http://www.tuck.dartmouth.edu/news/articles/ en Alicia.N.Green@tuck.dartmouth.edu Copyright 2012 2012-05-23T14:53:05+00:00 http://www.tuck.dartmouth.edu/news/articles/stickney-wins-distinguished-doctoral-alumni-award/ http://www.tuck.dartmouth.edu/news/articles/stickney-wins-distinguished-doctoral-alumni-award/ {media1}The Signal Companies’ Professor of Management, Emeritus, Stickney taught accounting at Tuck from 1977 to 2003, and has authored seven editions of his classic text, Financial Reporting, Financial Statement Analysis and Valuation: A Strategic Perspective, as well as 11 editions of his managerial text, Managerial Accounting:  An Introduction to Concepts, Methods, and Uses. Fittingly, Stickney recently won the 2012 Distinguished Doctoral Alumni Award from Florida State University, where he earned his bachelor’s, master’s, and doctorate degrees in accounting between 1965 and 1970. “For many years,” said Frank Heflin, the Arthur Andersen Professor of Accounting at the FSU College of Business, who nominated Stickney for the award, “untold thousands of students from most of the top MBA programs learned their accounting from Clyde’s books.” One of those students happened to be senior associate dean Robert G. Hansen, the Norman W. Martin 1925 Professor of Business Administration at Tuck. He used Stickney’s managerial accounting book as an undergraduate at Northern Michigan University in the late-1970s, before he even knew that Tuck existed. “And then I came to Tuck and there he was,” he said. Today, the book sits on a shelf in Hansen’s office, filled with the marginalia of an eager economics student. At Tuck, Stickney was loved by students, not only because he was caring and gentlemanly, but also for his ability to teach arcane, non-intuitive accounting principles. “I think Clyde takes the top honor for teaching accounting at Tuck,” Hansen said. “Accounting is hard stuff, but Clyde had a way of putting it into an approachable, sensible context.” This skill was especially helpful when Stickney taught newly graduated liberal arts college students in Tuck’s Business Bridge Program. Stickney was also lauded for his research, which delved into multiple aspects of financial statements and how differences in accounting methods affected price-to-earnings ratios and the evaluation of corporate strategies. Since he retired in 2003, Stickney has been living in his native Florida, teaching adults at his church and doing genealogy research. Accounting, Alumni, Faculty, News, Teaching, Tuck Today iPad app, 2012-05-23T14:53:05+00:00 http://www.tuck.dartmouth.edu/news/articles/not-so-fast/ http://www.tuck.dartmouth.edu/news/articles/not-so-fast/ {media1}Since then, the so-called Buffett Rule, which would require households with more than $1 million in adjusted gross income to pay at least 30 percent of it in taxes, has been put forth as a more equitable way for the government to raise revenue. Yes, framing tax policy analysis in terms of the effective tax rate—the ratio of individual income tax to taxable income—is simple and convenient because the data needed to compute the rate for an individual in one year can be obtained from a single tax return. However, this approach misses the larger picture. Warren Buffett has a low individual effective tax rate because dividends and realized long-term capital gains face a tax rate of 15 percent, even though other forms of income are taxed at rates up to 35 percent.*  Consider "Thurston," a hypothetical high income taxpayer with ordinary income (salary less deductions) of $2 million and dividend income of $13 million.**  Suppose that without the dividends, Thurston would have an income tax liability of $660,000, yielding an effective tax rate of 33 percent ($660,000/$2 million). The dividend income increases Thurston’s tax by $1.95 million ($13 million x 15 percent) but lowers his effective tax rate to 17.4 percent ($2.61 million/$15 million). Buffett refers to Thurston’s low effective tax rate as "coddling the super rich." What this line of reasoning fails to acknowledge is that the dividend income eligible for the 15 percent tax rate has already been taxed at the corporate level, so the individual tax on dividends is the second tax on the income, not the total tax. Suppose that a corporation owned by Thurston invests in a manufacturing plant that generates annual pretax cash flow and taxable income of $20 million in perpetuity and is depreciated for tax purposes at the same rate that it decays economically. The government collects $7 million annually in tax, and the remaining $13 million is distributed to Thurston. A very different picture of the taxes associated with Thurston emerges if we consider all the income and all the taxes. The pretax income for Thurston is really $22 million: $2 million ordinary income and $20 million of pretax corporate earnings. The tax on this income is $9.61 million: $7 million paid by the corporation and $2.61 million paid by Thurston, giving Thurston a combined effective tax rate of about 43.7 percent. The Buffett Rule would raise this figure even further. The 43.7 percent figure never appears on any single tax return, but it is a far more meaningful measure of the tax associated with Thurston in this setting than the 17.4 percent individual effective tax rate that is more easily calculated. Now suppose that the manufacturing facility is "tax-favored"—the tax code allows it to be depreciated more rapidly for tax purposes than the rate at which it decays economically. This would decrease the corporate taxes paid in the early years of the project, increase them in later years, and decrease the present value of the government’s tax collections over the life of the project. The combined tax rate in any one year could be higher or lower than the 43.7 percent figure in the first example, so no single year would necessarily be representative of the combined tax rate on the entire project. Further complicating the analysis is that tax favored projects often involve lower pretax rates of return, as entry into the tax-favored industry drives the prices of inputs up and outputs down. The decrease in pre-tax rates of return represents opportunity costs, or "implicit taxes," that don’t show up on the tax return of either the corporation or the individual taxpayer but that are critical to understanding the burden of the corporate income tax. Regardless of the tax rate you think Thurston should pay, it is disingenuous to frame the problem in a way that focuses only on the shareholder tax on dividends while ignoring the corporate tax on the income that made the dividends possible in the first place. The Buffett Rule should be debated on its merits. The individual effective tax rate provides a convenient sound bite, but it is not useful for informing the debate. *The 15 percent tax rate on dividends is a relatively recent change in U.S. tax law. Prior to 2003, dividends were taxed as ordinary income. Unless extended, the lower rate on dividends will expire at the end of 2012. **Similar issues arise with respect to realized long-term capital gains from stock sales, but the analysis is more complicated.   