Wharton Alumni Club of NY Magazine - Winter 2016 by Wharton Alumni Club Magazine of New York

W H A R TO N A L U M N I C L U B O F N E W YO R K | W INTE R 2016

WCNY GIVES

$100K

TO SCHOOL

JOSEPH WHARTON AWARDS DINNER 2016

EXECUTIVE COMMITTEE Kenneth Beck WG’87 President 646-416-6991 kbeck@whartonny.com George Bradt WG’85 Executive Vice President 203-323-8501 gbradt@primegenesis.com Rosemarie Bonelli WG’99 Vice President, Finance 212-828-8644 finance@whartonny.com Blair Duncan WG’85 Vice President, General Counsel 347-731-6206 generalcounsel@whartonny.com Udayan Chattopadhyay, WG’01 Vice President, University Relations 212-421-4035 universityrelations@whartonny.com Diana Davenport WG’87 Vice President Volunteer Services 212-606-3834 volunteer@whartonny.com Chuck Forgang W’78 Vice President, Career Development 212-938-0500 careerdevelopment@whartonny.com Jeff Greenhouse W’97 Vice President, Marketing & Communications 215-650-7250 marketing@whartonny.com Jennifer Gregoriou W’78 Vice President, Programming 516-551-2992 programming@whartonny.com Regina Jaslow W’97 Vice President, Business Development 347-879-0024 businessdevelopment@whartonny.com The Wharton Business School Club of New York 1324 Lexington Avenue, Suite 409, New York, NY 10128 Phone: 212-463-5559 Club website: www.WhartonNY.com FRONT COVER :

Wharton Club of New York Board of Directors and Executive Committee join President Kenny Beck, WG’87, on stage at the 2016 Joseph Wharton Awards Dinner.

LETTER FROM THE PRESIDENT

A Winter 2016

s I reflect on the Wharton Club of New York, it’s clear how far we’ve come the past 15 years. Our Executive Committee is powerful. Our volunteers are engaged. Our affinity groups and speaker series hosted almost 100 quality events this year. These reflections are joyous, but also poignant because this was my final year as Club President at the Joseph Wharton Awards Dinner. This glittering event gets better and better every year! Jay Baker, W’56, Founder of the Jay H. Baker Retailing Center at the Wharton School, and the Former President and Director of Kohl’s, received the Joseph Wharton Award for Lifetime Achievement. Jay gave an ebullient speech on giving, that prompted a standing ovation. Phebe Novakovic, WG’88, Chairman and CEO of General Dynamics, received the Joseph Wharton Award for Leadership and shared how important Wharton was to her journey. Eric Adler, WG’96, Chair and Co-Founder of The SEED Foundation, received the Joseph Wharton Award for Social Impact. Eric showed how unanticipated connections, smarts and hard work enabled his foundation to provide a promising future for hundreds of disadvantaged kids. Jake Schwartz, WG’08, Co-Founder of General Assembly, received the Joseph Wharton Award for Young Leadership. Jake shared the many lessons still fresh in his mind from school that proved essential to growing his company. The ever genial Al Shoemaker, W’60, Hon’95, returned as Dinner Chair. Al spoke on behalf of a group of Wharton’s giants who were and are his friends and what we can inherit from them. Also, for the first time ever, our Executive Committee and Board Members came up on stage to help me announce that our Club will do something that never seemed possible, give back to the Wharton School with a $100,000 gift! How is it that WCNY never had an affinity group for CFOs? James Son, WG’11, and Saloni Sanghvi Varma, WG’07, have filled the gap (GAAP, get it?) with the Wharton CFO Network (WhCFO). Read about the group’s first and highly attended event, which showcased six CFOs sharing what it takes to become a CFO, and what that role means in various organizations. The Wharton Real Estate Investment (WREI) group recently held a panel discussion on the challenges and opportunities of urban retail. Nick Petkoff, WG’02, organized the event, and David Robinov, ENG’86, W’86, moderated the panel of three experts — a broker, a developer and a retail tenant — who are all heavyweights in New York City and gave tremendous insights. Lastly, take note of our premium members and facility sponsors. They make it possible for WCNY to present events and affinity group meetings to you each week throughout the year. In 2017, be inspired by these alumni. Be like them and “Take the Call.” Kenneth Beck, WG’87 Chief Executive Officer | CEO Connection President | Wharton Club of New York T 646.416.6991 | F 646.292.5129 kbeck@ceoconnection.com www.ceoconnection.com

WHARTON CLUB OF NEW YORK MAGAZINE PUBLISHER Kenneth Beck, WG’87 kbeck@ceoconnection.com

EDITOR Kent Trabing, WG’01 ktrabing@optonline.net

MANAGING EDITOR Peter Hildick-Smith, C’76, WG’81, P’13 peter@codex-group.com

LAYOUT & DESIGN Alberto Faccon afaccon@gmail.com

SOCIAL MEDIA Alexandra Sternlicht, C’16 asternl@sas.upenn.edu

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JAY BAKER, W’56, FOUNDER OF THE JAY H. BAKER RETAILING CENTER – LIFETIME ACHIEVEMENT AWARD

ERIC ADLER, WG’96, CHAIR AND COFOUNDER OF THE SEED FOUNDATION – SOCIAL IMPACT AWARD

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JOSEPH WHARTON AWARDS

2016 JOSEPH WHARTON AWARDS DINNER:

FOUR ALUMNI ARE HONORED...

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... AND WCNY PLEDGES $100,000 GIFT TO THE SCHOOL! This is the season of thanksgiving, and even the Wharton School had to be thankful for our Club’s 2016 Joseph Wharton Awards Dinner. Held on October 6, at the JW Marriott Essex House in New York City, old friends caught up, and new friends were made. The food was excellent, the ambience perfect and the mood forward-looking. We gathered to honor four individuals, because of all they had accomplished it, and how they accomplished it.

“As l said, I will tell you that Wharton has changed my life: I met my wife; I started a student credit union; I met my business partner; and I attended my daughter’s graduation in May. I hope you all get as much from this community as I have. I urge you to get involved, because you can do great things on your own, but we do greater things together. So one last time, Wharton is forever. Protect the brand, and don’t forget to Take the Call.” READ ARTICLES ONLINE AT READWNY.COM

ALL FOUR HONOREES REFLECTED ON HOW WHARTON HAD INFLUENCED THEIR TRAJECTORIES IN LIFE:

Jake Schwartz, WG’08, Co-Founder of General Assembly, received the Joseph Wharton Award for Young Leadership. Wharton taught Jake that the truth is in the numbers, giving him a competitive advantage as a startup; that working with people is all about “expanding the pie,” an expression he got directly from his negotiations professor; and that the small details matter.

Phebe Novakovic, WG’88, Chairman and CEO of General Dynamics, received the Joseph Wharton Award for Leadership. For Phebe, Wharton provided an intellectual foundation in managerial accounting, finance and economics to understand American commerce.

BRETT HABER, WG’01 AND UDI CHATTOPADHYAY, WG’01

Eric Adler, WG’96, Chair and CoFounder of The SEED Foundation and General Partner of Adler Associates, received the Joseph Wharton Award for Social Impact. Having been a high school physics teacher, Eric read his first balance sheet and income statement at Wharton.

WCNY PRESIDENT KENNY BECK, WG’87

SPONSORS

Jay Baker, W’56, is the Founder of the Jay H. Baker Retailing Center at the Wharton School, and the Former President and Director of Kohl’s. Recipient of the Joseph Wharton Award for Lifetime Achievement, Jay spoke about the inner confidence Wharton gave him.

