Mays Impacts

TiVo is killing television commercials, while the Internet is making newspaper ads obsolete. Marketing budgets are shrinking, yet marketers are being asked to accomplish more than ever. These changes are reshaping the field of marketing at a fundamental level, says Philip Kotler, S.C. Johnson & Son Professor of International Marketing at the Kellogg School of Management, Northwestern University. What does he see in this new age of marketing 3.0? Connection and co-creation.

Paradigm shift

“Marketers are prisoners of an old paradigm,” says Kotler. That old paradigm says that companies need to maximize profits and please shareholders above all else, that customers are rational, and that they are informed by sellers, not by other customers, about purchases.

2010 Dean’s Distinguished Scholar Philip Kotler says that marketing has transitioned from being a monologue to a dialogue. (view more photos)

Communication in the old marketing paradigm was one-way, marketer to consumer. Now, it’s a multichannel, circular, dynamic process that involves rapid communication between marketers, consumers, and retailers. No longer do marketers have all the power. Increasingly, the power lies with consumers and middlemen.

Companies cannot simply transmit “buy this!” to consumers and expect success. Consumers now demand two-way communication and input into the product and services they consume. It’s a dialogue, not a monologue, says Kotler.

“You don’t want marketers to operate in a time warp,” he says. “It would be a mistake not to acknowledge the growing power of consumers and of middlemen…The middlemen are kings now.” As the liaison between a product and a consumer, middlemen/retailers are flexing their muscles as never before, expecting a bigger cut of the profit, and withholding shelf space when it is not given. One example is when big box chain Costco pulled Coca-Cola products from its shelves nationwide in late 2009 when the beverage company wouldn’t come down on their price.

In that light, marketers must be experts in listening and predicting. Instead of convincing consumers to buy the widget they are already making, they must ask consumers, “What kind of widget do you need?” and create products that are directly aligned with demand. They must ask retailers, “How can this widget make a profit for you AND for us?”

Kotler calls this community building, as opposed to brand building. Marketers should continue to build the brand but recognize that consumers control the brand. It’s up to marketers to serve the community that builds their brand. To that end, Kotler recommends practicing brand journalism: creating many brand messages that speak to different groups in the target audience.

Business with values: No bad companies

Thanks to the new age of instant information, you can’t be a bad company anymore, says Kotler. If you mistreat your employees, create a shoddy product, or leave a carbon footprint too large, your customers will know about it and demand better performance—or become someone else’s customer.

This is good news for everyone. It is the opportunity to combine profit, passion, and purpose in the marketplace, so that you can create goods and services that are not only different but that make a difference. This is leading to a new kind of capitalism in the U.S., the capitalism of caring.

“You don’t want marketers to operate in a time warp,” said Kotler, seen here talking to MBA students. “It would be a mistake not to acknowledge the growing power of consumers and of middlemen…The middlemen are kings now.” (view more photos)

Kotler discussed a recent book on this topic, Firms of Endearment, which asks the public which companies they love (like Apple, Amazon, or Southwest Airlines) about their business practices. The common denominator they found was an upside-down approach to stakeholders: instead of a pyramid of power with the investors on top, these companies place greater emphasis on employees, customers, and the communities where they do business. This is reflected in modest salaries for these top CEOs and better than average salaries for all other employees; an open door policy with top management; and a belief that corporate culture is the company’s greatest asset.

The recession has shaped more than marketing budgets–it has reshaped consumer values. People are less likely to pay higher prices for top brands when they perceive quality differences are minimal, leading to an increase in sales of store brands. People want to spend less, be more satisfied with less, and place more value on social and environmental consciousness.

This is what’s behind marketing 3.0, value-driven marketing that focuses on the triple bottom line: profits, people, and planet. It strives to make the world a better place. It utilizes new technology. Its key marketing concept is values. It engages and speaks to the whole person: heart, mind, and spirit. Its value propositions are products that are both functional and carry emotional and spiritual weight. More than ever before, people feel defined by and connected to the brands that they consume, and so they demand those brands deliver more.

Three primary forces shape marketing 3.0, says Kotler: the age of participation, the globalization paradox, and the age of creative society.

• Participation: computers, cell phones, low-cost Internet, open source software, and social media make it simple to communicate and collaborate. While marketing 2.0 focused on listening to consumer voices to learn customer insight, in marketing 3.0 consumers are co-creators of the products. R&D has become C&D (connect and develop).
• Globalization paradox: Never before has it been easier to connect to the whole world. While globalization connects many nations, it also hurts others (note the loss of blue collar jobs in the U.S.). In that way, globalization often provokes nationalism and protectionism. Buying local is increasingly important to consumers.
• Creative society: Humanity is moving into an age of creativity, where reliance on muscles is giving way to reliance on brainpower. Consumers are now not only looking for products and services that satisfy their needs but also searching for experiences and business models that touch their human spirit. Supplying meaning is the new value proposition in marketing.

