. He also welcomed his second, third, and fourth grandchildren this past year. Keith Martin Cox

(’79, accounting) serves as treasurer and director of administration for the North Georgia Conference of the United Methodist Church. His passions include international travel.

E. Burnley Davis (’70, business administration) celebrated his 47th year with Standard Equipment Company in Mobile, Alabama. He serves as the company’s president and chief executive officer. 44 HM, Spring 2017

Steve Goodson

(’72, business administration) is CEO, “resident visionary, and benevolent despot” at Saxgourmet Products in New Orleans. The company, which specializes in high-end saxophones, recently finalized a manufacturing partnership with EMR Machine in Arizona. “Our mouthpieces are now manufactured in Delrin, a very high-tech and acoustically-superior polymer, on aerospace-quality five-axis CNC machines,” Steve says. “We are also doing extensive experimentation with bringing 3D printing to the musical instrument industry.” His son, Brian Goodson, recently completed his second year as a professor of accounting at the University of Cincinnati. His daughter, Tonya Crutchfield, serves long lines of hungry customers and music lovers at Blue Grass Barbeque in Moody, Alabama. Steve and his wife, Sharon, are active with the Mystik Orphans and Misfits Mardi Gras Krewe.

the “Life Member Award” from the Wire Association International for 30 years of service in the wire industry. He is a sales representative for Leggett & Platt in Gulf Shores, Alabama.

Billy Ray Kelly (’70, business administration)

is retired. He has been married to Lela Charlotte Griffin [’74] for more than 38 years and enjoys spending time with his two children and two grandchildren.

Joel Klein (’79, business administration; ’91,

MBA) serves as assistant director of finance and accounting for Lambert-St. Louis International Airport. His hobbies include cooking, travel, and fishing.

Ron Manley

(’75, industrial management) owns Opelika Bolt in Opelika, Alabama. His company designed fasteners for NASA’s space shuttle, as well as commercial and military aircraft, automobiles, and computer electronics. He is preparing for retirement in Auburn.

Randy Morgan (’73, finance) serves as district sales manager, covering northern Alabama, northern Georgia, and eastern Tennessee for Monsanto out of St. Louis, Missouri. “We work with retailers and growers to produce higher yields in corn, soybeans, and cotton,” Randy says. Joseph H. Newberry (’75, business administration) serves as president and chief executive officer of Redstone Federal Credit Union and is the incoming chair of the Chamber of Commerce in Huntsville and Madison County, Alabama. He celebrated 40 years of marriage to his Auburn sweetheart in May 2016 and also marked the birth of twin granddaughters. His hobbies include growing pecan and fruit trees. James Terry Noonan (’72, business) is retired

and splitting time between his farmhouse in Reform, Alabama, and Okeechobee, Florida. He enjoys training horses.


Tom Raney (’79, marketing) serves as senior vice president of JE Dunn Construction. “We are very proud to have a large percentage of Auburn graduates helping our clients realize their dreams and accomplish their goals,” he says. His daughter, Sally, is a sophomore in the Harbert College of Business.

William J. White

(’73, business administration) works for the Alabama Department of Transportation as payroll administrator, a role he has served in for 36 years. He plans to retire in 2017. He’s the proud parent of three daughters with college-degrees —one a doctor and award-winning author, one a civil engineer who graduated from Auburn, and one an Auburn-educated registered nurse.

Stuart Schoppert (’74, MBA) is retired and Stevan D. Williams (’79, accounting) serves as “relaxing at the lake” in rural Texas. He en- chief financial officer of the Robert Trent joys fishing and hunting, but also remains Jones Golf Trail in Birmingham, Alabama. active doing chores on his farm. Larry Willingham (’72, business administraMark Wanamaker (’79, finance) is a sales man- tion) is self-employed as a realtor in Gulf ager for energy storage at Lockheed Mar- Shores, Alabama, specializing in vacation tin Energy. He serves as a sales manager and personal real estate. His hobbies infor its lithium ion energy storage system—a clude fishing and boating. turn-key energy storage solution for utility, commercial, and industrial electricity ap- John Youngbeck (’77, transportation) owns plications. He lives in Greenwood Village, and manages a logistics consulting and a suburb of Denver, Colorado, with his wife transportation infrastructure financing Suzanne and three children. business.

1980s Frederick Arthur (’89, economics) serves as brand building manager for Orgill Incorporated in Memphis, Tennessee. He spent 25 years in corporate outside retail in forecasting, buying, planning, and marketing with companies including Parisian, Saks, Inc. Magazine, Disney, and ESPN. In his current role, he advises and provides marketing counsel to more than 6,000 dealers and retailers. His oldest child, Avery, graduated from the Harbert College of Business in May 2016 with a marketing degree. His middle child, Davis, will graduate from high school in 2017 and has been accepted by Auburn, as well as other universities.

