CarlsonSchoolA magazine for Alumni and friends / Carlson School of management university of minnesotaA Pictureof HealthCan the health careindustry be saved?Carlson School graduatesin the know offer ananalysis of its woes—andsome possible solutions.Chris Hutchison, ’84 BSB, president,Tyco Healthcare, Parisfall 2006
A Letter from the DeanIam fortunate to have joined the Carlson School of Management at a timeof great momentum at the school and at the University of Minnesota.The mission of the Carlson School can be summed up in three words—discovery, opportunity, and community. We have a great tradition in theseareas, and it is my responsibility as dean to ensure that we build on andenhance that tradition.My first priority as dean is to create new opportunities for our students.At this time, I am particularly focused on the opportunities we provide toour undergraduate students and themanagers and executives who participatein our executive education offerings.In September, we broke ground on anew undergraduate facility, which youcan read about on page 2. When HansonHall opens in 2008, it will be the premierundergraduate building in the nation. We arelooking at all aspects of the undergraduateexperience, including curriculum andstudent services, to ensure that our programwill set the standard in the United Statesfor undergraduate business education.We recently completed a consultativestudy of our executive education offering.New efforts are underway to develop amore robust and innovative executiveeducation program to serve the current andemerging learning needs of our alumni and ofAlison Davis-Blakecompanies in the Twin Cities and beyond.We will expand and strengthen our tiesto the vibrant business community that we are privileged to serve. We will alsoplay an expanded role within the University community as we collaborate in newways with other colleges on joint degree programs and common initiatives. Thisfall, we partnered with the University of Minnesota’s Humphrey Institute ofPublic Affairs to launch the Center for Integrative Leadership. This Universitywide leadership initiative will promote research and teaching about the natureand value of leaders working across disciplines to solve complex problems.We will build on the University’s reputation as one of the world’s leadingpublic research institutions. You may be aware that the University ofMinnesota has embarked on a series of initiatives to support the goal ofbecoming one of the top three public research universities in the world, andwe at the Carlson School are committed to that goal. In the words of theUniversity’s new advertising campaign, we are indeed “Driven to Discover.”I want to thank you for supporting the Carlson School by staying engagedand interested in our progress, by attending alumni events, by helping to connectgraduates with companies, by volunteering and mentoring, and by your generousphilanthropic support. I look forward to meeting more of you and to workingwith you to build meaningful, life-long connections to the Carlson School.Best wishes,Alison Davis-BlakeDean and Investors in Leadership Distinguished Chair in Organizational BehaviorCarlson SchoolA Ma g a z i n e f o r A l u m n i a n d F r i e n d sCarlson School is published biannually for alumni andfriends of the Carlson School of Management. Directcorrespondence to: Alumni Relations, Office of theDean, 321 Nineteenth Ave. S., Minneapolis, MN 55455.Visit our website at carlsonschool.umn.edu.For information about Carlson School alumni programs,contact Alumni Relations at [email protected] EditorKaty HolmgrenEditorChris MikkodesignBarbara Koster Designcustom publishing servicesThe Coghlan GroupContributing writersFrank Jossi, Danny LaChance, Brian Lieb,S.M. Pederson, Kate Peterson, Mary LahrSchier, Jenny Sherman, Vicki Stavig, MichaelWeinbeck, Mac WileyPhotographyDennis Ayuson, Gary Bistram,Gareth Brown, David Ellis, Tsar Fedorsky,Roberto Frankenberg, Jayme Halbritter,Stephen Hill, Mark Luinenburg, Dan Marshall,Tim RummelhoffOffice of the DeanAlison Davis-BlakeDeanDeb CundyAssistant Dean, External RelationsLouise Muldoon, ’85 MBADirector, Marketing ServicesDawn SkellyAssociate Director, CommunicationsChris MayrChief Development OfficerLori Kocer, ’06 MBADirector, Alumni ServicesAdvisory Board LeadershipEdwin “Skip” GageChair, Board of OverseersJames LawrenceVice Chair, Board of OverseersWilliam Van Dyke, ’76 MBAVice Chair, Board of OverseersBruce Beckman, ’90 BSB, ’99 MBAChair, Alumni Advisory BoardJason Sorenson, ’93 BSB, ’01 MBAChair, MBA Alumni Advisory Council 2006 by the Regents of the University of Minnesota.All rights reserved.Accredited by AACSB International—The Association to Advance Collegiate Schools of BusinessThe University of Minnesota is an equalopportunity educator and employer.This publication is available in alternative formats upon request.M i s s i o n s t at e m e n tThe mission of the Carlson School ofManagement is to provide the highest qualityeducation for present and future businessand academic leaders, and advance theunderstanding and practice of managementthrough research and outreach.