Kotler used Starbucks as an example of a company that is utilizing marketing 3.0 concepts. They treat their employees well, offering greater training than most food service outlets, plus stock options and health benefits. They are involved in the communities where they are located. They are globally conscious, purchasing fair-trade products. And they offer a total sensory experience, with the highest quality ingredients, that connects with customers on a meaningful level. With these methods, they can beat out competitors while charging significantly more.

Kotler summarized this way: “The difference between marketing 1.0, 2.0, and 3.0, is whether you’re emphasizing reaching the customers mind or heart or spirit; whether you’re product-centered, customer-oriented, or values-driven; whether you only see yourself as creating economic value, or creating people value…or environmental value; and whether all you’re concerned with is profits, or social progress and sustainability.”

Kotler has shaped marketing thought for more than 50 years, and has helped industry move through marketing paradigm shifts before. So, according to this expert, while simply appealing to the customer’s mind may have worked on consumers of the past, successful companies have to touch the consumer’s emotions and human spirit. With this in mind, whether one is a marketer, retailer or candlestick maker, business people, according to Kotler, would be wise to move marketing efforts in the direction of connectivity and co-creation.

Philip Kotler visited Mays to present the Dean’s Distinguished Scholar Lecture on Friday, September 24. The Dean’s Distinguished Scholar Lecture Series is an annual forum to present the best in scholarly thought from an array of business disciplines.

Pursuing satisfied customers rather than high profits isn’t a mainstream Wall Street strategy for success. Yet, since 1938, when Max Gotchman began selling tires in San Antonio, Academy Sports and Outdoors met success with that very notion.

For Academy, this means establishing dominance in a core market and fostering happy customers. For Rodney Faldyn “88, president of Academy, this makes perfect sense. To execute this strategy, Faldyn adheres to four cornerstone values. “My job is pretty easy…not to stray from these four strategies that the company is built on.”

Speaking to room full of Mays grad students, Rodney Faldyn ’88 put the company’s strategy simply: “Focus on what you are good at.” (view more photos)

Faldyn put Academy’s strategy simply: “Focus on what you are good at.”

Right stuff

A geographic focus allows the company to know its customers better based on specific markets. Because Academy is a regional company, it can focus on a specific customer demographic. According to Faldyn, the Academy footprint is in the south and southeast. “There are a lot of similarities between a person in South Carolina, Georgia, Louisiana, and Dallas or Houston.”

Instead of a customized inventory with surfboards in California and ski equipment in Colorado, the company develops product lines for its core customer, a customer they “know the customer inside and out.”

Low price

The Academy strategy all comes back to “EDLP” or “every day low price.” Still, having low prices doesn’t mean selling low quality items, said Faldyn. Instead, their tactic is a “good, better, best” approach, an approach that sets Academy apart from its competitors. It carries low price products similar to those that big box discount stores offer. However, Academy also stocks mid-level and higher end products that sports retailers like Dick’s Sporting Goods and Sports Authority. At his stores, “You have every type of sneaker from $19.99 to 199.99,” said Faldyn.

In stock

Relative to its competitors, Academy typically has much more inventory. “We’re not going to miss sales due to an item being out of stock.”

The strategy is one that public companies and analysts would disparage, but Faldyn holds firm to doing what’s best for the customer. Though having a large amount of inventory is usually labeled as risky, Faldyn believes that avoiding an unhappy customer outweighs that risk.

Great service

In order to have happy customers, a store must have happy associates. “That positive attitude is an integral component of Academy’s culture,” said Faldyn. As a private company, Academy grows organically to maintain the culture and values that it was founded on, instead of through mergers.

One of the obvious elements of Academy’s great service cornerstone is its lenient return policy. Though some customers do abuse the generous policy, Faldyn explained that it is well worth the company’s reputation and continued customer loyalty to overlook these instances. “For every one customer that abuses it, there are many others that respect our policy.”

For Faldyn, leading Academy this way makes running a successful business simple. Know what you are good at, stick to your strategy, and, “if you have something that works, don’t change it.”

Rodney Faldyn recently spoke to students at Mays. He earned a degree in business from A&M in 1988. Before serving as president of Academy, he was the company’s CFO.

Faldyn held assorted executive positions at N.F. Smith associates, as well as eight years at Enron and seven years with Deloitte & Touche, LLP.

In London-based Financial Times latest rankings of executive MBA programs, Texas A&M’s Mays Business School is recognized as having one of the top programs in the world.

