New HBS Portal Offers Alumni Just-In-Time Business Information
Good Day, Sunshine: The October Reunions
Hawes Family Funds New Class Room Building
African-American Alumni Conference Considers Success and the Bottom Line
Business Ethics Fellow Honored
Buffett Preaches Investment Discipline
EMC's Ruettgers Finds Gold in Data Storage
Alumni Ticker: A Random Sampling of HBS Graduates in the News
New Jakurski Chair Supports Research in Global Finance
Class of 1942 Chair Honors Paul Lawrence, Promotes Leadership
Christensen and Vernon Remembered

Hawes Family Funds New Classroom Building

Inspired by Dean Kim B. Clark's vision for the School, Beverly and Rodney A. Hawes, Jr. (MBA '69), recently made a generous gift to HBS that will fund a new classroom building. "You can't succeed in the world today without having a global perspective, without realizing how crucial values are, and without understanding technology. I admire the School's commitment to these areas," said Rod Hawes in a campus interview during his 30th Reunion in October.

Hawes Hall, to be located at the northeast edge of Aldrich Hall, will house a number of state-of-the-art classrooms designed for case-method instruction. The initial phases of planning and design have just begun, with construction anticipated to commence in the summer of 2000 and completion scheduled for late 2001.

Hawes retired last year as chairman and CEO of Life Re Corporation, a Stamford, Connecticut-based provider of life and health reinsurance. During almost four decades in the insurance business as a salesman, entrepreneur, top executive, and industry leader, he established a remarkable record of success while maintaining a sterling reputation for character and integrity. For example, in 1978 when a Florida firm his company had invested in was struggling, Hawes's sense of obligation to his investors took him and his family to Tampa to work with the failing enterprise. "It took us a year and a half," he recalled with characteristic enthusiasm, "but we fixed the company, turned it around, and sold it."

A chance meeting with a recruiter in an HBS corridor in 1969 led Hawes to a small Connecticut company that focused on insurance company mergers and acquisitions. In 1972, he ventured out on his own and founded Insurance Investment Associates, which soon became the country's leading M&A advisor to the insurance industry. Joined in 1979 by Douglas M. Schair (MBA '71) and another partner, Hawes followed an ambitious agenda. By 1988, the firm had completed more than one hundred deals and outdistanced even the leading Wall Street investment banks in its specialty.

In 1988, Hawes and his colleagues purchased the life reinsurance unit of General Re Corporation, Life Re Corporation of America. The firm continued to grow as a major player in the U.S. reinsurance business, helped considerably during the 1990s by several strategic acquisitions. Life Re went public in 1992 and was sold to Swiss Re in 1998.

"I hold a strong belief in the individual," said Hawes, who explained that much of what he has learned in the insurance business has come from talking to those who don't ordinarily get a voice in a company. "Some of the best advice I've gotten has been when I've gone down in the trenches and asked the people who are doing the actual work what they think about a problem and how they would solve it. They are much more likely to come up with solutions because they've got the experience. It's just that no one ever asks them."

Hawes's belief in the individual led him to give every single Life Re employee stock options; as a result, about 20 percent of his work force became millionaires when the company went public. "We shared the profits with everyone and gave those staying on an excellent opportunity," Hawes proudly noted.

Hawes, who grew up in Marsing, Idaho, earned his BA in political science from Stanford University in 1959. Beverly Hawes, a Boise native, earned her degree at Whitman College in Washington. The Haweses came to HBS with four young children (two more followed in 1973 and 1976), and Rod Hawes earned his MBA as a Baker Scholar. "I gave Beverly the key," said Hawes, attributing his success to the support he received from his wife, who typed every paper he wrote.

Now the proud grandparents of thirteen, the Haweses are active in the Mormon Church. Last year they created an endowment at Brigham Young University's Marriott School of Management to fund several initiatives, including awards modeled on the Baker Scholar program at HBS. The Haweses' philanthropic interests have also extended to a number of humanitarian causes, including world hunger and the plight of people in troubled regions throughout the world.

"Rod and Beverly Hawes are a wonderful model for us all," said Dean Clark when announcing the gift. "While building an outstanding business and a close-knit family, they never have lost sight of the importance of helping others. Now, thanks to their extraordinary generosity, Hawes Hall will play an important part in preparing future generations of HBS students for leadership."

African-American Alumni Conference Considers Success and the Bottom Line

The second annual HBS African-American Alumni Association (HBSAAAA) conference was held in Chicago, October 8-10. Titled "Creating and Preserving Wealth: Leading the Next Great Migration," the two-day conference attracted close to two hundred attendees. Organized by honorary chairman Peter C.B. Bynoe (MBA '75/JD '76) and cochairs Gregory A. White (MBA '90) and Jeffrey S. Perry (MBA '91), the conference brought together African-American alumni from HBS, the University of Chicago, and Northwestern University.

The distinguished group of conference presenters included the Reverend Jesse L. Jackson, Sr.; John H. Johnson of Johnson Publishing; Robert Johnson, CEO of Black Entertainment Television; and Stuart Alden Taylor (MBA '87), senior managing director at Bear Stearns. Interactive sessions explored private equity deal structuring, equity participation as a component of the compensation package, angel investment opportunities, the creation of wealth in the digital age, the building of successful urban enterprises, and transferring wealth to future generations. A provocative discussion on the relationships among success, wealth, and networks was led by Steven S. Rogers (MBA '85), an entrepreneurial finance professor at Northwestern's Kellogg School.

