Mays Impacts

The world is waiting for full economic recovery, and the retail sector — the “engine of the American dream” — has a role in that rebuilding. Those were the words spoken and reinforced at the recent Retailing Summit conference in Dallas.

Roy Spence, author of It’s Not What You Sell, It’s What You Stand For, emphasized that to survive, companies must be driven by purpose.

Culture and branding were common themes at the 2012 Retailing Summit conference hosted by Mays Business School’s Center for Retailing Studies in October.

Southwest Airlines puts people first

Southwest Airlines, for instance, is not in the transportation business. Instead, it gives people the freedom to fly and democratize the skies. Great companies offer customers more than quality products or services, they commit to improving the lives of their customers, says Ginger Hardage, Senior Vice President of Culture and Communication at Southwest, the nation’s largest domestic airline. Its fleet of 700 aircrafts serves 100 million customers annually.

Ginger Hardage, Senior Vice President of Culture and Communication at Southwest, told conference attendees that great companies commit to improving the lives of their customers.

By putting people first and treating customers like family, the low-cost airline has built an edgy brand, elevating it to 10th on Fortune‘s “most admired companies” list. Hardage says maverick marketing and promotion played a key role in differentiating Southwest Airlines. In an industry plagued by bankruptcies, bag fees, bad press and overall passenger frustration, Southwest has remained profitable for 39 consecutive years by valuing people (customers and employees), nurturing its culture and changing ahead of the times to remain relevant for the ever-evolving consumer.

Companies must personalize relationships with customers

GameStop’s Jenn McMillen described the $10 billion dollar retailer’s culture as “irreverent.” Journeys CEO Jim Estepa said the teen footwear chain must always “be cool” and embrace diversity. Toys”R”Us, Inc. Vice President of HR Kelly O’Neill labeled his employees “brand ambassadors.” Together, they demonstrated the many diverse ways companies define, cultivate and communicate brand promise and inspirational customer experiences.

In 2010 McMillen launched GameStop’s PowerUp loyalty program. In 23 months, more than 20 million customers signed up for the rewards program. By capturing and analyzing customer purchase information, GameStop personalizes promotions, engages members through “love it/hate it” game evaluations, excites buyers through game reservations, and better drives new sales, pre-owned sales and trades. A PowerUp member who interacts with GameStop through all four of these customer experience options is worth $8x in annual sales what a non-loyalty member who shops one channel, such as only buying used games. This successful program makes GameStop very data rich and able to target and reward customers.

Changing the way people shop

While GameStop’s market share and roster of 6,000 stores surprised many audience members, most attendees had shopped the members-only e-commerce site, Gilt Groupe. Co-founder Alexandra Wilkis-Wilson recapped the luxury flash sale site’s early days, saying, “We didn’t have a business plan when we launched.” With experience and valuable contacts from her work at Louis Vuitton and Bulgari, Wilkis teamed with other Harvard grads and engineers to put sample sale merchandise in the hands of consumers. This mix of knowledge was vital to the business’s execution and the ultimate success of the start-up.

Gilt Groupe has changed the way people shop. Each day members receive highly customized promotional emails based on past purchases, click-through history, gender and zip code. By effectively using data, Gilt personalizes customer interaction with the brand. Gilt also made heavy early investment in its mobile application, which is now faster than the traditional web platform. This further connects Gilt to its affluent, on-trend customer base. In fact, Gilt has only run one print ad in the last five years. Instead it relies on events, public style influencers, social media and word of mouth for customer acquisition.

Fun is needed in business

Teen shoe retailer Journeys builds customer relationships through numerous “cool” events, including the annual Backyard BBQ Tour concerts. By hosting top bands, extreme sports exhibitions, and skateboard competitions, Journeys stays relevant to an ever-finicky young customer through music and unique experiences.

Toys”R”Us Vice President of HR Kelly O’Neill (left) spoke about his company’s focus on being serious about fun.

Jim Estepa says the Journeys executive team surrounds themselves with teenagers and young people to stay current with trends, lifestyles and youth culture. Many of the chain’s 1,200 stores are staffed and managed by associates under 20, which energizes the stores. Journeys celebrates and rewards “attitude” among employees through incentive compensation, recognition programs, manager meetings and amazing vacations for top performers.

