April 2003 Vol. 5 No. 1

http:// mits loan.mit .edu

Periodic statements from the

MIT Sloan School of Management

The Entrepreneurial Spirit of Sloan

Inside the E-Center: Ideas into action

Forbes Entreprenuer of the Year: Jim Foster, SF ’85

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http://mitsloan.mit.edu/roi

Publisher: MIT Sloan Communications

Editor: Michelle M. Choate, Codirector of Communication

Contributors: Linda Jenkins, Riverside Communications;

Phil Primack; Michael Perrone

Photographer: Mark Ostow

Printing: Quebecor World Eusey Press

MIT Sloan ROI, your Return on Investment in MIT Sloan, is a news

publication for the alumni, faculty, students, staff, corporate partners,

and friends of the MIT Sloan School of Management.

Send address changes and correspondence to MIT Sloan ROI, MIT Sloan

School of Management, Office of Communication, E60-176,

77 Massachusetts Avenue, Cambridge, Massachusetts 02139. Telephone

617-253-7750; fax 617-258-6796; e-mail roi@sloan.mit.edu.

Copyright ©2002 Printed on 100% post-consumer waste paper

roi Periodic statements from the MIT Sloan School of Management

C O N T E N T S

A Message from Dean Schmalensee

The Spirit of MIT Sloan

The MIT Entrepreneurship Center

Where management science, engineering,

and technology intersect

The Year of the Mouse

Sloan Fellow Jim Foster named

Entrepreneur of the Year

Briefs

Faculty lauded, Tech Treks, Reunion update

Disclosure

Quotable profs, January Tech Treks,

curriculum redesign

Research

Faculty research in the news

Philanthropy

Inventing the future at MIT Sloan

O N T H E C O V E R :

The Global E-Lab team presents their final report to

Professor Simon Johnson (second from right). The

team’s internship at NTT DoCoMo was organized by

Ken Morse and Koyi Sasaki under the sponsorship of

DoCoMo’s CEO Keiji Tachikawa, SF ’79.

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S L O A N ’ S M I S S I O N

The mission of the MIT Sloan School of Management is to

develop principled, innovative leaders who improve the world and

to generate ideas that advance management practice.

T O A C C O M P L I S H T H I S , W E

> Offer premier programs for shaping leaders who will create,

redefine, and build cutting-edge products, services, markets,

and organizations;

> Col laborate across MIT to capital ize on and contr ibute

to the Institute’s distinctive intel lectual excellence and

entrepreneurial culture;

> Attract, develop, and retain outstanding faculty and staff who lead

the world in management education and research;

> Enroll students with integrity, strong leadership potential, high

aspirations, and exceptional intellectual ability; and

> Foster a cooperative and adventurous learning community that

includes alumni and business partners, works on important

problems, and is based on mutual respect, rigorous analysis, and

high ethical standards.

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> T H E S P I R I T O F M I T S L O A N

A M E S S A G E F R O M D E A N S C H M A L E N S E E

As you will see from the masthead on the page opposite this

letter, MIT Sloan has a new mission statement. With the active

involvement of the Sloan community, we have created what

we believe is a mission that better expresses our identity and

our aspirations: to develop principled, innovative leaders who

improve the world and to generate ideas that advance

management practice.

Throughout this process, it has been reaffirmed — once

again — how strong this community is and how much talent it

contains. With this kind of foundation, I have no doubt that

our aspirations will soon become accomplishments.

As we head into this new year, armed with our new

mission, we cannot help but reflect back with pride on the

wonderful 50th Anniversary celebration of 2002. The

unprecedented gathering of faculty and alumni to exchange

ideas is a source of great pride for all involved. But far from

basking in the glow on this monumental occasion, we are

spurred on by the spirit of the past to keep creating the future

of Sloan.

Critical to that future are several initiatives. A redesigned

MBA curriculum will focus more sharply on developing

leaders who can drive successful innovation — as well as

manage day-to-day execution — and other programs are also

being enhanced and aligned with the new mission. The new

Sloan/SHASS complex — a technological marvel featuring

state-of-the-art internal networks, study and team rooms, and

a multimedia library — will help attract and bring together the

brightest faculty and staff in an atmosphere that encourages

collaboration and innovation. This new complex will play a

part in building on our invaluable links to the rest of MIT, a

hot-bed of technology-based innovation and entrepreneurial

activity. It will also permit continuing expansion of Sloan

executive education, which will enhance our direct impact on

the practice of management.