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All four honorees called out their friends, family members or employees attending the event. Jay Baker had Professor Peter Fader in attendance, as well as the Presidents of the Fashion Institute of Technology and Hunter College. Al Shoemaker, W’60, Hon’95, is the former Chairman of First Boston, and recipient of the Wharton Dean’s Award. As Dinner Chair, Al said, “I want to speak on behalf of a lot of great guys — Mickey Tarnopol, W’58; Billy Mack, W’61; Jon Huntsman, W’59, HON’96; Saul Steinberg, W’59; and a lot of others. We had a passion for this school, and we were determined to make it better than when we found it. We’re proud of what we accomplished over the past 40 years, and we want to pass the torch on to all of you. Look at the school, and say, ‘We can do better than these old guys!’” Kenny Beck, WG’87, President of the Wharton Club of New York, for one, took Al’s advice. Kenny told the audience that, after 15 years as

Club President, he reflected on why he joined. “I had acquired a furniture company in Manhattan, and thought I should get involved in the Wharton Club. It’s my competitive advantage!” A few years earlier, the school had asked some dedicated young alumni — including Allen Levinson, W’77, WG’78; Bill Haddad, W’89; Dana Michael, W’82; Nigel Edelshain, WG’93; and Johannes Albeck, WG’74 — to revive the Club after some past financial difficulties. When Kenny volunteered to get involved, the Board said, “Great! Do you want to join the board?” Kenny attended meetings and told them that the small number of events they were doing each year was not going to help him sell office furniture. They told him, “OK, do what you want!” So he started two leads councils, which are noncompetitive groups of alumni who exchange business cards, and in nine months, he made $1.5 million of sales, which made him think, “I need to get more involved here!” That’s what he did.

Kenny became the Club’s President. Today, Kenny pointed out, “We have 250 volunteers, and 27,000 alumni in the New York region. We connect alumni looking to hire people, to invest, to buy things and even to find spouses! We do this based on three principles: (1) enlightened self-interest — you have to give to get; (2) tangible results; and (3) small, interactive events, which are more valuable and powerful than large, passive events. “Fifteen years ago, one of our goals was to show the school that the alumni association can not only run events, but also provide real value to the alumni community, without being a cost center for the school. We have accomplished a great deal since then. We wanted to put the Club in a financial situation where it could always serve alumni. And once we could do that, we wanted to contribute to the school. So I am proud to announce that the Club’s Board of Directors has agreed to donate $100,000 to the school this year.

SUSAN MARX, CW’66, PRESIDENT, PENN CLUB OF NEW YORK; SALLY SHOEMAKER AL SHOEMAKER, W’60, HON’95, DINNER CHAIR AND BILL GRIFFETH, CNBC, MASTER OF CEREMONIES

KATHERINA MYLENE ROSQUETA, WG’01; LESLY POOLE, THE SEED FOUNDATION

ANDREW STERN, W’10; RICARDO MARTINEZ, W’92; AND DESERRIE FORTE, WG’09 READ ARTICLES ONLINE AT READWNY.COM

REAL ESTATE JOSEPH WHARTON AWARDS

JOSEPH WHARTON AWARD FOR LEADERSHIP PHEBE N. NOVAKOVIC, WG’88 Chairman and CEO, General Dynamics

Phebe Novakovic, WG’88, puts you at ease with her genuine, friendly manner. When asked about her memory of Wharton, she laughs, “It was a challenge!” One might not guess that she leads a company leading aviation and national defense, not to mention 90,000 employees. Phebe rose through a nontraditional path to become Chairman and CEO of General Dynamics on January 1, 2013. Since Phebe took the helm, General Dynamics’ stock price has more than doubled to about 150 and stayed there for over a year. Her practice is to eschew the spotlight, letting results speak for themselves, but she was happy to share her thoughts here. She received the 2016 Joseph Wharton Award for Leadership.

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What does General Dynamics do? We engineer, design and manufacture high-end business aviation platforms and high-end national security programs. Three-quarters of our business is nationalsecurity-oriented. We design and make tanks, combat vehicles, ships and submarines. We also participate in cybersecurity programs and IT services. General Dynamics is one of several large U.S. defense firms that do some of the most high-end manufacturing in the U.S. today. You are recognized for turning around General Dynamics in 2013. How do you lead your executives to be more effective, to do more with less? You have to define the culture and the fundamental moral character of the organization. We defined a set of principles by which we live: transparency, honesty, trust and alignment. Establishing that cultural environment is the first step toward success in any institution. Then, we defined our mission — ours is to create value for our shareholders, our customers, our employees and our community. Once you define your prime directive, then you have to execute it. In my mind, simplicity is critical to communication. We have a value creation equation that we are committed to: Strong operating performance, coupled with the wise deployment of capital, creates value. Of course, there are complex moving parts that contribute to the equation.

But at the end of the day, it’s a simple message about value creation, which when combined with our common culture, and mission, allows us to execute effectively. How do you drive that culture throughout your organization? Once the senior leadership has determined the prime directive, then it’s about execution. To accomplish our operating performance, we think about four terms: increased earnings, margin expansion, return on invested capital and cash generation. Each individual needs to understand how he or she contributes to that value proposition. If you’re in contracts, the terms you write into the contract impact the operating performance of that contract. If you’re on the manufacturing shop floor, producing a product, you need to continuously improve your processes. Every process that anyone in this company touches, they need to think how to make it better. We are committed to all of these elements of the value creation equation, and we push them down to the lowest competent denominator. It’s not enough for senior leadership to be sitting in an ivory tower issuing dicta. All 90,000 employees need to understand where we are headed and why. And by the way — it doesn’t always work perfectly! How do you make important decisions? Do you prescribe a decision-making process to your executives? My experience is that a team brings diversity of thought, which is what solves complex problems. First, we need to make sure we have identified the problem, and that is not always easy. Once we have the metes and bounds of the problem defined, then we approach how to fix it. Our leadership is made up of engineers, finance professionals and operators, and I’m a liberal arts person. So we all bring our perspectives and experiences to a problem. I also rely on intuition and judgment to ferret something out. I think, “OK, this is a sticky wicket. How are we going to fix it?” I remember learning at Wharton that a complicated problem will come to you with no clear genesis — and time is wasted in trying to understand the prime contributor to that problem. So we need to confront and ask, “What is the real issue here?” Sometimes, it’s not knowable, and that’s where judgment can help. And how do you decide what to pay attention to? Sooner or later — if you have a good financial system — everything will show up in your finances. If you are a person who gets lost in the details, then you will struggle in a senior-level position. I’m lucky because I’m less interested in minutiae, but you need to be careful. In that sense, you need to set your own agenda. Lastly, if you’re not sure what to pay attention to, ask yourself, “Does this add value? Is my participation in this moving us forward? Does it drive our prime directive?” What lessons from your parents helped you? They gave me a value system. I learned to have a great love and respect for our nation, and I feel privileged to serve it any way I can. My parents taught me to be courageous and

KEN MOELIS, W’80, WG’81, OF MOELIS & COMPANY, PRESENTS THE JOSEPH WHARTON AWARD FOR LEADERSHIP TO PHEBE NOVAKOVIC, WG’88

humble, and to work hard. Those attributes, I think, lead to a successful human experience, right? Those values have defined me. How would you counsel young alumni as they leave Wharton? Well, I don’t presume to be the Oracle of Delphi. I’ve found that it’s good to do the job that’s in front of you, and to not worry about being the next guy. Do your job, be a good person and play well in the sandbox — and a lot of success will take care of itself. What role has Wharton played in your life? It gave me an understanding of the fundamental components of U.S. business. The concept I walked away from Wharton about how American enterprises function was helpful to me. And the lexicon that I picked up in microeconomics, corporate finance and managerial accounting, helped me be comfortable in business. And I loved operations research! Wharton gave me that intellectual foundation. And then, when you graduate from a school with a fine reputation, there is a presumption that you must be capable, that at least helps get your foot in the door. Then, it’s up to you to prove yourself. Excerpt from Phebe Novakovic’s acceptance speech at the 2016 Joseph Wharton Awards Dinner. This award is special for me, because six of the many Wharton and University of Pennsylvania alumni among our 96,000 employees, are here with us tonight. READ ARTICLES ONLINE AT READWNY.COM

The intellectual foundation that Wharton provided was pivotal. The superb grounding in economics, finance and managerial accounting gave me a lens to understand American commerce. That understanding of American commerce is essential to the ability to create value for our shareholders. The tools by which we create that value, in addition to common sense, are rooted in accounting, corporate finance, tax and capital return.