At Toys”R”Us, engaged employees value bringing joy to children and families. As the world’s leading toy retailer, Toys”R”Us attracts positive people who play to win, but are serious about fun. Kelly O’Neill proposed his department members “are the drivers of the employment brand. Through video, photos, social networks, print and surveys, they communicate that kids are at the heart of the business.”

O’Neill bluntly stated, “We must hire nice, fun people because that’s not something you can teach.” Toys”R”Us’ charity work helps attract people who fit the brand. The company is the largest corporate supporter of Autism Speaks and Alex’s Lemonade Stand, which funds children’s cancer research. They help military personnel celebrate life milestones through gifts, toys, and even baby shower presents no matter where they are deployed worldwide. This consistent and cultivated employment brand message results in high team retention.

Eliminating customer pain points

Retail marketing maverick Jim McIngvale, founder and CEO of Gallery Furniture, reviewed key tenets that drive his business, including:

1. Create real value.
2. Don’t sell, help customers buy.
3. Retailing should be entertaining.
4. Micromanage on behalf of the customer.
5. Retail is about emotion.

Gallery Furniture founder and CEO Jim McIngvale stressed the importance of eliminating “anything that stands between the customer and your company.”

McIngvale recounted how his team prejudged a customer as either not ready or unable to buy. After feeling ignored, she showed McIngvale, who is ever-present in the store, her purse filled with $20,000 in cash. Whether his customers seek the perfect night’s sleep on a $30,000 mattress or to furnish a living room for less than a $1,000 with bargain tent finds, each customer deserves respect.

He shared Gallery Furniture’s commitment to eliminating customer pain points which he defined as “anything that stands between the customer and your company.” The top complaints for his store related to a poor delivery experience. Customers hated receiving dinged-up dining sets and scratched settees. They resented four-hour delivery waits, and worried over welcoming burly men, who offered more brawn than beauty, into their homes. Today, Gallery Furniture applies higher employment screening practices; its drivers wear recognizable company uniforms; and GPS chips monitor trucks, texting customers updates with the exact time their merchandise left the warehouse and when it will arrive at their doorstep.

Create social value in shopping

The Maritz Institute shared its philosophy on “the social life of brands.” The default system of the human brain is “social.” Human beings are social creatures. While most marketers understand the need to create functional and emotional value, businesses are just learning how important it is to create social value though experiences and interaction.

“When a brand makes you feel special and strives to make your life better, in contrast to simply trying to get more share-of-wallet, then social value is created” says Maritz Institute Director Marybeth McEuen. “And social value, at its pinnacle, is created when you join a brand community because you identify with the purpose and ideals of the brand. Great companies like Starbucks and Method understand this type of social value.”

H-E-B is the largest corporate giver to non-profits in Texas. The 340-store chain focuses on putting people and communities first. Its leadership practices “relentless dissatisfaction,” meaning that if they are not working every day to help customers and improve the shopping experience, then they are not satisfied.

Craig Boyan, H-E-B president and COO, reviewed historical fact that the American consumer today has far less discretionary income and far more debt than past generations. With wallets thinner, H-E-B promises low prices to help customers save and live better. While labor costs often top retailers’ expenses, Boyan urged the audience not to race to the bottom with wages, but instead raise them and hire great people. Finally, H-E-B is a multi-format retailer. Boyan noted that his discount stores, such as Joe V’s and Mi Tienda, and high-income stores, like Central Market and H-E-B Plus, are growing the quickest. This reflects the increasing gap between rich and poor in Texas.

As GSD&M’s chief advertising leader for retailers for 30 years, Roy Spence concluded by offering the following recommendations for the retail leaders attending the Summit:

• Retailer leaders have a job to do. To enrich the lives of their customers they must do business with purpose.
• They must practice the Golden Rule.
• Leaders fess up when they mess up.
• They don’t find common ground, they find higher ground.
• Retailers are best when they are in the service of others.