Accounting, Faculty, News, Featured Media Content, Tuck Today Ideas, Tuck Today iPad app, 2012-05-21T18:42:01+00:00 http://www.tuck.dartmouth.edu/news/articles/proof-of-concept/ http://www.tuck.dartmouth.edu/news/articles/proof-of-concept/ Bright sunlight streams through the row of windows along one wall, while the fan in the office’s air-conditioning unit hums away in the corner. “It’s cooling the room just because I’m on this side of the building,” says Healy. “I just came from an office about 50 steps away that’s running a heating unit—if the manager knew to turn this off and turn that off, we’d be fine, but they don’t have any alarm.” Healy pays attention to energy. In fact, you might say he’s a little obsessed with it. As CEO of EnerNOC, it’s his job to play the role of that hypothetical building manager, albeit on a much grander scale. During times of extreme weather—a summer heat wave in the Northeast, for instance—homes and businesses running air conditioners and other appliances full tilt put tremendous stress on the energy infrastructure. If there’s too much, it can lead to a power outage. Healy’s team at EnerNOC makes sure that doesn’t happen, cutting deals with companies to automatically shut off their nonessential functions during peak times in exchange for a portion of the savings. “We’ll turn off a third of the lights at the grocery store, turn the rock crusher from crushing rocks to maintenance mode, unplug all the forklifts in recharging mode,” he says. “Press a few buttons here in Boston, and suddenly we can make 7,000 megawatts of electricity disappear off the grid.” Healy makes it sound simple when, in fact, the U.S. electricity grid is mindbogglingly complex. The National Association of Engineers has called it the “greatest engineering achievement” of all time—putting it ahead of the automobile, spacecraft, and computers. Standing in EnerNOCs lobby, you can see why—on the wall, a massive map of the nation’s electricity grid is a spider web of colored lines and dots that belies the ease with which we flick our light switches on and off. Healy first had the idea to do something to streamline the energy market when he entered Tuck in 2000. His father was in the alternative energy field, and he planted the idea in his son’s head that if customers were only able to track their energy use more wisely, they could create incredible efficiencies in the system—driving down demand, saving energy, and cutting costs across the grid. At the time, information technology was creating incredible opportunities to micromanage data on finances, human relations, and supply chains. But company profits and customer apathy kept energy information in a black box, with no one to help customers connect the dots to decrease energy usage overall. {media1}Healy focused like a laser on the task. “It was just a maniacal focus on the entrepreneurial endeavor,” he says. He started by interviewing every classmate who had any energyrelated experience on his or her resume—finally partnering with classmate David Brewster, who would become a co-founder of the company. During their time at Tuck, the two turned to the school’s alumni network to learn all aspects of the business they hoped to create—untangling the intricacies of the energy grid, understanding marketing and sales, and signing up initial customers willing to take a chance on the unproven technology. By graduation in 2002, they had founded EnerNOC with two additional employees. By the time the company went public in 2007, they had more than 100 employees and $26 million in revenues. As energy prices continued to rise and interest in sustainability skyrocketed, they were poised to take advantage of the market. Now, five years later, the company has grown to roughly 650 employees and $300 million in revenue—with some 5,000 customers around the world. Healy walks across the office to his “desk,” a chest-high stainless steel podium that looks like something off the bridge of the Starship Enterprise, and clicks a few buttons. “We’ve saved customers over half a billion dollars,” he says. “That’s a pretty good amount of money.” For all of their success, Healy says he and Brewster could not have launched EnerNOC without the support and encouragement of Tuck and its alumni. “If you were going to tell me 10 years after graduating that I’d be running a global corporation dramatically changing one of the largest industries in the world, and asked me where I should have gone to business school to prep for that,” he says. “I can tell you there’s only one place I’d choose.” He’s not alone. According to a recent analysis of its members by LinkedIn, Tuck ranks fifth among business schools whose graduates have started companies since 2000, behind only Stanford, Harvard, MIT Sloan, and the Haas School of Business at University of California, Berkeley. Tuck’s own numbers bear out the strong entrepreneurial drive: 10 percent of graduates report starting a business within 15 years of leaving Tuck; after 25 years, that number grows to 25 percent. What makes Tuck graduates so entrepreneurial? Senior Associate Dean Bob Hansen points first to the school’s natural surroundings. With the mountains of New Hampshire as a backdrop, Hansen speculates that Tuck attracts students who prize “adventure and a frontier mentality.” These are not people who are going to be working at a desk the rest of their lives,” he says. Second, research shows that the most successful entrepreneurs are not mavericks but those who excel at creating partnerships and teams to carry forth their vision. “Tuck has an advantage right there,” says Hansen, pointing to the school’s small scale, residential focus, and emphasis on teamwork. “As a student, you leave here with a handful of really good friends—people you would trust executing your will—and then 250 people you know reasonably well, so you can say later, ‘Mary was in that marketing research class, and she was good at marketing. I wonder what she is doing.’” As much success as Tuck has had in creating entrepreneurs, many still wondered whether the school could do more to help students get their businesses off the ground. The result of the deliberations? Tuck’s new Entrepreneurship Initiative, launched last fall, which acts as a clearinghouse for entrepreneurial resources. “When you come to Tuck, your mind becomes this big sponge and you start absorbing things you haven’t thought about before,” says Joaquin Villarreal T’08, manager of the initiative. “If we expose people intensely to entrepreneurial issues, maybe we can find that dormant interest in other students to start thinking entrepreneurially.” {media2}Originally trained as an engineer in Argentina, Villarreal worked in strategy consulting after Tuck and later co-founded