Tuesday, April 29, 2008

Sloan 2008’s East Coast Study Trip

Reporter : S. B.
Each year, as part of the Sloan curriculum, the Sloan class travels to Washington DC and New York to meet leaders in federal government and financial industry. This year, our class had the privilege to visit some top notch institutions and meet their exceptional leaders. Some of the movers and shakers that we met in Washington DC included Ben Bernanke (Federal Reserve Board Chairman), Hank Paulson (Secretary of Treasury), and Carolina Barco (Colombian Ambassador to USA). In New York, we visited leaders of the NYSE Euronext, and the CEOs of Martha Stewart Living Omnimedia and Ernst & Young, among many others.

Hearing Mr. Bernanke was a special treat. He discussed the current liquidity crisis and the Fed’s response. But he also provided an interesting analysis of ‘The Wizard of Oz’—apparently the story is an allegory of the Federal Reserve at the turn of the 20th century. Did you know that the scarecrow represented farmers and that the tin man represented industrial laborers who were desperate for lubricant (currency)? Also, Dorothy was the average American girl, the yellow brick road was the gold standard which led to the Emerald City (Washington or, alternately, New York’s financial district), and the wizard was the U.S. President, who in the book is terrified of evil witches... Needless to say, our class found our interaction with the Fed Chairman to be very informative and entertaining.
We also had the chance to meet with Mr. Cal Dooley (Sloan 1987), an actual Washington lobbyist and CEO of the Grocery Manufacturers Association (GMA) and the Food Products Association (FPA). Mr. Dooley discussed the unintended consequences of alternate sources of energy and energy independence, such as large spikes in the cost of food which disproportionately affect the poor. Then, during her speech to our class at the Colombian Embassy, Ms. Carolina Barco eloquently described Colombia’s steady progress under President Uribe, as well as the need for a US-Colombia free trade agreement. It was therefore interesting to find, once we got back to Stanford, that Hillary Clinton’s campaign manager was fired due to his association with the Colombian free trade agreement.

After we finished our last meeting in DC, we traveled on Amtrak Acela to New York City. We had a car reserved for our class and the entire trip was a lot of fun filled with socializing, coordinating social activities with business meetings, and to downing some ..ahem.. adult beverages. The change in time zones was probably the least enjoyable part of the trip. On most days, the first appointment of the day for us would be at 9 AM EST. This meant that we had to leave our hotel by 8 AM, which in turn meant we had to wake up at 7AM- but that is 4 AM California time! Even some of the morning people were having a tough time. However, large doses of coffee infusions along with cat naps on the bus between meetings helped. On the upside , partying late into the night, which happened often, was easy. By the time hard-partying New Yorkers were ready to call it a night, we were just getting started.

Our visit to NYSE Euronext was very interesting from a number of angles. First, we had to go through a pretty rigorous security gauntlet. The security folks were cordial, even though some of them walked around the building with M4 carbines. Then we had a great interactive session with Larry Leibovitz, the Chief Operating Officer of NYSE. He walked us through all the challenges the NYSE had to overcome in transitioning from a private, member-operated entity that relied on market-makers, to its present form as a global public electronic exchange. At the end we got a chance to tour the trading floor of the stock exchange- the “sanctum sanctorum of capitalism”. Fox Business Channel and CNBC had permanently-stationed people on the floor, and we could still see left-over signs for the now defunct CNNfn channel.

Then the meeting with Susan Lyne, the CEO of Martha Stewart Living Omnimedia (MSLO), provided useful insights regarding hiring and firing decisions. Before joining MSLO, Ms. Lyne worked for Walt Disney Pictures and Television where she was chartered with turning ABC around. She was responsible for green lighting a number of shows for ABC including “Desperate Housewives”, “Lost” and “Grey’s Anatomy”. Unfortunately she was fired before these shows aired. She did not exhibit any bitterness, however, and gave us useful philosophical frameworks to use when being fired, and hopefully, when doing the firing as well. We asked on what it took to be successful when working for a visionary demanding founder; her answer ‘communication and more communication’.

We ended our trip with a visit to offices of Ernst & Young (E & Y) and meeting with Jim Turley its CEO. When he walked into the conference room, he made it a point to shake hands and to remember all our names and nationalities. He also knew the names of all major corporations around the world, the names of their leaders, and their relationships with E & Y. We then had a great Q & A session. For example, he explained the challenges of his first front-line manager job as being a lone fire hydrant in a 50-dog town. His next job was similar expect that there were far more dogs. He also discussed his philosophy towards making tough decisions. He thinks it’s better to act on them immediately and move decisively rather than postponing the decision, hoping that the situation will get better. He compared that to being forced to eat a sandwich filled with “very unappealing material”. If, during the course of your career, you are forced to eat such a meal, it is better to Koichi Zaiki and Robert Jungerhans have fun in Washington eat it in one bite rather than nibbling on it. Needless to say, visiting with Mr. Turley was an awesome way to finish an excellent study trip.

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