The 2010 rankings place the executive MBA program at A&M 11th in the nation among programs offered in the U.S. by public universities (29th among all U.S. schools, public and private), and 62nd globally.

This is an improvement over the last time the program was included in these rankings in 2007. At that time, the program was 16th among public U.S. programs and 66th globally.

The program was also ranked 2nd in the category of work experience among U.S. public schools (6th overall). Globally, they are ranked 17th in that field. The most recently admitted class of executive MBA students at Mays averages 17 years of work experience.

The Financial Times considers faculty research quality and quantity metrics in its rankings. A&M ranked 31st globally in terms of research productivity, based on appearances of Mays faculty members in 45 leading journals across all disciplines.

“We manage our program to produce business leaders, not rankings. Nonetheless, I am very happy when we receive independent recognition of our efforts and results,” said David Blackwell, associate dean for graduate programs, and RepublicBank/James W. Aston Professor of Finance.

What does it take to succeed as an entrepreneur? A degree from a prestigious school? A great business plan? A really nice suit? Larry Warnock ’83 says it’s simpler and more fundamental then that: creativity and passion.

“The people who become successful have creativity and passion, and when those things blend, exciting things happen.” Successful entrepreneurs, according to Warnock, “have the passion to stick with their idea even though everyone tells them it’s the stupidest thing they ever heard of.” They also have the creativity to develop a new product or service, or see a market in a new light. Starbucks didn’t invent coffee, but they did invent a new way of serving it. Entrepreneurs must see opportunities in the marketplace where others don’t.

“The people who become successful have creativity and passion,” Larry Warnock ’83 told a classroom full of undergraduate business students. “When those things blend, exciting things happen.” (view more photos)

Warnock’s an expert: he has more than 25 years of experience working with start-ups, most recently as the president and CEO of Phurnace Software. B.M.C. Software acquired Phurnace earlier this year, freeing Warnock up to return to his passion—being involved with very young companies. He is now an advisor with DFJ Mercury, a privately held venture capital firm.

Many students haven’t considered entrepreneurship, says Warnock, and they should. “It’s an exciting business career option,” he says, and one that is essential to the economy.

“Entrepreneurs are the true creators of wealth in the economy. They are the creators of ideas, of business, of jobs, and of wealth.” Every major company started out as “two or three people in a garage…drawing pictures on the back of a napkin. Every business started as an entrepreneurial venture.”

Entrepreneurship is for the resilient because for every product that sells, there are probably 50 that flopped. “It’s a high stakes poker game….you’ve got to try again and again and again…and occasionally you get a Facebook. Occasionally you get an Apple.”

Warnock’s advice for applies to students, entrepreneurs, and those in traditional business environments.

1. Interact with your customers regularly. Whether your product is floor cleaner or tooth brushes, get out there and see the product in use. Talk to the people that use it. You will glean new ideas and insights that will propel the business forward.
2. Be decisive. This is something Warnock says he learned through his time in the Corps of Cadets at A&M. “You need to learn how to make tough decisions and make them quickly…then act.” He says too often he sees “death by duck bite,” where a manager or company fails to act decisively and is then nibbled to death by small, wrong decisions. If a tough decision is in front of you, bite the bullet. Don’t make a half-decision.
3. Be nimble. Once you’ve made a decision, you may need to change your mind later on. “Even if you’re on the right track, you’re going to get run over if you just sit there.”
4. Maintain a healthy paranoia. Somewhere there is an entrepreneur gunning for your business that will up-end you if you’re not prepared for the competition.
5. Sometimes all you can do is say “IIWII,” or “it is what it is.” There are certain situations you can’t change. When something is out of your control or not going your way, apply your passion and creativity on the things that you can affect. Then move on.
6. Have a vision and execute with a passion. What is passion? “A feeling at your core that this is important to you.” That’s what you should build your business or your career on.

Advice and lessons learned in the classroom will only get you so far, says Warnock. There is no one recipe for a successful venture or career, and frequently what you major in will have little bearing on your career (Warnock has a degree in marketing from A&M). Many times you will learn the skills you need for your job on the job, or while you’re creating your job. Successful people bring their creativity to an opportunity and have the passion to drive it through. That’s the secret to success.

“Creativity and passion…These really differentiate successful business people and successful entrepreneurs.”

In addition to his entrepreneurial ventures, Warnock frequently guest lectures in the MBA program at the University of Texas at Austin and the Acton MBA program of Hardin-Simmons University. He serves on the executive committee of the board of directors for the Austin Technology Council, a non-profit that focuses on the advancement of the technology community in central Texas. He is also an advisor to several early-stage technology companies on their go to market strategies and fundraising activities.

