Latha Ramchand, Ph.D.

At the Bauer College, graduation celebrations mark the month of May —Sales Excellence Institute, Wolff Center for Entrepreneurship, and MBA and MS graduation celebrations.  Each event is marked by a great keynote, and a celebration of student successes.  LINN Energy founder Mike Linn spoke at the MBA Graduation celebration at the Houstonian and shared the story of the company with the audience.  Houston, we are the place to be, and Mike described it very well — compared to Coloradans who think electric power comes from the “wall,” Houston understands the energy business like no other city does.  As our Bauer economist Bill Gilmer explained in the bi-annual symposium hosted by the Bauer College Institute for Regional Forecasting, in Houston, the business of energy “is in the air.”  Houston reaps the benefits from creating a “commons” for the energy business.  It does not hurt that The Wall Street Journal, in a May 6 article titled “A Tale of Two Oil States,” described the tale of two states, both oil-rich, and with different policies: Texas, where the energy boom has expanded energy production, which could triple by 2020, and California, where production has declined by more than 20% owing to restrictive drilling practices.  The unemployment rate in Texas is less than 6.5% while that in California is 9.4%

I was in New York City (NYC) during the first week of May, meeting alumni, stakeholders, and business school deans.  Being in NYC is always a delightful experience — the buzz, the crowds, the traffic, the construction, and most of all the people, who seem to be held together by their love for “living,” if that is the right word.  Crossing the streets alongside masses of humanity, reminds me of Bombay, the town I grew up in.  It reminds me that we are all similar in our core — despite differences in color, race, gender, language and other variables, the humanity in us unites us.  From the employees who work at crowded JFK and LaGuardia to cab drivers, doormen, concierge attendants, and of course men and women in the best tailored suits, getting into and out of chauffeured limousines only to stop to get a pita plate from the state vendor, the delicious aromas of foods from all over the world — visiting NYC is a comforting and uniting experience.

Visiting other business schools drives home the point that the Bauer College is large in size.  With close to 6,000 students, we are significantly larger in size and significantly smaller in resource base than most business schools in the country.  As one of our faculty explained to me, we at Bauer are like the bumble bee — thermodynamically the bumble bee is not supposed to be able to fly, and yet it does.  Given our size and with the limited resources we have, we are not technically supposed to be able to exist, but we do, and we thrive thanks to talented faculty, a committed staff, an engaged student body and supportive alumni.

My meeting with Sam DiPiazza, Vice Chairman of the Institutional Clients Group at Citigroup, underscored the value of the Bauer brand — humility without hubris, and aptitude with no attitude.  I had dinner with two friends of Bauer at the Lotos Club and was awed by the history behind every piece of art in the club.  Overall the trip was about catching up with friends of Bauer, learning from other business schools, and catching up with alumni who speak to the value of the Bauer brand.  You can never do too many of these visits.

Thank you all for what you do and congratulations to all you graduates.

I recently had the opportunity to listen to Tony Wagner talk about the challenges we face in the landscape of higher education. Knowledge is getting commoditized. It is not so much about what you know, but more about what you can do with what you know, or taking initiative. Being able to have a few stretch goals, only some of which are achieved, is a lot better than having goals that are easily achievable.

We need to think of creating a learning environment where participants focus on learning to ask the right questions, not so much on problem solving. As Einstein said, “Formulation of the problem is more important than the solution.” We need to do away with what Tony calls the “sitting and getting” model, and emphasize creating and not getting. We do not talk about failure, rather we talk about iteration.

Today, the skills we need at work and the skills for good citizenship have converged. Discussions and teamwork are becoming more important than ever before, and leading with influence is the key. Do academics have the experience to know this, much less teach it?

Tell me what you think.

I have been travelling this past week, meeting other business school deans (at the ICAM conference in Chicago), meeting alumni, and corporate stakeholders, and listening to thought-provoking speakers. Sheena Iyengar from Columbia University talks about the art of choosing.

Choice is important because the act of thinking about choices and what you want to do empowers action. At the same time, our culture affects the way we perceive choice. For Americans, choice was positively correlated to performance; for Asians, the reverse is true.