a California-based animation studio. When he returned to the school to seek business advice, he was approached to see whether he would be interested in looking at how entrepreneurship resources at Tuck could be improved. Recent years have seen a big uptick in interest among entering students, 40 percent of whom list entrepreneurship as one of their top three interests. The number of students picking an entrepreneurship venture for their First-Year Project has also skyrocketed, says Villarreal. At the same time, the students he spoke with said they would welcome a more formal entrepreneurship program. “Students were making use of the faculty and other resources, but there was very little structure around it,” says Villarreal. He helped establish the initiative as a student-facing program that would serve as one-stop shopping for an MBA student looking to start a company from the ground up. “The most asked question is, What courses should I take and when? We basically provide them with a road map so they don’t miss an opportunity.” There’s an ongoing debate in business circles about whether entrepreneurs are born or made. (One somewhat controversial study even suggests entrepreneurship is genetic.) Villarreal compares it to the quality of leadership—something that has inherent traits but that can also be taught. That’s a definition embraced by associate professor Ron Adner, who teaches the Entrepreneurship & Innovation Strategy elective. As he expresses in his new book, The Wide Lens, published this spring, the mistake many new entrepreneurs make is to focus so much on their own project that they miss the wider “ecosystem” of their industry, which can determine whether their idea ultimately succeeds or fails. “It’s not, How do you do a great job with your piece? It’s, How do you do a great job with your piece so it fits in a broader way?” When students are serious about creating a company, however, there’s no substitute for actually creating one. That’s where experiential learning comes in handy, staring with the Introduction to Entrepreneurship course taught by adjunct professor Gregg Fairbrothers D’76. “I don’t feel like I teach entrepreneurship,” says Fairbrothers, an entrepreneur himself. “I guide people toward a process where they can’t help but teach themselves.” The distinction is crucial, he says. There are just two assignments in his course: that students come up with an idea for a company in the first 10 days, and that they are ready to make a full investor pitch in eight weeks. Fairbrothers says the hard part for most people isn’t coming up with an idea—a recent poll found 60 to 80 percent of Americans thought they had a good idea for a business—but figuring out how to turn that idea into something practical. In his course, he challenges students with the risks and impediments they might encounter in turning their idea into a reality; if they can’t overcome them, they must change their idea—or kill it. “The problem is people fall so in love with their baby, they can’t leave it. They hold on to an idea way too long,” he says. “It’s just an idea, it’s not a baby. The whole thing about building value into a company is taking away the risks. You have to get into this mindset of not being afraid to ask the tough questions.” That mindset was especially helpful to T’12s Gavin McGrath and Prasad Joglekar in launching the travel website Ruxpin. Their initial idea was to build a website that would help travelers calculate the total cost of a trip. But when they tried to validate the idea, they quickly realized it was more of a website feature, rather than a main focus. Next, they explored the area of group travel but found the dynamics were too complicated to simplify for the average traveler. Finally, they settled on a site to help business travelers pick hotels based on things that were important to them. Rather than spend time researching individual hotels on different websites, Ruxpin suggests hotels based on a traveler’s previous preferences and the preferences of similar travelers, putting a dollar value on each feature—whether that’s a pool, a business center, or an ocean view—and letting users determine how much each is worth to them. At each stage of the process, McGrath and Joglekar refined their idea until they found something that would work. “The idea might be awesome or it might be awful, but it’s not until you start diving into the details that you come up with problems right away, and if any of those problems are insurmountable, you want to ‘fail fast,’” says Joglekar. “That’s what we did in class. Without spending too much money, we figured out how to rectify the weaknesses.” After their first year, the two entrepreneurs were able to further expand the idea with the support of Tuck’s Barris Incubator Program, which provides office space and modest funding of $2,500 to three entrepreneurial projects a year. McGrath and Joglekar built their entire site for $1,000 by outsourcing the development work, purposely emphasizing speed over quality to identify the kinks before getting too far along in the process. “The small stipend was helpful to us,” continues McGrath, “because it constrained us and helps us make good decisions about what we are going to tackle.” Just as invaluable, however, were the tens of thousands of dollars in pro bono legal work the students received through the incubator to incorporate and deal with investor contracts. “We have friends who are on the hook for $100,000 in legal bills that are deferred until they earn money,” says McGrath. “The fact that we don’t have that is great for the business and great for investors too.” {media3}Along with more formal resources, the Entrepreneurship Initiative also helps students tap into the powerful network of alumni that has helped so many Tuck entrepreneurs along the way. Indeed, that was the very reason Kate Reiling T’09 came to Tuck in the first place. The journey of her company, Morphology, started on a snowy winter night in Minnesota, when she had some friends over to play board games. Stuck without a game everyone could agree on, she took a few pieces from Jenga and a few from Pente and created her own brand of Pictionary, where players choose words out of a dictionary and try to build them out of the three-dimensional pieces. The game became an obsession for Reiling and her friends, and she began buying random objects to create a prototype, play-testing it at a local coffee shop. When a customer offered to buy the game from her, she began applying to business schools to figure out how to make it herself. “The decision to me came down to Tuck and another school,” Reiling recalls. “At Tuck, I felt I would have better access to the people and things I would need to launch this company at a place that might be more open-minded to the broad array of possibilities.” {media4}She embraced the “learning by doing” philosophy of Fairbrothers’ course, relentlessly play testing the game