JENNIFER NAVARRO, WG’14; NEIL GOLDMAN, C’86; ARTHUR BASS, W’73 (WCNY); ARLENE BOHN, W’79; AND PHEBE NOVAKOVIC, WG’88, AT THE RECEPTION BEFORE THE DINNER.

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Phebe N. Novakovic became Chairman and CEO of General Dynamics on January 1, 2013. She was previously named the company’s President and Chief Operating Officer, and a member of the company’s Board of Directors in May 2012. Prior to her appointment as President and Chief Operating Officer, Novakovic was Executive Vice President for the Marine Systems Group, responsible for the performance of three General Dynamics companies: Bath Iron Works, Electric Boat and NASSCO. Previously, Novakovic had been Senior Vice President — Planning and Development since July 2005, where she was responsible for Government Relations, Communications, International, Investor Relations and Strategic Planning. She also has served as Vice President — Strategic Planning, a position to which she was appointed in October 2002. Before joining General Dynamics, Novakovic served as the Special Assistant to the Secretary and Deputy Secretary of Defense from 1997 to 2001. In that capacity, she was responsible for managing processes for all major U.S. Department of Defense budget and policy decisions for the Secretary and Deputy Secretary of Defense. Novakovic also worked for the U.S. Office of Management and Budget, where she served in a number of capacities, culminating in her selection as Deputy Associate Director for National Security where she was responsible for managing and submitting the President’s budget for the Department of Defense and U.S. intelligence agencies. From 1983 to 1986, she served as an operations officer for the Central Intelligence Agency. Novakovic began her career in 1979 as an analyst for the McLean Research Center where she performed operational analyses on Department of Defense weapon systems. Novakovic was elected to the Board of Directors of Abbott Laboratories (NYSE: ABT) in 2010. She serves on the Boards of Trustees of Northwestern University (Evanston, Illinois) and Ford’s Theatre, and on the Boards of Directors for several charitable organizations, including the Congressional Medal of Honor Foundation and the National Military Family Association. She is also a member of the Council of Trustees for the Association of the United States Army. Novakovic received her MBA from the University of Pennsylvania’s Wharton School in 1988; she completed her undergraduate studies at Smith College in 1979.

JOSEPH WHARTON AWARD FOR LIFETIME ACHIEVEMENT

FOR A LIFE WELL-LIVED Jay Baker, W’56

Founder of the Jay H. Baker Retailing Center, Former President & Director of Kohl’s I entered the reception room at the Joseph Wharton Awards Dinner, and asked an elegant woman standing close to Jay Baker, if she worked at Kohl’s. She replied, “Oh, I’m just a friend. We’re all here to celebrate Jay.” Indeed, friends came from Florida, and Professor Fader and others came from Philadelphia. The President of the Fashion Institute of Technology and the President of Hunter College in New York each had a table. Jay Baker is a rock star. Our Club honored Jay Baker with the Joseph Wharton Award for Lifetime Achievement, because Jay shows what a “life well-lived” looks like. His smile makes others smile. In fact, just thinking of him smiling makes others smile! When I met him, reminding him of our interview two years ago, he wanted to know what I was working on now. Howard Marks, W’67, Chairman of Oaktree Capital, and last year’s recipient of the Joseph Wharton Award for Lifetime Achievement, introduced him during the dinner: “Jay began his retail career at the age of 7,

greeting customers to his mother’s millinery shop in Flushing, New York. That’s a soft spot for me because I grew up in the next town over, and maybe my mother patronized his mother’s shop. After Jay graduated from Wharton in 1956, he entered the U.S. Army, where he became a sharpshooter. I wonder if that’s how he hit his targets so precisely throughout his career. After leaving the Army, he entered the Macy’s training program. Then he moved on to Ohrbach’s, the May Corporation and Saks Fifth Avenue. “He is hailed by his colleagues as the ‘merchant’s merchant.’ His stellar industry reputation peaked with his triumphant 14-year career at Kohl’s, which began in 1986, with 40 stores and $288 million in sales, and Continued on page 20

JAY BAKER, W’56, SHARI BECK, W’87 AND KENNY BECK, WG’87

JAY BAKER, W’56 RECEIVING AWARD FROM HOWARD MARKS, W’67

PROFESSOR PETER FADER, HOM’02, KENNY BECK, WG’87 AND JAY BAKER, W’56

READ ARTICLES ONLINE AT READWNY.COM

JOSEPH WHARTON AWARD FOR SOCIAL IMPACT Eric Adler, WG’96

Chair and Co-Founder of The SEED Foundation & General Partner of Adler Associates

This is a how-to story for someone who wants to start something big, fast. Eric Adler, WG’96, created a public boarding school 20 years ago, for kids from economically disadvantaged single-parent and no-parent homes, chosen by lottery without regard to academic talents. Now, with 355 students in D.C., 400 students in Baltimore and 180 students in South Florida, SEED students enter in the sixth grade and board until 12th grade. About 95% of the students at SEED schools graduate from high school, and 94% attend college. He did all this while winning a fight against pancreatic cancer and then dealing with its complicated aftermath, including 35 surgeries last year. Eric, within 18 months, you conceived an idea, lobbied Congress to amend a law, raised millions of dollars and opened a public charter boarding school for inner-city youth. How were you able to move that quickly? Well, the arrogance of youth is incredibly powerful. My CoFounder Rajiv Vinnakota, and I, we both had this idea for a public boarding school. If we’d been a little older, we might have thought twice about it. But we didn’t. We just did it. We met on February 11, 1997 and agreed, “Let’s open the school in September 1998 and back-map it to today for everything that has to get done.” We wrote it out on this whiteboard and said, “Well, we need a facility starting here. We won’t have the money until here, so that’ll leave three months. OK, so we’ll just build in three months.” Again, not knowing anything was really useful. We’re on our third school now, and it’s so much harder to do because we have board members we have to bring along with us, and we have schools that already exist that have to be protected. There’s a real freedom in having nothing to lose, and nobody to tell you, “No”. You just go and you do it. Why were you inspired to start SEED? Before attending Wharton, I taught high school physics at St. Paul’s, a prep school outside of Baltimore. I taught mostly white upper-middle-class kids who were paying, not kids of color from the inner city who came in with varying levels of academic preparation. 12