Georgia jurist leverages business education in wielding his gavel well When judicial decisions are made that involve taxes, insurance, or other regulations that might impact Georgia’s billion-dollar economy, it’s important to have a strong business background. HAROLD MELTON, presiding justice of the Georgia Supreme Court, has such a background—and he earned it at the Harbert College of Business. “You see litigation about everything, but business cases are very common in our court,” says Melton, an Atlanta resident who earned a degree in international business from Auburn in 1988 before pursuing a law degree at Georgia. “It’s very helpful to have a sense of corporate forms, accounting and basic business principles. Business is definitely in play for a lot of what we see.” Georgia’s GDP approached $500 billion in 2015. Court decisions on legislation regarding tax structures, incentives, zoning, etc., have broad economic implications. “Above all else, we have to have predictability and reliability, and if the business world feels like

there is no sense of reason to our business decisions, then that might be one factor in businesses looking elsewhere to operate,” says Melton, who has served on the Supreme Court of Georgia since 2005. “We want to get it right and we want to be clear. “But the level of detail and complexity in the deals that are being struck as of late has really increased. You might have a number of different business relationships and corporations or subsidiaries and you almost have to chart and graph them sometimes just to figure out who is doing what, who is responsible for what and try to provide further clarity and follow the rules based on what’s in play.” Melton notes that people can be confused about the role of the state Supreme Court. “A lot of times it’s hard for people to understand that cases we get are not necessarily before us because of some overarching, important issue that the public might identify with,” he says. “Sometimes it might just be a legal question that needs to be cleared

up and that legal question might arise in a case that may not have a lot of visibility to it. Sometimes there are cases that come before us, like murder cases, that are before us just because that’s what the statute requires. We hear appeals in cases that, on the face, might look like the legal questions are very clear, or guilt or innocence might look very clear, but still the appeals process has to be followed.” Melton, elected as Auburn University’s first African-American SGA president in 1987, says the position was “the best education I ever had” and prepared him for his duties today.

HM, Spring 2017 45


Amelia Annette Baldwin (’86, accounting; ’87, MAcc) is the Neal Pendergraft Professor of Accounting at the University of Arkansas-Fort Smith. James Combs (’88, accounting) is an applications developer for Aflac in Columbus, Georgia. He will celebrate his 20th anniversary with the company in July. He and his wife, Angela Dawn Runkel Combs, celebrated their 25th anniversary in 2016.

Pamela Albright Conner (’82, marketing) is the

co-owner and an agent at Conner Insurance Agency in Arlington, Georgia. She serves as a board member for Aspire BHB Services in Albany, Georgia, and the Hospital Authority of Calhoun County, Georgia. She also volunteers as the financial chair for Arlington United Methodist Church.

Pat Cornelius

(’88, marketing) is the vice president of sales for Nationwide Studios in Atlanta, Georgia.

Richard Cox (’86, industrial operations management) serves as national sales director of regional anesthesia for Ambu in Columbia, Maryland.

Tracy True Dismukes (’88, finance) owns Col-

lage Designer Consignment, with locations in Vestavia Hills and Homewood, Alabama. She will celebrate her 25th year in business in 2017. She also enjoys supporting her son’s acting and modeling efforts.

John Dowless (’89, economics) is president of Millennium Consulting in Orlando, Florida. He serves as president of the Edgewood, Florida, City Council, and as first vice chair of MetroPlan Orlando’s municipal advisory committee dealing with regional transportation. FloridaPolitics.com recognized him as the best consultant in central Florida, while Orlando Magazine named him among its “Twelve to Watch” on its “50 Most Powerful” list.

ning and analysis for the Atlanta Symphony Orchestra.

Jim Jager (’86, management) celebrated his

26th year as owner and president of New South Research in Birmingham, Alabama. His fourth daughter was recently accepted Leah Nunn Engelhart (’88, mar- to Auburn, where each of her three older keting) is shareholder and sisters graduated. managing partner of the New Orleans office for Preis Glen King (’81, marketing) is a national acPLC. Leah was recognized count executive with US Foods in Montas a 2016 Young Leadership gomery, Alabama. Council Role Model in the city of New Orleans and was confirmed as a new memJennifer Bevel McCaghren (’88, ber of the board of directors for the Bufinance) serves as office reau of Governmental Research, a private, chief and contracting officer non-profit research group dedicated to for NASA’s Marshall Space informed public policy making and effecFlight Center in Huntsville, tive use of resources for the improvement Alabama. She supports the of government in the New Orleans metro liquid engines office for the new space area. She is the proud mother of three chil- launch system and oversees a team that dren—Wilson, Elizabeth, and McCall. procures engines. She and her husband, Donnie, a 1990 Auburn University alum, Russell “Rusty” Grice (’88, operations manage- have two children. ment) is an oyster aquaculture business specialist with Auburn University in Mo- Stephen Nordness (’81, industrial managebile, Alabama. He recently accepted a posi- ment) is the president and chief executive tion with Auburn University Marine Ex- officer of Automation Personnel Services tension & Research, working with the in Pelham, Alabama. He earned CEO of Shellfish Laboratory on Dauphin Island in the Year recognition from the Birmingsupporting existing and future oyster farm- ham Business Journal in its large company ers in Alabama’s coastal region. “It’s a awards category in December 2015. In Jandream job that I never had even imagined uary 2016, his company earned a Best of after spending my career in the telecom- Staff, Client Satisfaction award. In April, the munications industry,” he says. His oldest company earned Top Tigers recognition as daughter was recently accepted into Au- a fast-growing, alumni-led company. burn University’s School of Nursing, while his other daughter will enroll in the Har- Brenda Weidle Peeples (’84, finance) owns two bert College of Business in the fall. businesses—the Spa Professional Advisors and B Beautiful in Marianna, Florida. She started the Spa Professionals Advisors as a continuing education provider for massage therapists in Florida. Her hobbies include refinishing furniture and finding bargains at garage sales and thrift stores.

