Mays Impacts

The sun blazes down and the searing sand burns her feet as Alexandra Weber ’12 stares at the pounding waves. She hears only the wild thudding of her heart. As the expectant silence intensifies, she waits breathlessly.

BANG!

The beach explodes as a hundred bodies launch forward into the turbulent ocean. Flailing arms and legs strike out, driving Weber deeper and deeper until her feet touch the ocean floor. She forces her way to the surface, fighting through the melee to gasp for air before she can begin cutting through the waves.

Alexandra Weber ’12, a sophomore Business Honors and finance student at Mays, competed in the Triathlon World Championships in September 2009.

Now she is out of the water, legs pumping fast, straining against the gears of a bicycle. Around her, people are wrecking and riding on with bruised elbows and bloodied knees.

Bike gone, her feet pound a rapid rhythm on the pavement. Exhausted to the point of collapse, a burst of cheers and applause greets her as she crosses the finish line.

This may sound like a nightmare to the average person, but this experience is one that every triathlete dreams about.

Weber, a sophomore at Mays Business School at Texas A&M University, says that competing in the Triathlon World Championships in September 2009 has taught her the value of self-discipline and motivation, in athletics and in the business world.

When other A&M students were attending their first classes of the semester, Weber traveled to the Gold Coast (Eastern Australia) to compete in the Triathlon World Championships, September 9-13. Weber finished 6th out of 36 competitors with a time of 01:09:18. She competed in the sprint distance, which includes a 750-meter swim, 20-kilometer bike ride, and 5-kilometer run.

The Australian experience is one Weber says she will always remember. Swimming is the only leg of the race where pushing, pulling, and punching can easily be disguised as overly enthusiastic strokes, and Weber says her opponents took full advantage of this fact. Though she has faced many competitors over the course of her young career, she was taken aback by the ferocity of the Australians and New Zealanders in the swimming component. “They were brutal in the water. I have never seen swimming like that before. They were intense. I got pushed down to the bottom three times.”

Having to fight through an ocean of people unabashedly looking out for number one has taught Weber that she cannot let the actions of others discourage. Each time she was pushed to the ocean floor, Weber fought her way to the surface. It’s the same concept of resilience she’ll apply as she enters the corporate world; she will not let what is going on around her affect the quality of her work.

When asked how she manages to stay focused on the finish line, Weber reveals that it is not the last leg of the race that holds her attention. “I have to think in the present. When I’m swimming, I think about the swim. I don’t think about the bike or the run.”

For her, winning a race has everything to do with intense focus on the present, and chasing the person directly in front of you. Weber says she knows how to take one step at a time and that method, in the grand scheme of things, will allow her to achieve her big goals.

“My goal was to finish in the top ten, and I definitely achieved that goal,” said Weber smiling.

The Australian experience is one Weber says she will always remember. “Getting to walk with all of these people in our country’s uniform was special.”

Weber has been competing in athletics since she was eight years old. When it was time to apply for college she was certain that she wanted to be a swimmer. “I was really committed to Columbia [University] and swimming, but in November of my senior year I decided it wasn’t the right fit. Then I got into Business Honors here at Mays and I decided to focus exclusively on the triathlon,” she says.

Her life at Texas A&M is balancing a rigorous school schedule and strenuous workouts. “My triathlon coach is in San Antonio, so I have to motivate myself without someone standing over me. If I didn’t do the workouts, she wouldn’t know. It would show up on race day, though.”

She’ll use this self-motivation in her career. “If I don’t do my job, no one may know initially. But when the financial reports aren’t done right, then it will be obvious,” she says.

The Gold Coast race was not only about the competition. “Getting to walk with all of these people in our country’s uniform was special,” Weber said as she described the emotional opening ceremonies.

When asked if she could see herself becoming an Olympian, Weber was enthusiastic.

“Well, I definitely want to get my master’s first, and then I was thinking about law school at Columbia. The 2016 games would be the first Olympics I’m eligible for, and I’d love to be there.”

Weber is a sophomore Business Honors and finance major at Mays, a participant in the Texas A&M club triathlon team, and a member of the Kappa Kappa Gamma sorority. After school and athletic competitions, she has plans to become an entrepreneur.

With Mark McGwire apologizing for his steroid use recently, I thought it would be appropriate to address the subject of saying “I’m sorry.” Years ago I expressed my view that a major gap in the implosion of Andersen after Enron was that they had never actually apologized. So kudos to Mark McGwire for coming out and saying he actually did it, albeit at least four, and perhaps ten, years too late.

