January, 2010 | Mays Impacts

In new rankings released by Financial Times, the Texas A&M University Full-Time MBA Program at Mays Business School is now listed among the top ten programs at public universities in the U.S. This year the program has climbed two places, moving from 11th to tied for 9th among public programs in the nation. Overall, the A&M program ranks tied for 28th in the U.S.

In the “Value for Money” category, the Texas A&M program ranks 1st in the U.S., with alumni reporting increased salaries after graduation and lower tuition costs relative to other programs. Job placement is another area of excellence: the program was ranked 6th in the nation in placement, with 89 percent of graduates employed within three months of graduation.

Globally, the program has moved up as well. This year it is ranked tied for 54th in the world, up from last year’s rank of 57th.

“For the third year in a row we have improved our standing in this ranking, thus continuing our climb to the top,” says Kelli Kilpatrick, director of the MBA program at A&M. “Our goal to be among the top ten public institutions in the United States has been achieved and is attributed to our outstanding students, top-notch faculty and undeniable return on investment. We are very pleased with this progress and remain committed to being one of the best MBA programs in the world.”

To determine its rankings, Financial Times surveyed thousands of MBA alumni from more than one hundred of the top programs in the world.

For more information about the MBA program, see ftmba.tamu.edu or contact the office at ftmba@tamu.edu.

Categories: Programs

Mays Business School at Texas A&M University will again partner with the United Way of the Brazos Valley to provide free income tax return preparation to qualifying taxpayers in the Brazos Valley. Mays Business School students will serve as IRS-certified volunteer preparers for the Volunteer Income Tax Assistance (VITA) program. The students will prepare and electronically file federal income tax returns for eligible taxpayers at no cost.

To arrange to have your taxes prepared by volunteers, please call the United Way information and referral service by dialing 2-1-1. The operators will confirm you are eligible for the service and will provide information about which documents to bring. Appointments are not required to receive tax help, but are recommended to avoid waiting.

For the second year in a row, Mays students will partner with the United Way of the Brazos Valley to provide free income tax return preparation assistance for qualifying taxpayers.
For the second year in a row, Mays students will partner with the United Way of the Brazos Valley to provide free income tax return preparation assistance for qualifying taxpayers.

Tax return preparation will take place from January 30 through April 15, Tuesday and Thursday evenings from 5:30 to 7:30 p.m., and Saturdays from 9:00 a.m. to 1:00 p.m. Services will be offered at the Center for Regional Services (3991 E 29th Street, Bryan), as well as many other locations in Bryan/College Station and surrounding counties. Dial 2-1-1 to find additional locations and dates.

This is the second year Mays students will volunteer for VITA. Their efforts will net them more than good karma: The students will also earn course credit. Their volunteer service is part of the course “Special Topics in Tax—Federal Taxation of Low Income Filers: Socio-Economic Forces.” In the classroom, they will study federal income tax legislation and its impact on low-income filers, and the socio-economic forces impacting low-income families and individuals. In addition, each student must log 54 volunteer hours of service with the VITA program. To find more about the class, see “Students help ease the stress of tax season” (MBO, March 2009).

Adam Myers, instructor for the course, says working people who may not otherwise be required to file a tax return are encouraged to file a return to receive the benefits of the Earned Income Tax Credit (EITC). The EITC is a special tax benefit designed to improve the financial situation of people who work but earn low wages. Many filers who qualify for the EITC receive a cash refund. Free electronic filing through VITA speeds receipt of the refunds. A speedier refund could save a taxpayer substantially, as it may prevent some from being enticed by an expensive refund anticipation loan. The refunds generated from the EITC also help the local economy. The average 2008 EITC for Texans was $2,313.86, and this year, the EITC could put up to $5,657 in the pockets of eligible taxpayers. The new maximum credit for tax year 2009 is $5,657 for a family with three or more children; $5,028 for a family with two children; $3,043 for a family with one child; and $457 if there are no children.

For more information, please call the United Way information and referral service by dialing 2-1-1.

Categories: Students

What are the emerging business models in retailing? What’s new in how retailers approach promotions? What’s the next big idea in store assortment?

These will be among the questions discussed at the second annual Thought Leadership Conference, hosted by the Center for Retailing Studies, the Department of Marketing, and Mays Business School at Texas A&M University.