Janet Meeks Pettus (’83, finance) serves as billing coordinator for Auburn University, serves as senior director of financial plan- where she has worked for 17 years. Kimberly Galbreath Hielsberg (’87, accounting)

46 HM, Spring 2017


Michael Pilver (’83, business administration)

serves as vice president of automotive sales and product development for APL Logistics in Farmington Hills, Michigan. He celebrated his 15th anniversary with the company in 2016 and his 33rd year in the global logistics and supply chain management industry. His group specializes in supply chain services to support global vehicle assembly and finished vehicle distribution. He remains active as a cyclist, scuba diver, and tennis player.

He provides strategic executive direction of the company’s information technology organization, managing critical data systems and internal software development in support of sales, marketing, and tube-mill production, as well as enterprise systems, data, and corporate processes.

Cheryl Crook Thompson (’83, industrial man-

agement) is a customs and export compliance manager for Eaton’s lighting division. “My career in global trade and logistics has been rewarding—both lucratively and Harith Shaari (’89, information intellectually,” she says. She enjoys reading systems) serves as director of and is “struggling to learn to cook as well.” academics for MyWIN Academy, an “avant-garde setup James F. Tierney III (’85, accounting) is owner for women aimed at foster- and broker at Gulfsands Rentals in Gulf ing innovative and creative Shores, Alabama. His hobbies include remindsets” in Kuala Lumpur, Malaysia. storing, modifying, and showing classic and modern muscle cars, and spending Charles T. Smotherman (’87, accounting) is the time at Lake Martin. corporate controller for Teradata Corporation in John’s Creek, Georgia. He is the Herman L. Wilkes Jr. (’87, finance) is the seproud father of two children—a son who nior advisor for operations at the National recently graduated from the Harbert Col- Search and Rescue Center in Abu Dhabi, lege with a degree in finance and account- United Arab Emirates. His current project ing and a daughter who is a sophomore at originated in 2009 with a small committee Clemson. tasked to improve the capacity of the UAE’s search and rescue system. The system foVictor E. Sower (’80, MBA) is cuses on rescuing individuals in danger at retired as a distinguished sea or on land in situations requiring the professor emeritus at Sam use of aviation or maritime resources. He Houston State University. spends much of his free time on the links The second edition of his at Abu Dhabi Golf Club and wakes up at co-authored book, RFID for 3:30 a.m. during football season to catch the Supply Chain and Operations Profes- Auburn football games. sional, was published in 2016 by Business Expert Press. Another co-authored book, Richard B. Williams (’89, marketing), president We Move Our Own Cheese: a Business Fable of Media Fusion in Huntsville, Alabama, about Championing Change, was published celebrated his company’s 20th year in busiin January 2017 by ASQ Quality Press. ness last year. In October, Media Fusion was named Small Business of the Year by Robert E. Sullivan (’82, marketing) owns Do- the Huntsville Chamber of Commerce in nato’s Pizza in Vestavia Hills, Alabama. He the Government Services category. had previously been retired after working for 28 years in the pharmaceutical industry. He is the proud father of three college graduates and enjoys playing golf.

1990s Jeff Call (’95, accountancy; ’96, MAcc) was

promoted to lead the tax service line at Bennett Trasher in Atlanta four years ago. He has won awards as a “Top Wealth Manager” from Atlanta Magazine each of the last five years.

Staci Skroback Clark

(’91, marketing) has served as chief executive officer of Galo Enterprises for 19 years. The company includes 11 Subway sandwich shops in its holdings. Her travels have taken her to the Cayman Islands, St. Thomas, Jamaica, and Turks and Caicos.

Michael Clifford

(’90, finance) serves as director of information technology for X-Cel Specialty Contacts in Sarasota, Florida. He has been with the company for five years, and has held information technology leadership positions with four different companies since 1990. Hobbies include boating, motorcycling, and following Auburn football, and he also enjoys playing guitar in a band.

Shawanna Buckles Cogar (’95, management) is owner of Chic to Chic Furniture and chief executive officer of SLB Home Furnishings. She recently celebrated the nine-year anniversary of her custom furniture store in Corpus Christi, Texas.

Col. Courtney Cote (’91, busi(’84, finess administration) serves nance) began serving as as project manager for the chief information officer for US Army’s unmanned airSouthland Tube, a leading David Winters (’82, MBA) serves as civil encraft systems at Redstone manufacturer of carbon steel gineering manager for the City of Atlanta. Arsenal. His hobbies include pipe and tubing located in His favorite pastimes include photography following Auburn football and training for Birmingham, Alabama, in November 2016. and videography. running races with his wife, Shelly. Gerald A. Templeton

HM, Spring 2017 47


Kelsey Crook (’94, management information systems) has served as an information technology consultant in corporate America, working with Fortune 500 companies. He has since transitioned into a new career as an entrepreneur, motivational speaker, and founder and owner of N10CT, a non-profit devoted to investing in people. He also owns a small business that provides amenity services to multi-housing and apartment communities in the Southeast and serves as vice president of operations for Atlanta-based Valet Trash. Kelsey played for the undefeated 1993 Auburn football team. Bill Davis (’95, finance) is vice president for A&R Super Markets, which is based in Calera, Alabama. Neal Davis (’93, PhD, econom-

ics) is an industry economist with the US Energy Information Administration in Washington, DC. The EIA is part of the US Department of Energy, and is a principal agency of the US Federal Statistical System, producing energy-related statistics and analysis. Neal is planning to retire in April 2017, and took

a significant step in preparing for this life in 2012, Kristy has worked with the unichange by purchasing an RV last summer. versity’s software provider and served on several development partner groups. She Frank Corley Ellis III (’93, business administra- has also served as a member of the Nation; ’95, MBA) serves in the Alabama tional Association of College and UniverHouse of Representatives, representing sity Business Officers’ Student Financial constituents in District 41 (Shelby County, Services Conference planning committee Alabama), and is self-employed as a real es- for the last three years. She enjoys visiting tate broker. Disney World with her 10-year-old son and 7-year-old daughter.