The 100 fastest-growing Aggie-owned or Aggie-led businesses in the world will be recognized October 22 at the sixth annual Aggie 100 program, sponsored by Mays Business School’s Center for New Ventures and Entrepreneurship at Texas A&M University.

The Aggie 100 focuses on growth as an indicator of job creation, product acceptance and entrepreneurial vision. Recipients of the award were selected based on compound annual revenue growth rate for the 2007 to 2009 period. In all, companies from six states and three countries will be honored at the event.

Each year, the Aggie 100 program recognizes the 100 fastest-growing Aggie-owned or Aggie-led businesses in the world.

Several of the businesses on the list are local to the Bryan/College Station area, while many others are from across the state of Texas.

More than 450 representatives and guests of honored companies have been invited to the A&M campus for the event. Six hundred people are expected to attend the luncheon in The Zone Club at Texas A&M’s Kyle Field, including approximately 100 current students. A&M President Bowen Loftin will present the keynote address at the luncheon.

A complete list of all companies qualifying for the 2010 Aggie 100, along with their placement on the list, will be formally announced at noon October 22. The list will be posted later that day on aggie100.com.

To be considered, companies (corporations, partnerships, sole proprietorships) must operate in a manner consistent with the Aggie Code of Honor and in keeping with the values and image of Texas A&M. They must also meet the following criteria:

• In business for five years or more as of June 30, 2010; and
• Verifiable revenues of $100,000 or more for calendar year 2007.

Additionally, the company must meet one of the following leadership criteria:

• A Texas A&M former student or group of former students must have owned 50 percent or more of the company from January 1, 2007, through December 31, 2009, or
• A Texas A&M former student must have served as the company’s chief executive (for example chairman, CEO, president or managing partner) from January 1, 2007, through December 31, 2009, or
• A Texas A&M former student must have founded the company and been active as a member of the most senior management team from January 1, 2007, through December 31, 2009.

About the Center for New Ventures and Entrepreneurship

The Texas A&M Center for New Ventures and Entrepreneurship provides encouragement, education, networking and assistance to entrepreneurially minded students, faculty and Texas businesses. Founded in 1999, the center is part of Mays Business School’s Department of Management. The center enhances student education through campus speakers, competitions, work experiences and financial support. The Texas A&M faculty and Office of Technology Commercialization benefit from the center’s educational programs, extensive business community network and the entrepreneurial services.

The center also reaches out to the state’s business community offering educational programs, business assistance and access to university resources.

The center is supported by corporate and individual members and sponsors who believe in the value of an entrepreneurial education program and the value of Texas businesses working with Texas A&M University.

For more information

To find out more about the Aggie 100 program, visit Aggie100.com or contact Ashley Crane, assistant director of the Center for New Ventures and Entrepreneurship at (979) 845-4882 or aggie100@tamu.edu.

How do you learn to lead a department, regional division, fleet, or multinational organization? Theory based-education will only get you so far. It’s experience that truly hones your skills.

From creating cost-saving systems to developing new growth strategies, students in the Texas A&M Executive MBA Program at Mays must use their business knowledge and leadership skills to tackle an important challenge facing their organization. This effort, their Capstone Project, creates solutions for a real problem, giving immediate application to their classroom learning—and creating value for the individual students, their companies, and their customers.

In fact, The Wall Street Journal recently ranked the A&M Executive MBA Program first in the nation for precisely this sort of experience: when examining factors such as raises received after graduation, company-sponsorship figures, tuition, and out-of-pocket costs, the program was ranked number one for individual return on investment. This program is a point of differentiation for Mays, most executive MBA programs don’t incorporate participants’ professional work into an individualized curriculum.

Below are some of the most interesting and impactful Capstone Projects to come out of the EMBA Class X, which graduated in May 2010. Their work will save millions of dollars and create more efficient organizations that will grow the economy. You don’t have to be considering an executive MBA to learn something from their experiences, too.

Shawn Corkran

Director, Transmission and Distribution Operations, Entergy Texas, Inc.; Beaumont, Texas

Hurricane winds blow, ripping off roofs and siding, shattering windows, relocating trees and trashcans, and downing power lines. When the storm is over, the vital work of restoration begins. Key to the recovery is turning the power back on—a job that customers expect to have completed very quickly. A job that requires a huge investment of manpower.

Shawn Corkman developed a model to optimize Entergy’s decisions for supporting emergency operations.

For a business utility company with approximately 500-1,000 employees, the restoration process after a catastrophe can temporarily swell their ranks to more than 10,000-15,000. Acquiring the additional workers from contractor companies and other utility companies, then providing for them logistically (equipment, housing, food) in a storm-damaged area is a huge resource management and supply chain challenge.