on campus, weeding out pieces, and adding new words according to feedback from players. Even so, Reiling didn’t think about everything needed to take the game to the next level until she met Richard Tait T’88, inventor of the game Cranium, who was visiting campus. At the Lebanon airport, while waiting for his flight to leave, Tait went through Morphology piece by piece with Reiling, suggesting not what could be added but how existing pieces could be better designed and packaged. “Looking back, it was obvious,” she says. “He was like, ‘You’ve got the concept down, but now you need to spend time on the other pieces. You are OK to move on.’” That was the encouragement Reiling needed to go to friends and family and raise the necessary funds to produce an initial 250 games. She sold them all within 10 days. Since then, sales have tripled every year for the last three years. “Tuck changed my life— that’s not a throwaway comment. I can’t see myself having the courage and maybe even the skillset without a Tuck degree.” Building on those success stories, Villarreal says he hopes the new Entrepreneurship Initiative will help extend Tuck’s approach to entrepreneurship across campus. “That model is working really well; now the idea is trickling it down to all students, who are maybe not as intense but who still need the support,” says Villarreal. That includes not only Tuck students but students and faculty in the wider Dartmouth community. “Five MBAs in a room might not be the best guys to produce a revolutionary technology,” he says. “We’re reaching out to Thayer, Dartmouth Medical School, The Dartmouth Institute for Health Policy and Clinical Practice, and Dartmouth itself to figure out ways to integrate better.” At the Greener Ventures conference this spring, Villarreal invited the entire Dartmouth community to think about the theme “Innovation at Dartmouth: What’s Next” with panels on international, medical, and environmental entrepreneurship. “The conference is basically an excuse for Dartmouth as a whole to think about innovation and entrepreneurship and encourage cross-campus collaboration,” says Villarreal. “Schools can get stuck in their own universes, and sometimes you need to make an effort to break through that.” To continue the momentum, the initiative has created an online meeting space called Start-Up Hub to initiate virtual discussions among MBAs and students and faculty at other Dartmouth schools. Learning how to think big and develop game-changing ideas can be a marketable skill in any company, as Tim Healy has found at EnerNOC. The company recently inaugurated an “intrapreneurship” program, allowing one employee to leave his or her position to pursue a “big idea” within the organization, with a chance to earn a “million-dollar payoff” if it succeeds. The first recipient, appropriately enough, is a Dartmouth alum. Each fall, Healy and Brewster drive up to Hanover to speak to students in the school’s Advanced Entrepreneurship course about their experiences, bringing the advice they got from alumni a decade ago full circle. “When I go back to Tuck,” says Healy, “I think, ‘What if this is the year that something David or I convey touches one aspiring entrepreneur who wants to change his or her industry.” Alumni, Entrepreneurship, MBA, News, Featured Media Content, Tuck Today Feature, Tuck Today iPad app, 2012-05-15T19:59:58+00:00 http://www.tuck.dartmouth.edu/news/articles/flour-power-steve-voigt-t86/ http://www.tuck.dartmouth.edu/news/articles/flour-power-steve-voigt-t86/ Whether baked goods are the definitive answer to global strife or not, one thing’s for sure: It has certainly done wonders to bolster the following of King Arthur lately. And some of the company’s most ardent fans are its employees—all of whom are regularly encouraged to learn about and practice baking as much as possible through classes, community outreach, and free baking supplies. For Voigt, it’s as much a business strategy as a way of life. “We’ve never considered ourselves just an SIC code,” says Voigt. “It’s as important to us to teach and promote the baking culture as it is to sell the most wonderful products.” It wasn’t always thus. When Voigt came to the venerable institution in 1992 as the vice president of finance, he had his work cut out for him. Founded in Boston in 1790, King Arthur had been owned and operated by the same family for five generations, and it enjoyed a trusted, if staid, reputation. “Here I was at a company that wanted to get where it needed to be, but in a socially responsible way,” he says. Then, a few years after Voigt joined on, the company embarked on a plan to sell shares to an employee stock ownership plan. In the meantime, in 1999, Voigt took over as president and CEO. Today, he leads a company that is owned entirely by its 240 employees. Since Voigt, whose background is in finance, took up the mantle, the changes have come fast and furious. Not the least of them is a brand new, state-of-the-art Baking Education Center, expanding room for classes and demonstrations for employees and community members. Courses with names like The Fundamentals of Bread Baking, Setting Up A Successful Bakery, and That Takes The Cake: Divine Decoration regularly sell out and have waiting lists. {media1} They also offer classes online, and employees travel all over the country to teach in-person sessions and spread the gospel of good baking. Voigt has a team on the road constantly, talking to high schoolers about how to make pizza, explaining to crowds how yeast makes bread rise, and presenting at conferences about the benefits of baking with whole grains. But that education and enthusiasm about baking always starts from inside the company before it moves outward, insists Voigt. “The more we empower our employees to love what they make, the easier it will be for them to share that with the larger community.” To that end, in addition to discounts on baking supplies at the company store, all employees get a free bag of flour every month—and a number of them act as instructors themselves. The results are nothing short of inspiring. “People are so interested in baking. They come to visit us here, to a class or to our store, to see our bakers bake here, and they’re so happy, it’s like they’ve arrived at mecca.” Sitting at the center of such a passionate community can make for a lot of moving parts—a fact Voigt is quick to recognize. “There are still new things happening all the time here,” he says. “We’re making so many changes and creating new programs out of many diverse ideas.” As far as how he keeps up, Voigt credits his time at Tuck with providing him with the raw know-how. “There are so many things to keep on top of in a midsize company; you have to wear a lot of hats,” he says. “My professors at Tuck taught me to be nimble and how to be very good on your feet in a triage situation. You figure out how to get a lot going in a very small amount of time, and you have to learn to put certain things on ice but always be fired up about everything.” Getting—and staying—fired up doesn’t seem to be much of a problem for Voigt and his crew, who, on top of their education programs, keep the community engaged with a popular blog called “Baking Banter,” a series of cookbooks, and a recipe-filled, colorful bimonthly newsletter, “The Baking Sheet.” But for all of King Arthur Flour’s recent innovations, Voigt insists that it’s also fundamentally the company’s history that keeps folks coming back. “So much of what attracts people to the company,” he says, are “long-standing traditions.” And the fact that everyone is as involved in the mission as they are, he says, helps empower them to keep driving the company forward. “All of our employee owners,” he adds, “know they have the help they need to overcome roadblocks.”   