Karen Heisel (’91, finance; ’92, MBA) oversees sales for the Stubb’s Legendary Bar-B-Q brand for McCormick. She had previously served as national sales director for Stubb’s. She has been married to her husband Neel [’92] for 22 years and the couple has two Christie Granata-Meadows (’97, accountancy) daughters, ages 15 and 12. earned a promotion to director of tax in her 10th year of working for Beall’s in Braden- Dr. Jim Kee (’95, PhD, economics), president ton, Florida. She oversees sales tax, payroll and chief economist of South Texas Money tax, and corporate tax. Management, recently earned the 2016 C-Suite Award in the CEO category from Kristy Turner Harner (’99, fi- the San Antonio Business Journal. He and nance) serves as director of his wife, Lea, enjoy watching Auburn footstudent financial services for ball and are the proud parents of a future Lee University in Cleveland, Auburn Tiger (hopefully) in daughter KelTennessee. Since being pro- lie, 16, and an 18-year-old son, Robbie, moted to her current role who is a freshman at Notre Dame.

Securities analyst supervisor shares tactics for thwarting fraudsters SPENCER LEE sat inside the office of a closed Phenix City Ponzi scheme in 2000 and heard knocking at the fake business’ front door. It didn’t matter that an obvious sign read “Closed by Order of the Alabama Securities Commission.” People still wanted to make investments—even trying to slide checks beneath the door. They had no idea they were giving money away. Lee, who received his MBA from Harbert College in 1992, has assisted in 40 fraud investigations as a securities analyst supervisor at the Alabama Securities Commission since 1999. The case in Phenix City stands out. “When we went to court, our forensic accountant produced a chart showing how many new investors would be needed to keep this scheme going for another year,” says Lee, who lives in Auburn but works in Montgomery. “The chart read ‘one billion.’ All of the air was sucked out of the room—especially the staffers at this business who were sitting right behind me. I got a real appreciation for

48 HM, Spring 2017

how badly some people wanted something for nothing.”

Whether it’s securities fraud or simple telephone scammers, Lee says, “If it sounds too good to be true, it probably is.” Lee says unscrupulous investors take advantage of

people who have little knowledge of the products they are investing in. “Fraudsters are always waiting for these people,” he says. “Fraudsters will change the same way a chameleon does—altering their pitch to match whatever happens to be trending and set their hook with a deal that seems too good to pass up. As for the basic tactics used in many respects, they are the same as always—the scammers use a high-pressure approach, make it seem like a limited time offer, and will employ whatever they can to sway the victim, including guilt, flattery or fear. Elderly investors are prime targets. They are the least likely to hang up when a fraudster calls. They were raised believing it was rude to hang up on someone and sometimes have no one else to talk to during the day. “This demographic group has the largest pool of assets of any in the United States and are susceptible to certain pitches, such as concerns over who may have to pay for their long-term care.”


Derek Meek (’96,

Lee Tindal (’92, international business) serves Brett Allen Bunch (’07, business administraas product manager for BBVA Compass. tion) serves as a business management specialist with US Army headquarters in Cyndi Hammock Varacalle (’97, Arlington, Virginia. He accepted his new marketing) oversees new cli- position with the Deputy Assistant Secreent development as vice pres- tary of the Army, Procurement, in October ident of account development 2016. In this role, he has oversight of and for CulverCareers in San Di- provides support to the Army’s acquisition ego, California. The company community. is a recruiting firm that helps businesses nationwide in meeting their hiring needs. Brent Clarkson (’03, management informaShe has been with the firm for more than tion systems) earned a master’s degree in 17 years. education administration and currently serves as an assistant principal with the Jimmy Owen (’96, manageKaty Independent School District in Texas. ment) is the vice president of advancement for Young Harris College in Young Harris, Georgia. He previously served in the development office at Emory University’s School of Medicine and Woodruff Health Center for five years. international business) is a partner with Burr & Forman in Birmingham. He was recently named chair of the Chapter Presidents’ Council of the Global Turnaround Management Association for 2017. In this role, he will provide oversight and support to all TMA chapter presidents. At Burr & Forman, he focuses on bankruptcy, commercial litigation, counseling creditors and representing various groups in matters related to bankruptcy court.

2000s

J. Don Overton (’92, finance/ accounting) is founder and principal at The Overton Firm and Sustainable Construction. He was selected as NAHB National Director by the Home Builders Association of Greater Little Rock and State Director to the Arkansas Home Builders Association. Brett Sheedy (’95, accounting) is owner and president of Brett S. Sheedy, Attorney at Law, and Strategic Tax & Accounting. Before founding Strategic Tax & Accounting, he served as president of Partners Tax & Accounting and helped increase revenues by 50 percent during his five-year tenure. Steven Speakman (’95, finance) was re-elect-

ed as Lee County District Court Judge, a position he has held since January 2011. He lives in Auburn with his wife, daughter Mary Grace, 8; twin sons Ben and Eli, 5; and a cat. Favorite pastimes include participating in activities at First Baptist Church of Opelika, running the trail at Chewacla State Park, and competing in marathons.