ContentsFall 2006Nila Kahn, page 5Robert Strand, page 7Dean’s Corner Carlson School DeanAlison Davis-Blake on new initiatives and new momentum atinside front Cover: The20the Carlson School.414The Atrium Brian Kovalchuk builds brands, PerryHines sets his sights on new goals, Jennifer Haggertyfills a great need with a new nonprofit, and more.26Features28The UnitedStates is an unquestioned leader in pharmacology andmedical technology, but cracks are showing elsewherein the system. Carlson School graduates offerprescriptions for change.Cover Story—A Picture of HealthHandle With Care Big, important, and fragmented,the U.S. health care system makes a fascinating subject forCarlson School researchers.6 Questions A chat with Stephen Parente, directorof the Carlson School’s Medical Industry LeadershipInstitute.Executive Decisions The Carlson School’s ExecutiveDevelopment Center has carved out a stellar reputation.Here’s a look at how it earned the distinction.31Class Notesfront Cover: chris hutchison, tyco healthcarephotograph by Roberto Frankenberg
From left, Thomas Sullivan, Robert Bruininks, Carmen Campbell, JamesCampbell, Steven Rosenstone, Sonia McDonald, Malcolm McDonald,Herbert Hanson, Bar Hanson, Alison Davis-Blake, Frank Berman, MarilynCarlson Nelson, Barbara Carlson Gage, Goldy Gopher, and Adam Simonett.Starting PointThe Carlson School breaks ground on Herbert M. Hanson, Jr. Hall.The Carlson School broke ground onHerbert M. Hanson, Jr. Hall on Sept.28, 2006. The new facility will support apremier Undergraduate program when itopens in 2008.Construction kicked off with wordsof encouragement from University ofMinnesota President Robert Bruininks;Carlson School Dean Alison Davis-Blake; benefactor HerbertM. Hanson, ’49 BA; U of M Regent Frank Berman, ’62 bsb; andCollege of Liberal Arts Dean Steven Rosenstone. The eventalso featured a virtual tour of the new building, shown on a30-foot-high screen and hosted by undergraduate students.Hanson Hall takes its name from Herb Hanson, who kickedoff the campaign with a 10 million pledge in 2004. “Myeducation here at the U of M changed my life,” Hanson said,addressing the 250-some people who gathered for the ceremony.“It’s important that future generations of students benefit fromtheir education in the same way that I’ve benefited from mine.I’m honored and humbled to play a role in the Carlson School’shistory and in its future.”“I remember three years ago when I first entered thebusiness program and talks of this incredible new facility werejust beginning,” said Adam Simonett, president of the CarlsonSchool’s Undergraduate Business Board. “I know the school willcontinue to change lives for many others in the future.“Herb Hanson has been an advocate for us undergraduates,” University of MinnesotaSimonett added. “He has come into the classroom to provide hisinsights into business and ethics, and even to talk about manners.He has also served on the board of the Funds Enterprise and onthe Board of Overseers.”Fresh commitmentThis spring, the Minnesota state legislature granted 26.6 millionin funding to the Carlson School as part of the University’sbonding bill request. The support signals a commitment to theCarlson School’s well-regarded Undergraduate program. “Mostof the money for business school bricks and mortar over thepast decade has gone to buildings and spaces serving graduatestudents,” said Dean Davis-Blake. “The support for this buildinghas been outstanding.”Hanson Hall will be four stories high and will connect to theexisting Carlson School building by skyway. The 124,000-squarefoot building also will feature several state-of-the-art classrooms,as well as an expanded undergraduate advising office and theCarlson School’s Business Career Center, which facilitates thejob-search process for Carlson students.Hanson Hall will also be home to the University of Minnesota’sDepartment of Economics. “This is a historic reunification of theCarlson School and the Department of Economics,” said DeanRosenstone, noting that the Carlson School and departmentlong shared space in today’s Heller Hall, then known as theManagement and Economics building. Rosenstone added that helooks forward to the intellectual synergies that will arise from the