Fostering innovation is — and always has been — a

critical part of Sloan. And nowhere do we see innovation in

action more than at the MIT Entrepreneurship Center. Here is

where the spirit of MIT Sloan really shines, where ideas

become entities, and the people with those ideas learn to

implement them in the real world. In this issue of ROI, we take

a look inside this thriving center, and at the people who make

it tick.

What happens to Sloan’s would-be entrepreneurs once

they graduate? They implement the principles they’ve learned

to drive change and lead their companies in a competitive

global marketplace. And if they’re Jim Foster, SF ’85, they get

named Entrepreneur of the Year by Forbes magazine (see story

page 8). Congratulations, Jim.

In a world increasingly filled with unpredictable political

and economic developments, it is comforting to note that after

50 years, the spirit of Sloan has remained true to the vision of

its founding. The changes we embrace and encourage are

those we believe will make Sloan, and the world its graduates

enter into, a better place.

I encourage you to stay connected to Sloan, via ROI, the

web site, and our Alumni Relations Office. Over the coming

months there will be many other exciting developments to

share, including a redesign of the overall School web site, as

well as updates on the new building complex. This an exciting

time for Sloan, and we want you to share in the excitement.

Sincerely,

Richard Schmalensee

John C Head III Dean

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Where management science, engineering, and technology intersect

“ E I G H T Y P E R C E N T O F A L L C O M P A N I E S

S T A R T E D B Y E N G I N E E R S W I T H O U T A

B U S I N E S S P E R S O N O N T H E T E A M F A I L

— W H I L E 8 0 % O F M I T F I R M S S T A R T E D

W I T H A B U S I N E S S P E R S O N O N T H E

T E A M S U C C E E D . T H A T K E Y D I F F E R E N C E

I S V E R Y S I G N I F I C A N T . ”

T H E M I T E N T R E P R E N E U R S H I P C E N T E R —

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That’s Ken Morse speaking, managing director of the MIT

Entrepreneurship Center, and one of the true believers in the Center’s

mission: to train the men and women who will make high-tech start-up

companies successful. According to Edward Roberts, David Sarnoff

Professor of Management of Technology and chairman of the MIT

Entrepreneurship Center, “The MIT Entrepreneurship Center began to

take off in 1996 when we recruited Ken Morse, a successful serial

entrepreneur, to be the managing director.”

Morse himself has helped to start six companies, including 3Com

Corporation and Aspen Technology, Inc. And it was Morse’s father,

Richard Morse, founder of National Research Company — inventor of

freeze-dried coffee and Minute Maid frozen orange juice — who

brought the first entrepreneurship course (#15-390 New Enterprises) to

MIT in 1961. That foundation course has been taught continuously at

MIT ever since. So entrepreneurship is in his blood.

When Morse and Roberts began to develop a long-term plan for

the E-Center, they had four goals in mind:

> To recruit ten tenure-track faculty

> To recruit 10 entrepreneur practitioners

> To raise a $60 million endowment to support the new

programs, and

> To build a global network of like-minded entrepre-

neurship centers in high-tech hot spots.

They are making steady progress towards those goals. The E-

Center’s staff and faculty now number 29, with senior lecturers plucked

right out of the business world: Noubar Afeyan, PhD ‘87, Senior

Managing Director and CEO of Flagship Ventures; Howard Anderson,

founder of the Yankee Group, Battery Ventures, and YankeeTek

Ventures; William Aulet, cofounder and former President of Cambridge

Decision Dynamics; Shari Loessberg, cofounder of Zeta Networks; and

Ken Zolot, Visiting Entrepreneur and cofounder of Egenera, Inc.