Anthony Alford (’02, MBA) served as chief Sam D. Cobb (’01, marketing) is executive officer of Houston Healthcare, a vice president and producing two hospital system, after earning his MBA sales manager for SunTrust from Auburn and subsequently became Mortgage in Destin, Florida. CEO. He retired and “relaxed and unWhen not at work, you can stressed” before the implementation of the find him spending time with Affordable Care Act. His travels have taken son Brackin, 10; daughter Maddox, 8; and him to Costa Rica, Peru, Ecuador, Hawaii, wife Joanie [’03]. Russia, Mexico, and Israel. Brandon Colvin (’10, business Richard Blohm (’09, human resource manadministration) serves as seagement) serves as human resource mannior operations manager for ager for Group 1 Automotive in Atlanta, Multivista in Birmingham, Georgia. In this position, he oversees HR Alabama. Last year, he marduties for 700 employees in two states. He ried 2011 business alum Emicelebrated the birth of a child in April 2016. ly Austin at the Venetian in Las Vegas. Amra Boucher (’03, marketing) serves as vice

Renata Gallyamova (’08, MS fipresident of operations for Smart Lighting nance) leads a digital risk iniSolutions in Duluth, Georgia. Two years tiative as senior manager for ago, she left her position as regional vice advisory and transformation president with Acuity Brands to launch a at multinational professional small business with her former boss and services and “Big Four” acmentor. Smart Lighting is a manufacturer’s counting firm EY in Atlanta, Georgia. rep agency representing lighting and lighting controls manufacturers in Georgia. She Brad Garland (’04, accounting; and her husband, a fellow Auburn graduate, ’05, MAcc) serves as a consulcelebrated 13 years of marriage in January. tant for full-service CPA firm Brand Blackwell & CompaMegan Brown (’09, accounting) was promotny in Huntsville, Alabama. ed to corporate development finance manHe is also the president and ager at Accenture in Atlanta, Georgia, in founder of Rocket City SGO, a nonprofit December 2016. Her hobbies include read- that provides scholarships under the Alaing, working out, and drinking wine. bama Accountability Act. HM, Spring 2017 49


Faulkner brings lessons learned on the baseball field to healthcare sales The New York Yankees had just invested a half-billion dollars in all-stars Jason Giambi and Alex Rodriguez at first and third base in 2001. “Where was I going to go?” asked TODD FAULKNER, a former minor leaguer in the organization who had been looking to move up the ladder. Instead, the former Auburn two-time All-American swung for the fences in the powerful medical sales industry. In his third year as system sales director at Omnicell, Faulkner now deals with selling pharmaceutical automation equipment. “It’s the second-most touched thing in the hospital behind the health information system, so obviously medications play a huge role,” says Faulkner, who earned a finance degree from Harbert College in 2002, and lives in Atlanta. “We sell software systems and the cabinets that supply the medications. We’ve got 20 hospitals and they can see their inventory at any given second.”

Faulkner, Auburn’s career leader in doubles (71) and total bases (532), is also second all-time in RBI (255) and home runs (50). He played first base for the Tigers from 19982001 and helped Auburn reach the NCAA Super Regionals in 1999. In 2000, Faulkner finished runner-up in Smith Award voting—the college baseball equivalent of a Heisman Trophy nomination. Today, he parlays the lessons he earned on the playing field into a highly successful sales career. “No sport has a higher failure rate than baseball,” he says. “If a player fails to hit 70 percent of the time, he’s going to the Hall of Fame. In business, you’re not going to win every deal. But if you do everything you could at the end of the day and don’t get dejected from failures, and learn from them, over the course of your career you are going to be very successful. “In baseball, you really can’t control how the ball bounces. All you can control is how

prepared you are. The fundamentals of sales are really just making your calls every day, trying to extend your network of meeting people, and building a pipeline. Even though you might not have success in the get-go, if you do that over time you will have success. We always used to say ‘baseball knows.’ If you're cheating yourself and doing just the minimum, you might have success one year, but the next year or the year after that, baseball knows and it will catch up with you. Same thing with sales. If you do the consistent fundamentals all of the time, and you are always trying to get out there and meet new people, you do what’s right and you do what’s best for the customer, they will see that and it will continue to grow. Next thing you know, you’ve become real busy because your pipeline is full, you’ve got people referring you and you’re constantly selling.” Faulkner spent three years selling spinal implants to orthopedic and neurospine surgeons at Stryker before joining Omnicell in March of 2014. “It was a real big change for me,” he says. “Ten years ago, we had 5 percent of the market share. Now, we’re up to 40 percent.”

Lauri Gibson (’03, finance) serves as regional off the job coaching his children’s soccer Lucas Monroe (’09, finance) earned a promovice president of finance for Richmond and basketball teams, boating, and fishing. tion in July to materials manager for tufting American Homes. Her son turned 1 in equipment supplier Card-Monroe Corp., September 2016 and she is expecting the Larry Hipp (’02, management information which is located in Hixson, Tennessee. arrival of a daughter in 2017. systems) is the chief technical officer for Brightwell Payments in Atlanta, Georgia.