talent if we wish to maintain the economic vitality we enjoy todayin our region.”Left, DeanAlisonDavis-BlakeBelow, leftto right,PresidentBruininks;MarilynCarlsonNelson;and GeraldFischer,presidentand CEO,University ofMinnesotaFoundationreconnection of business and economics—and also pointedout that Herb Hanson himself was an economics major. “Thismakes it all the more fitting that Hanson Hall will house boththe business school and the economics department.”Expanding to meet demandGiving backHerb Hanson is one of a growing list of individual and corporatebenefactors who are supporting the Carlson School’s expansion.Naming opportunities exist for spaces, including classrooms,public gathering spaces, and large auditoriums.Some 35 University of Minnesota alumni partners at theDeloitte & Touche accounting firm contributed to a doublematch program through the Deloitte Foundation, which raised 1 million to name one of the classrooms in Hanson Hall. “We seethis as an opportunity to assist the Carlson School in its efforts toexpand its Undergraduate program,” said Chris Swanson, ’90 BSB,a partner with Deloitte & Touche LLP. “We want to keep topaccounting students in Minnesota.”Scholarship support for undergraduates is also key. At theCarlson School, 299 undergraduates received scholarship supportduring the 2005-2006 school year. As the numbers of studentsin the Undergraduate program increases, more benefactors arestepping up to the plate to ensure that enough scholarships areavailable. Don Heltner, ’69 BSB, ’74 MBA, and his wife, JoAnne,established a President’s Match scholarship in 2005. Heltner,a vice president with State Farm Insurance, wanted to makeeducation more affordable for students who need financial help.“For me, financing my education was critical,” he said. “I oftenthink about students who might be apprehensive about how tofinance college. If this scholarship can make it more affordable,then maybe they’ll be willing to take the chance and do it.”Demand by applicants has consistently exceeded the CarlsonSchool’s capacity. Hanson Hall will allow the Carlson School toserve at least 50 percent more students by 2008, and the schoolis already ramping up admissions. This fall, the Carlson Schoolwelcomed 425 freshmen, up from 300 admitted last year. Demandby prospective undergraduates has also increased, as applicationsTo support the Carlson School,rose by more than 30 percent for the third consecutive year.contact Chris Mayr, chief development officer,“This will bring bright and talented students to the Universityat 612-624-4193 orof Minnesota, keep them a part of our community, and [email protected] student services,” said President Bruininks.“It will also allow us to recruit top-flight faculty inbusiness and economics. It’s an exciting project,and it’s right in line with our aspiration of becomingone of the top public universities in the world.”The Carlson School has long been a source ofbusiness leaders, and this is true now than ever.In fact, the number of businesses seeking to hireCarlson School graduates more than doubled between2002 and 2006. That’s one reason why the CarlsonSchool’s expansion is so important. By increasingthe size of the Undergraduate program, more futureleaders will be able to stay in Minnesota for theireducation—and for their long-term careers. Statisticsshow that 40 percent of well-qualified applicants whoare turned away leave Minnesota for their collegeeducation and don’t come back for their careers.“With 19 Fortune 500 companies based in Minnesota,we rely on the Carlson School for top-notch businessschool graduates at the undergraduate or graduatelevels,” said Berman. “It’s particularly important atthis time to expand the Undergraduate program. OurRight, Sonia and Malcolm McDonald, ’60 BBAFar right, Herbert and Bar Hansonbusiness community requires an ever-expanding pool ofFall 2006 Carlson School of Management
AtriumNews and updates from around the Carlson School and beyond.The Brand BuilderBrian Kovalchuk, ’73 BA, ’75 MBA, helped revive one of America’s oldest beers.Now he’s enjoying some time off, and turning his attention to the Carlson School.Six years ago, the Pabst Brewing Co. was in trouble. Thecompany, best known for Pabst Blue Ribbon (PBR) beer,had recently acquired Stroh Brewing Co. The acquisitionhad left Pabst mired in debt and unprofitable.“It looked like it would be a lot of fun,” says Brian Kovalchuk,without a hint of sarcasm, of his decision to sign on as Pabst’spresident and CEO to build a management team to help return thecompany to profitability. From his home in Minneapolis, Kovalchukbegan making a weekly, Sunday-to-Friday commute to Pabstheadquarters in San Antonio. One of the first challenges thatemerged was the issue of the company’s branding. “These wereold brands, your grandfather’s beer,” Kovalchuk says, adding thatthe beers had great name recognition, but not the kind that woulddrive large-scale sales. “For us, the real issue was: Can we harvestthe brands’ equity and put that equity back to work for us?”The answer, they quickly found, was yes. Just as Kovalchukjoined the company, Pabst began to see an uptick in PBRsales at dive bars in Portland, Ore. From out of nowhere, 20something hipsters were adopting the beer as their own.Interviews in bars confirmed that the sales surge wasn’t a fluke.Over and over, Kovalchuk says, Pabst representatives kepthearing the same thing: “It’s authentic, and it’s a real value.”More tellingly, survey respondents were also notingthat PBR was not Budweiser, Miller, or Coors. “Thosecompanies are producing television commercials