At the same time, too much choice is not optimal. It is not true that 15,000,000 date possibilities on Match.com are necessarily good. Sheena and her colleague find that when buyers at a grocery store were given the option to sample jams at a table with 24 different flavors versus a table with 6 different flavors, people are more likely to sample and taste from the table with 24, but they are more likely to buy when they sample from the table with 6. The more choices we have, the more we stick to status quo, delay in decision making makes us unhappy about the choices we make, and hence, the worse the decisions become. The average person makes 70 different choices in a single day, and 20% of our effort leads to 80% of results.

So, what is the action item here from this research? Or, how do we become choice wise? Choice is an act of invention, and leadership is the ability to see choice where others do not.  Leadership is also the ability to frame and bound the choices.

Tell me what you think – more or less choice?

Since the 2008 recession, business schools have done extensive soul-searching. What is our role in the larger context of society? How do we empower our participants to understand the language of business, but more importantly to create opportunities for themselves and for others around them? How do we incentivize our graduates to understand business in the context of social good?

I spent the last two days in Washington, D.C., with four of our undergraduate students — Jason, Nadine, Tracy and Vanessa — who are spending this semester working as full-time interns on Capitol Hill. Working through the Washington Internship Student Housing (WISH) program, Colleen Davies and Sarah Gnospelius, our dedicated student advisors, picked four students through a selective screening process for this pilot program. Jason works at the Department of Commerce, Office of Public Affairs, Nadine is at the Consumer Financial Protection Bureau (CFPB), and Vanessa and Tracy are at the Financial Services Roundtable.

Travelling with me from Houston were Frank Kelley and Colleen Davies. Frank is the heart and soul of our undergraduate programs, not just because he is the Associate Dean, but more importantly, he cares, and cares deeply. Colleen is passionate about “her” students and will accept nothing but the very best for and from her students.

We arrived in D.C. Wednesday evening and met the students for dinner. Listening to them talk about their experiences was both fulfilling and humbling. Jason is learning about the importance of communications in public affairs and the value of timely news that connects legislative work to the public. Nadine is working on regulations that will help promote diversity. Vanessa conducts interviews and appreciates the value of effective communications skills when dealing with legislators and financial institutions. Tracy works hard and long on issues related to consumer financial protection. Her latest project involves finding homes for disabled veterans, reallocating foreclosed homes that banks are willing to donate. These students are learning important life skills through this program. They are gaining a solid understanding of the role of public policy in connecting business and society. They are learning to move out of their comfort zones, building their résumés, and making connections which they will take with them long after the semester is over.

Most important, however, is their appreciation for the value of public service. When Jason talked about the importance of communications and news in public affairs, when Nadine talked about the importance of ensuring diversity, when Vanessa spoke about the role and responsibility of financial institutions in serving and protecting the consumer, when Tracy told me about her commitment to helping veterans find homes, it was clear that these students were inspired by goals bigger than themselves. They want to make a difference, and I know they will. You can teach skills inside a classroom, you cannot teach passion for service. Listening to their commitment and their passion was humbling and fulfilling at the same time.

How do we scale these experiences? Your input, please.

About three weeks ago, I participated in a panel discussion along with other business leaders in Houston.  Titled “A Crisis in Leadership,” the panel discussion centered on the issue of trust or lack thereof in institutions that power our economy. Why is trust important and how do we increase trust?

The Edelman trust barometer is created by Edelman Berland based on interviews with over 30,000 respondents worldwide.  The 2013 Edelman Trust Barometer is based on the 13th annual trust credibility survey and captures the level of trust that the public has in various organizations from government to business across countries and cross-sectionally across various industries.  The key takeaways from the research findings were:

1. While trust is based on performance, an organization’s message, culture and values, are equally important to build trust.  Today less than 20% of those surveyed trust business and even fewer, the government.
2. Trust in institutions, while low, is greater than trust in the people that lead these institutions. We trust business more than we trust business leaders; we trust government more than we trust government officials. Sadly enough, today, less than 1 in 5 individuals trust business leaders to do what is right and ethical.

Both factors underline the fact that decline in trust is more about a crisis of leadership. Why is it important for us to create trust?