Wendy Monroe (’04, logistics) earned two promotions in the last year, becoming supto run worldwide payments for IBM. He Katie Kingston (’07, marketing) is a develop- ply chain manager for Borbet Alabama in previously ran the company’s North Amer- ment coordinator at Auburn University Auburn and a captain in the Alabama Air ican sales for business-to-business and and welcomed a son into the world in 2016. National Guard. payments software. Before coming to IBM, he built and sold a cloud-based software Lawrence A. Martin III (’07, ExecLauren Jenny Pfeiffenberger (’07, company. utive MBA) serves as global international business) serves vice president of research and as a clinical research associBrent Hexkart (’04, MBA) earned a promodevelopment for business ate at PRA Health Sciences tion to chief financial officer at MECS in St. software company Epicor in in Villa Hills, Kentucky. PRA Louis in September 2016. He stays active Atlanta, Georgia. is dedicated to Merck studies. David Heath (’01, MBA) earned a promotion

50 HM, Spring 2017


Casey Rigsby (’07, business administration)

cludes helping the company expand its reach the goal of home ownership, and I serves as mitigation markets representa- Appstore in international markets. wouldn’t trade it for the world,” she says. tive for Westervelt Ecological Services in Auburn. She enjoys working on the family Patrick Fields (’12, accounting) is an audit farm and hunting waterfowl. senior accountant for Cherry Bekaert in Atlanta, Georgia. Shaundra “Sonny” T. Smith (’06, entrepreneurship and family business) is the founder Riley Giadrosich (’14, accounting) serves as a and chief executive officer of Air Care financial representative and full trader with Travelers, an all-inclusive travel companFidelity Investments. His hobbies include ion services company in Atlanta, Georgia Harris Sewell Worley (’07, finance) is an appli- golf and investing, and he recently took a that provides travel support for seniors, mi- cation sales manager with Oracle in Ros- “bucket list” trip to Scandinavia. nors, families, those with reduced mobility, well, Georgia. Previously, Harris worked and more. She was nominated for Jezebel for CareerBuilder and was the top manager Ellen Gooch (’11, business adMagazine’s most eligible Atlantans list, “so in the company for three years, a four-time ministration) is a material and that should tell you that I’m still single!” President’s Trip winner, a member of the logistics coordinator for SVSI She is the author of the upcoming book El- Leadership Development Council, and a by Harman in Huntsville, ephants Can’t Jump! How to Accelerate Your two-time National Sales Manager of the Alabama. SVSI was acquired Ideas, Influence and Leadership in Any En- Year. He married his wife, Audrie, in 2014. by Harman International in vironment. She earned an Excellence in 2016. Hobbies include playing basketball Leadership award from the National Amand completing Pinterest projects. putee Golf Association for her work as an operations director and has been invited to Kelly Hamm (’14, business administration) sit on the committee for the 2021 World began working with MainStreet Family Games as a logistics specialist. Urgent Care last year as part of its marketing team and recently earned a promotion to senior community educator.

2010s

Adrien Helms (’12, marketing) (’12, is a realtor with Weichert Reinternational business) serves altors–Porter Properties in as stewardship coordinator Auburn, Alabama. She is an for Watermark Community Auburn Chamber of ComChurch in Dallas after workmerce diplomat and a tutor ing in the oil and gas finan- for the Lee County Literacy Coalition. She cial software consulting realm. Her duties married Nick Helms in 2015. include overseeing a financial stewardship class and a benevolence ministry. She was Jacob Hobbs (’15, management married in April 2016. information systems) is a customer support specialist with Jeremy Wayne Busby (’11, business adminisVertafore in Pulaski, Tennestration) is a materials planner with JAC see. He will marry his fiancée, Products in Franklin, Georgia. The comJensen Porter, in June. pany is a Tier 2 automotive supplier. He recently purchased his first house. Tom Laming (’12, aviation management; ’13, MBA) has Alexandra Chrys (’16, supply served since August as senior chain management) finished analyst of air service developtraining in 2016 as a staff ment at Omaha Airport Auconsultant for Capgemini in thority in Nebraska. Atlanta, Georgia. She enjoys traveling and hiking. Chelsea Lolley (’15, human resource management) works Madison Dickey (’16, finance) graduated in as a human resource specialMay 2016 and became a mortgage loan conist for Crawford & Company sultant with SunTrust Mortgage in Tampa, in Atlanta, Georgia. She curFlorida. “It is so rewarding to help people rently manages benefits adSylvia McCallum Bateman

Brandy Sponsler (’00, human resource man-

agement) serves as human resource director for the Alabama Forestry Commission.

Keithner S. Tucker (’01, management information systems) works for Radiance Technologies in Huntsville, Alabama, as a program manager. After completing Auburn’s ROTC program, he was commissioned as an air defense officer and served in the military for 21 years. He made the transition into government acquisitions to support PEO IEW&S Aberdeen Proving Grounds in Maryland. His highest honor earned was the Legion of Merit. He and his wife, the former Tiffany N. Lyles, have two children—Christopher, age 14; and Keithner, who is age 6. Juston Western (’09, MBA) accepted a new role as a senior solutions architect for Amazon in London, England. His focus in-