that tellyou who you are if you drink their beer,” Kovalchuk says,an approach that Pabst’s newfound, anti-establishmentconsumers found off-putting. Learning when to remainsilent, Kovalchuk adds, was critical with this crowd. “Wedecided to let people define themselves with our beer.”The approach, which he calls “no-marketing marketing,”has reaped rich dividends for the company. Instead of buyingJumboTron advertising in major league stadiums, Pabstsponsors minor league baseball teams. Capital that wouldhave been invested in glossy magazine ads is now spent onsponsorships of local music and women’s flat-track roller derbyevents. The result: bike messengers, theater artists, Studentsfor a Free Tibet, and the like have embraced the beer and, inthe process, returned Pabst to profitability and made PBRthe fastest-growing domestic beer of the past four years.With the company’s turnaround complete, Kovalchuk hasleft Pabst and is enjoying life full time in the Twin Cities. After 13years of commuting across the country for his previous employer,Benetton Sport System, and then for Pabst, he was anxious toreconnect to his local community. Since his return, he has joinedCarlson’s Undergraduate Advisory Board, mentored Carlsonundergraduates, and endowed an undergraduate scholarship in his family’s name. Theschool’s plans for the Undergraduate program expansion, Kovalchuk says, captured hisimagination. “When I compare my Carlson School experience with what the studentshave now, it certainly appears that there are many more tools and services availableto the students besides the classes,” he notes. “I wanted to be a part of that.”—Danny LaChance University of MinnesotaBrian Kovalchuck
Nila KhanHigher PowerCarlson School junior Nila Khan has taken an energeticapproach to her college experience and her burgeoning career.photographs by gary bistramAt one time, Nila Khan had different plans. But the summerbefore her first year of college, after already being admittedto the University of Minnesota’s College of Liberal Arts,everything changed. “I was working at Xcel Energy’s HighBridge generating plant in St. Paul and I loved every minuteof it,” she says. “I decided that business was right for me.”Unfortunately, the Carlson School’s application deadlinewas long past. So she changed her first-year schedule andworked to attain one of the highly competitive transferadmission spots. “It was pretty much the most exciting newsin the world when I got my acceptance letter,” she recalls.Now a junior majoring in marketing and finance, Khan stillinterns at Xcel as one of four employees in its nuclear assetmanagement division. The group is responsible for oversight ofthe company’s two nuclear power plants—facilities that produceroughly 12 percent of Xcel’s total energy, enough to power morethan 1.5 million homes. Khan analyzes a range of incomingdata to see if the plants are meeting performance indicators.If her job sounds impressive, particularly for someonewho just finished her second year of college, it is. She is thefirst intern in the division, and while she initially performedtypical intern work, she quickly expanded her duties. “I justread manual after manual until I had a good understanding“ I just readmanual aftermanual untilI had a goodunderstandingof the topics.Then onceI figuredsomething out,I would go tomy supervisorand ask forsomethingnew.”of the topics,” she says. “Then once Ifigured something out, I would go to mysupervisor and ask for something new.”Khan brings that same drive tocampus activities. She is vice presidentof finance for her sorority and has beena University of Minnesota New StudentWeekend leader. She was also recentlynamed a Carlson School Ambassador.This select group of students plansand organizes special events and interacts with legislators,deans, corporate leaders, and community members.For Khan, the most exciting part of serving asan ambassador is the opportunity to work withnontraditional incoming students. “I believe everyonedeserves a chance at higher education,” she says.Now just two years removed from her High Bridge days,Khan has wide-ranging interests but clear goals in mind.She expects to eventually return to the Carlson School foran MBA. After that, she would like to teach. “I have hadsome amazing professors throughout my experience at theUniversity,” she says, “and I want to be a part of that.”—Brian LiebFall 2006 Carlson School of Management
At r i u mMan on a MissionPerry HinesTalk with Perry Hines for a few moments, and you’ll discoverseveral notable things. The Indianapolis resident is a devotedfamily man who brought his newborn son to his MBA classesevery day for six months. He is committed to his churchand recently dedicated time to a nonprofit that works toincorporate faith into the workplace. He served as theDemocratic National Committee’s network television medialiaison at the party’s 2000 nominating convention in LosAng