Alumni, Careers, Finance, News, Featured Media Content, Tuck Today iPad app, Tuck Today Alumni News, 2012-05-15T16:09:45+00:00 http://www.tuck.dartmouth.edu/news/press-releases/tuck-fundraiser-races-into-28th-year/ http://www.tuck.dartmouth.edu/news/press-releases/tuck-fundraiser-races-into-28th-year/ On May 19, the Tuck School of Business at Dartmouth will host the 28th annual Run for the Kids. The student-organized charity road race features a 10K, 5K walk/run, and a 1K kids' fun run. The event provides people with an opportunity to connect with and give back to the Upper Valley Community. The race is family-friendly and all funds raised will go to three local nonprofit organizations: David's House, the Children's Hospital at Dartmouth (CHaD), and Upper Valley Child and Family Services. Over its history, Run for the Kids has raised more than $190,000. In 2011, more than 150 runners registered, and the event raised over $3,000 for local charities. This year, Tuck students plan to raise more money than last year by enlisting greater community participation. "Run for the Kids has been a great Tuck tradition for almost 30 years. We want to take this chance to give back to the Upper Valley community. We are grateful for the wonderful support from the school, our classmates, and the generous sponsors this year: Mascoma Savings Bank, RSG, King Arthur Bakery, TomTom, Brooks, Systems Plus, Long Trail Brewery, TuckStuff, and Bagel Basement" says Mickey Chena, a second-year Tuck student and co-chair of the event. "Every year, we see everyone having so much fun throughout the event to support a great cause." Race day check-in for racers and volunteers is 8:00 a.m. in Tuck Circle on the Dartmouth College campus. The race starts at 9:00 a.m. Runners can register before the race at www.runforthekids.org. The first 250 racers will receive a free t-shirt. David's House is a home-away-from-home for families with children being treated at Dartmouth-Hitchcock Medical Center. David's House requests $20 per night for rooms and meals which covers only a small portion of its operating costs. Families are never turned away if they are unable to pay and donations help defray the remaining costs. Through its Child Life Program, CHaD provides opportunities for children and families to develop a better understanding about hospitalization and illness in order to minimize psychological trauma. Run for the Kids' donations are used to purchase toys, games, and other supplies for the ChaD program center. Upper Valley Child and Family Services is a private, nonprofit organization dedicated to advancing the well-being of children by providing an array of social services to strengthen family life and by promoting community commitment to the needs of children. Funds raised through Run for the Kids will help support services to Upper Valley communities.   2012-05-14T13:59:59+00:00 http://www.tuck.dartmouth.edu/news/articles/small-world/ http://www.tuck.dartmouth.edu/news/articles/small-world/ That included seeing Standard Bank’s efforts to expand in impoverished areas like Soweto and learning about the mining company Anglo American’s attempts to combat the spread of HIV/AIDS by offering free anti-retroviral treatments to workers. “It was very interesting to get the perspectives of many senior executives,” she says. “Africa is really the next big opportunity and having this experience and understanding how things are done in South Africa will definitely be very helpful throughout my career.” Bouvron’s exposure to global business won’t end with her return to Hanover, however. Like other top MBA programs, Tuck is increasing its international course content and programming, but is doing so in a way that only Tuck can. In addition to Learning Expeditions, students can broaden their global mindset through curricular offerings such as the Tuck Global Consultancy, First-Year Project, Research-to-Practice seminars, and independent studies that emphasize small-group learning with faculty involvement. {media1}Tuck also encourages students to form global education plans and offers counseling to help them understand the options available to them and how they fit with their individual needs and goals. “We’re telling people up front, ‘These are all your options. Now let’s focus on your goals and how to reach them,’” says Penny Paquette T’76, assistant dean for strategic initiatives at Tuck. “We’re trying to help them get the most of what Tuck has to offer.” Tuck’s approach is predicated on the belief that every student needs a global mindset, even if they plan to work in their home country after graduation. For example, American student Ben Dower T’12 plans on joining the Chertoff Group in Washington, a security and defense consulting group founded by former secretary of homeland security Michael Chertoff. Dower has gone to South Africa on the Learning Expedition, been to Peru for a Tuck Global Consultancy project, worked with Tuck’s Center for International Business as an MBA Fellow, and studied the European debt crisis and the bubble in Spain’s solar market through a mini-course at Madrid’s IE University Business School in 2011. “The Chertoff Group works with some clients in a number of different countries in Africa, Asia, South America,” he says. “They’ve got plenty of homeland security and defense expertise there. Thanks to my experiences at Tuck, it’s more the intangibles that I can add.” With global trade increasing at about 6 percent annually for the past two decades, the need for MBA students to grasp the norms of international business is only accelerating. “I fear that some students don’t fully realize the immediacy of globalization when it comes to their careers,” says Lisa Miller, executive director of Tuck’s Center for International Business. “The integration of the global economy has proceeded at a rapid clip. So we think that no matter what you do, there will be a global dimension to your career.” Miller, who previously lived in China, Taiwan, Singapore, Tunisia, Vietnam, and France before coming to Tuck in 2006, tries to get students to engage in projects in