An MBA track since 1996 (New Product and Venture

Development), “entrepreneurship” at MIT has grown from two courses

to twenty, and from serving 250 students a year to 1500, reaching out

Senior faculty involved in the E-Center — such

as Chairman Ed Roberts (above) and Assistant

Director Simon Johnson (below), along with

Rick Locke and David Scharfstein (not shown) —

are critical to the Center's success and its

impact on the business world.

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to MBA students and engineering/science students alike. As an Institute-

wide initiative, the E-Center attracts students from management

science, technology, and engineering.

The new gathering place of choice

Morse stresses that the MIT Entrepreneurship Center is for the whole

MIT community — that it’s not just a Sloan thing. “That’s one of the

reasons we’re in E40,” he says. “To my knowledge, it’s the only MIT

building that has both engineering and Sloan programs housed

together. That’s symbolic of what we’re trying to do with high-tech

entrepreneurship here: It’s the interface between management science,

technology, and engineering.”

The new E-Center offices provide space for the student-run

organizations that are a great source of energy and vitality for the

entrepreneurial spirit at the Institute, including the $50K

Entrepreneurship Competition and the MIT Venture Capital Club which,

among its other activities, hosts the best-known annual venture

capital event on the East Coast each December. There will also be the

new Richard J. Testa Memorial Conference Room (see sidebar), which,

according to Morse, “will very likely become the meeting place of

choice for entrepreneurially minded students from all parts of campus.”

World-class venture capital library

The E-Center will be home to the most complete set of works in the

world about the early days of the venture capital industry. The library

includes the Stan Pratt Venture Capital Library, the Dan Holland, ME

’58, Collection, and the General Georges Doriot Collection, which is on

long-term loan from the French Library and Cultural Center of Boston.

General Georges Doriot, who is known as "the father of the

venture capital industry,” formed American Research & Development

Corp. (ARD) in 1946 at the request of Karl Taylor Compton, then

president of MIT, with MIT and Harvard Business School as investors.

Dan Holland was one of ARD’s first employees, and kept copious notes

and documents from ARD’s early years. ARD made a number of

successful start-up investments, including High Voltage Engineering

and a $70,000 investment in Digital Equipment Corp. The Pratt Library

documents the growth of the venture capital industry since the 1960s,

and analyzes the development of the US venture capital market and its

institutions over the last 25 years. Taken together, these

comprehensive collections are invaluable resources for students of

venture capital.

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E N T R E P R E N E U R S H I P T O D A Y

When asked how being an entrepreneur today

differs from being an entrepreneur 10 or 20

years ago, Morse’s answer was immediate.

“Being an entrepreneur today is the same as it

always was, except for the brief bubble period

in 1999-2000, which we will never see again in

our lifetime.”

He says it takes four basic traits to be a

successful entrepreneur: integrity, passion,

persistence, and commitment to customer

satisfaction. He puts money at the bottom of

the list. “Sure, money is an important measure

of success and it provides the ability to sustain

and grow the enterprise. But, in most successful

companies, making money is seen as a measure

of productivity and not as an end in itself.

Those companies that were founded just

to make money or were born to flip…

mostly flopped.”

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The entrepreneurial challenge

The challenging thing about being an entrepreneur is that you need to

be good at many things. Most academic institutions require that you

be excellent at a few things. But MIT is one of the few universities that

really understands what a true interdisciplinary institution looks like.

To generalize, some schools teach entrepreneurship entirely by

academics; others teach entrepreneurship by practitioners — but MIT

optimizes by using both.

“We have practitioners who are leveraging their vast experience

as entrepreneurs and company builders; they bring their knowledge

and relationships into the classroom, and the students love that,” says

Morse. “Our discipline-based faculty is doing research in the area

which, over the long term, is very complementary. This is, after all, a

research-based institution.”

Exposure to the best & brightest

Students have many opportunities for broad exposure to global

markets at the E-Center and can get first-hand experience through the

Entrepreneurship Lab and Global E-Lab courses. Over the years, more

than 350 start-up companies have offered internships to MIT’s E-Lab

and G-Lab students. For aspiring entrepreneurs, corporate venture

Can entrepreneurship be taught? Yes!

Unlike a few industry pundits, Morse definitely believes that

entrepreneurship can be taught, a vision that goes hand-in-hand with

the MIT Sloan School’s new mission: To develop principled, innovative

leaders who improve the world and to generate ideas that advance

management practice.