To the 30 students in the audience — likely the next generation of industry leaders — he said:

• Be curious.
• Think.
• Stay humble.
• Stay hungry.
• Help those who help you.

Representatives from thriving Aggie-owned companies gathered in The Zone at Texas A&M University Friday for the Aggie 100. The celebration sponsored by the Center for New Ventures and Entrepreneurship at Mays Business School began with a reception Thursday and lasted through lunch on Friday at the Zone Club.

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

The companies recognized this year reported a combined revenue of $18.2 billion — the highest in the eight years the program has existed. The top recipient was Navidad Resources, an independent oil and gas company founded in Tyler in 1992. It reported 206.14 percent growth. CEO and president Harold E. McGowen III ’82 said he was honored to be on the list with the other 99 companies. “You are some of the smartest and most capable people in the country,” he said. “These companies are created by men and women who inspire others to exceptional achievement.”

This year’s group included 40 newcomers, and eight of the recipients have been on the Aggie 100 list at least five times.

The key to the companies’ success is the entrepreneurial spirit, several of the speakers commented. “You people had the vision — in fact, the courage — to take some chances that most people wouldn’t take,” said Texas A&M President R. Bowen Loftin. “You’re here today because you were persistent and also successful. We applaud you. We think you embody the true spirit of Aggieland.”

Keynote speaker Dan Moran, an Aggie and former Marine whose Houston company funds veterans’ start-up companies, summed it up this way: “Aggie entrepreneurs never, ever, ever give up.” He called entrepreneurs ” the backbone of the economy… You’re going to get us back on track.”

The inaugural Summit Award, created to recognize the large-corporation Aggie 100 applicant with the highest average revenue, was given to Houston-based Oil States International. CEO Cindy B. Taylor ’84, who received a bachelor’s degree in accounting from Mays, said her company is approaching $4 billion in growth this year. Taylor, one of the 2011 Mays Outstanding Alumni, is the mother of three Texas A&M students.

About Aggie 100

The Aggie 100 identifies, recognizes and celebrates the 100 fastest growing Aggie-owned or Aggie-led businesses in the world. The Aggie 100 not only celebrates their success, it also provides a forum to pass lessons to the next generation of Aggie entrepreneurs.

One-of-a-kind at the college level, the Aggie 100 was created by Mays Business School’s Center for New Ventures and Entrepreneurship. The center provides encouragement, education, networking and assistance to entrepreneurially minded students, faculty and Texas businesses.

Each year, Aggie 100 honorees are invited to campus for celebrations that includes an evening networking reception with fellow honorees and special guests from Texas A&M University, speaking engagements with Texas A&M students, breakfast with the deans of their colleges and an awards luncheon where the rankings are announced.

To be considered for the Aggie 100 program, companies (corporations, partnerships, sole proprietorships) must have been in business for at least five years and have had verifiable revenues of $250,000 or more for calendar year 2009.

The full list of 2012 recipients is available at aggie100.com/Aggie100Archives/2012/2012List.

Arnold Torres ’85, the CFO of Daystar Television Network, says Daystar is the world’s fastest growing faith-based television network and uses the airwaves instead of physical buildings to spread the message of their ministry.

His work at Daystar is inspiring and always interesting, the accounting and finance graduate of Mays Business School recently told a group of undergraduates, including Business Honors students. Every day, Torres utilizes the accounting and finance skills he acquired in college and in banking to do his job at Daystar. He encouraged the students to consider careers in television, where opportunities range from analysts who work for the networks to accountants to CFOs.

Daystar Television Network CFO Arnold Torres ’85 recently spoke to Mays Business Honors students about his experiences in the television industry. (view more photos)

When Torres’ career with Daystar began in 2001, he intended to stay six months. “Then they got rid of their COO, and I’ve been there ever since. I learn something new all the time, so it is really enjoyable. I am fortunate to have this job.”

Torres says he has learned a lot about the industry in his years with the company. TV still remains the No. 1 way to reach people each day, with 88.3 percent of people as viewers compared with 73.1 percent on the Internet. In comparison with the Internet and other media outlets, TV also reaches more people at all age groups, more upscale households and more women than men.