parts of the world of which they may know little about. “Sometimes their global education plan will be driven by career goals, sometimes it’s more driven by their personal background,” she says. “Many seek to gain experience with countries they haven’t been to before.” One of the most popular options for Tuck students interested in enhancing their global mindset is the Tuck Global Consultancy, in which teams of second-year students travel overseas to advise an international company; recent clients were based in the Czech Republic, China, and Jordan. Dower and classmate Ose Oteze, who is originally from Nigeria, spent three weeks in Peru last November and December with a team of students consulting for a company that builds modular housing for the country’s booming mining industry. “The company had been growing rapidly and wanted to see if its organizational structure made sense,” says Dower. “It had done a number of acquisitions and had only one back office.” During the project, Dower also learned that the founders of companies in South America often play a more active role in managing all facets of operations than their counterparts do in the United States. While many of the Tuck team’s recommendations were well received, their advice that the company’s chief executive should delegate some tasks was greeted coolly. “This person wanted to retain a lot more control and I think that’s fairly typical in South America of individual or family controlled firms,” he said. “We got pushback on this.” The global consultancy project was an intense in-the-field experience, says Oteze, who also went to China last year on a Learning Expedition. “It was really hardcore, working 12-hour days minimum,” she says. “It definitely added to my understanding of an international business climate and it was something that will help me going forward.” Fresh off her South Africa Learning Expedition, Bouvron says that Tuck provides more international opportunities than many expect. Along with the travel-abroad programs, there are also numerous on-campus programs and activities with a global theme: conferences, guest speakers, panel discussions, and cultural events. International students also make up about a third of the student body and many American students have lived and worked outside their home country as well. Programs such as Country Chats enable these students to share their experiences with the whole community. “There are so many ways to develop and nurture a global mindset while in business school,” adds the CIB’s Miller, “and we want to continue to offer programs, especially in emerging markets, that have a lasting impact on our students.” Curriculum, International Business, MBA, Students, Tuck Today Portfolio, Tuck Today iPad app, 2012-05-10T17:27:14+00:00 http://www.tuck.dartmouth.edu/news/articles/tuck-gives-raises-68000-for-nonprofit-and-public-sector-internships/ http://www.tuck.dartmouth.edu/news/articles/tuck-gives-raises-68000-for-nonprofit-and-public-sector-internships/ Stop AIDS Now, a non-governmental organization based in Amsterdam, got a lot out of Kelly Winquist T’12 during her internship there last summer. Winquist, who’s also pursuing an MPA degree at the John F. Kennedy School of Government at Harvard University, wrote a grant proposal and helped create a development project to allow grandparents in Ethiopia to care for the orphans and vulnerable children in their communities. By the same token, Winquist benefitted a great deal, too: she got real-world experience that put her one step closer to her dream job as CEO of World Vision or Save the Children. But none of it would have been possible without Tuck GIVES, an annual auction at Tuck that raises money to support students like Winquist in nonprofit and public service internships that otherwise don’t have the financial capacity to hire MBA students. “Stop AIDS Now was able to provide some funds,” Winquist, a co-chair of this year’s event says, “but Tuck GIVES added enough to make the internship feasible.” The GIVES in Tuck GIVES stands for “Grants to Interns and Volunteers for the Environment and Society,” and it’s a program that Tuck students have organized—with the support of the Allwin Initiative for Corporate Citizenship, the Career Development Office, and the Dean’s Office—since 2001. Over the past 12 years, the auctions have raised a total of $658,000 and funded 135 interns. This year’s auction, which took place on April 12, was another resounding success: it brought in more than $68,000 and is funding at least five student internships in Maine, California, Africa, and the Philippines. One of them is Alvin Choy T’13, who will be a Farber Intern at REDF, a venture philanthropy firm in San Francisco that funds and advises nonprofits that help disadvantaged people find jobs. Before Tuck, Choy worked at an investment management firm and an Internet startup, but Tuck GIVES is allowing him to try something different. “I wanted to use the internship as a way to explore the nonprofit sector/social impact space, while still being able to apply the things I’ve learned academically,” he says. At REDF, Choy will help evaluate which nonprofits the firm should support, and provide operations consulting to some organizations REDF is already funding. “This is a chance for me to give back as well as find a greater sense of purpose,” he says. The main engine of Tuck GIVES is the live auction, which is usually a spirited mix of fundraising and “fun-raising” (the theme this year was the “roaring twenties” and Raether Hall was transformed by Tuck students and partners into a ballroom of Gatsby proportions, including a speakeasy). The items up for bid vary from year to year, but they always reflect the interests and skills of the Tuck community. Some examples from this year’s auction included a Titanic 100th anniversary dinner party for eight people, stick shift lessons in a Porsche, Belgian chocolate, Mandarin lessons, and a South Carolina pulled pork barbeque for 15. “We found that the more creative auction items raise more money and awareness,” Winquist says. “Plus, they usually end up facilitating later interactions among faculty, students, and staff in the Tuck community.” Months before the big auction, the Tuck GIVES team took every opportunity to draw attention to the event’s purpose (and, of course, the opportunity to donate), organizing a candy-gram drive around Valentine’s Day, pong, and poker tournaments, and collaborating with Tuck’s social chairs on a Texas party. “Everyone had to make a donation to Tuck GIVES in order to ride the mechanical bull,” Winquist notes. The co-chairs of the event had weekly meetings since the end of last year, and during the two weeks before the auction the organizing was almost a full-time job. “It was a substantial commitment,” says Winquist, “but well worth it.” The value isn’t just for the students who secure grants for their internships. Putting MBA students into nonprofit and public sector organizations that typically can’t compete with private sector salaries has a more subtle effect: proving the impact that business knowledge and skills can have. “Over time, I think it will encourage nonprofits to create long-term positions for MBA graduates,” says Tuck GIVES co-chair Kellie Jo Ciofalo T’12. “That just gives us more options to use our business degree and help society as a career.”   