This exclusive, invitation-only event will welcome 31 academic experts and senior retailing executives from the U.S. and other countries, January 27-29. Attendees will work in teams to explore a variety of topics in retailing and marketing strategy, then will present their ideas and recommendations at the conclusion of the conference.

To maximize the conference’s impact, papers and findings based on the conference deliberations will be disseminated in a variety of formats, including a special issue of the Journal of Retailing.

Building on the theme “Innovations in Retail: Emerging Issues and Future Outlook,” topics to be covered include innovation in the following areas: retail business models, retail channels and supply chain management, retail assortment and store brands, retail shopper marketing, retail price promotions, and global retailing.

Gary Kusin, former president and CEO of Kinkos/FedEx, will present a keynote address to kick off the conference.

The first Thought Leadership Conference on the theme “Marketing in a Multichannel, Multimedia Retailing Environment,” held last year, was a huge success, says Venky Shankar, professor of marketing at Mays, as it attracted top minds in retail and resulted in a special issue of the Journal of Interactive Marketing. Cheryl Bridges, director of the Center for Retailing Studies, echoed that sentiment saying, “This conference uniquely brings together industry and university experts, positioning the center and Mays as leading contributors in retailing research.”

The 2010 event is also sponsored in part by the Center for International Business Studies at Mays, the Marketing Science Institute, and the American Marketing Association. Shankar and fellow Mays Professor of Marketing Manjit Yadav will serve as conference co-chairs.

For more information, contact the Center for Retailing Studies at (979) 845-0325, or visit http://www.crstamu.org/conference.php.

Categories: Centers

When one thinks of a business school, thoughts of applying accounting, finance, information systems, management, marketing, and supply chain to large, public corporations come to mind. However, this past fall, our sophomore students did something a little different: they applied their business skills to assist local organizations as part of a service-learning course. The numbers speak volumes: 435 students donated 8,700 hours of service to 43 different organizations. Through their work, our students impacted the lives of young children, elderly people, disadvantaged people, and neglected animals.

For the final presentation of the semester, each student group provided a five-minute summary of their experience demonstrating their ability to apply skills to a real-world setting and to effectively communicate the results of their experiences. As I judged their presentations, it was amazing to hear how this experience changed their perspective, and how impacting others had impacted them. When I asked them to summarize their greatest learning experience, it was not related to business, but to their awareness of others and the impact they can have, even now while they’re still in school. What a wonderful message for these young people to reflect upon during the holiday season.

I hope you had a wonderful holiday season and that you will have a healthy and happy 2010.

Categories: Deanspeak

The debate over health care is a current news staple as U.S. senators and congressmen trumpet the merits of plans to expand coverage and lower costs for all Americans. No matter what the resulting legislation will be, it will have a deep impact on businesses, both large and small. That was the topic of a panel discussion called “The business of health: expert insights and perspectives,” presented by Mays Business School in November.

Hosted by the Full-Time and Executive MBA Programs, the panel brought together expert opinions from industry insiders, as well as an audience of more than 200 professionals from various industries. Presenters included a physician, the VP of benefits at large multinational company, and a member of the Mays management faculty. Moderated by Loren Steffy, business columnist at the Houston Chronicle, opinions varied, but all agreed on one thing: health care reform is imminent and vitally necessary.

A costly necessity

J. James Rohack, MD, was the first panelist to jump into the discussion. As a physician, the president of the American Medical Association, and the director of the Center for Health Care Policy at Scott and White Clinic, Rohack had a lot to say about the topic of reform. “The AMA decided two years ago to get involved in health system reform as frankly we noted…that for those that didn’t have health insurance, they lived sicker, they died younger, and the federal government said your access point is the emergency room,” he said. With the uninsured gaining primary care through ERs, we’re already paying for universal health care, as the cost of treating these people comes from everyone else paying a higher premium, Rohack contends.