HM, Spring 2017 51


ministration for more than 4,000 employ- Corporation. He was married in the fall of ees and is involved in the design and 2015 and bought a home last summer. implementation of Crawford’s Healthy Living program. She serves as team captain for Mathew Mokler (’11, business the company’s Relay for Life team and has administration) has earned been recognized by its chief executive offithree promotions in his first cer for volunteerism. two years with SHI International in Fort Lauderdale, Elizabeth Mercer (’11, business Florida, and now serves as an administration) is vice presi- account executive. He moved from corpodent of Jungle Scout. She and rate headquarters in Austin, Texas, to the her husband, a fellow Auburn branch location in Florida but represents alum, created a SaaS product the company on a global scale, managing in February 2015. Their prod- accounts with as many as 100,000 employuct helps people find profitable products to ees. His hobbies include watching college sell on Amazon. Their business has now football, snorkeling, and playing with his “grown to a 17-person team all fully remote 1-year-old golden retriever, Aspen. and distributed.” They have since launched other software tools, including Review Precious Morris (’12, human reKick, Splitly, and Fetcher, that help Amasources management) directs zon sellers with reviews, A/B testing, and women’s basketball operaaccounting. Their hobbies include traveltions for Auburn Universiing, and they have visited 20 countries in ty’s athletics department. the last 18 months. She earned several promotions after her second season with the proGreg Mitchell (’10, MBA) serves as participant gram, becoming administrative director of education manager for ETrade Financial the Terri Flournoy Girls Basketball Camps,

equipment operations liaison, and on-campus housing coordinator, as well as overseeing the intake process for freshmen and transfers. She is pursuing a master’s degree in higher education administration and recently organized a book club.

Benjamin Murphy (’11, finance and supply chain management) recently completed his MBA and serves as a senior consultant for Ernst & Young. He studied abroad in Italy for three months and vacationed in Ireland. When he’s not working, he enjoys volunteering, playing tennis, and attending concerts. Evan O’Brien (’14, business administration) is

working to grow payment processing solutions firm PayHawk in Atlanta, Georgia, as its director of business development. The company is a holding of The Rhino Family. His initiatives helped PayHawk grow its customer base threefold in the first three months. “I now work on expanding our team, developing strategic relationships

Nelson and his team create opportunities for Auburn alumni to connect

Left to right: Kelly Triplett-Benton, Drew Ohmstede, Bayless Ydel, Matt Nelson, Dennis McKeen MATT NELSON graduated from Auburn in 2010 with a BS in business administration and finance, and from the University of Alabama with a JD and an MBA in 2014. A vendor risk analyst at Regions Bank, Nelson joined the Auburn Young Alumni Chapter after settling in Birmingham, Alabama. He first became part of the chapter’s leadership as director of

52 HM, Spring 2017

membership development. Now president of the chapter, Nelson hopes to foster its growth. The signature event for existing chapters in Birmingham, Atlanta, Charlotte, New York City, and Nashville is a quarterly happy hour and speaker series. Fully funded by the college, alumni hear from business luminaries such as Raymond J. Harbert, former Auburn quarterback and Campbell Wealth Management founder Randy Campbell, and Delta chief financial officer Paul Jacobson. Nelson emphasizes how the chapter’s meetings create an important space for alumni to meet and exchange ideas. “We’re building on the foundation already started by alumni, and you see a little more of an outreach effort, with more alumni coming to events,” Nelson says. The team's efforts are already seeing results. The Charlotte and New York City chapters just launched last fall. A Texas chapter is on the horizon. Chapters create bridges between community, businesses, and the Harbert College of Business, and Nelson knows that Auburn’s alumni chapters bring benefits not just to

those participating, but to those who may join in the future. Young alumni have the opportunity to serve Harbert College of Business students and the local community through their chapters. Opportunities include speaking to classes and other groups of students and one-onone mentoring with Harbert students. Some chapters have already spearheaded community service projects. “I think, both now and in the future, we will give back to the community and the young alumni themselves,” Nelson says. “We want students to look at the young alumni group as an opportunity, a chance to reach out to a community and connect.” If you want to create change and stay connected to your college, look no farther than your local chapters. “This is a chance to give back, both to Auburn and the community. I think giving members the opportunity to go speak to the students, be on a panel, or take on a mentee are ways to give back to the college. Ultimately, these chapters are here to remind us that it’s not just about us.”


and partnership to increase top of the fun- someone recognizes my lanyard and says, Addison Waller (’15, human renel opportunities, and focus on major ac- ‘War Eagle!’” Smith says. In his spare time, source management) serves count acquisition,” he says. he enjoys coaching 8- to 10-year-old youth as a business consultant with football in Arlington County, Virginia. ADP in Mobile, Alabama. Lukas Ollert (’15, finance) plays She’s engaged to Peyton Jemiprofessional tennis on the Asson, a Harbert College senior sociation of Tennis Professtudying accounting and finance. Addison’s sionals World Tour and won hobbies include duck hunting, fishing, and his first doubles title as a pro reading business-related non-fiction. in August 2016. David Yurko (’13, MAcc) celJoshua Orlich (’11, MBA) ebrated his first anniversaserves as a financial planning Riley Smith (’14, supply chain management) ry as chief financial officer and analysis consultant at is a pilot with SkyWest Airlines in Chicafor Lipman Family Farms Aflac in Columbus, Georgia. go, Illinois. in Immokalee, Florida. The He earned a promotion in business is the largest fieldAugust 2016. He and his wife Caitlyn Rummer Stafford (’10, in- grown tomato company in North America. Alicia have three children—Tegan Page, ternational business) works He and his family reside in Naples, Florida. who was born in 2012; Austin Haddon, as operations coordinator for born in 2014; and Evan David, who was the Boulder, Colorado branch FACULTY MEMORIAL born in 2015. of Techstars, an international startup accelerator program. Capt. Christopher Rattan (’10, finance) is an of- She married John Tyler Stafford in Septemficer and financial analyst in the US Army ber 2016. Her hobbies include skiing, fly SAIC in Huntsville, Alabama. He currently fishing, and hiking with her dog. manages more than $45 million in funds for SAIC as a defense contractor. He also Nikhil Tamhane (’15, MBA) is commands the Bravo Battery 1/117th Field the president of API Heat Artillery unit for the Alabama Army NaTransfer in Montgomery, tional Guard. He is married to his college Alabama. He was promotsweetheart, Tabitha, a College of Engineered from general manager to ing graduate, and they have three sons— president of the Thermasys Sean, 14; Cade, 12; and Lucas, 2. Tubing business unit. His daughter Anika started kindergarten in the fall.