Corporate Citizenship, MBA, Students, Tuck Today iPad app, 2012-05-08T18:55:37+00:00 http://www.tuck.dartmouth.edu/news/articles/tuck-launches-entrepreneur-in-residence-program/ http://www.tuck.dartmouth.edu/news/articles/tuck-launches-entrepreneur-in-residence-program/ At the end of March, serial entrepreneur Mark Ranalli T’92 stood before a room full of Tuck students and told them the story of his business life. It started in 1996, when he became vice president of Fax International, a global IP communications company. Then he launched BaseSix, a marketing strategy firm that served companies such as AT&T Broadband, AOL, and HBO. From there he founded Helium, Inc., which bills itself as the world’s largest editorial content provider and was purchased by R.R. Donnelley last year. After Helium came OurStage, a website where musicians go to get discovered. On the whiteboard, Ranalli had written some topics for discussion: Ideation phase Funding Execution lessons Should you work with a VC? Exit challenges Life as an entrepreneur Boards, advisors, friends When Ranalli opened the floor for questions, they came hurling at him fast and thick. “How did you protect Helium from copycats?” one student asked. The company was susceptible to such a problem because it was the first to create a platform for crowdsourced, peer reviewed writing. “We patented it,” Ranalli said, “and we did it better.” Another question came soon after: “During the idea phase, how do you determine to move forward or scratch it?” Ranalli answered with intuitive advice: research, gut feeling, test as much as possible. Then he added a pithy axiom: “be right, but be on time.” To illustrate the point, he explained that he had the idea for Dropbox in 2003, but the costs of networking and storage were too high back then. “Now it’s a great business,” he said. Ranalli is Tuck’s first Entrepreneur-in-Residence (EIR), a role organized by the Entrepreneurship Initiative. The idea flowed from the desire to provide more extra curricular entrepreneurship support for students. “We wanted to increase students’ exposure to your classic entrepreneur,” said Joaquin Villarreal T’08, the manager of the initiative. “It’s the person who has an idea, has no money, quits a job, and tries to pull it off. Those are usually the most fun for students to hear, and it’s a story they can relate to.” The EIR comes to campus for a day or two and then has “office hours,” via email or phone, for an entire month. Most of the time, students can contact the EIR directly with their entrepreneurship-related questions. Villarreal chose Ranalli because his narrative is a bit unconventional. Rather than rely on venture capital firms for funding his startups, Ranalli has always preferred to raise money through angel investors, sovereign funds, and broker-dealers. “That’s an exhausting way to do it,” Ranalli told the students, “but we were able to raise $16 million for Helium off a PowerPoint deck.” The lesson, according to Villarreal, is that there’s a wide range of financing options for startups, each with its own form of value. “If you just want money, there are various ways to get it, and at varying costs,” he said. “If you want money plus advice, there are other sources you can tap.” Ranalli was also a good example because he’s started companies on both coasts. “It’s nice for students to see that you can move around, that you don’t need to be in Silicon Valley to do a technology startup,” Villarreal said. Shortly after his hour-long talk, Ranalli sat down with David Weisburd T’12, who’s working on a business that uses a proprietary algorithm to help people find rental apartments and roommates. “He gave me specific advice on executing my business, on how to solve the chicken/egg problem, and he offered to introduce me to Craig Newmark, the founder of Craigslist,” Weisburd said. Villarreal is having no trouble lining up EIRs for the coming months. “The Tuck network is so big, relative to the class size, and everyone is so eager to help” “This is a very clear value add for students,” Villarreal continued. “It’s just pure experience coming in and telling you how it worked.” Curriculum, Entrepreneurship, News, Tuck Today iPad app, 2012-04-27T17:18:04+00:00 http://www.tuck.dartmouth.edu/news/articles/brand-interrupted-burger-kings-overhaul/ http://www.tuck.dartmouth.edu/news/articles/brand-interrupted-burger-kings-overhaul/ Earlier this month, Burger King rolled out the biggest overhaul to its menu in the company’s 58-year history. Replete with “better-for-you” options like real-fruit smoothies, garden-fresh salads, and chicken snack wraps, the menu is designed to lure more women, children, and families into the restaurants and, just maybe, regain the franchise’s No. 1 spot in the fast-food rankings. Burger King lost that position to Wendy’s last year and has been struggling for a long time to differentiate itself from the true king of the burger joints: McDonald’s. But after the wrapper came off the new offerings, and after the company announced an advertising campaign featuring Jay Leno, David Beckham, and Mary J. Blige, marketing professor Peter Golder was not impressed. His main question: “What is it about Whoppers that gives you the credibility to sell garden fresh salads and smoothies?” Golder, who has researched enduring market leadership and the fast-food industry, says Burger King’s new persona lacks authenticity because it wasn’t built on a strong brand foundation. Indeed, Golder says, Burger King “is one of the more poorly managed brands of the last three decades, at least.” What happened? According to Golder, the problem is that Burger King has been passed from owner to owner, none of whom seemed to be in the game for the long term. And that’s probably the case with the current owner, private-equity firm 3G Capital, which bought the company in 2010 and has already announced its intentions to partner with an investment fund and go public. “If you want to manage your business for customer value,” Golder asserts, “you don’t want to appear anxious for a quick buck.” It’s not as if Burger King has a dearth of brand equity. From the beginning, the restaurant has been the home of the “flame-broiled” burger. But instead of nurturing that image, the company has experimented with ridiculous characters like “Sir Shakes a Lot,” the “Wizard of Fries,” and most recently, the “Subservient Chicken,” a web marketing boondoggle where a man in his living room orders around a person in a chicken costume. The tagline: “Chicken the way you like