Trust is important not only because it feels right, but it also makes business sense. If you watched the movie Castaway with Tom Hanks, and ‘Wilson’ the volleyball, you appreciate the fact that Tom’s need to connect with another human being kept him going through the experience.  It is our need to be more than ourselves even when we are alone, our need to have a purpose, our need to be connected that drives us to action.  And research shows that we are hardwired to seek connections with others, to build trust.  Trust in turn generates positive responses which then motivate us to ‘cede power and resources’ to those we trust.  Hence, when people trust us they are willing to allow us to make decisions on their behalf.

Here, Jason Kottke tells the story of Ralph the street vendor in NYC, who sells coffee and donuts.  Donuts cost 75 cents at Ralph’s food cart.  The customer who hands $1 to Ralph when he buys a donut, is motioned toward a bowl with change.  Ralph yells “next,” asking you to take your change from the bowl, so he can serve the next customer. Does every customer take exact change from the bowl or do they take more than they should?  Does anyone keep track?  Interestingly, Ralph’s store serves a large number of customers. Kottke, who observes Ralph, looks at two other vendors nearby and notices that they spend twice as much time on each customer and serve less than half as many as Ralph does.  Ralph serves customers in half the time it normally takes, and so the loss he potentially makes in the ‘change bowl’ is more than made up by the volume of business.  The business model here is built on trust, and it is this trust that differentiates Ralph’s store from the others.

Jeff Dyer and Wujin Chu examine the buyer/supplier relationship for automakers in the U.S. and find that the least trusted buyers incurred procurement costs that were six times higher than the most trusted buyers. When trust is low, negotiation, diligence costs and enforcement costs are all significantly higher, reducing the value of the business.  Driven to an extreme, low levels of trust mean lower investment, income and hence growth. The more effective a country’s legal system, and the greater the trust it engenders, larger is the economic growth.  Hence trust is a valuable asset.

How do you build trust?  In addition to performance, engagement and transparency are key drivers of trust.

Creating engagement via a shared vision is easier said than done. We live in a world where we spend 8 minutes on average reading the news (via digital editions of an average of seven sources). We spend 10 seconds on a landing page before moving on.  Hence creating engagement is a continuous process.

Transparency is equally important. We live in a world where we are separated by what Mitch Joel refers to as ‘Six pixels of separation.’ Behavior matters.  The ‘how’ is as important as the ‘what’ and more important today than it has ever been.  Our behaviors can cause people to ‘friend’ or ‘unfriend’ us with the click of a mouse.  In 2011, the demonstrators in Tunisia and Egypt were initially armed only with cell phones that could take pictures and it gave rise to a whole movement — the Arab Spring.

Of course engagement and transparency must be backed by performance.   Then trust follows.

Do you agree?

Dawn and Richard Rawson recently gifted $1 million to The Bauer Excellence Scholarship Endowment, which supports The Bauer Excellence Initiative. The funds go into an endowment which has been established to help us recruit talented students and help them graduate on time and without debt. To honor Dawn and Richard, Room 160 in Melcher Hall has been named the Dawn and Richard Rawson Auditorium.  And with the naming we honor everything that the Rawson name stands for.

The Rawson story is a tale of hard work, and dedication, and with several sub-chapters that speak to the essence of what the Bauer brand is all about. It was in the late sixties/early seventies that a young man from San Antonio was here in the business school, the College of Business Administration (CBA), as it was then called, taking classes mostly at night, working more than 20 hours a week as an accountant, and working hard to graduate on time and with good grades.  He graduated in 1972 with a BBA in Finance and his professional career worked its way through interesting and challenging assignments. He worked as a Senior Financial Officer, then as Controller for several companies in the manufacturing and seismic data processing industries.  In 1989 he was invited to serve as Senior Vice President, Chief Financial Officer and Treasurer of a company known as Administaff, which had been founded in Houston in 1986.  Of course as we all know, titles and careers go and life happens, and life did happen for this young man — a lovely young bride, and two beautiful daughters, completed the picture.

In February 1997, Administaff went public, and this young man was appointed CFO. Then in 2003 he became President of Administaff and all its subsidiaries.

In 2011, Administaff underwent a complete renewal and transformation — changing its name to Insperity, which combines inspiration and prosperity. The firm went from the staffing business to create a new industry of its own, an industry that employs business performance advisors who help clients create value in their businesses, to help businesses succeed, as they say, so communities prosper.  Today Insperity is a NYSE listed firm with $2 billion in annual revenues, and with over 57 offices and 2000 corporate employees. The man behind this story, of course is Richard Rawson, and I want to say the rest is history, but not quite.