However, his explanation seems a little less than forthcoming, in that he characterizes his use as only designed to maintain his health. It reminds me of the explanation offered by his companion both in the 1998 record home run chase and at the Congressional hearings, Sammy Sosa. In 2003, when there were already whispers about steroid use, Sosa’s bat cracked unexpectedly in a game and was discovered by the umpires to be corked. Caught with irrefutable evidence about his cheating to gain an advantage, he referred to it as a “mental mistake.”

As I said in an article at the time, mental mistakes do not bring into question integrity, but competence. In baseball that might include throwing to the wrong base or forgetting how many outs there are. But the questions with Sosa’s actions, and McGwire’s, are all about integrity.

The apology for issues of integrity is entirely different from the apology for issues of competence. I will sometimes have students apologize to me for their performance on an exam. I respect these apologies, but for the most part they are unnecessary, unless they are used by students to motivate themselves to give a better effort in preparing for the next exam. However, if a student apologizes for an issue of integrity in my class, it matters how that apology is expressed.

I have on many occasions apologized to my wife for my incompetence—in home repairs, car repairs, investments, you name it. Acknowledging my failure is usually more than sufficient to satisfy my wife, and often she does not even require that. I am guessing that for Tiger Woods simply saying, “Hey, I’m sorry, I messed up” was not sufficient.

So what should an apology look like for issues of integrity? My first piece of advice is to avoid, if at all possible, progressive revelation. McGwire’s confession to Bob Costas appears to be the kind of halfhearted trickle of information that often leads to a feeding frenzy as other reporters build a case for there being more to the story. And there are always the Jose Cansecos of the world around to fill in the details.

Second, the reason for the eventual confession ought to be acknowledged. These confessions are virtually always delayed until after some event that triggers the need to say something. In McGwire’s case, he not only received fewer Hall of Fame votes this year than Tim Raines, but he has been hired as the hitting coach for the St. Louis Cardinals, who are unlikely to be happy if he is a spring training sideshow. If these are not the reasons, why did he wait until now to apologize? These apologies ought to be prefaced with a simple acknowledgement that the time was right for specific reasons.

Third, there ought to be visible evidence of a changed heart. By this, I am not referring to the crocodile tears that seem prevalent when revelations are made. But when people get the sense that the confessor would do it all over again, given the chance, there is no hope of repairing a reputation. Even Pete Rose’s strongest supporters for entry into the Baseball Hall of Fame would be unwilling to bet their fortunes that, given the same set of circumstances, he would avoid the kinds of gambling he engaged in.

Fourth, there can be no residual attacks on those who have raised the issues. This has to be especially hard for people like McGwire, who is faced with continuing assertions that he was injected with steroids by Jose Canseco, one of the most unlikable truth-tellers in modern sports history. Of course, this attacking behavior is often part of the legal defense team’s strategy if there are still issues being addressed in court. But when you are apologizing for integrity failures, no one wants to hear you blame others.

And, as hard as it is, embrace the consequences of your action in a way that will lessen the chance that you make that choice again. My son’s first hero, when he was a five-year-old baseball player on the Rookie Cardinals, was “Mark-uh McGwire.” We have a picture together in our uniform shirts taken from the back, like the old Maris and Mantle pictures, and he wears that number 25 so proudly.

Today, he only winces when I mention the name McGwire. Mark McGwire will never see that, just as CEOs like Ken Lay and Dennis Kozlowski are often insulated from the betrayal of trust felt by investors and employees. But coming face-to-face with the consequences of a trust betrayal is often the most powerful deterrent to repeating the behavior.

Life is always better if you can avoid integrity failures, but it is relatively certain that most of us, from time to time, are going to fall short and need to say, “I’m sorry.” Being up front about what we have done and communicating a genuine rejection of the values that led us to fail are important. Leave the opinions about others’ culpability to others. And, as painful as it is, face up to the impact. It is the shortest route to refining character.

How did a self-professed farm girl from Idaho become one of Forbes’ 100 Most Powerful Women? Of greater significance, how did she become one of only a small number of business leaders to be named to that list four years running?

Sharon Allen, University of Idaho alum, did not join this elite group of powerful women overnight. When Allen joined Deloitte as a young professional after college, she was determined to make something of herself. “I was the youngest of four sisters who were all very accomplished, so I guess I felt like I had to do it all,” Allen recalled. Today she is chairman of the board and U.S. managing partner of Deloitte.