In view of this year's conference theme, HBSAAAA president Kenneth A. Powell (MBA '74) notes that Chicago was chosen "in part because of its history as a primary destination for African Americans migrating from the rural South to the industrial North to create better lives for themselves, their families, and the community." Powell applauded the many African-American HBS graduates whose support for the gathering helped attract a long list of corporate sponsors, including BP/Amoco, Citibank, Andersen Consulting, Heidrick and Struggles, Medtronic, Morgan Stanley Dean Witter, Shell, and Sun Microsystems. A portion of the conference proceeds will benefit HBS community initiatives such as the campaign to fund a chair honoring H. Naylor Fitzhugh (MBA '33) and the George P. Baker Fellowship, as well as programs in the local Chicago community.

by Mary Ellen Gardner

Business Ethics Fellow Honored

A September dinner at the Dean's House honored HBS assistant professor Ashish Nanda, the 1999-2000 Henry B. Arthur Fellow. Henry ("Hank") Arthur was a distinguished member of the HBS faculty for ten years and is known for his innovative work in agribusiness. From early on in his career, Arthur maintained an interest in ethics and its teaching. The Henry B. Arthur Fund for Business Ethics was established in 1987 by Arthur's daughter, Janice A. McCoy Miller (HRPBA '61), and his then son-in-law Bowen H. ("Buzz") McCoy (MBA '62). Pictured above are Nanda, Miller, McCoy, and Dean Kim B. Clark. Nanda was awarded the fellowship in recognition of his work integrating ethics into the MBA curriculum and for his elective course development.

Buffett Preaches Investment Discipline

When Warren Buffett speaks at HBS, it's always standing room only in Burden Auditorium. The cavernous hall fills up early, reverberating with the mounting excitement of a revival meeting. When the 69-year-old investment sage finally takes the stage, thunderous applause is punctuated by whoops and whistles.

And, as was the case during a visit to the School last September, the "Oracle of Omaha" doesn't disappoint. From his opening gambit ("Testing, one million, two million," he intoned into the microphone), to his astute overview of American business, to his warnings about investment sins to avoid, Buffett had the audience in the palm of his hand.

With a nod to scripture, the Berkshire Hathaway CEO began his remarks by noting that the last 34 years on Wall Street could be divided into "17 lean years and 17 fat years." Declaring that "interest rates exert a gravitational pull on valuations," Buffett asserted that high interest rates were to blame for keeping the Dow Jones Industrial Average virtually unchanged between 1964 and 1981 despite a 370 percent increase in U.S. GDP during that period. From 1982 through 1999, however, an extended bull market has prevailed because interest rates have remained low and corporate profits high - a situation, he warned, that is not likely to go on indefinitely.

Underlining the transitory and cyclical nature of business, America's most successful investor advised his audience that amid the fever and hype surrounding the Internet, it is wise to remember that equally hot industries have cooled with time. Once there were some two thousand companies manufacturing trucks and cars in America, Buffett said, but today "only three have finished the race." Between 1979 and 1998, he continued, in what once was considered a "glamorous" industry, 120 airlines filed for bankruptcy. "You've got to think where the competitive dynamics of a business or industry are going to lead over time," Buffett said.

"What causes unusual profitability," he emphasized, "is not demand or a great idea, it's sustained competitive advantage." The challenge for investors, Buffett observed, is to find companies, preferably undervalued, that will maintain that edge over the long term. Successful investing, he concluded, is not "a game of IQ, it's a game of discipline."

EMC's Ruettgers Finds Gold in Data Storage

"During the Gold Rush," EMC Corporation's Michael C. Ruettgers (MBA '67) reminded a Burden Hall audience last September, "a lot of infrastructure people got rich, along with a handful of gold panners." That's why, amid the glitz and glory of the high-tech revolution, Ruettgers is perfectly happy providing an unglamorous but essential (and lucrative) support service. EMC stores, safeguards, organizes, and makes instantly accessible the currency that, in the information age, constitutes companies' inherent wealth: their corporate data, or "enterprise information," as EMC calls it.

During his eleven-year tenure at the Hopkinton, Massachusetts-based firm, Ruettgers, who became CEO in 1992, has guided EMC to the top of its market. With $1 billion in profits expected this year (compared with $30 million the year Ruettgers became CEO), EMC is one of Wall Street's hottest companies.

"Technology is very different from any other industry; it's winner take all," explained Ruettgers, whom Business Week has named one of the world's top 25 executives. "There's a clearly defined winner's circle, and if you're in it, you're way, way ahead." But to maintain its leadership position, Ruettgers noted, EMC has spent some $1 billion during the 1990s developing its own software for data storage and retrieval.

Emphasis on R&D and quality control has been a key to EMC's success. But Ruettgers, often noted for making brilliant strategic moves, does not overlook the people side of the equation. "Strategy counts for only about 10 percent," he said. "We focus on execution." Not surprisingly, therefore, EMC demands topflight performance: some five hundred of its managers are paid according to their attainment of quarterly goals. "People who don't achieve the goals for two consecutive quarters usually don't get to participate in a third," Ruettgers said. "A team can't be successful unless the whole team is producing."

Despite increasing competition, the future looks busy for EMC, with a new mother lode - the Internet - waiting to be mined. "Some dotcoms are already collecting more information than the big banks and the major telcos," Ruettgers said. "We'd like to make them customers."