As a longtime Gulf Coast resident and Entergy employee, Shawn Corkran knows how vital timely response to natural disasters is. The focus of his EMBA Capstone Project was improving Entergy’s ability to bring in thousands of new employees and put them to work as quickly as possible. Applying what he learned in operations management, Shawn developed a model to optimize Entergy’s decisions regarding crew deployment, housing, and meals. After many hours spent building and validating the model, Shawn’s work resulted in his promotion to director of operations.

When he presented his project to his storm team at Entergy, his ideas were enthusiastically embraced. Shawn expects that his proposal, which includes the creation of a new resource management model, will be applied in the near future.

“My storm team loves this,” he says of the new model. “It allows us to take people who are under a lot of stress and a lot of duress, and make good decisions on behalf of everybody.”

Sara Bucaram

Brand Manager for Services Marketing department, Dell; Dallas, Texas

“Many hands make light work,” says the proverb—but how many hands are needed depends on the job. For her Capstone Project, Sara Bucaram evaluated her team of IT professionals at Perot Systems, delving into the daily details of their work to create a scalable model so that as customer volume grew, the appropriate number of staff would be added.

Her ambition was not micromanaging her employees, but rather understanding the demands of the position so that each team within Perot was right-sized for the workload of a particular client. Sara measured and analyzed the time spent on each IT request, the number of requests each employee handled per month, and the customer feedback. She says it was enlightening to turn over every rock and analyze specific components of the employees’ days.

When all of the data was collected, Sara determined that each team member should be able to respond to about 200 requests per month. Using this and other variables, she developed a model that could forecast staffing adjustments based on a client’s growth rate.

After her Capstone Project, Sara says there is great value for managers in any kind of business to closely examine the output delivered by a team of employees. Only after fully understanding the objectives and the nature of the job can a manager determine if modifications to team size or workload would lead to greater productivity.

Before Sara’s models could be applied to other teams within the company, Perot was acquired by Dell. As the companies merge, Sara has moved from service to marketing, but the experience she gained from her project and from the EMBA degree are not wasted. They have opened doors for promotion for her in the reorganization phase. When the dust settles, Sara plans to implement certain elements of her models to teams within Dell.

Michael Hopkins

Production Control Group Leader, IAH/HOU Heavy Aircraft Maintenance, Continental Airlines; Houston, Texas

Mike Hopkins can easily quantify the value of his Capstone Project: millions of dollars in corporate savings.

From the trucks that tow the luggage from the gate to the plane, to the tugs that push aircraft into position on the ground, it takes a fleet of thousands of support vehicles to ensure that your flight leaves safely and on time. Mike’s Capstone Project was to improve efficiency in the strategic organization of Continental’s ground services equipment division.

A problem of this magnitude was more than Mike could handle alone, so he enlisted the help of four Mays Full-Time MBA students, Justin Zsiros, Derek Egbert, Imraan Mulla, and James Kress. Together the team collected and interpreted more than 60,000 lines of data on vehicle performance and maintenance. After eight months of hard work that required the cooperation of many units within the organization, Mike was ready to present his recommendations to Continental’s top executives.

The results were received with excitement and will be used to drive change and reduce costs at every hub within Continental’s system. Mike’s timing couldn’t be better. Continental is currently preparing for a merger with United Airlines, and both companies will place a high priority on streamlining operations as they integrate.

Bruce Pool

South Business Unit VP for North America, Aggreko, LLC; Houston, Texas

Not all growth is good. If expansion isn’t strategic, then it may not be sustainable. So says Bruce Pool, whose Capstone Project examined the growth patterns of the rapidly expanding global firm, Aggreko, LLC, a rental power, temperature control, and compressed air systems company.

Bruce Pool’s Capstone Project has helped Aggreko take a more critical look at their expansion plans.

As demand for services outpaced strategic planning, Aggreko had followed customers’ growth into new markets, committing $8-$12 million in facility, rental fleet and people with each new site. In many cases the investments were successful. But if the customer they were following had a downturn, if the market was too narrow or already saturated, or if they could offer no advantage over area competitors, then they experienced only marginal results at best.

To help Aggreko understand the dynamics of rapid expansion, Bruce gathered and analyzed economic and market data for 50 existing sites that had performed best for Aggreko in recent years, not in terms of total revenue, but for year-over-year increases. Using these data, he then developed a model to evaluate six sites under active consideration for expansion.

The data he collected challenged assumptions about the way Aggreko does business, such as the long-held belief that growing in areas with a large energy trade was the best strategy. It turned out, however, the best markets are far more diversified.

Based on Bruce’s project, Aggreko has put expansion into one of the markets it was considering on hold. During the next year, he hopes to refine the model to more effectively incorporate pricing and demand data by sector. As the company grows globally, his models will be at the forefront of expansion decisions.