While speaking to Mays Professional Program in Accounting students, Deloitte chairman of the board Sharon Allen stressed the importance of both receiving and offering mentorship as the key to a successful career. “Everyone in this room should be mentored, and be a mentor.” (view more photos)

Allen recently addressed students at Mays about her career as a public accountant with Deloitte Touche Tohmatsu (DTT), a consulting company that offers tax advice to corporations like Boeing and Hewlett Packard. As a woman who has held many leadership roles in her industry, Allen was able to offer students sound advice about becoming a success. As she looked out at the crowd, Allen said that before you can become truly successful, you must do something you’re passionate about. “Find something you love, and do it. It’s important to do what you love,” Allen said, commenting that a recent study indicated that 45 percent of Americans are unsatisfied with their current job. “Now that’s just sad,” she says.

After 36 years working with Deloitte, Allen says she still enjoys her work, and hasn’t yet developed a “retirement mentality.”

“I suppose I could just say to myself, ‘Well, I just got reelected to the chairman of the board, I guess I can sit back for the next three years,’ but that’s not what builds excellence,” she says. Allen compares the zeal she has for her company to the spirit of Aggieland, saying that she prides herself in working for a company whose mission is to “set the standard for excellence.” This is evident by the fact that Deloitte participates in a Big Event of its own annually, as all 160,000 employees team up to serve in 800 community projects.

In her presentation, Allen discussed the importance of sticking with your style. When she became a chairman of the board, Allen remembers several people being astonished: “People said to me “You can’t be a chairman, you’re too nice!'” Allen does not deny the fact that she is more congenial than the stereotypical chairman, but after many years in leadership positions, she is confident in her management style. Allen encouraged her audience to find the style that works for them and to stick with it. “Be yourself. Everyone else is taken,” she said, quoting Oscar Wilde.

When students dream of becoming successful in the business world, they know that it will take intelligence, determination, ambition, diligence, and creativity, but Allen says that having a mentor is arguably the most important step towards becoming a success. When Allen began her work at Deloitte, she looked to her mentors to help guide her through areas in which she had little or no experience. Now that she’s got several years of experience under her belt, Allen takes pride in mentoring many young professionals. “Everyone in this room should be mentored, and be a mentor,” Allen says, emphasizing that it’s never too early to start being a leader.

When Drew Jones ’05 started his studies at Mays, he had no idea what he wanted to do when he graduated. As the years progressed, he was still having a difficult time finding anything he could be passionate about: working behind a desk from 8 to 5 was not at all what he had envisioned for himself. As a fifth year senior, Jones headed off to Beijing to do some manual labor for the U.S. embassy. After a year, he returned home with a tailored-fit business plan.

Jones started DJones Tailored Collection, his line of custom-made men’s suits for college students and young professionals, in May 2008. This year, Jones was awarded second place in the Newpreneur of the Year contest sponsored by Inc. magazine and Alibaba.com. The honor came with a $25,000 prize and recognition of Jones’ endeavor as being one of few to achieve success amidst the economic recession.

Drew Jones ’05 has found success in the world of custom-tailored menswear even in the midst of an economic downturn. [Photo courtesy Stacy Reeves]

The idea of starting DJones came during Jones’ time in Beijing, where custom suits can be made inexpensively compared to other world markets. Jones went to tailoring school where he learned how to take suit measurements, and then he offered his services to some of his fellow embassy workers to see if his product would sell. The response was hugely positive, and Jones set off to chase his newfound dream with $18,000 in savings and $12,000 in personal loans.

Experts appear to be divided as to whether starting a business in the middle of the economic recession is a gutsy gamble, or a nail in the coffin. For Jones, it was an opportunity to make his name in the world, and he went for it. Though the journey hasn’t always been easy, Jones falls back on his cardinal rule when the road gets rough: Be persistent. “You will face many obstacles and will have those days where you wonder if you will survive,” he says, “but that’s what keeps us thinking and what allows us to achieve success.”

