At some schools, reunions may be little more than an excuse to catch up with former classmates over a beer. At Kellogg, however, Reunion means plenty of networking and socializing, but also opportunities to learn from top professors.
Reunion , held May 4-6 in Evanston, brought nearly 1,600 Kellogg alumni and friends back to school for three days of activities that included several intensive classroom sessions where expert faculty led discussions on subjects such as crisis leadership, marketing, finance, entrepreneurship, family business, and healthcare management.
With seven sessions held over two days, Kellogg alumni were treated to the insights of some top professors. Janice Eberly, Steve Rogers, Daniel Diermeier, David Dranove, Lakshman Krishnamurthi, John Ward and William White all led updates lasting from 75 to 120 minutes.
With topics like “Is the Global Economy Out of Balance?” and “Entrepreneurship and Its Importance to the American Economy,” the MBA Updates delivered on their promise by refreshing alumni with some of the latest thinking on important and varied business topics.
In Eberly’s session, the chair of the Kellogg Finance Department shared her perspective on the implications of the U.S. economy’s debts and deficits. Using historical data to trace the development of the country’s current fiscal condition, Eberly, the John L. and Helen Kellogg Distinguished Professor of Finance, outlined the reasons why capital continues to flow into the U.S. despite facts suggesting that the country should be treated like a bad credit risk, now that its debt is some $8.8 trillion and growing.
With the U.S. government budget deficit “the largest in the world and in history,” according to Eberly, the country is experiencing imbalances in trade and global capital flow. Indeed, far more capital is flowing into the United States than is flowing out, including investment from nations such as Thailand. “This is not what you would expect,” said Eberly, noting that typically capital should flow from more developed countries into less developed states.
The U.S. budget deficit is not a “transient phenomenon,” she said. “It’s been building for years” and is not helped by a near-zero household savings rate, she noted. Eberly also indicated how savings, both for firms and individuals, was connected to investment, since these funds help ventures undertake initiatives. Because U.S. public savings remains low, Eberly said that capital inflows from countries such as China (which currently has invested some $200 billion in U.S. Treasury Bonds) must cover the gap to help finance the deficit.
“You imported a lot [of inexpensive goods], consumed a lot, so therefore didn’t save a lot,” said Eberly, assessing the overall recent U.S. economic situation. “These are all interrelated factors.”
MBA Updates treated alumni to several other professors, including Daniel Diermeier, the IBM Distinguished Professor of Regulation and Competitive Practice, who discussed reputational management. He explained how fast-changing risks were forcing companies to develop formal processes and capabilities for identifying and evaluating future trends and emerging issues related to reputational risk.
In another session, David Dranove, the Walter J. McNerney Distinguished Professor of Health Industry Management, provided insight into the U.S. healthcare crisis, offering suggestions for addressing the costs, quality and access to care. Under consideration were consumer-directed healthcare and quality report cards.
Lakshman Krishnamurthi, the A. Montgomery Ward Professor of Marketing, presented alumni to “The Changing World of Television and Advertising,” providing an overview of how new media sources are having an impact on the traditional world of advertising. The impact of television is declining, Krishnamurthi said, adding that the decline in print advertising is even more pronounced. About 12 percent of total media spending in the U.S. is now being spent on the Internet, he indicated, although this is still mostly “low-impact banner advertising.” Still, video and social networking spaces are creating new opportunities for marketers to get their message in front of hard-to-reach target groups.
Addressing developments in family business was John Ward, clinical professor of family enterprise and an international expert on the subject. His session explored the role of family businesses in the U.S. economy and how family controlled firms compete and perform differently than non-family firms.
Professor William White of the McCormick School of Engineering and Applied Science, meanwhile, showed how some executives were “moving ‘up’ by taking a step ‘back’” in their careers. His discussion revealed how some professionals have found both personal satisfaction and renewed corporate success by following a “premeditated detour off the fast track” once they have learned all they can by traveling a particular career path or if they have discovered that their true passion lies elsewhere.
Steve Rogers, meanwhile, shared his expertise in entrepreneurship and its importance to the U.S. economy. The Gordon and Llura Gund Family Distinguished Professor of Entrepreneurship led an interactive discussion that revealed the numerous ways a person can become an entrepreneur. In the process, he considered why so many entrepreneurs fail.
Drawing on the wisdom of billionaire entrepreneur and recent Kellogg guest speaker Wayne Huizenga, who made his fortune renting everything from videos (via Blockbuster) to industrial-sized garbage bins (via Waste Management Inc.) to loyal customers, Professor Rogers offered up this entrepreneurial mantra: “It’s always easier to sell to an existing customer than to find a new one.”
Rogers is well known for his dynamic classes and, as usual, he insisted that students participate actively in his session. After pointing out that Huizenga is currently in the business of renting seats at the various sports stadia he owns, Rogers asked the alumni, “What other businesses rent seats?”
“Airlines,” someone said.
“Movie theaters,” added a classmate.
“Come on, people,” urged Rogers, who is also the director of the Larry and Carol Levy Institute for Entrepreneurial Practice. “You’re missing one that’s right under your nose.”
Following a hesitant silence, a voice called out, “Education.”
“Education!” Rogers affirmed. “Education is the business we’re in, my friends.” Like any rental business, said Rogers, a university can safely assume its customers will keep paying for seats long after their initial investments. Smiling, he added, “We fancy it up by saying education is provided as well, but we’re renting seats.” Though the similarities between a lecture hall and a coach cabin on a commercial airliner may be few and far between, Rogers said that before entrepreneurs can face the challenges and capitalize on the potential rewards of their businesses, it’s helpful to be a bit reductive:
“When you strip it all away, what’s the business you’re actually in?”
Citing the many American franchises that became wildly successful only after the original owners sold them to enterprising entrepreneurs and the lessons learned during the dot-com bust, Rogers reminded the alumni to be aware of their own weaknesses and of opportunities to pick up the ball where others have dropped it.
“The skills it takes to start a company are often not the same skills it takes to make the company grow,” he said.
Before dismissing the students for the remainder of the weekend, Rogers told them how glad he was to see them all back in his classroom, if only for the 75-minute session: “I see you five, 10 years ago, and I see you now: successful businessmen and -women. It’s always good to have members of the family back home.”