While the global recession can be blamed on many factors and individuals, Peggy Cunningham ’92 thinks there is one player in the catastrophe that has been largely overlooked: business schools.

“Something that hasn’t been in the discussion—in newspapers, business magazines or whatever—is the liability of business schools in thinking about the products we have created,” said Cunningham in a 2009 interview with The Globe and Mail. Business schools must examine their curriculum and core concepts carefully as they train the next generation of business leaders.

Cunningham ’92

That is precisely what Cunningham is doing at Dalhousie University (Nova Scotia, Canada), where she was recently appointed dean of the faculty of management (this title is equivalent to Dean Strawser’s position at Mays). She believes a greater emphasis on corporate social responsibility is a needed shift in MBA education.

There has been too great a focus on individualism in business education, says Cunningham. “Many people say greed is good. That has promoted a lot of wellbeing, but I don’t think those models are sustainable any longer,” she says. “If what it takes to make one person rich is to make two-thirds of the rest of the world poor, I don’t think that’s a sustainable model. It’s a big wakeup call. When we look at issues of sustainability, we have to look at not only our own sustainability but that of our society.”

Cunningham joined Dalhousie in March 2009 as director of the School of Business Administration and associate dean (research). In April of this year she was promoted to dean, making her the first woman to hold the role in the school’s 35-year history.

Regarded as one of North America’s leading professors of corporate social responsibility and marketing, she is widely published and has received numerous accolades for her teaching prowess.

Cunningham graduated with a BA from Queen’s University, an MBA (marketing) from Calgary and a PhD (marketing) from Mays. Prior to her position at Dalhousie, she spent 19 years at Queen’s, where she served as director of the Centre for Corporate Social Responsibility and founded the accelerated MBA program.

Her ideas about education aren’t limited by geography: she has worked in the U.K., Germany, China, and the U.S. She recalls an interaction with an Australian colleague who works for a large bank. “She was doing work on responsible leadership with a group of us who are senior people in business schools. She looked us in the eye and said: “You have graduated a generation of monsters.’ It brought home that business schools have to take a very hard look at themselves to see the kind of people we are graduating and take our responsibility very much to heart in terms of the models we use to graduate these people.” Now more than ever, training leaders that understand the value of ethics is central to the future of business.

The year was 1960. A young engineer fresh out of college was granted a patent for his invention; an invention he knew would radically shift an industry. The competitor’s product weighed 400 pounds and cost $800. His? A mere 10 pounds selling for $105.

He had a great, patented idea but no money and few connections. What did he have? Desire.

“I started with nothing…I didn’t have any money, so I rode a Greyhound bus for two years from city to city introducing my product, an electronic valve actuator, to chief engineers and getting orders from them. I built the business one sale at a time.”

Frank Raymond started out with one great invention, a Greyhound bus ticket and a whole lot of moxie.

Fifty years later, Frank Raymond’s hard work has paid off. Though now co-founder and chairman of a multinational corporation, he has not forgotten those long bus trips doggedly pursuing sales. He wants to use the lessons he’s learned to benefit the entrepreneurs of tomorrow. That was the motivation for Raymond and his wife, Jean, to commit $410,000 for scholarships through the Mays Business School Center for New Ventures and Entrepreneurship over the next 20 years. Along with the financial gifts, Raymond wants to mentor scholarship recipients.

Taking a product from design to production, launching and selling and merging companies, opening plants all around the world—Raymond has seen it all when it comes to entrepreneurship. He hopes that through these scholarships, he can help a young person learn in the classroom what he had to learn through the hard lessons of experience.

• • • • •

After the Greyhound sales trips to build his first venture, R&A Machine Company, Raymond merged the business twice, eventually becoming Raymond Control Systems. In 1976 he sold out of that business and started his next project, founding the controls division of Keystone International, Inc., the oil field services company owned by Texas A&M patron Galen T. Brown. Both businesses grew exponentially under Raymond’s leadership. Eventually, he led Keystone as president of their North and South American offices.

The transition as Keystone moved from a private to a public firm was a learning experience, says Raymond, as greater external funding meant he was able to control less of his company, leading to business decisions he didn’t agree with. After Keystone’s public offering, Raymond and Craig Brown ’75 (son of Galen) left the company to organize Bray in 1986. Raymond is proud to boast that Bray is not for sale and that it has never been dependant on outside funding. He has no intention ever taking the company public, as that would put others in the decision-making seat that he enjoys sharing with Brown, now the president and CEO.

Some entrepreneurs can’t sit still long enough to enjoy a meal all the way through dessert. Raymond defies this stereotype. He founded Bray in 1986 and says the work there continues to be fulfilling, especially as the company grows, adding new products and services, acquiring other companies. “It’s been a phenomenal growth company…It’s been such an exciting run and it’s still exciting.”