Dallas-based Daystar strives for diverse programming within its genre, and there are so many programs trying to be carried by the network that there is a waiting list. Daystar is broadcast in 680 million home worldwide and is available in more than 200 countries. A toll-free prayer line receives more than 1 million calls a year.

“Our outreach is that we buy a TV station or secure cable carriage in a new city,” Torres explains. “We don’t sell any commercial advertising; we use that time to promote our own programming and our programmers on the network.”

The money raised from the programmers is used to cover overhead and operating expenses. Twice a year, the company holds fund-raising events to raise money and 100 percent is used for buying new television stations and other outreach projects.

Torres urged the Mays students to learn all they can while they are in school. “Don’t take it for granted that you are here, just take it all in every step of the way.” In particular, he urged the students to hone their communication skills, both written and verbal. “If you don’t have that, it doesn’t matter how analytical or book savvy you are. If you can’t explain it in spoken or written fashion, you won’t get your point across.”

The Executive MBA program at Texas A&M University’s Mays Business School is moving up the ranks among the top 10 programs offered by U.S. public universities, according to rankings released Monday by Financial Times. The standing of the EMBA program at Texas A&M improved from 10th to 9th place among U.S. public schools.

The program also rose three spots when considered against both private and public U.S. schools, from 27th to 24th, but dropped slightly in the global overall ranking from 54th to 58th. The overall ranking considers the top 100 Executive MBA programs in the world.

In the “years of work experience” metric, the Texas A&M EMBA ranked 1st in Texas, 2nd U.S. public and 7th U.S. overall. The program consistently averages 15 to 17 years of work experience in its classes. This year’s class average is 18 years — the highest ever.

To determine its rankings, London-based Financial Times surveyed thousands of Executive MBA alumni from more than 100 of the top programs in the world.

Mary Lea McAnally, associate dean for graduate programs at Mays, says the success of the program should be credited to its faculty, staff and students. “Our continued success in the rankings reflects the dedication of our faculty and staff in providing a world-class program for our students. This dedication leads to the success and satisfaction of our students, as they create value for their organizations and serve as leaders in the community.”

The Mays program continues to improve as it enters its 14th year, targeting professionals with at least 10 years of experience. Its recent move into a new private facility at CityCentre, a mixed-use urban development in west Houston, will further enhance the program.

McAnally was also positive in her view of how the program’s new facility in Houston would impact the students’ learning experience. “Our new space in Houston was designed specifically for the executive audience, and we are confident that it will be a significant asset for our students.”

For more information about the Executive MBA program from Mays Business School, visit emba.tamu.edu.

Texas A&M University’s Mays Business School has planted a flag in Houston, opening a new custom educational facility at CityCentre in west Houston that houses its Professional and Executive MBA programs.

Mays’ new 24,000-square-foot, custom-finished facility at CityCentre in west Houston is the home of the Texas A&M Executive and Professional MBA programs. (view construction photos)

Mays faculty and staff members celebrated the grand opening of the new facility the evening of Oct. 13 with more than 250 friends of Mays, including Texas A&M Provost Karan Watson and former members of the Texas A&M University System Board of Regents, as well as current and former Texas A&M students and corporate partners.

Those attending were able to tour the facility and learn about the customization of the design. The 24,000-square-foot facility features four executive classrooms, 11 team rooms, expansive dining and common spaces, and a luxuriously appointed boardroom. It encompasses the second floor of the CityCentre THREE building, and was custom-designed by a team of faculty, staff and students to be the ideal environment for executive learning.

Mays Dean Jerry Strawser said the facility represents the best of Mays, both in the surroundings and in the programming. “We are bringing our best to Houston — giving our students access to top faculty from Mays, and offering our programs in a world-class educational environment,” he said. “We know this investment in our students will provide a great return in both the quality of education they receive and the value they bring back to their employers.”

Mays Dean Jerry Strawser speaks to guests at the CityCentre facility grand opening event. (view more grand opening photos)

Many of the remarks at the grand opening centered on how this project needed a wide group of people to be successful — the friends of Mays Business School — and how that night was a chance to celebrate the success of the project with those friends. “When I think of all the things that have made this project successful, what stands out is the support of the friends of Mays Business School,” Watson said.