Today, DJones offers its clients the opportunity to create a suit that is tailored to every aspect of their lives. Each customer has hundreds of fabrics to choose from, and DJones employees walk them through the process of creating a suit that is flattering not only to their physique, but to their personality as well. Though the suits range in price from $395 to $795, Jones offers his college clientele a significant discount. The response to this price cut has been tremendous, as Jones estimates that three-fourths of his clients are college students. “We provide our customers with a great opportunity. They are afraid to spend money right now, but still need to look sharp for their interviews and in the workplace; so we provide them with affordable, custom-tailored menswear,” says Jones. It is this genuine consideration for the customer’s needs that is making many start-up businesses formidable opponents for corporate America.

While DJones specializes in custom-made suits, the Cedar Hill company of seven also puts forth the extra effort to offer fitted customer service as well. Each of the employees and sales representatives works from home, and they meet their clients for fitting wherever is most convenient for the customer: homes, coffee shops, or Los Angeles, wherever. It is this commitment to customer service that keeps DJones competitive. Jones says he plans to use the $25,000 prize to upgrade the packaging of his suits, garment bags, hangers, and online shopping cart, and to expand his business to other areas in Texas.

Every year, Dan Wolterman’s Houston-based company gives away hundreds of millions of dollars of their product for free. If they don’t do it, they’d be sued for millions more. Sounds like a great business model, right?

That’s one of the biggest challenges facing the health care industry, says Wolterman, president and CEO of Memorial Hermann Healthcare System, which operates 91 medical centers in the Houston area, including 11 hospitals. How can you reduce the cost of health care when you’re required by law to give the service away free to some (uninsured patients), and at a loss to many others (Medicare/Medicaid patients)? Those who can’t pay inevitably add to the cost for the patients that can. In fact, 61 percent of hospitals in the U.S. today are losing money.

One of the biggest challenges facing the health care industry, Memorial Hermann president and CEO Dan Wolterman told an assembly of MBA students, is how to reduce costs while still fulfilling legal requirements to treat many for free or at significantly reduced rates. (view more photos)

The answer to this dilemma is important not only for Wolterman’s business, but for the future of the nation, as health care legislation looms large on Capitol Hill. The solution, in Wolterman’s estimation, is two-fold: a capitation payment system and a greater emphasis on wellness and prevention. He shared his ideas recently with students at Mays.

Under a capitation system, health care service providers would be paid a set amount annually for each of their patients. The set amount is determined by the average expected health care cost of that patient, based on factors such as their medical history, age, and location.

When payment is capped, wellness becomes very valuable, says Wolterman, who criticizes the “perverse incentives” of the current healthcare system, where the sicker you are, the more health care providers can earn. With a capitation system, providers are incented to keep patients from becoming ill, as it’s cheaper than treating them once they have become so, thus enabling doctors to pocket more of the money provided annually for each patient.

The end result, theoretically, would be healthier patients and reduced cost.

His prime example is compelling. A few years ago, his hospitals were spending hundreds of thousands of dollars on a handful of non-compliant diabetics without insurance. These patients would make poor health decisions that would land them in a hospital bed for 10-days at a time—four or five times a year. Each hospital stay cost Memorial Hermann about $25,000.

To curb this cost, the system did something radical: they offered free diabetes counseling to these patients, including a daily visit from a nurse to have their blood screened and administer medication and a quarterly visit from a nutritionist and an exercise specialist. The program cost $6,000 per patient—a significant investment.

The experiment worked: the system went from 100 such hospital admissions to one in the span of a year. Overall, they saved money, but they first had to spend money on wellness. This same system can be employed for many illnesses, he contends.

Radical changes are needed in the way we approach health care, he says. He holds up Japan as an example: They spend only 7 percent of their GDP on health care, yet are ranked number one for their health care outcomes globally. In juxtaposition, the American health care system is astounding: we spend twice as much as most other developed countries (currently 16 percent of GDP, predicted to increase to 20 percent by 2017), and we are generally much less healthy.

Wolterman has testified before congressional committees talking about his ideas for health care reform and wellness. He says most politicians are concerned with reducing cost—and that’s the wrong thing to focus on. What they really mean is price, he says, as cost is a function of price times volume. Congress is proposing to expand access to health care, which will undoubtedly increase volume, but not address price, and expect cost to decrease? That’s not tenable, says Wolterman. Look at Massachusetts, which is going bankrupt providing that sort of care. Before we can offer universal health insurance, we must address the price of care.