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One kid from the inner city had received a scholarship, and he commuted 90 minutes to school. Nobody was at home to cook his meals or iron his clothes, or make sure his homework was done. He had a huge disadvantage, and it showed. That’s when I had the idea. But I didn’t have the tools to do it, so I just tabled the idea. How did you envision the school? We thought it would be a private school. Then, we did the math and figured that, to be a sustainable private school, we would need to raise about $300 million, and recognized that we had never raised money. So then we thought, “How do you bring in public money?” Somebody told us about charter schools, that they received about $5,000 per student as a public school. This was just as the charter school movement across America was getting off the ground. And it was during the Newt Gingrich years and a Congress that created schools in the District of Columbia, yet left the authority with the city council to figure out how much each student was supposed to cost, with the stipulation that there would only be “add-ons” to that fee per student, for nonEnglish proficiency and for learning disability. So we went to the chair of the D.C. council committee on education, Kevin Chavous, to whom we are still very close, and we said, “Councilmember Chavous, we would like to create an add-on for the boarding student, and you are the person responsible for the formula.” And he said, “Fellas, I love what you’re doing here. I love the idea of this boarding school, and I would love to help you, but unfortunately as you know, the federal law prohibits add-ons for anything other than non-English proficiency and special ed.” And we said, “We know, but let’s just say that we could get Congress to change the law.” Kevin looked back at us and said, “Yeah, you boys go get an act of Congress, and I’ll be here waiting for you.” In other words, he thought it was impossible. Yeah. So we had made friends with Tom Downey who used to be a congressman from Long Island (and now on our Board of Directors for 19 years). He would take us up on Capitol Hill, and we would talk to anybody who would listen to us. Finally, we

Eric Adler is Co-Founder and Chairman of the SEED Foundation, which develops and operates college preparatory boarding schools for highly at-risk children. Eric has been involved in every facet of SEED, including designing the program, hiring and managing key staff, raising almost $100 million in private donations, doing PR and communications, developing boards, lobbying U.S. and state governments for $60 million of annual operating funding, establishing $55 million of tax-free bond financing, and building out a half-million square feet of finished space on the schools’ campuses. SEED has been featured in media outlets such as 60 Minutes, Time, Newsweek, Nightline, Good Morning America and the film Waiting for Superman. For his work at SEED, Eric has received an Echoing Green fellowship, Manhattan Institute’s Outstanding Social Entrepreneur Award, Fast Company’s Social Capitalist Award and Harvard’s Innovations in American Government Award. He received Oprah’s Use Your Life Award on the air and was named a 2002 Washingtonian of the Year by Washingtonian Magazine. Eric earned degrees in engineering and economics from Swarthmore College, and an MBA from the Wharton School. He taught high school physics and was a management consultant before cofounding SEED. Eric is a general partner in Adler Associates LP, a principal of Blu Venture Investors LLC and a director of Big League Advance LLC. Eric is married to Suzanne Myers Adler, an endocrinologist on the clinical faculty of George Washington University, and they have two children.

ERIK ADLER , WG’96, WITH ESTHY ADLER, DR. SUZANNE ADLER, MD, AND JAMES ADLER

JOSEPH WHARTON AWARDS persuaded Congress in 1997, to amend the District of Columbia School Reform Act of 1995 to allow an add-on for our boarding students. Now we went back to Kevin Chavous, and we said, “Hi, remember us?” And darn it if he didn’t keep his word. He said, “All right, I said I’d do it.” He calls in his aide, a 26-year-old law school grad, and said, “Adrian, I want you to sit down with Eric and write an amendment to the funding formula, which adds money for students in a boarding school.” Adrian, who by the way is Adrian Fenty, who eventually became the mayor of D.C., sat down, and looked across at me and asked, “How the f___ did you talk my boss into this?” My imagination is not good enough to make this up. We got, first, an act of Congress and then an act of the District of Columbia to amend legislation to fund our boarding students. To this day, that is how we fund our boarding students in D.C. Plus, we raised a lot of private money. You still had to build a board of directors, hire teachers and administrators, and recruit students. How did you build your board? In the beginning, you’re looking for board members, and you’re looking for funders. Glen Lewy, an investment banker from New York, was our first five-figure donor. Raj had gone to college with his son. Glen told us, “I’ll give you $25,000 when you raise $175,000.” We did it in a few weeks. I think that impressed him, and he joined the board. Another guy, Don Brown, who was our first six-figure donor, is a real estate guy in Washington, D.C. Let me back up. So, this is how you build a social entrepreneurship venture. We met Marc Miller who is a Princeton alum and nobody can milk those relationships like Raj. We sat down with Marc, and he thought that we were kind of nuts, but he said, “What do you need?” We said, “Well, we could really use some office space.” He said, “You know what, I’ve got a client who just took on a bunch of office space.” So he introduced us to Tom Downey, who’s the guy that I mentioned to you a little bit earlier, who took us to Capitol Hill. Tom put us in office space, and introduced us to his wife, and his wife introduced us to a friend of hers named Anne Fleming, who’s kind of a woman around town. She’s married to a guy named Gordon Peterson who’s a big newscaster in D.C. And Anne was so excited about what we’re doing, because she grew up in an orphanage, so she really cared about this. She said, “I’ve been trying to do something big in D.C. for years, but the city just beats you down, you can’t get anything done. But you guys are getting it done. I’m excited, and I’m going to help you.” By this point, we’d heard a lot of people telling us they wanted to help, so that was nice to hear, but you know, you don’t always believe it. We met Anne Fleming on a Monday. On Tuesday, she called us up and said, “Tomorrow, Wednesday, you’re coming to my house for dinner, and I’ll introduce you to a lot of people.” So, we went to her house for dinner on Wednesday. She introduced us to her husband (who has been a very close friend to us), and she introduced us to George Allen who had been NBC Bureau Chief in Saigon during the Vietnam War. He was like this grizzled old veteran. And his wife Anne Allen was the Executive Director of the Cafritz Foundation, one of the largest READ ARTICLES ONLINE AT READWNY.COM

JOSEPH WHARTON AWARDS foundations in town. By the end of the dinner, she was in tears. “I can’t get you money until my board meets in June — will it be OK?” We said, “Yes, that will be OK.” And in the next year, her foundation gave us $1.15 million. A few days after the dinner, Anne Fleming called us and said, “Guys, I’ve got a real estate developer who I want you to meet; his name is Don Brown, a big developer, and a well-respected guy.” He and his two business partners had just sold a significant chunk of their real estate portfolio, so they had money burning a hole in their pockets, and everybody knew it. Anne said, “I’m going to bring you next week to meet Don who’s very excited to meet you.” We said, “Great!” So we went over to meet Don, and we walked in and Anne was not there yet. Don Brown was less than overjoyed to see us, and we could not understand why. Years later, Anne told us that this was actually how her conversation with Don Brown went: ”Hi, Don. It’s Anne.” “Hi, Anne. How are you doing?” “I’m doing great. Don, I really want you to meet these guys. They’re doing something really interesting, and I really want you to support them.” “Anne, I’m not interested in meeting your guys.” “No, Don. I really want you to meet them.” “No, Anne. I don’t want to meet them. I’ll tell you what, here’s how much I don’t want to meet them: If you don’t make me meet them, I will give them $5,000.” “No, Don. That’s not how this is going to work. I’m going to bring them on Wednesday of next week, and you’re going to have sandwiches in your conference room. You’re going to have all of us there, and we’re going to have lunch, and you’re going to listen to them.” “No, I’m not.” ”Yes, you are.” “No, Anne. I’m really not.” “Don, I will see you on Wednesday at noon in your conference room with sandwiches.” And she hangs up on him. And then she called us and said, “You have an appointment with Don Brown — he’s very excited to meet you.” Anyway, when we met Don, he was grumpy, but he listened for almost three hours. We left, and a week later, he asked us to send him some financial information, which we did. A week later, he called us to make an appointment with his lawyer. We went into his lawyer’s office. Don was there, and he spent 20 minutes telling us what shmucks we were and how our plan sucked and our board sucked. We said, “We know, we want you on our board.” And whatever he said, we would say, “Yes, that’s right. We know, we need to work on that.” And he would respond as if we’d said, “No, that’s totally wrong, we’re brilliant, and you don’t know what you’re talking about.” I think he just wanted to see if we would sit there and get rained on. Then he turned to his lawyer, a well-known attorney. Now his lawyer spent 10 minutes telling us what losers we were. At the end of all of this, Don turned back to his lawyer and said, “So, what do you think I should do?” So the lawyer said, “I don’t think you should give them $25,000 because whatever you give them, you’re putting your money at risk.” Don turned back to us and said, “I’m going to give you $500,000 — $100,000 now, and the rest of it when you ask 14