“Entrepreneurs will never be comfortable for long. There will be happy and prosperous periods and other times when you’ll lose your shirt. The majority of your career will be spent adjusting to or creating change. ”
—Frank Raymond

The life of an entrepreneur isn’t for everyone, Raymond acknowledges. “The risks of entrepreneurship are extremely high and the work ethic must also be extremely high. You have to have tremendous drive to do it.” Entrepreneurs will never be comfortable for long he says, as there will be happy and prosperous periods of the business, and other times when you’ll lose your shirt—but the majority of your career will be spent adjusting to or creating change. In that environment, it takes a certain breed of person—and a certain kind of family—to survive and thrive.

Raymond counts himself lucky to have the family that he does, as their support was integral to his success. “I never had to worry about them being a problem, as families can be if they get scared.” He says his wife never complained when, more than once, he leveraged their assets to invest in advancing the business.

In fact, Jean was also an entrepreneur, operating her own interior design business for many years, so she understood better than most the challenges her husband faced.

“The driving force [for an entrepreneur] is starting from nothing and trying to be successful for yourself and for your family,” says Raymond.

“I think most people don’t have the fire in the belly to take those risks. But I do.” In the end, the risks are well worth it. “The satisfaction is unbelievable. Some people call it the rush…solving problems, moving ahead, the challenges of constantly developing new products and seeing them become successful in the market place.”

“I must say, even after doing this for 50 years, I’m still emotionally excited about what we do and where we’re going and how we’re getting there.”

Three alumni will be honored for their careers of merit and lives of service at a gala event on Thursday, October 7, as Mays Business School recognizes the 2010 recipients of their Outstanding Alumni Awards.

This year’s recipients are John A. Van Alstyne ’66 of College Station; Robert D. Loeffler ’77 of San Antonio; and Bruce D. Broussard ’84. (See bios below.)

“These alumni exemplify what makes Mays and A&M so special,” said Mays Dean Jerry Strawser. “They have excelled professionally and personally, making an impact on their organizations, their communities, and the world. We are honored to call them our former students and are proud to give them the recognition that they deserve.”

John A. Van Alstyne ’66

Service to the nation and leading and developing young Americans, both soldiers and civilians, have been the hallmarks Lieutenant General John Van Alstyne’s career.

Van Alstyne ’66

Before he became a decorated officer, he was known simply as fish Van Alstyne in the Corps of Cadets at A&M. He graduated, received a commission in the U.S. Army, and traveled the world in the service of his country. In 2002, he returned to campus to serve as the 38th Commandant of Cadets and Head of the School of Military Sciences. Today, he puts his leadership expertise to work as the director of the Mays Business Fellows program.

In addition to a degree in marketing from A&M, Van Alstyne holds a master’s degree in military science from the Army Command and General Staff College, and a master’s degree in national security and strategic studies from the Naval War College.

Van Alstyne’s long career in the Army provided him with a variety of leadership experiences. He led troops in Germany, Vietnam, Panama, Iraq, and at a number of posts in the United States. His final military assignment was as deputy assistant secretary of defense for military personnel policy at the Pentagon, where he worked with displaced military families after 9/11. It was that kind of experience that impressed current Secretary of Defense Robert Gates, then president of A&M; Gates described Van Alstyne as “a no-nonsense person” when he put him in charge of the disaster relief efforts at A&M after Hurricanes Katrina and Rita brought hundreds of refugees to campus.

In the course of his long military career, Van Alstyne has received a number of awards: three Defense Distinguished Service Medals, the Army Distinguished Service Medal, four awards of the Legion of Merit, two Air Medals, and five Army Commendation Medals. He also holds the Combat Infantryman’s Badge.
During his seven-and-half years as Commandant of the Corps, Van Alstyne worked to emphasize leadership and academics. Now at Mays, he is working with top students through the Fellows program, a premier leadership opportunity for business Aggies.

“I enjoy very much working with the Fellows program,” he says, noting that the students he works with are intelligent and interested in service. “Their optimism and enthusiasm are encouraging.”

Van Alstyne and his wife, Anita, reside in College Station. They have three children and six grandchildren.

Robert D. Loeffler ’77

From his small town start to his role at the helm of a Texas-sized, Texas-based company, Robert Dean (Bob) Loeffler has worked diligently to develop a career and a life of significance.

Loeffler ’77

Loeffler attended the U.S. Naval Academy in Annapolis, Maryland, where he graduated with a bachelor’s degree in 1972. He then served as an officer on a destroyer, including combat duty in Vietnam. His military experience became a leadership training ground: at 22-years-old, had 40 men under his command. His sphere of influence continued to grow as, after six years in the Navy, he proceeded to A&M where he taught naval science courses. While teaching, he also earned an MBA at Mays, which he completed in 1977.