Strawser recognized the hard work of the faculty, staff and friends of Mays that brought the project to fruition. “As beautiful as this facility is, it reminds me that we are so much more than bricks and mortar,” he said. “Our most important asset is flesh and blood: the students, faculty and staff of our program.”

The Professional MBA program began its first year of classes in August. The program targets participants with two to 10 years of work experience. Texas A&M’s Executive MBA program, in its 13th year of operations, targets professionals with at least 10 years of experience. The Executive MBA moved to the CityCentre facility from its previous location in The Woodlands. Classes for both programs continue over 22 months, with schedules that allow students to earn an MBA degree while maintaining full-time employment.

Mays’ new facility encompasses the second floor of the CityCentre THREE building, and was custom-designed by a team of faculty, staff and students to be the ideal environment for executive learning. (view more grand opening photos)

Strawser says the programs are designed to help professionals “propel their careers into high gear. The Professional MBA was developed in response to demand for Mays to increase offerings in the Houston market, and extends the legacy of excellence set by our Executive MBA program. Through these programs, our network of MBA graduates will continue to grow and build upon the international power of the Texas A&M “Aggie Network.'”

The CityCentre development, located off Interstate 10 and Beltway 8 in West Houston, is named because Houston’s westward growth indicates the location is predicted to become the center of the city. Developed by Midway, which is owned by two-time Mays graduate Brad Freels ’81, CityCentre is designed to be a mini “ecosystem” — boasting everything from shopping and restaurants to living and hotel accommodations. The location is hoped to ease accessibility for many Professional and Executive MBA participants. “CityCentre is on the leading edge of growth, with close proximity to the energy corridor and ease of access from major Houston business districts,” Strawser says.

To learn more about the MBA programs at Mays Business School, visit mays.tamu.edu/mbaprograms.

When she donated $250,000 to Mays Business School to establish the Karen N. Pape ’80 Scholarship in Accounting, Pape says she had the parents of the students in mind as much as the students.

Distributions from the endowment will be used to provide scholarships to full-time students enrolled in the Professional Program within the Mays Department of Accounting, a track that allows students to earn bachelor’s degrees in accounting as well as a master’s degree in five years.

Pape says she wanted to give back to the college that gave her so much. She says the Professional Program did not exist when she received her bachelor’s degree in accounting. “Back then, you got a four-year degree, you graduated and you went to work,” she says. “I would have enjoyed this program, but I don’t think I could have afforded another year.”

She says she can attest to the program’s quality, as she employs six graduates from the program at Genesis Energy LP in Houston, where she is senior vice president and controller.

Concern over expense prompted Pape to donate to Mays — to support the students in the program as well as their parents. “I know the struggle the students face with the program, particularly during that fifth year. And I know the parents aren’t anticipating that extra expense from the outset.”

“Karen’s generosity will have a significant impact on our students,” said Mays Dean Jerry Strawser. “The ability her gift provides to offset some of the costs associated with the required additional year of study in our Professional Program will open this opportunity to a greater number of our top students.”

About Mays Business School

Texas A&M University’s Mays Business School educates more than 5,000 undergraduate, master’s and doctoral students in accounting, finance, management, management information systems, marketing and supply chain management. Mays consistently ranks among the top public business schools in the country for its undergraduate and MBA programs, and for faculty research. Its mission is to create knowledge and develop ethical leaders for a global society.

Texas A&M University’s Mays Business School has planted a flag in Houston, opening a new custom educational facility at CityCentre in west Houston that will house its Professional and Executive MBA programs. Mays will celebrate the grand opening of the CityCentre facility the evening of Oct. 13.

“We are bringing our best to Houston — giving our students access to top faculty from Mays, and offering our programs in a world-class educational environment.” says Mays Dean Jerry Strawser. “We know this investment in our students will provide a great return in both the quality of education they receive and the value they bring back to their employers.”