“The MIT Entrepreneurship Center supports the Dean’s mission in

the following ways,” explains Morse. “First of all, it takes a spark to

make innovation happen. That spark is usually an entrepreneur.

Secondly, if innovation can be taught, so can entrepreneurship. A vast

number of students come to MIT not imagining themselves as

entrepreneurs, but they leave here knowing that it’s possible. Thirdly,

most of the key donors who are working to make our new campus a

reality are themselves successful entrepreneurs.”

The E-Center encourages researchers and inventors to take their

ideas and technologies way beyond the ivory tower. It puts students in

close proximity to real-world practitioners and faculty who can instruct

them in sales and marketing, teamwork, networking tactics, research,

building credibility, managing intellectual property, and venture

financing. Just as Babe Ruth could learn from his batting coach, so can

budding entrepreneurs be mentored by those who came before.

Each year the E-Center team (l to r: Patricia

Fuligini, Melanie Etchison, Ken Morse, Audrey

Dobek-Bell, and Gracie Alcid) organizes and

supports dozens of events in several countries.

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According to Ken Morse, it takes four basic traits to be

an entrepreneur: integrity, passion, persistence, and

commitment to customer satisfaction.

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officers and regional developers, the E-Center offers an intensive one-

week Entrepreneurship Development Program on campus every January

to help participants develop successful new ventures and increase

entrepreneurial opportunities in their home organizations.

Three of the newest stars at the MIT Entrepreneurship Center

now are M. Diane Burton, assistant professor of Management of

Technology, Innovation, and Entrepreneurship (MTIE), who came from

Harvard Business School; Fiona Murray, also assistant professor of

MTIE, who came from Oxford University; and Antoinette Schoar,

assistant professor of Finance, who came from the University of

Chicago. Morse believes there is no other entrepreneurship center with

as many highly qualified up-and-coming professors.

The E-Center, post-bubble

While the desire, interest, and passion for entrepreneurship has ebbed

at many schools in the wake of the “post dotbomb bubble,” it has

persisted at MIT. One reason is that MIT’s brand of entrepreneurship is

more serious, longer term, and is not as affected by superficial trends.

In Morse’s words, “Very few of our rigorous-thinking engineers and

analytical MBAs were seduced by the siren songs of market dis-

intermediation. It didn’t make sense to them; they were surprisingly

sage during the ‘crazy’ period.”

One interesting note is that there’s a new kind of student at MIT

these days: the survivors of the bubble, who know that it takes more

than a line of bull and a PowerPoint presentation to build a serious

business. According to Morse, many of those who are coming back for

MBAs want to learn how to master technology and use it as a source

of sustainable competitive advantage their next time out.

There’s so much going on at the MIT Entrepreneurship Center

that it’s impossible to keep up with it in print. Visit the web site

(http://entrepreneurship.mit.edu), visit the new space, and get in touch

with the E-Center (ecenter@mit.edu ) if you have ideas or projects or

funding to contribute. The E-Center has created a thriving network of

academic, government, and industry leaders dedicated to expanding

the vision of entrepreneurial success. You’ll want to be a part of it.

T H E L E G A C Y O F R I C H A R D T E S T A

The new MIT Entrepreneurship Center offices

will house the Richard J. Testa Memorial

Conference Room, a tribute to one of the

preeminent professionals in the world of

venture capital. Dick Testa was the consigliere

of the New England venture industry. Venture

capitalists, limited partners, and entrepreneurs

around the world sought his advice, counsel,

and blessing. He and his firm, Testa, Hurwitz &

Thibeault, LLP, set the standards of honor,

relationships, performance, and continuity that

are the hallmarks of the MIT Sloan new venture

creation community. He was the heart and soul

of the famous Route 128 Venture Support

System from the early days of ARD until his

untimely passing in 2002.