Wolterman also met with Business Honors students to discuss the health care industry and his own career. (view more photos)

Also, Wolterman says as a nation Americans need to address end-of-life care. Typically, 60 percent of all of a person’s health care expenses for their entire life will be spent in the last 30 days of life, he says. Should extraordinary measures be taken to keep a person alive, even when the quality of life is gone, or the likelihood of recovery is nil? These are questions that must be explored as part of the reform of the system.

The good news, says Wolterman, is that this is a great time for young people to consider a career in health care, where they will have the opportunity to be on the forefront of change in the system. When reform comes and the system experiences the huge shift he sees coming, Wolterman says everyone will be at ground zero. The executive playing field will be leveled, so newcomers will be able to rise through the ranks quickly. When considering your career path, don’t overlook the health care industry, he told students at Mays. Among its many benefits, a career in health care is recession proof: people get sick in a good economy, and, thanks to the added stress it brings, people only get sicker in a bad economy.

Clarence Otis, Jr., chairman and CEO of Darden Restaurants, will be honored with the 2010 Kupfer Distinguished Executive Award at Mays on March 3. This award is given in memory of Harold Kupfer ’54 and recognizes a business professional that has made a significant impact on the business world. The award will be presented at 8 a.m. in the Ray Auditorium (113 Wehner), followed by an address from Otis.

Otis

Before he joined Darden as vice president in 1995, Otis had an impressive résumé of previous leadership experiences. As a member of the New York Bar Association, he earned a law degree from Stanford Law School and worked as a securities attorney in New York City for four years. His time as a New York attorney prepared Otis to take the position of managing director and manager of public finance for Chemical Securities, Inc. (now JP Morgan Securities, Inc.) when he began his career in financial services a few years later.

At Darden, Otis oversees the world’s largest full-service restaurant operating company. Darden owns and operates nearly 1,800 Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze and Seasons 52 restaurants in North America, with annual sales of more than $7 billion. In addition to dishing out 400+ million meals a year, the company also serves its communities by employing 180,000 people.

Otis is actively involved in a wide range of educational and civic activities: he serves on the board of directors of The Metro Orlando Economic Development Commission, VF Corporation, Verizon Communications, Inc., the Federal Reserve Bank of Atlanta, and the Central Florida YMCA. He is also an active member of the Business Roundtable, the Business Council and the Executive Leadership Council, a professional network and forum for Fortune 500 African-American executives.

In April 2007, Otis was presented with a Horatio Alger Award and inducted as a lifetime member of the Horatio Alger Association of Distinguished Americans for his outstanding accomplishments, which showcase the American dream.

Gerald Ray ’54 and Donald Zale ’55 sponsor the Kupfer Distinguished Executive event to honor their friend and fellow Corps member for his outstanding career and contributions to the Texas business community.

For more information about this event, contact Missy Lund at mlund@tamu.edu.

Each year universities across the United States are given the opportunity to select some of their exemplary students to be named among Who’s Who in American Universities and Colleges. Mays is pleased to have 10 students selected for the honor by Texas A&M University.

Who’s Who describes its students as being those “young adults who enhance the positive image of American youth through their contributions to community and school.” Being chosen for Who’s Who means that the student has demonstrated exceptional leadership and service to his or her campus. University nominating committees representing faculty, administration, and the student body make their selections each fall from among all students eligible for the program.

Each of the students will be honored for their achievements at the All-University Awards Ceremony on the A&M campus on Sunday, April 18, during Parents’ Weekend.

Congratulations to all the Mays students who were chosen for Who’s Who this year:

Undergraduate

• Hunter Charles Bollman ’10, Accounting and Finance
• Dillon Dewald ’09, Accounting
• Gregory Gerard Dyer ’10, Finance
• Ashley Elizabeth Freeman ’10, Accounting
• Amber Jordan ’10, Management
• Matthew John Keenan ’10, Supply Chain Management and Marketing
• Travis Matthew Rutledge ’10, Management
• Casey Scott Schaefer ’10, Management
• Matthew Alan Wey ’10, Accounting

Graduate

• Eric George ’09, Accounting

I was sitting in Starbucks this morning, the day after Lane Kiffin announced that he was leaving after one year at Tennessee to become head football coach at USC. Just as I began to write this piece, Texas A&M women’s basketball coach Gary Blair walked through the front door. I do not know Coach Blair, but I was prompted to walk up to him and shake his hand to say thanks for what he brings to the table here. He is a fantastic recruiter, and there is no question that he is a salesman. But he has brought a stability and an integrity to the women’s basketball program that makes it easy to be a fan.