Harris Hollans

Eric Tovar (’14, entrepreneurship) serves as

assistant project manager with The GreenBench Companies, a real estate production firm based in Rockville, Maryland. He previously served as a project engineer for Donohoe Construction Company in Taparit Saetang (’11, finance), who works in Washington, DC. finance for power and data networks supplier Yazaki in Thailand, recently celebrat- Ashley Kreis Vette (’10, MAcc) is a senior ined the birth of son Matthew. ternal auditor with gas and electric utility holding firm Southern Company in AtlanLee Walter Smith (’13, MS, information sys- ta, Georgia. She and her husband, Brandt tems) serves as information management [’09, ’10] welcomed their son Max into the officer for the Secretary of State Mobile world in 2015 and celebrated his first birthCommunications Branch of the Depart- day in November. ment of State in Washington, DC. In his current role, he made improvements to Secretary of State John Kerry’s mobile communications and secure connections to the president, the National Security Council, and foreign leaders. “In my travels abroad with State, it is never surprising when

He loved his students, loved his fellow man, greeted folks with a warm smile, could make the best of any situation—and made the best BBQ on campus. Harris Hollans, associate professor in finance who specialized in real estate at Harbert College and founded the college’s Master of Real Estate Development program, died in February after a brief illness. He was 47. “I knew Harris back when he was a student at Auburn and of course worked closely with him over the years,” said finance professor John Jahera. “He was a wonderful friend who was academically very smart but also had tremendous knowledge about a variety of things from motorcycles to fishing, hunting and, of course, BBQ. I will miss him tremendously. We lost a great friend and colleague.”

HM, Spring 2017 53


Dean’s Last Word

Looking Beyond Our Horizon At Harbert, we’re looking to the future, working to keep our collective gaze aimed over the horizon. It’s a challenge we embrace, for we know we can’t stand still in today’s competitive environment.


F

rom the outside, universities appear steadfast in their ability to resist change. Unlike a Fortune 500 company conditioned to increase market share and fend off ambitious challengers introducing new products and processes, universities historically have faced competition from peers who adhere to similar models and conventions. Defy change in a corporate setting and you may lose your job, or your company may close. In comparison, brick-and-mortar educational institutions may seem to enjoy an enviable level of security. Look at us; Auburn University celebrated its 161st birthday in February. Mission Statement: Yet it would We are dedicated be wrong for an to producing highly desired graduates and observer to assume generating knowledge that Auburn that drives industry and its peers are thought and practice. immutable—and in today’s ever more competitive higher education climate, especially dangerous for us to do so. We cannot afford to confuse everyday adaptability with genuine change. If we’re thinking clearly and speaking candidly about where we are and where we want to go, we won’t make that mistake.

In a sense, Harbert College is the ultimate change machine. We take in 17- and 18-year-olds and, over the course of about four years, help them grow into mature, resourceful professionals. This has been central to our mission for 50 years as a college of business, but the process of cultivating that “highly desired graduate” we speak of in our mission statement depends on our willingness to engage in constant self-study, with the future always in mind. Business guru Gary Hamel once observed that enterprises “fail when they over-invest in what is at the expense of what could be.” We’re determined to avoid that trap. To create change within a college of business, you begin with fundamental questions: Do we want to get better? If so, what do we need to do? The echoes from your stakeholders may not be unanimous, but an overwhelming majority must welcome change and treat it as an imperative. We would not have shared the vision of becoming an elite public school of business if our collection of stakeholders viewed it as inauthentic or unattainable. Our strategic plan was shaped with input from students, faculty,

alumni, and industry partners, and we treat it as a living document. The results of that approach include a built-from-scratch business analytics program, new research centers, an influx of talented faculty, an entrepreneurship summit, a successful comprehensive campaign and, soon, a graduate business building. Against the backdrop of a 161-year-old university, these successes may seem sudden and compressed into a tight time frame, but they were planned and paced in a very purposeful manner, with an eye to the future we want to build. Let’s see them for what they are— not our crowning achievements, but instead the preface for the story we’ll be writing in Harbert’s next 50 years. War Eagle!

Bill C. Hardgrave, PhD Dean and Wells Fargo Professor Harbert College of Business

Share Your News Whether you are an alumnus or a supporter, a student or a parent, you have a stake in our future. We’d love to hear from you. Web: harbert.auburn.edu E-mail: cobletters@auburn.edu

HM, Spring 2017 55


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Auburn University Raymond J. Harbert College of Business 1161 W. Samford Ave., Building 8 Auburn, AL 36849-0001 harbert.auburn.edu

That’s gonna be swell! I can’t wait to get to the Flush to tell the guys!

Have you tried that new “social media” thing, Susan?

Gee! That sounds neat, Carol!

THIS IS AUBURN.

Join the Conversation Facebook: facebook.com/AUBusiness Twitter: twitter.com/AUBusiness LinkedIn: linkedin.com/groups/Auburn-College-Business-Alumni-153974 Instagram: instagram.com/aubusiness

Harbert Magazine - Spring 2017  

We can't avoid change, but that doesn't mean we like it. This issue of Harbert Magazine tackles some of the uncomfortable questions about ch...

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