After a brief experience in the oil and gas industry, Loeffler began work for H-E-B in 1979 as a systems designer in the management of information systems department. He held several positions in that area, which eventually led to his appointment as the vice president of the department.

In 1990, Loeffler became the leader of the burgeoning Pantry Foods division as vice president and general manager. In 1994 he added to his bank of knowledge and skills by attending the advanced management program at Harvard Business School. In 1996, he was promoted to senior vice president/general manager of H-E-B Pantry Foods and in 1998 was promoted to president of the division.

The following year, Loeffler moved to H-E-B headquarters in San Antonio, where he served as president of the Dallas region and Pantry Foods division and also as the interim chief information officer. In an impressive initiative, Loeffler commenced a major enterprise resource planning program, beginning in 2000, which remains in use today. Loeffler was named president of H-E-B in January 2003 and served in the position until, beginning the retirement process, he stepped down early in 2010.

He continues to work for H-E-B part-time as chief administrative officer and will serve in that capacity until 2012, when he plans to retire completely.

Earlier this year, he received the M.B. Zale Visionary Merchant Award, presented annually to a retailer who is celebrated for their innovation in the field. While on campus to receive the award, Loeffler impacted hundreds of students as a guest lecturer, sharing lessons learned from a long career in retail leadership.

Loeffler was chairman of the San Antonio/Bexar County United Way Campaign for 2009, is a member of the board and executive committee of the National Association of Chain Drug Stores, and a member of the San Antonio USO advisory board.

In addition to a successful career, Loeffler has achieved a deal of success in his personal life. He is married to his high school sweetheart, Janet. They have two daughters and five grandchildren.

Bruce D. Broussard ’84

Striving to create and maintain a balance between the business and the personal as well as the financial and the philanthropic arenas of life, Bruce Broussard’s desire to balance a life of accomplishments with a legacy of service is evident in the way he lives.

Broussard ’84

As chairman and CEO of US Oncology, Broussard is leading the company in doubling its size during one of the most uncertain times for the healthcare industry. Broussard is passionate about improving the company and its work environment. A family man himself, he encourages employees to take advantage of the company’s flexible work arrangements, empowering them to achieve balance between their professional and personal lives.

Cancer, the enemy US Oncology battles everyday, impacts communities in addition to individuals. That’s why the company and its CEO are heavily involved in supporting cancer related charities, giving to the communities where the business operates. Broussard directed the creation of the Life Beyond Cancer Foundation in 2008, among his many charitable works. The foundation is US Oncology’s primary philanthropic vehicle, advancing cancer care in local communities by removing the barriers to prevention, education, early detection, treatment and survivorship. The foundation also sponsors a survivors’ retreat and provides financial support to patients undergoing cancer treatment.

Janine, Broussard’s wife of 17 years and a former operating room nurse, shares his commitment to serving the community. It is a family affair as they involve their two children, ages 11 and 15.

Though Broussard is known for his compelling work ethic, he makes time for the activities that renew his spirit. An outdoor enthusiast, he enjoys saltwater fishing, cycling, and any outdoor activities that he can participate in with his family.

He has lived in many areas of the country, but Broussard is a Texan at heart. He earned a double major in accounting and finance from A&M and an MBA in finance from the University of Houston.

Prior to joining US Oncology, he was CFO of two publicly traded healthcare companies and CEO of a $20 million private company. He joined US Oncology in August 2000 as the CFO. In November 2005, he was appointed president of US Oncology Holdings and US Oncology and served as CFO of each. In February 2008, Broussard began serving as CEO and a board member and was named chairman of the board of US Oncology in September 2009. He also serves on the board of US Physical Therapy.

More information

• Previous Mays Outstanding Alumni Award honorees

Penner

Ethan Penner, who is widely recognized as a pioneer and innovator in real estate finance, will share his insights regarding the recent economic turmoil with Mays MBA and master of real estate students. Penner, who will be on the A&M campus Friday, October 8, currently serves as the executive managing director of CB Richard Ellis Investors.

Using commercial mortgage-backed securities and the development of that market as a springboard, Penner will discuss the impact of financial leverage on the economy. Asset devaluation, economic growth, and job creation, as well as challenges and opportunities in moving forward will also be discussed.

Penner’s visit is part of the Mays Dean’s Distinguished MBA Executive Speaker Series.

Penner joined CB Richard Ellis Investors in 2008 as an executive managing director and member of the firm’s executive committee. He has 24 years of experience in the real estate sector. Penner earned a BA in finance from New York University. He is currently a board member of The League, an organization aimed at encouraging youth to engage in community service through the use of a competition-based model.