A distinguished panel of industry leaders, policy experts, and Texas A&M faculty members met on November 12, 2009 at the Federal Reserve Bank of Dallas, Houston Branch to discuss how pending historic changes to the health care system will impact the business community.
A distinguished panel of industry leaders, policy experts, and Texas A&M faculty members met on November 12, 2009 at the Federal Reserve Bank of Dallas, Houston Branch to discuss how pending historic changes to the health care system will impact the business community. (view more photos)

Congress is concerned that reforming the system will add to the national deficit. Inaction will do the same, says Rohack. “The reality is these bandaid approaches…have grown the problem.” The AMA has been working with Congress to devise a solution since 2001. If serious action had occurred three years ago, the cost would have been less than $50 billion. Instead, stopgap measures were utilized, so that now, to “fix” the system the price is $210 billion—and will increase to $310 billion by 2012, when four million Baby Boomers will start to draw Medicare benefits.

Rohack is critical of proposed changes to Medicare that would reduce the amount paid to physicians. Fifty percent of health care in the U.S. is provided by solo practitioners or offices of less than three physicians. They are small business owners, Rohack says. The proposed Medicare cuts would reduce the profitability of these practitioners by 21 percent and the current business model will not be viable. This creates a new dilemma. If physicians have to close their practices, it will exacerbate access problems. That is especially true in rural areas where there are a disproportionate number of Medicare patients, he says.

John Kajander, senior vice president of the Texas Medical Center, echoed Rohack, noting that hospitals receive a large portion of their revenues from Medicare patients. That kind of subsidy already provided by the government means that all non-Medicare patients are paying 25 percent more to pay for others’ care. The money is already being spent, he says. When it comes to reform, it’s just a reallocation of where the money comes from.

To those that are concerned about “death panels” and government involvement in health decisions, Kajander was unsympathetic. “We should never kid ourselves. We’ve got health care rationing today,” he says. If you’re at a public hospital and you’ve got cancer, you may have to wait several months to see an oncologist and start chemo—and that wait may be too long.

Americans tend to have a negative perception of anything that sounds like socialized medicine, however, there are lessons to be learned from the Canadian health care system, says David Kasper. His company, Waste Management Inc., operates in most states and several other countries. As the vice president of benefits, he is familiar with the health care options for his employees in the U.S. and Canada.

Kasper says Americans demand more amenities from hospitals (such as private rooms, cable, etc.). Canadian hospitals are very basic by comparison. But nobody in Canada goes broke when they get sick.

Kajander commented on this as well, noting that the American system is inefficient, but that Americans might not be willing to make certain trade offs (such as choosing your own doctor) in order to reduce costs.

The public option still being debated will provide everyone with a bare minimum of coverage, Kasper says. To those that are worried that all business will cease to provide insurance and will pay only for the public option, Kasper says we must remember that many employers see benefits packages as recruitment tools; they want to offer what’s going to net the best employees. Small businesses are the ones that will save the most through a public option, if it’s offered. However, some larger companies will stick with private insurance or their own self-insurance programs, predicts Kasper.

Wellness programs key to savings and health

Waste Management Inc. is self-insured, providing tailored coverage for their 45,000 employees. Kasper says they look at health care expenditures as an investment. “It’s a very labor intensive business. People are our most important asset…We cannot operate unless we have people on the job doing what they need to be doing…Their health and productivity is…directly linked to the success of our organization,” he says.

A large part of Waste Management’s focus is on wellness programs, where healthy behaviors, such as not smoking and proper weight maintenance, are incentivized. Kasper says that legislation should incent employees to do the right thing for their own health, placing a monetary emphasis on prevention and healthy behaviors.

Rohack agrees. “Half of health care costs are because of choices people make…We can fix the system, but people are going to have to be engaged in healthier choices,” he says.

Michael Wesson, associate professor of management at Mays, mentioned corporate examples of wellness programs that are working, such as the incentive program implemented by grocery chain Safeway (see Wall Street Journal article: “How Safeway Is Cutting Health-Care Costs” ). They’ve reduced healthcare costs enormously, he says. As has IBM, who have dropped employee co-pays to encourage better preventative care from employees. New legislation should provide concrete funding for wellness programs, says Wesson.

What should reform look like?

Where in the country is health care being done well? In non-profit community health centers, says Rohack. The costs are lower and the outcomes are high. He also held up Lasik eye surgery as an example: the cost has decreased over the years, even as the procedure has improved. Why? Because it isn’t covered by insurance, so customers shop around to find where it can be done most affordably, forcing doctors to provide quality and economy. It’s rare to have that level of price comparison with other medical procedures.