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me for it.” Then he leaned across the table and said to us, “Now, don’t f___ it up.” And he got up and left. That was our first six-figure gift. That all started, I wish to remind you, because we met a guy named Marc Miller, and one thing led to another, and that’s how we got on the map. Once Don gave us money, everybody gave us money. And you were able to raise that money with only a piece of legislation, a charter school application and a plan? Yes, that’s all. I just think that Raj and I were comfortable waking up every day with 20 things to do, and we only knew how to do 10 of them, or maybe five, right? I think that’s the definition of entrepreneurship. I want to do something big. I don’t know how I’m going to do it — that’s OK, I’ll figure it out. What’s the benefit of lower-income kids being in a boarding school? Well first, there are some disadvantages. In a day school, at 3 p.m., everybody leaves and gets away from everybody else, including the kids who don’t get along with one another. In our school, they may be roommates. Now, the downsides are worth it, because we own the clock, and we offer services to our kids 24 hours a day with everything they need to be successful in the classroom. You know, for years, the way I described why SEED is important is to say, “A child who falls asleep in front of the TV at 2 a.m. with an open bag of potato chips and goes back to school the next morning in the same rumpled clothes is probably not going to learn. And neither is the student to his left or to his right.” We know that our students have eaten breakfast, have eaten dinner, have had a supervised study hall and have seen a therapist if they need to talk to an adult about whatever’s on their mind. They have been able to work with friends on homework, and have all the things needed around the clock to be a successful student. So it’s worth it, but it’s not easy. It’s expensive, and it’s complicated, and it’s not easy. Why won’t the student on his left or right learn anything? When we first started SEED, one teacher said something to me that opened our eyes. He said that we have so many girls and boys in inner cities who are being labeled as learning-disabled, and here’s why — Because all their teachers did was to say, “You in the front row, you read the first paragraph of the textbook, and then you, next to him, the second paragraph,” and all the teacher is going to do is move down the rows. So you as a kid, and this is ninth grade, are sitting midway in the second row and you’re functionally illiterate and you haven’t admitted it to anybody. What has to happen? You have to disrupt the class. Right, you have to get thrown out of class. You will get thrown out of class every day if you have to. You are not going to suffer the humiliation of not being able to read that paragraph. And when I learned that: oh my God. Nobody ever sat down with these kids one on one and said: “I want to ask you to read to me now, it’s just going to be me, and nobody else is going to hear. If you can’t, that’s OK.” Nobody’s done that for these kids.

“My career was made possible by growing up in my parents’ household. My parents launched a business in 1969. They grew it substantially and sold it in 1979. Between the ages of 5 and 15, I had a front-row seat on entrepreneurship. But entrepreneurship was not the only thing that I witnessed at the dinner table. I heard how my parents valued their employees. I saw how angry they became when someone suggested behaving unethically. Once, I heard my dad say, ‘We all drink from wells dug by others.’ And that sentence changed my life. You see, the children are always watching the adults around them. And they are learning.”

What were some of the initial challenges? Did you think of throwing in the towel? We had challenges all the time. A challenge on the finance side: We used tax-free bonds to finance the campus, but it was underwritten by a letter of credit, which in the end was written by Bank of America. Getting that was unbelievably difficult because we had no operating history, right? On the education side, the kids came to us with greater needs than we had imagined. We thought that, if we offered this great environment with three meals a day and great teachers, the kids would immediately be able to perform at a high level, and it wasn’t like that. Kids had other things in their lives, Their needs were much greater than we imagined. It just turned out to be harder to do than anybody in America has ever thought, and you’ll hear that from everybody who has been working in education reform circles. What role has Wharton played in your life? I can’t imagine having to run SEED without it. I mean it. It wasn’t just the connections; it was the education. Prior to Wharton, I taught high school for eight years. I didn’t even know how to read an income statement or balance sheet. I took Richard Shell’s negotiation class. He said,

“Everything in life is a negotiation. Anytime, anybody wants anything from anyone, even something as basic as respect or information, the parties will be negotiating, whether or not they realize it.” Understanding this framework gave me a sustained competitive advantage. Wharton made me a problem solver, an entrepreneur. I remember one instance. Wharton had been in a dark period; it had been ranking fifth or below. Our year, it began ranking No. 1. It was announced on a Friday, and by Monday morning, people were selling T-shirts. I remember thinking, “How come I didn’t think of that?” I became a different person in that moment. I never want to not do something because I didn’t think of it. And I ran my business in a completely different way from what I otherwise would have. How has your battle with pancreatic cancer and its aftermath, informed your work? I wanted to have a career from a fairly young age, where I would have no regrets. I feel lucky that I have been able to do that. ♦ – KT READ ARTICLES ONLINE AT READWNY.COM

JOSEPH WHARTON AWARD FOR YOUNG LEADERSHIP

USING WHAT HE LEARNED! Jake Schwartz, WG’08 Co-Founder of General Assembly

“You left your recorder on — the battery will drain,” Jake Schwartz, WG’08, Co-Founder of General Assembly, warned me as I packed up from our interview. He was concerned about my ROI. He thinks about ROI constantly, for his students, his clients and his own company. With some success. Receiving its venture capital funding in 2011, General Assembly (GA) has established itself as an education-to-employment company. Making this kind of impact does not come naturally to an entrepreneur, but GA has graduated more than 33,000 students from its long-form programs across its more than 20 physical campuses around the world and creates value for thousands of employers — it works to help companies source, assess and transform their talent. What is valuable for Wharton alumni is that Jake grew his company, by consciously looking to the frameworks he learned at Wharton.

SLAVA RUBIN, W’00, GIVING AWARD TO JAKE SCHWARTZ, WG’08 16

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When I first interviewed Jake for this magazine’s Autumn 2014 issue on entrepreneurs, he was confident in his model, which is based on educating coders and web developers, using skilled practitioners versus teachers. As I interviewed him for the 2016 Joseph Wharton Award for Young Leadership, he reflected on how he’s confronted scaling the company. How have you used your Wharton education to move your firm forward? This year, I thought back on a marketing class. It was a very complicated computer simulation on how to spend money against all these channels, and it was very abstract. Our team did terribly. The best team was an undergrad team that cynically looked at the simulation and decided that it must be run off of regression factors’ coefficients. The team members said, “We just need to reverse-engineer what those coefficients are, and then we can hack the game.” By the second week, they understood what the coefficients were and how to drive performance. Because our company had grown to a different stage, we were revamping our marketing. I thought about how we have all these stories that we tell to our customers about why certain things work or don’t work, or how GA can help them reach their career goals better. We needed to strip away the artifice and the story lines around our business, and get to the heart of what we are trying to do and how we win. I pulled out my old statistics software and thought that we should run this as a regression, and see what the data is actually telling us about what is driving performance and what’s not. For my team members, who are still relatively young, to see me diving in, helped them get out of that narrative stance and into the numbers stance. Continued on page 20

WCNY AFFINITY GROUPS

WCNY CFO Network (WhCFO)