As I chatted with him, he mentioned that we are all struggling with ethical issues in our own lives, and that he had brought up a number of examples at a Lions Club speech the day before. I agree. But there is something deep in a person’s character that leads to a pattern of behavior. Certainly we all fall short of what we want to be. And a single failure can have disproportionate results in our lives. But it seems worthwhile to seek out the kinds of relationships that will give us the ability to live consistently, to make good choices as frequently as possible. And, as a society, it is worth our while to have the kinds of values that reward those who live this kind of life.

But, to be honest, we value far too many vacuous things as a society. Which brings me back to Lane Kiffin. The love of sports is deeply ingrained in me. But in so many ways, sports, particularly big-time intercollegiate sports, has abandoned virtue for success. And it results in fans and alumni who reward people like Lane Kiffin.

One of my favorite C. S. Lewis quotes about the importance of teaching virtue comes from The Abolition of Man: “We make men without chests and expect of them virtue and enterprise. We laugh at honour and are shocked to find traitors in our midst.” This must be the feeling in Knoxville this morning. One minute you are mocking Urban Meyer and Florida and thumbing your nose at the NCAA, and the next minute the head mocker is headed for Southern California. But these are chances to look inward at what we have become as fans.

I am no more a fan of the somber grinders like Alabama’s Nick Saban than I am of the Lane Kiffins of the world. His is another example of rewarding success, and success alone. Does anyone look like he’s enjoying what he does less than Nick Saban? His Gatorade dousing after the national championship game was perhaps the most painful celebration event I have ever witnessed. He seemed as likely to punch his players as to embrace them. I respect the fact that he did neither. But I cannot imagine having my son play for someone so humorless, so consumed by his work that he can’t even publicly enjoy reaching the pinnacle most coaches can only dream of achieving.

I am trying to teach my children, and my students, to embrace the types of values that make them the parents, spouses, and friends that can sustain a civil society in the next generation. Sports gives me a regular chance to examine my own heart, whether I am having a running conversation with a referee at a basketball game or critically evaluating my children’s performance. I do not claim to have the right balance. Competition reveals character more than it creates it.

But when I see the good in sports, I want to make sure that I say something publicly. Gary Blair, the consummate salesman, offered me tickets for the game tonight. I turned them down—this time. For once, all I wanted to say was, “Thank you.”

Imagine walking into a store with a shopping list on a digital device. As you pick up an item, information about the product, including user reviews, best prices at other retailers, and which of your friends is buying the same product, is displayed directly on the packaging, beamed there from your device. This sort of information stream that integrates technology and social interaction to fully engage the consumer at every moment of the shopping experience may be the future—the near future—of retail. (For an example of this kind of technology, watch this video clip from the recent TED conference.)

Retailing is dynamic, shifting as quickly as new technology creates new platforms, supply chains, and business models for selling everything from toilet paper to cars. Exploring such innovation in retail was the goal of the Thought Leadership Conference, held January 28 and 29 at Mays Business School. The event, which brought together 31 academic experts and senior retailing executives from the U.S. and other countries, was hosted by Mays’ Department of Marketing and Center for Retailing Studies.

The event was sponsored in part by the Center for International Business Studies at Mays, the Marketing Science Institute, and the American Marketing Association. Mays Professors of Marketing Manjit Yadav and Venky Shankar were conference co-chairs.

Social media: The game changer

Social media is revolutionizing retail, says Gary Kusin, a senior advisor at TPG and former CEO of FedEx/ Kinko’s. Kusin presented the keynote address at the start of the conference, presenting on an apt topic, as nearly every other presentation at the event had a social media component.

Our increasingly digitally connected society impacts retailing more than it does any other industry, says Kusin, as people’s consumption patterns and expectations are changing. No longer are television commercials the gold standard for advertising. In fact, consumers indicate that they are much more likely to trust product recommendations from friends or other consumers—even those they haven’t met—than they are traditional advertising. This necessitates a shift in the way retailers engage their audiences.

TPG senior advisor and former CEO of Fedex/Kinko’s Gary Kusin told attendees that social media was too valuable and widely used by consumers for retailers to ignore.

According to Kusin, social media presents an awesome opportunity for the kind of involvement consumers are looking for. Your brand IS being talked about, whether you’re a part of the conversation or not, he says. Thanks to innovations like Google Sidewiki, where any user can contribute information to any website, more and more it will be the consumers that control a brand image, not the corporation. Consumers want to be heard, not shouted at, says Kusin. They will patronize the company that listens.