That’s part of the problem, says Wesson: the price of medical procedures is too mysterious. Most patients have no idea how much it costs to receive healthcare, and most doctors have no idea what the real cost of a procedure or drug will be for their patients. He doesn’t believe that the current legislation pending before Congress does anything to alleviate this issue or to bring consumers into the picture.

A distinguished panel of industry leaders, policy experts, and Texas A&M faculty members met on November 12, 2009 at the Federal Reserve Bank of Dallas, Houston Branch to discuss how pending historic changes to the health care system will impact the business community.
Following comments from each of the speakers, the panel answered questions from the audience.

Wesson says everyone should have health coverage, but he is concerned about the price tag associated with the reforms before legislative bodies currently. The challenge before Congress is to expand coverage and lower costs. He says many versions of the bills before the House and Senate expand coverage, but are lacking in the cost reduction guarantees.

Robert Ohsfeldt, professor of health policy and management at the School of Rural Public Health at Texas A&M System Health Science Center, commented that there are about 48 million uninsured in the U.S. One of the main challenges in passing a reform that would expand coverage is convincing the other 256 million people in the U.S. that it is needed. “Those that have insurance for the most part don’t see this as a crisis that needs to be addressed right now,” he says, noting that whatever changes are made, people will complain.

Bruce Broussard, chairman and CEO at U.S. Oncology says that in markets that are highly competitive, there is a lower cost-delivery system. For that reason, the introduction of a government option will reduce cost by increasing competition. He also mentioned that potential litigation drives up the cost of health care significantly. If that problem could be solved through tort reform, the cost savings would be dramatic. (Rohack was quoted on this topic in the article “Trial lawyers plan tort reform fight” in Politico. ).

Reform is essential the panelists agreed. As Broussard and Ohsfeldt asserted, the cost of health care must come down. It’s unsustainable at its current level.

Complete video from the event is available at mays.tamu.edu/health.

Categories: Featured Stories, Programs, Texas A&M

Earnings are down slightly and things are not looking great for your company this quarter. Your boss comes to you and says, “Look, if you could tweak the numbers—just a teensy bit—it will look like we didn’t lose money. We can make up the difference next quarter, no problem. Besides the amount is so small, it’s not a material difference.”

If you don’t do it, then three people will lose their jobs, including your officemate who has a family of four to support on her income alone.

What do you do? It’s right to report earnings truthfully, but it’s also right to help your coworkers keep their jobs.

How about this one: Your boss lets you know that staff reduction is inevitable in the coming months due to budget cuts, but the information is confidential. One of the staff members you know is going to be pinked asks you directly, “Do I need to start looking for a new job?” How do you respond?

Every day in the workplace, decisions like these are being made. Sometimes the choices are so commonplace that we make them without thinking, operating on ethical autopilot. Autopilot mode can get us in trouble, though, if like the proverbial frog in the pot of boiling water, it leads to a slippery slope of complacency that can be fatal—at least to your career.

Encouraging students to analyze these decisions is the goal of a few faculty members at Mays who are committed to training this next generation of business leaders to be ethically sensitive, not merely technically proficient.

The first challenge: strip the armor

Part of the problem with teaching ethics is that we all tend to see ourselves as fairly moral individuals already, says Roemer Visser, clinical assistant professor in the Undergraduate Special Programs Office. Students often think ethical training doesn’t apply to them. “Most of us, our students included, fool ourselves into thinking, “I would never do that,’ when it comes to unethical behavior,” says Visser. He describes an automatic judgment that happens when we hear of a scandal: That person did something unethical, ergo he or she is an unethical person. I, however, am an ethical person, so I wouldn’t behave that way.

This kind of cyclical reasoning is dangerous, he says, because given the right circumstances, nearly everyone—even highly moral people—will behave unethically.

“I’m trying to get them to understand, not only up here,” he points to his head, “…that just because their parents taught them good values does not inoculate them against ethical transgressions,” he said, commenting that to get to that point, he must strip the students of their armor of prejudgment and positive self-regard.

“If we screw up, we blame it on the circumstance. If somebody else screws up, we blame it on their character.”
—Roemer Visser

Visser works with students in the required sophomore-level course Integrated Work-life Competencies (BUSN 205). Part of the curriculum for the class focuses on ethics training.