it.” According to Golder, these diversions were a waste of time and money. “Long term equity is built around food, or the dining experience. That’s the great thing McDonald’s has built,” he says. “Burger King is more built around, ‘Look at me as I flap my arms around and get attention.’” If Burger King had invested more in communicating the quality of the food—and “flame-broiled” fits in that category—it would have a firmer platform on which to add new items. Even more valuable than the “flame-broiled” brand is the trademarked slogan, “Have it Your Way,” which Burger King introduced in 1974. Type those words into Google and the first search result is Burger King. But if you perform the same search on Burger King’s homepage, nothing comes up. “That, to me,” says Golder, “means they don’t know what they’re doing.” “Have it Your Way” is actually a brilliant brand, because it’s so broad. It’s not about burgers or fries or chicken, but food and the dining experience in general. In that way, it’s similar to McDonald’s corporate model of quality, service, cleanliness, and value. Both are big tents under which the companies can fit almost anything. “If Burger King stuck with ‘Have it Your Way,’” Golder says, “they’d have a platform on which to build new menus and the credibility to try something different.” Take the current menu revamp, with its focus on freshness and healthier food. “Have it Your Way,” could reasonably include those qualities, because that’s what people are looking for these days. McDonald’s and Wendy’s responded to this shifting demand years ago and have been successful for two reasons: the quality of the food, and strong brand equities that allowed for improvisation. However, Burger King has neglected the “Have it Your Way” brand, so today it’s being labeled a McDonald’s copycat. “If Burger King had shown legitimacy from several decades of supporting “Have it Your Way,” it would be harder to say it’s just copying the competition today,” Golder says. Golder hasn’t written off Burger King completely. He points out that Howard Johnson’s was the most popular fast food franchise in the mid-1960s. Then came McDonald’s, with its wondrous efficiencies and value. Even today, there are opportunities to disrupt the industry structure. “Food freshness is not what you think of when you think of McDonald’s or Wendy’s,” Golder says. “It’s not a space they own.” Burger King could own that space by building on the brand equity of the flame-broiled burger and “Have it Your Way,” becoming the fast-food symbol for food quality, freshness and premium ingredients. This strategy would work internationally, too, where most of the growth in this industry is happening. Building a brand around quality and freshness makes it possible to serve any kind of food, whether its burgers or lentil-based snacks. “The pieces are there,” Golder says of Burger King’s brand. “I just think it’s been poorly executed and they’ve gone for the quick fixes.” Faculty, Marketing, News, Tuck Today iPad app, 2012-04-23T13:46:25+00:00 http://www.tuck.dartmouth.edu/news/press-releases/tuck-professors-publish-reverse-innovation-create-far-from-home-win-everywh/ http://www.tuck.dartmouth.edu/news/press-releases/tuck-professors-publish-reverse-innovation-create-far-from-home-win-everywh/ Tuck professors Vijay Govindarajan and Chris Trimble T’96 recently released Reverse Innovation, Create Far From Home, Win Everywhere (Harvard Business Review Press). In their new book, they reveal a bold discovery with far-reaching implications: Innovation flows uphill and its future lies in emerging markets. Today’s poor countries are being tapped for breakthrough innovations that can unlock new markets in the rich world and help solve global societal problems such as the high cost and poor access to health care. With their new book, “Govindarajan and Trimble offer a framework for the next phase of globalization,” says Jeffrey Immelt D’78, CEO of General Electric. Most global companies recognize that emerging markets have become today’s last source of growth. But all they do is modify and export products that they developed in their home country. To capitalize on the full potential of emerging markets, they must head in the opposite direction—by innovating specifically for and in developing countries to create breakthroughs that will be adopted at home and around the globe. The idea for the book originated in 2008, when Govindarajan was chosen as GE’s first Professor-in-Residence and Chief Innovation Consultant. Reverse Innovation offers an inside account of how reverse innovation is transforming GE’s strategy. It includes seven additional in-depth case studies based on original interviews with senior leaders, including: • PepsiCo, which drew upon local teams and global resources to develop Aliva, a new savory cracker created by Indians for the Indian market, but with high global potential. • Before employing reverse innovation, Logitech almost lost leadership of computer mice in China to an unexpected Chinese rival with a better understanding of local needs. • Procter & Gamble, which developed a globally successful tampon called Naturella in Mexico after discovering why its American product, Always, was losing market share to rivals there. • In China and India, Harman designed from scratch a completely new infotainment system for emerging markets with functionality similar to their high-end products at half the price and one-third the cost.  It has generated more than $3 billion in new business. As these examples show, the biggest hurdles to reverse innovation are not scientific, technical, or budgetary. They are managerial and organizational, and with the right mindset and tools they can be overcome by any manager. Better yet, the evidence shows that companies can earn the same or even better margins and return on investment for a low-cost product designed for China or India than for a higher cost current product at home. The result is a win-win at home and abroad. About the Authors  Vijay Govindarajan is the Earl C. Daum 1924 Professor of International Business at Tuck and the first Professor in Residence and Chief Innovation Consultant at General Electric. He is ranked third on the Thinkers50 list of the world’s most influential business thinkers and has appeared on CNBC-TV and Bloomberg TV and in The New York Times, Wall Street Journal, Financial Times, Bloomberg Businessweek and many other publications. He has worked with CEOs and top management teams in more than 25 percent of Fortune 500 firms to discuss, challenge, and escalate their thinking about strategy. He is a co-leader of a global initiative to design a $300 house for the poor. Chris Trimble T’96 is an adjunct associate professor at the Tuck School of Business. Govindarajan and Trimble co-authored Ten Rules for Strategic Innovators and The Other Side of Innovation. For more information, please visit www.innovationreverse.com 2012-04-18T19:19:58+00:00