Connects

Current and Aspiring JAMES SON, WG’11, AND SALONI SANGHVI VARMA, WG’07

James Son, WG’11, and Saloni Sanghvi Varma, WG’07, created the latest affinity group, the WCNY CFO Network (WhCFO). It provides a forum for finance professionals to explore ideas, share knowledge and build their networks. The WhCFO seeks to engage finance professionals who work in a broad range of fields related to finance, such as corporate finance, treasury, accounting, tax, supply chain finance, sales finance and e-commerce finance. Saloni is Vice President of Finance at Hunter Boots, responsible for North America Finance. James is Vice President of Corporate Development at Harland Clarke Holdings, a MacAndrews & Forbes Company. On October 17, WhCFO held its first event, Interested in Being a CFO — Learn From the Experts, with 42 alumni in attendance. Panelists visited each of six circles for 15 minutes, shared their careers and answered questions from each group. Discussions in our circle focused on the CFO role and the prerequisites to become a CFO in the various types of organizations that the panelists represented. Panelists included: • Howard Katzenberg, WG’06, CFO of OnDeck, has led the finance department since 2009. • Eric Aboaf, ENG’86, W’86, is EVP and CFO of Citizens Financial Group. Eric will join State Street in December 2016 as EVP and a Member of its Management Committee, succeeding State Street’s current CFO in March 2017. • Geoffrey Strong, WG’06, is Partner at Apollo Global Management. Prior to 2012, Geoffrey worked at Blackstone and Morgan Stanley Capital Partners.

Finance Professionals • Anders Petersen, WG’09, is Partner of VO2 Partners. Before that, he was Vice President at Merrill Lynch Global Private Equity. • Liam Stewart is Managing Director and CFO of Macquarie Infrastructure Corporation (MIC). Prior to that, Liam oversaw MIC’s Atlantic Aviation and Contracted Power & Energy businesses. • Rose Mistri-Somers is with the Financial Officers Practice of Russell Reynolds Associates. Rose works with clients on key executive-level appointments within their finance functions. Reflecting on the event, Eric Aboaf pointed out, “CFO careers is a great topic. There are no natural-born CFOs anymore. The job has become too big and complex. This also means that there are many ways into the job: financial planning and analysis; investor relations; treasury; and for people with a range of analytical backgrounds, strategy, investment banking or capital markets.” A participant also agreed that the topic was very relevant. Lex Wolf, WG’04, Managing Director at The Beekman Group, shared, “It was great to see Saloni and James addressing the role of the CFO function, which traditionally has not been top of mind for Wharton students. As the CFO function continues to evolve into a key strategy role within companies, I hope and expect Wharton will play a role in training the next generation of CFO leaders.” The event itself also drew praise. Howard Katzenberg said, “I really enjoyed the speed-dating format and opportunity to answer questions from a diverse group of aspiring CFOs. I look forward to future events with this new and very promising alumni group.” WhCFO is a great opportunity to build your network and knowledge within the world of commercial and operational finance. If you would like to get involved, contact Saloni Varma and James Son at WhCFO@whartonny.com READ ARTICLES ONLINE AT READWNY.COM

WCNY AFFINITY GROUPS Wharton Real Estate Investment Group, presents:

A Closer Look at the Strengths & Challenges of Urban Retail A SUPERB PANEL OF NEW YORK CITY RETAIL REAL ESTATE MAVENS SPOKE TO AN ENGAGED GROUP OF WCNY MEMBERS IN THE REAL ESTATE PROFESSION. NICK PETKOFF, WG’02, PRESIDENT OF ANG INVESTMENT PARTNERS, AND VICE CHAIR OF THE WHARTON REAL ESTATE INVESTMENT GROUP (WREI), ORGANIZED THE EVENT HELD THIS AUTUMN IN MIDTOWN MANHATTAN. DAVID ROBINOV, ENG’86, W’86, MODERATED THE PANEL. DAVID IS MANAGING DIRECTOR OF INVESTMENT SALES AT ACKMAN ZIFF, AND HAS SOLD OR FINANCED SUCH HIGH-PROFILE PROPERTIES AS THE WESTCHESTER, STAMFORD TOWN CENTER AND BERGDORF GOODMAN’S FLAGSHIP STORE IN NEW YORK CITY.

The panelists represented the three key players in a retail real estate transaction: • Broker — Chase Welles, Partner at SCG Retail, represents Whole Foods Market, Kohl’s and LA Fitness, but also leases close to a million square feet of retail space. • Landlord — Scott Auster, Managing Director at Grid Properties, developed Harlem Square in Manhattan and is now planning Boulevard, a 230,000-squarefoot retail destination in downtown White Plains, New York. • Tenant — Dan Shallit, Director of Store Development of Starbucks Coffee Co., has opened over 100 Starbucks locations, and a variety of Starbucks concepts. The questions and answers delved into key issues faced by retailers and developers today.

MODERATOR DAVID ROBINOV, ENG’86, W’86, AND PANELISTS CHASE WELLES, SCOTT AUSTER AND DAN SHALLIT

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In Manhattan, where retail rates can be astronomical, say $2,000 per square foot, do retailers write off high rents as a marketing expense? Chase: I’ve never heard a retailer say that it doesn’t need to make money on its location. But when you have 35 million, 53 million people going through a subway stop and they’re all looking at your store, then I do try to convince them that they could allocate some of the dollars to marketing. Scott: Tenants who come into our projects have to make money. You see brand value in certain particular locations, but I don’t think there’s a retail metric behind that. Dan: We have a Starbucks in Times Square. When we make a decision to move forward with a site, we call it our decision logic — foremost, we look to see if it is

profitable. So, as long as the store is making money, maybe it’s not going to make the same money as a project up in a regular suburban market, but we will accept the low return, understanding that there’s a secondary value — whether it is marketing or good community outreach. Also, we look at where we can tell a story for our company. We were the first major retailer to open at 125th Street, in Harlem, 15 years ago, and it sent a message. What’s funny is that, with Whole Foods opening directly across the street from Starbucks, in Harlem, we probably can’t afford to stay there, because the rents have gone so far up. Who makes those secondary decisions? Dan: The development manager provides the first analysis. In the hierarchy of things at Starbucks, there’s a director, which is my position, and there is a vice president who usually covers more than three major metropolitan areas. So my vice president covers Boston, Chicago and New York. We recently signed a lease on Rockefeller Center on 46th Street, between Fifth and Sixth Avenues. The development manager pointed to our sign on the building and said, “This sign is worth money, because it will be on the Today Show every morning.” I remember arguing in my head, with the inner accountant saying, “I can’t put that money in the bank,” and my director side jumping in and saying, “You’re right, but you’ve got to think about the company as a whole and understand that it benefits us to be on the Today Show every morning. And yes, while your store doesn’t benefit from it, the company does.” Looking back, what have you guys missed? Do you ever say, “We should have built there”? Scott: I think when we build large complicated urban retail projects, like the ones that we’ve had, there’s such a significant development risk associated with that, so you really have to know your market at a very micro level. And that’s hard to do over a bunch of different areas. In Harlem, for example, my boss, Jude Greenwald, when he took tenants around trying to convince them to locate in Harlem, he knew exactly which blocks with the brownstones to drive in on and which blocks, with the boarded-up buildings, to avoid. What I think you might miss in all that is that we should have acquired more assets in those markets. We spend a lot