It’s a tough subject to teach when most of the students think they understand it all already. Visser challenges preconceptions through small group discussions of ethical scenarios like the ones above, teaching them how to analyze the situation to discover “the higher right” instead of looking for the correct answer.

One of the most compelling cases they discuss is that of Betty Vinson, a midlevel accountant who was instructed to commit fraud by her boss, kicking off the Worldcom scandal. She spent five months in prison and five months under house arrest for her actions. Visser says that this case in particular resonates with students, who can identify with Vinson, a good person caught in a bad situation: lie or lose your job. “She was trying to do the right thing, yet…she ended up being the first one to go to jail.”

Real-world lessons

You would expect that with all of the current events to choose from—the financial collapse blamed on fraudulent accounting practices, Ponzi schemes, bank bailouts and inflated corporate compensation—that Visser would include plenty of headline news in his curriculum. Not so, he says. While some of these events illustrate the four kinds of ethical dilemmas (see sidebar), they don’t have much traction in the classroom.

FOUR CATEGORIES OF ETHICAL DILEMMAS
  • Truth versus loyalty
  • Individual versus community
  • Justice versus mercy
  • Short-term versus long-term

“As informative as they are, most of the business cases I’ve worked with don’t really hit home [for students]. So, they become detached, clinical exercises in intellectual acrobatics and reasoning,” rather than scenarios students can identify with. Besides, “All of the cases we read about in the paper are the right versus wrong cases,” says Visser. That doesn’t make for much conversation. It’s the right versus right scenarios, where there are sound arguments on both sides, that bear further investigation.

It’s tough for students to acknowledge right versus right problems. “This generation is all about “right’,” says Visser. Even when they are told ahead of time that there is no one right solution to a problem, after spending a class period discussing the arguments of both sides of a case, they will still ask “What’s the right answer?”, and leave frustrated when there isn’t one.

“We need to be compassionate with this generation of students,” says Rushworth Kidder, the renowned ethicist who created part of the curriculum for Visser’s class. “They have been raised in a right versus wrong atmosphere. Everything they soak up, from talk radio, from the blogosphere, from the television news channels, from the way that people argue in public, it’s all about right versus wrong.” Kidder used politics as an example. “We don’t argue for the rightness of one candidate, we argue for the wrongness of the other,” he says. We criticize the opposition and turn the vote into a right versus wrong debate. Accepting that both options are right and you still have to choose one is uncomfortable.

Don’t rely on your gut

Part of the process of making sound ethical decisions is learning to not always go with your gut. Often we come to ethical decisions too quickly, says Visser. Our choices are reactive rather than analytical. When presented with a hypothetical dilemma, he asks students to build arguments in favor of both options in the scenario, but to refrain from making a decision about action. If you make the decision before you do the reasoning, it’s not reasoning, he says. It’s rationalizing. And when you’re rationalizing, you can make almost any choice seem defensible—even a wrong choice—”if you massage it long enough.”

“We make attributions about character based on actions. If somebody does something stupid, we say they are a stupid person. If they do something unethical, we say they are unethical. The reality is the overwhelming majority of unethical acts are committed by perfectly honorable people with the right intentions…It’s not about character.”
—Roemer Visser

“Often we respond to a gut feeling—oh this is wrong, or this is right—and we act on it. We don’t challenge it, we don’t interrogate it,” he says. “We need to get people to recognize when that is happening and hit that pause button, to say “I know that this is what I’m feeling right now, but do I really have all the information?'”

The label “ethics” can be a turn-off for students, because it sounds like heavy and philosophical. The truth is, when you reduce it to a process of analysis, of weighing all the information impartially, students realize that it doesn’t feel like “ethics”—it feels like problem solving.

Categories: Faculty, Featured Stories

I hated dancing. I’d always hated dancing. Events like wedding receptions made me nervous, because I knew that at some point I would have to dance. When forced to take the floor, I’d always pick a slow song where I could fumble around without anyone really noticing.

Now, when I hear a good beat, I love to grab the hand of my wife, my favorite partner, and twirl her out on to the dance floor.

So, what changed? How did I become a dancer?