Retailers that choose not to enter the social media conversation are missing the opportunity to engage their consumers where they are most interested. This platform gives a retailer a channel for providing customer service in a way that’s instant and public; building rapport and enthusiasm among customers; correcting misinformation; and gathering new ideas and feedback from those who know your products and are using them. It’s too valuable and ubiquitous a tool not to use it, says Kusin. Even the Pope is making use of social media, with his own iPhone app, Facebook and Twitter accounts, and Youtube channel. Of the top 10 most visited sites in 2009, four were social—five, if you count Craigslist.

This shift in expectations has changed retail from an environment of create > advertise > sell, to one where retailers listen > interact > react > then sell, says Kusin.

One challenge social media presents is metrics. No one has yet determined the formula for how much one follower, fan, or comment thread is worth, so when examining social media through a budgetary lens, its impact is difficult to quantify. Whatever the dollars and cents ROI turns out to be, Kusin says it’s easy to see that the retailers that are on the forefront of social media, such as Best Buy, are the ones that are succeeding in the marketplace.

Further Research

The purpose of the Though Leadership Conference was to identify new areas for research based on recent innovations in retail. Attendees were broken into six groups and assigned a specific area of retailing to explore, including global retailing, supply chain, and assortment.

The 2010 Thought Leadership Conference brought together 31 academic experts and senior retailing executives from the U.S. and around the world.

At the conclusion of the conference, each group of scholars and retail practitioners presented their thoughts on the future of retail and identified areas for future research in retailing innovation. Will facial recognition software and digital messages such as “shelf-talkers” and monitors within a store (think Wal-Mart) stream more highly targeted ads to shoppers? How could retailers best manage how customers share promotional codes via websites like Myretailcodes.com? How can retailers create a more seamless customer experience through multiple channels? Which new platforms or business models have the potential to radically alter the way retail is done?

Over the next few months, conference groups will continue to explore these questions while drafting papers to be published in a special issue of Journal of Retailing, to be published in 2011.

When David Mebane ’98 enlisted the help of the Mays Business Fellows to create a concept for a new business venture in College Station, he was thinking something along the lines of a drive-in movie theatre. What he got was the city’s hottest frozen yogurt shop, Spoons.

Senior accounting major Andrew Pappas ’10 (seen here serving customers) was part of a team that pitched the concept of a frozen yogurt business to David Mebane ’98 for a Business Fellows class project.

What began as a project for the Fellows has turned into a frozen treat sensation since the shop opened on Texas Avenue last fall. Andrew Pappas ’10, a senior accounting major at Mays, pitched the concept to Mebane alongside his teammates for a class project. Mebane was intrigued and started exploring options with them, moving it from concept to concrete business plan.

Any successful entrepreneur will tell you that in order to sell a product well, you have to know it inside and out. Each of the team members learned more about yogurt than they ever cared to: the difference in flavors across brands, what flavors were available, and which toppings consumers were most likely to pair with yogurt were only a few of the questions the Fellows team had to answer. Yogurt aside, Pappas spent an entire summer working alongside Mebane as they ironed out the logistics of opening the shop. Not only did everything have to be plugged in, decorated, and arranged, the team also entered the HR realm by working with employees to insure exceptional customer service.

Besides being simply delicious, Spoons’ competitive edge comes from the way it interacts with its community. The shop has become a popular hangout for Fish Camp groups and other campus organizations, and has partnered with various organizations to raise money for causes. Jennifer Hayes ’11, an officer of Christian Business Leaders at Mays, visited Spoons last semester to help raise money for CBL’s Support the Troops drive. “It was a very easy process. We called, set a date, signed some paperwork, ate yogurt, and made money,” says Hayes.

When tragedy struck Haiti a few weeks ago and students wanted to support the relief effort, Mebane donated every penny Spoons made on a recent weekday to the American Red Cross. Events like “Spooning for Haiti” appeared on Facebook, and the group “Eat Spoons—Help Less Fortunate!” had more than 1,600 members within a few days. The result? Spoons flooded with customers and experienced record sales.

Hayes said it best when she described what makes the business successful. “Right down to the shirts for sale, which say “Come Spoon with Us,’ [Spoons] appeals to the average college student.” Perhaps that has to do with the fact it was created in part by business-savvy Mays students.