A big part of the history here would not have happened but for the inspiration in Richard’s life, his wife Dawn.  You see, in the 90s, Dawn Rawson, set up a volunteering initiative at Administaff and set up a corporate philanthropy program giving back to the community.  They gave to the UH College of Education and to the CBA, where the city’s business leaders were being educated. In fact they were one of 50 entities to set up a $10,000 fund to help create the Center for Entrepreneurship (now the Wolff Center). Then, in September 2005, Richard Rawson headlined the college’s Distinguished Leader Speaker Series, and talked to a packed audience of students and faculty here in the very room that now bears his name.  It was the Dawn and Richard Show, and boy, was it well received.  Of course as we all know no good deed goes unpunished, so we in 2007, we invited Richard to give the fall commencement address to our students titled “Leadership: From the Classroom to the Boardroom,” a speech which still echoes in my mind. The next year, in 2008, he joined the newly formed Dean’s Advisory Board at Bauer College, and in 2010 he was voted chair of the board.

In 2009, a young woman named Kimberly, who was working at the time in Washington D.C., at the White House, a young woman who could have gone to any business school of her choice, decided — rather, was convinced by her father — that the Bauer College would be her top choice destination for an MBA.  Kimberly, rather Kimberly Rawson, I am proud to say, was my student, and she graduated with an MBA from the Bauer College in 2011.

I got to know Richard really well in 2011 soon after I was appointed dean.  We worked together, and thanks to Richard’s leadership, the Insperity deal, came to fruition.  The Insperity gift was the single largest gift for our new building, which helped us build out the top three floors in the new building.  This deal would not have happened but for Richard’s leadership and commitment.

Last spring, Spring 2012, I started working on The Bauer Excellence Initiative, an initiative focused on raising funds entirely to fund student scholarships.  With the Bauer gift in 2001, the College had invested heavily in faculty and building programs, which have gained national recognition today — the Cyvia and Wolff Center for Entrepreneurship, the Sales Excellence Institute, the Global Energy Management Institute, among others. Next in 2005, we started investing in facilities — Cemo Hall, the Insperity building. Investing in student scholarships must and will be our next priority.  Helping students graduate on time and with no debt is not just our responsibility; it is our duty.  So, I took this idea of setting up a $25 million endowment to my advisory board, which was chaired by Richard.  I was honored beyond words, when in December 2012, Dawn and Richard decided to fund the first 7-figure gift to The Bauer Excellence Scholarship Endowment, which supports the scholarship initiative.

A successful alum, married to a woman who believes that success is measured by what you give rather than what you receive, a corporate leader, chair of my advisory board, obviously a parent who has the written the book on bringing up kids — (if you can convince your offspring who can go to any school of her choice that she should attend his alma mater, no more said), president of a company that gave a significant gift to the College in 2011, and to now know that he is making a million dollar personal gift to fund student scholarships — the story is the stuff that business school deans dream of, I guess.

Dawn and Richard, your investment in our students, will help us change lives one successful student at a time.  As Ted Bauer, whose name we proudly bear said, “An investment in people is the finest thing you can do.”  And by this gift, you will be touching generations of students, countless lives who will graduate knowing that the reason they were able to afford a fine education was thanks to the generosity of people who believed that giving is more satisfying than receiving.  Thank you Dawn, thank you Richard.

The gift, the name and really, the message behind the name is significant.  Just like the message when you enter Cemo Hall and learn about Mike Cemo’s life and success, or when you visit students at the Cyvia and Melvyn Wolff Center for Entrepreneurship.  Mike, Melvyn, Richard, they are our proud alums and they fully represent the Bauer brand.  To me, the Bauer brand is captured in the work ethic that our students, our alumni, our stakeholders bring to the table, a willingness to do the job, and an integrity, that is second to none.

These names, these buildings, the bricks and stones that lie behind the Rawson Auditorium or Cemo Hall or the Cyvia and Melvyn Wolff Center speak to the quality of the Bauer brand  — we call it aptitude, without attitude, humility without hubris, success without arrogance, that is the Bauer brand.

 

“What else can you do? …It is the right thing to do.”