Dancing

It started with a movie. My wife and I subscribe to Netflix, and she choses all of the movies for us. One night about four years ago, we watched Shall We Dance. The story revolves around a lawyer, John Clark (played by Richard Gere), who has a successful practice, but is bored with his life. He realizes that something is missing. The character is about 50 (my age at the time) with a teenage daughter and a busy, professional wife.

John’s train ride home takes him by a dance studio where night after night he notices a pretty girl looking out the window. He eventually summons the courage to get off his train and go up to the dance studio to meet her. Before he knows what’s happened, John is signed up for introductory ballroom lessons. From this point the story twists and turns, as most do, but one thing remains: John discovers that he loves to dance. He didn’t know that he loved dancing, because he’d never really known how to dance. Now, the more he learns, the more he likes it.

While not a four-star movie, I liked Shall We Dance. Later I learned it is an American re-make of a Japanese film. So, we got on Netflix and ordered that version, too. As is almost always the case, the original is better. The story’s the same, but in the Japanese version the protagonist is an accountant.

I’m an accountant. I connected with the character. When we finished the movie I said to my wife, “We ought to take some ballroom dance lessons.”

I didn’t mean it. In the passion of the moment, I just blurted it out and soon forgot about it. Then, about two months later, my wife told me that she’d signed us up for beginner ballroom lessons. As soon as I opened my mouth, she reminded me that I was the one that said we should do it. I was trapped.

I still vividly remember my first dance lesson: Tuesday night, 6:00 to 7:30 p.m., a grade school gym, basketball hoops and white linoleum floors. I ate six Rolaids on the car ride there. But, the lesson wasn’t as bad as I had feared. These were community education lessons and everything was pretty relaxed. I survived my first dance lesson without too much damage to my ego. We progressed through the four lessons, but I didn’t improve much. It was clear to me that I was not having a Richard Gere experience—life is never like the movies. When the class was over, my wife suggested we immediately do the same set of lessons over again. Since now I knew what to expect, I agreed. My second time through was like magic. I began to dance without fear. I got better at it. And I began to like it.

Since those early dance lessons, we have graduated to more advanced ballroom lessons with a very good local dance instructor. I continue to enjoy the lessons. I sometimes ask myself, “Would I rather be home watching TV on a Tuesday night or would I rather be taking a tango lesson with my wife?” For me, it’s an easy choice: the tango lesson. My wife and I have joined the local ballroom club, which has a dinner dance once a month, and we try to go dancing whenever we can.

We also do country dancing, waltz, two-step, and polka. We’ve worked our way through most Aggie Wrangler lessons. Invariably, we are the oldest people in the class by about 30 years, but it doesn’t matter. No one is watching. We go country western dancing every Thursday night at a local dance hall, and like ballroom dance, I’ve grown to love it, too.

In the end, the same thing that happened to Richard Gere’s character in Shall We Dance happened to me. Once I stepped out of my comfort zone, I discovered I have a passion—and a talent—for dancing.

Categories: Perspectives

Many corporate leaders viewed the recent recession as a time to hunker down, put long-term plans on hold, and simply ride out the storm. Eric Foss, chairman and CEO of Pepsi Bottling Group (PBG), wasn’t one of them.

“One of the things leaders look to do in very challenging times is reshape the business model and hopefully reshape industry boundaries,” Foss says.

That’s exactly what his company did when it agreed to merge with PepsiCo in August 2009. Upon completion of the merger, PepsiCo will form a new bottling entity called PepsiCo Bottling North America (PBNA). The new entity will comprise the operations of PBG and another Pepsi bottler, PepsiAmericas. Foss has agreed to serve as PBNA’s CEO.


“To be a great people leader, you’ve got to start with a passion for people,” Pepsi Bottling Group chairman and CEO Eric Foss told Mays students. “You’ve got to give people hope and insipiration.” (view more photos)

He sees the merger as a big opportunity for the Pepsi system to stand out in the market. “I think this deal will give us a competitive advantage as we come out of the recession.”

The process leading up to the merger was unique. PepsiCo, who owns a 40 percent stake in PBG and also has a franchiser/franchisee relationship with the bottler, made its initial bid to purchase the company in April 2009. PBG was suddenly confronted with the challenge of maintaining an ongoing business relationship with PepsiCo, while simultaneously negotiating for a better deal for the sake of its independent shareholders.

“It was an interesting dating process,” joked Foss.