of time focused on getting this or that project built and realized later that it was going to improve the area around us. That’s something we are doing, going forward, even on our current projects. Do you think that there will be significant appreciation in retail in that area? Scott: It depends on the exact location. On the one side, there is an existing, very successful retail project. So we’re sort of taking what’s there already and trying to fill a hole in that type of retail that exists. On the other side, there is a lot of opportunity, because it’s sort of a forgotten area downtown, and we own a five-acre site. There are a lot of small commercial buildings across the street from us, some vacant and some underutilized buildings in either direction. How do you know a market is saturated? Have you ever been to a Starbucks and not waited in line? When did you guys know that you had enough branches? Dan: For us, it is a fine line. Coffee consumption in America has grown year over year since Starbucks has entered the market. So, premier coffee consumption has gone up each year. So where we could have been sort of maxed out on our capacity in 1996, fast forward five years, and the market is expanding. So the best example here in Manhattan is 53rd Street and Sixth Avenue. We had the opportunity to locate on the northeast corner and the southwest corner. Everybody in the company was making tons of jokes: “Don’t they know we are them?” But this was a big moment for us to take this chance. We negotiated the right to leave the first store if it didn’t work out, and just keep the second store. Behold, we opened up the first store, and we opened up the second location and beat annual projections within six months. Wasn’t there cannibalization? Dan: There was some. However, demand is great enough that we lose more because people don’t want to wait in line. Whole Foods developed another concept called ‘365’, that is supposed to be a slightly lower-price version. Is the company doing that so there won’t be too many Whole Foods stores out there? Is there room for competition in the market? Chase: 365 is designed to appeal to a younger customer than the typical Whole Foods customer. It’s a smaller footprint; the product is displayed much more informally; there is less prepared food; and the design of the stores is uniform, with half the

development costs per square foot. Interestingly, if Whole Foods has excess property, it can sublease that to Trader Joe’s, and it won’t have a material effect on Whole Foods’ sales. There seem to be more alternatives to Starbucks — Blue Bottle Coffee, Café Grumpy, Juice. Is it just that people are buying much more coffee? Dan: There’s room for competition in any market that we’re in. Starbucks was the premier coffee provider, so everybody used to think of it as the $5 cup of coffee. Now other retailers are saying, “Well, Starbucks is becoming ubiquitous. We can open up in any city and be more premier than Starbucks. Most of them are more expensive than Starbucks on a per-cupof-coffee basis. They’ve tried to take that premier market share. People don’t want to shop at Starbucks every day. So these companies you’ve mentioned have filled that void. With retail sales continuing to migrate online and the demise of stores, how do you respond as a developer? Scott: Our biggest concern is designing a project that’s flexible because we are now aware that these tenants are evolving through that. Does that mean they’re going to stay that way? Does that mean five, 10 years from now, they’re going to be totally online? But while there is still demand, we’re trying to be very careful about developing projects so that they can be reconfigured. If you have a store that is 350-feet deep, and that store goes out of business, even if you have tenants that want to have small stores there, you can’t reconfigure that box. So, flexibility of design is essential. Retailers are beginning to say, “I used to have a store in this mall that made $5 million in sales. Now, $2 million in sales occur online in this trade area.” Now, when I’m negotiating with that tenant, and that tenant says, “I do only $3 million in this store, so I can pay you only this much in rent,” which is a lot less than the rent I got when that tenant was making $5 million in sales. Then I say, “If you close this store, you’re going to lose the $2 million you’re making online in this trade area, because customers won’t see you when they drive by on their way home, or they won’t be able to pick it up at your store. So, I need to get rent on some of that $2 million as well.” That’s a bridge we’re going to have to cross because I can’t make the net I need, at the volume that their stores are producing.

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JOSEPH WHARTON AWARDS

Continued from page 11

ended in 2000, when he retired as President with 500 stores, 54,000 employees and $5 billion in sales. And for those of you who didn’t go to Wharton, that’s a 22% annual growth rate in sales. In 2014, the Wharton School presented Jay with its highest honor, the Dean’s Medal. “Jay currently chairs the Baker Retailing Center, a global retail institute he began at Wharton. At present, he is Chairman of the Baker Museum of Art in Naples, Florida, where he is also a trustee of Artis—Naples, and is a Trustee of the Fashion Institute of Technology in New York City. While he was Chairman of the Cal Ripken, Sr. Foundation, donations increased from $2 million a year to $30 million a year. He believes that one should give while one has a say in how the money is spent, and he has done so.” You can read our full-length interview in this magazine’s Spring 2016 Retail Issue, on how Jay created Kohl’s and his path from Wharton. Here, we will focus on his acceptance speech. Congratulating his fellow honorees, Jay said, “It’s the first time I met them. They are amazing people.” Jay thanked the Club, his wife Patty Baker, children and friends in attendance. He then told his story. “I grew up in Flushing, Queens. We had wonderful parents. None of them went to college. Their whole thing was to give us a chance. They both worked. We didn’t have a lot of money, but we had a lot of love. “I look at the kids we interview today for scholarships. They have

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What was the outcome? We increased the size of our marketing funnel by 50% in the past four months. This meant more flow-through, and more students coming in. It was a big deal to improve our reach to the right individuals. What other frameworks have you used? From my class on managing people at work, I remembered that classic article, On the Folly of Rewarding A, While Hoping for B. I was able to direct my HR department toward the ideas in that article, as HR was revising the compensation structures for our sales department so that salespeople would focus on the right things. Of course, there are people who have done this before. A big part of Wharton education is knowing that these frameworks exist, and that you’re not a special snowflake. I’ve found that simplicity is the only way to effect change. Frameworks are a beautiful way of driving toward simplicity and a common understanding. What lessons can you share from surviving growth? We opened up 15 additional campuses around the world this year. You can’t underestimate the challenges of managing people 8,000 miles away, as well as the human resources and financial overhead when dealing with a new set of regulations and guidelines. Today, we are much more careful about what markets we go into and why. The markets we are in now have the same demographics as what we have in the United States: London, Hong Kong, Singapore, Australia and Canada. Our courses are currently 20

| WHARTON CLUB OF NEW YORK | WHARTONNY.COM

| WINTER 2016

a 4.6 GPA out of 4 GPA. They are the president of every club. They were football stars. And I am asking myself, ‘How did I ever get into Wharton?’ Luckily, there weren’t as many geniuses in those days. But I had four wonderful years there, in 1952. I had the chance to get an education from the best professors in the country. To think — to go to the Wharton School — it was phenomenal! As I look back over the years, one of the things that stayed with me … it was like an inner confidence. I was always so proud. “Years later, I had the opportunity to get more involved in Wharton. One day, when I was still at Kohl’s, I got a call from the Dean: The School was building Huntsman Hall, and could they come out and see me? I should have known. I should have said, “No, I’m very busy!” But I didn’t. Today, there is a photo of Patty and I and our dog Kizzy. So Kizzy is very famous in Philadelphia. “I worked very hard my whole life. But I was very fortunate. Especially the 14 years that we spent at Kohl’s. It was an amazing thing — it was 40 stores, $288 million, which is very small for our industry, and more important, it would have been out of business in a year. Bill Kellogg, John Herma, myself and some wonderful financial partners, which always helps, we were able to grow it. “Patty and I, luckily, have the same values from our parents. We want to give back now. We have been very blessed. There are a lot of incredibly successful people here. To give back is an incredibly wonderful thing. The only thing we ask of the students whom we give scholarships to, is that if you make it one day, think about another student and give to them.”

taught in English. If and when we enter emerging markets or nonEnglish-speaking markets, we will do a joint venture with partners who will allow us to scale. Is GA in the education business? For us, it’s an investment business. Students invest their time, energy and money with us, and they expect a return. For decades, there has been an almost willful naiveté about college education with the idea that, if students go deeply in debt now, over the next 30 years, they’ll earn a return. The way we drive consumer demand, and create an economic value proposition, is to give our students a payback period of one year — meaning the salary increase that they receive from this course, and the economic value they accrue, will be realized within the first year. How did you scale GA? The company doesn’t just get bigger. We had to change our economic model, value proposition and customer base. To achieve real value, not just venture value, I need to make sure I’m not fighting yesterday’s battle today. We realized that we are not just an education company, nor are we an enterprise B2B company. We are a two-sided marketplace between potential and existing employees and employers. Our job is to offer great value propositions for both, in ways that add meaning and value. We are a talent pipeline as-a-service! The art is in connecting the pipes, in making sure that the learning matches the goals, and the goals match the needs of the companies. This understanding makes a difference in how we answer these questions: How do we sell? How do we structure? What is the next product we have to build?