Mays’ new 24,000-square-foot, custom-finished facility at CityCentre encompasses the second floor of the CityCentre THREE building, and was custom-designed by a team of faculty, staff, and students to be the ideal environment for executive learning.

The Professional MBA program began its first year of classes in August. The program targets participants with two to 10 years of work experience. Texas A&M’s Executive MBA program, in its 13th year of operations, targets professionals with at least 10 years of experience. The Executive MBA moved to the CityCentre facility from its previous location in The Woodlands. Classes for both programs continue over 22 months, with schedules that allow students to earn an MBA degree while maintaining full-time employment.

Strawser says the programs are designed to help professionals “propel their careers into high gear. The Professional MBA was developed in response to demand for Mays to increase offerings in the Houston market, and extends the legacy of excellence set by our Executive MBA program. Through these programs, our network of MBA graduates will continue to grow and build upon the international power of the Texas A&M ‘Aggie Network’.”

Mays’ new facility at CityCentre features four executive classrooms, 11 team rooms, expansive dining and common spaces, and a luxuriously appointed boardroom. The 24,000-square-foot, custom-finished space encompasses the second floor of the CityCentre THREE building, and was custom-designed by a team of Mays faculty, staff, and students to be the ideal environment for executive learning.

The CityCentre development, located off Interstate 10 and Beltway 8 in West Houston, is named because Houston’s westward growth indicates the location is predicted to become the center of the city. Developed by Midway, which is owned by two-time Mays graduate Brad Freels ’81, CityCentre is designed to be a mini “ecosystem” – boasting everything from shopping and restaurants to living and hotel accommodations. This location is hoped to ease accessibility for many Professional and Executive MBA participants. “CityCentre is on the leading edge of growth, with close proximity to the energy corridor and ease of access from major Houston business districts,” Strawser says.

Mays will officially open their new facility on October 13, 2012 with a Grand Opening Celebration that is free and open to the public. To learn more about the MBA programs at Mays Business School, visit mays.tamu.edu/mbaprograms. To register to attend the Grand Opening celebration, visit mays.tamu.edu/citycentre.

Aggie pride runs deep in the heart of Lou Paletta ’78, Senior Managing Director of Investor Relations at Lone Star Funds. Paletta recently visited Mays Business School to speak with Business Honors students about his experience in the finance and investment arena, as well as his deep-rooted love for Texas A&M University.

Paletta graduated from Texas A&M with an accounting degree before venturing into public accounting, working for Deloitte & Touche. His job eventually took him to California, where he met and married his wife.

Lou Paletta ’78 told Mays Business Honors students, “ultimately the people you work with and the culture of the company make a difference.” (view more photos)

In 1993, the San Antonio native took a job back in Texas with Lone Star Funds, a global private equity investment firm with aggregate capital commitments totaling more than $33 billion, according to the company’s website. At Lone Star, Paletta’s position involves establishing new sources of capital as well as managing relationships between the company and investors. Lone Star Funds focuses on “distressed investing,” and Paletta says the company “likes being in the debt space.”

With a wealth of experience behind him, Paletta had a valuable piece of advice for the business honors students: “Don’t get consumed with the resume and miss the ride.” He spoke with the students about the “journey” of his career, advising the students to “listen a lot, and learn a lot” from those around them.

Part of Paletta’s personal learning process has been travelling the world with Lone Star. “I’ve been everywhere,” he says, “and my perception of America changes the more I spend time with different cultures.” Paletta’s career has taken him to places like Europe, Japan, the Middle East and most recently, Australia and New Zealand.

Paletta tells students to “find the right fit,” referring to their current or impending job search. “Don’t get overly consumed in the prestige of a job, because it’s ultimately the people you work with and the culture of the company that makes a difference.” Paletta says Lone Star’s own culture of maintaining a “flat organizational structure” suits him well, because he’s “never been big on titles.”

Paletta currently serves on the board of directors for the 12th Man Foundation, as well as the Dean’s Development Council for Mays Business School. A strong believer in Aggie values and education, Paletta urges students to take advantage of the Aggie network—”The relationships built during and after school will be a big part of your life.”