PBG rejected PepsiCo’s initial bid of $29.50 per share, and several months of negotiations ensued. Eventually PepsiCo increased its bid to $36.50 and the deal was cinched.

“When something like that happens, as a leader you’ve got to be ready to play, fight, and win,” says Foss. “In the end, we were able to provide outstanding value for PBG shareholders, create a new company that will better meet the needs of our customers, offer new and expanded opportunities for PBG employees, and accelerate growth for the Pepsi system going forward.”

Foss’s circumstance is unique: he was part of the management team at PepsiCo 10 years ago when it spun off its asset-intensive bottling and restaurant businesses (PBG and Yum! Brands, then called Tricon Global Restaurants). Now he’s overseeing the reverse action as PepsiCo reacquires the bottling business. “It was a once in a lifetime experience to go through that process,” he says.

While Foss says he enjoys being a public company CEO, he is excited to rejoin PepsiCo and lead PBNA. “As I’ve looked at setting up this business, I felt a huge sense of ownership and obligation to our 70,000 employees to make sure this thing gets set up for success.”

“As a leader, you can’t always predict what’s going to happen, but you can try to prepare.”
—Eric Foss

Foss has been with Pepsi in a variety of positions for the past 27 years—since soon after he graduated from Ball State University in Indiana in 1982. Beginning as an entry-level sales-rep, he moved up through the ranks of management, eventually attaining the top spot in July 2006. His first assignment with Pepsi brought him from his Midwestern home to Austin, Texas. Five months later Foss was transferred to Bryan/College Station where he met his wife, then a student at A&M. He says he sees many similarities in the culture at A&M and at PBG. Though he resides in Connecticut, he says he still loves to visit Aggieland, especially now that two of his three daughters are students here.

His daughters have contributed to his success as a leader, says Foss, as they have taught him much about how to work with and lead women. These lessons were solidified when he coached their athletic teams, where he learned that motivating females is very different from motivating males. “The way I was coached…was a more in your face, “you will get this done’,” he said. “I found out real early coaching fifth and sixth grade girls that was not going to work.”

His role at PBG is similar. “At the end of the day, my number one job is that of head coach and cheerleader.”

“To be a great people leader, you’ve got to start with a passion for people. You’ve got to give people hope and inspiration,” he said.

An integral part of his leadership style is gratitude and recognition, says Foss.

For example, every Monday morning, he expects his management team to write 10 thank you notes to employees who have done something well. “The key is not a plaque or a trophy…really great leaders build a culture of appreciation into [the company’s] DNA. Because what people appreciate most is the little things…The personal touch goes a long way.”

While on campus, Foss presented a check for $10,000 on behalf of PBG to student organizers of The Big Event.
While on campus, Foss presented a check for $10,000 on behalf of PBG to student organizers of The Big Event.

One of Foss’s initiatives at PBG has been to increase diversity at all levels. “We’ve created a more diverse and inclusive culture,” he says, noting that in recent years the number of women in management roles has tripled, and the corresponding number of minorities has quadrupled. “It’s very important to us, from the backroom to the boardroom, that our employees look like the marketplace, look like our customers who drink our products.”

Foss’s leadership skills have been honed over nearly three decades with Pepsi, but his rise to power was not faultless. He shared a defining moment in his career when he made a mistake that cost the company millions. He says he owned up to the mistake and quickly tried to mitigate losses. Though it was costly, it ended well. “Not only did I not get fired, ultimately, I got promoted…the point is you’ve got to be willing to take risks,” he says. He credits some of his professional success to his courage in calculated risk-taking, as well as his confidence. “He who makes no mistakes makes no progress,” he says, paraphrasing Theodore Roosevelt.

“You really do have to believe in yourself and trust that you know what you’re doing and exude that to the organization…people will decide to follow you or not based on whether they believe in you,” he says.

Foss recently visited Mays Business School to serve as an executive speaker, addressing several groups of students. While on campus, he also presented a check for $10,000 on behalf of PBG to student organizers of The Big Event. This is the second time PBG has made a gift of this significance to The Big Event, which Foss sees as an important investment in students and in the community. To see more information about this contribution, read “Big Event at Texas A&M receives $10,000 from Pepsi Bottling Group.” (The Battalion, November 2009)

Categories: Executive Speakers, Texas A&M