THE WHARTON CLUB OF NEW YORK APPRECIATES THE ENTHUSIASTIC SUPPORT OF THE FOLLOWING PREMIUM MEMBERS: BENEFACTOR MEMBERS: Ramkrishan Hinduja, W’91 Hinduja Group of Companies Regional Chairman, Americas (212) 355-0755 www.hindujagroup.com

Vikramjit Chawla, W’11 Echelon Asset Management Investment Professional (212) 390-2786 www.echelonassetmanagement.com

Daniel Lowy, WG’13 EMU Health CEO and Principal (646) 681-2225 www.emuhealth.com

Nancy Goldfarb, W’78 Smart Transition Strategies, LLC President (973) 610-0808 www.smarttransitionstrategies.com

Christopher Stavrou, WG’67 Stavrou Partners General Partner (212) 297-6110

Arun Kumar, CRT’15 Cadreon Global President (415) 583-9134 www.cadreon.com

... AND TO OUR WCNY VENUE SPONSORS The WCNY organizes a large number of events throughout the year. This is made possible through the generosity of our alumni who host WCNY events at their offices. We are honored to include among our recent facility sponsors: •

GOLD MEMBERS:

Clearbridge

•

Kaye Scholer LLP

Investments, LLC

•

KPMG LLP

•

Cooley LLP

•

Lee & Associates LLP

•

Debevoise & Plimpton LLP

•

Lee Hecht Harrison, LLC

•

DonorsChoose.org

•

Lyrical Partners, L.P

•

General Assembly

•

PwC LLP

•

Halstead Property, LLC

•

Skadden, Arps, Slate,

Allen Levinson, W’77, WG’78 Retired Karl J. O’Farrell, WG’89 Steel Wheels, LLC Managing Member (212) 798-3152 Keshab Panda, CRT’11 L&T Technology Services Managing Director and CEO (732) 609-1571 www.lnttechservices.com Marsha Plotnitsky, W’78 The Merchant House Founding Director and Curator www.merchanthouse.nl Janice Stanton, W’81 Contrarian Capital Management President and Portfolio Manager (203) 862-8204 www.contrariancapital.com

Note from Editor: To view hyperlinks to club events, company names, published books, and other items, please read articles at www.readwny.com.

Meagher & Flom LLP READ ARTICLES ONLINE AT READWNY.COM

Investment Sales Team at Cushman & Wakefield CAREER SALES ACTIVITY

$15.4B 1,714 TOTAL AGGREGATE

CONSIDERATION

(ALL PROPERTY TYPES)

PROPERTIES

SOLD

IF YOU ARE THINKING OF SELLING A PROPERTY IN THE NEW YORK METRO AREA, PLEASE CONTACT:

Robert A. Knakal Chairman, New York Investment Sales 212.660.7777 Robert.Knakal@cushwake.com

nyinvestmentsales.com

TAKE THE CALL! The Wharton alumni community is one of the most exclusive and powerful networks in the world. A key element to our success is the willingness of alumni to help other alumni. Take the Call is a simple concept: Wharton alumni should buy from, hire and help Wharton alumni. And if a fellow Wharton alum calls us for any reason, we Take the Call. The Take the Call Forum allows you to directly reach 30,000 Wharton alumni in the New York City metropolitan area. Promote yourself! Find opportunities offered by your fellow Wharton alumni! Help alumni get answers! Gain ideas and useful information! Just submit your message at www.whartonny.com/forum.html. Here are some excerpts from the latest Take the Call Forum.

WCNY Can Always Use Additional Space

http://www.whartonny.com/article. html?aid=348

The WCNY organizes a large number of events throughout the year. These events range from small and focused gatherings centered on a particular theme, and right up to the annual Joseph Wharton Awards Dinner. Our events provide opportunities for Wharton alumni to network and reconnect, and for sponsors to gain access to one of the most dynamic business communities in the region. Email gsanchez@whartonny. com for further details.

Nonprofit Development Manager – Full or Part Time Come help the Turtle Bay Music School (www.tbms.org), the 93-yearold music school and music outreach provider in New York City, build and grow our presence and mission. The Development Manager is responsible for securing funds from individuals, corporations, foundations, and other sources. Contact Jeff Schlosser, WG’01, jschlosser72@gmail.com.

Volunteer Leadership openings at WCNY! There are over 250 Wharton alumni volunteers working together to provide business, career and social opportunities to over 27,000 Wharton alumni in the New York City metropolitan area. We need more help! We need volunteers to take leadership positions and serve on committees. Please see

Would a Podcast Help Your Organization? To share stories about your products, people, customers, and mission? To reach a new audience, establish expertise, and connect with industry leaders? Podcasts engage, are searchable and time-efficient. Weekly listenership in the U.S has increased from 11% to 21% since 2013. Contact Kent Trabing, WG’01, KT@44thstreetpodcasting.com.

YES, I want to be a Contributing Member of the Wharton Club of New York, giving me benefits including: yy More access to fellow alumni yy Eligibility for leadership positions

yy 1/2 price on most WCNY events yy Special, members-only discounts on

special services, and health insurance

Name

Credit Card Number

Address

Expiration Date

Town/State/Zip Phone Email

Supporting Membership - $95/year Silver Membership - $500/year Gold Membership - $1,000/year Benefactor Membership - $4,000/year – includes membership in the Penn Club

To complete your application online, please visit www.whartonny.com/memsub.html Or please complete and mail to: Wharton Business School Club of New York, 485 Madison Avenue, Suite 747, New York, NY 10173 Questions? Please contact Gabriela Sanchez at: gsanchez@whartonny.com

W H A R TO N A L U M N I C L U B O F N E W YO R K | WINTER 2016

R A D N E L C N Y CA The Leadership Moment: Are We Born Leaders or Do We Become Leaders?

Speaker Series with Wharton Professors Harbir Singh and Michael Useem Tuesday, January 17 at 6:30pm Location: 1220 Fifth Ave. (104 Street), New York City http://www.whartonny.com/article.html?aid=2725

Wharton Club of NY Volunteer Orientation Volunteer Services Wednesday, January 25 at 7:00pm Register to receive location: http://www.whartonny. com/article.html?aid=2706

Business Development Groups!

Business Development Division Different groups meet at least bi-monthly on different weekday nights For details, please visit http://www.whartonny.com/ article.html?aid=2704

The Ivy League of Comedy

Wednesday, February 1, 2017 at 8:00pm Special & Social Events Committee Location: Broadway Comedy Club at 318 W 53rd Street, New York City The Ivy League of Comedy is the premier group of stand-up comedians touring America. For details and entrance fees, please visit http:// www.whartonny.com/article.html?aid=2662

Emotional Agility

Author Speaker Series Tuesday, April 4, 2017 at 6:00pm Dr. David shares her book: EMOTIONAL AGILITY: Get Unstuck, Embrace Change, and Thrive in Work and Life http://www.whartonny.com/article.html?aid=2686

Check website for full details on exceptional upcoming events!

Whartonny.com/events.html