Thanks to Testa’s extraordinary efforts,

the three best libraries documenting the early

years of the venture capital industry will be

located at the new site, adjacent to the

conference room. As chairman and cofounder of

Testa, Hurwitz & Thibeault, Testa was a man of

few words and great vision, who altered and

deeply affected the business and personal lives

of many people in the private equity and high-

technology industries. When he started his law

firm in 1973, he stood at the threshold of

the high-tech and venture capital revolution

and never blinked. His status as a true pioneer

in the VC and technology communities is

well deserved.

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According to the Chinese calendar, 2002 was the Year of the Horse.

But for James C. Foster, SF ‘85, it was definitely the Year of the Mouse.

In October, Charles River Laboratories’ Chairman and CEO Foster was

named “Entrepreneur of the Year” by Forbes Magazine. Forbes’ annual

“Best 200 Small Companies” issue ranks the nation’s top 200 publicly

traded companies with annual sales of less than $600 million.

the yearof the mouseS L O A N F E L L O W J I M F O S T E R N A M E D E N T R E P R E N E U R O F T H E Y E A R

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“perfect” for him at that time of his life. Foster, not wanting a

traditional MBA degree, never even flirted with other schools. He knew

what the Sloan Fellows program had to offer and went after it.

Trial by fire

Upon returning to Charles River, life was less than perfect for Foster.

Chalk it up to cultural clashes and new industry uncertainties, but

Foster was put through the wringer by B&L management and had to

prove that he was more than just the “heir apparent” to lead the

division. He came close to leaving once, but decided to learn what he

could from the experience. And that’s what created the impetus to get

the company back.

“It was a struggle,” recalls Foster, “Biotech is still a struggle

20 years later. It was a new industry, and it was very hard to call

the market trends right or to project sales, plus it was one of my

first experiences as a general manager. And the guy running the

show at B&L wanted to see what I was made of. The good news is

that I learned a lot from him about short-term and long-term

strategic planning.”

He also learned a lot about what not to do, in terms of cultural

practices, and about how to treat people. He learned how to step up to

difficult situations when the business wasn’t performing well or the

people weren’t performing well. And he learned how to acknowledge

people’s contributions and maximize productivity by treating people

well and making them a part of the solution.

From 1998 until June 2000, Foster undertook a management-led

buy-out from B&L, and then an IPO. With a program of strategic

acquisitions and technology partnerships, Charles River is building on

its foundation of excellence and innovation in the laboratory animal

industry, offering a wide variety of products and services to help

customers in their drug discovery and development needs.

Today, Charles River is more than a family business — it has a

family feel. According to Foster, hundreds of employees have been with

the firm for nearly 30 years. “That’s the best kind of family business,”

he exclaims. “When it’s no longer a job, it’s a life.”

But why mice? Because for more than 50 years, Charles River

Laboratories has been the global market leader in the commercial

production and supply of animal research models for use in the

discovery, development, and testing of new pharmaceuticals. Foster has

thousands of rats and mice in his facilities in Wilmington, Mass., their

“room and board” paid for by pharmaceutical and biotechnology

companies who are researching genes and drugs. The company operates

77 facilities in 15 countries and maintains more than 130 genetically

and microbiologically defined animal research models around the world.

Charles River was founded in 1947 by Foster’s veterinarian father,

Dr. Henry Foster, to provide rodents to drug companies and academic

labs. Fast breeders, and with genetic make-up that is very similar to

that of humans (a mouse shares 96% of its DNA with humans), these

mammals are invaluable for preclinical research. But the story of

Charles River is not just about innovation in the animal laboratory

industry. It is about how the son of the founder took control of a

family-founded company back from a giant corporation and reshaped it

in his own image.

Stepping out of the world

Foster, who holds a law degree from Boston University, joined the

company in 1976 as General Counsel. In 1984, he worked on the

transaction with his father to sell the then-public company to Bausch &

Lomb (B&L) for $110 million. Father and son went to work for B&L,

father to continue to run the animal production business, and son to

operate the newly established biotech division. It was right before this

that, wanting to strengthen his business background and capabilities,

Foster came to the Sloan Fellows program.

Says Foster, “It was an amazing luxury to sort of step out of the

world and weigh my options: Whether to go back to the company, or

leave the company, or go back in a different role. Sloan absolutely made

that decision crystal clear.”

Foster recalls the Sloan Fellows program as one of the great

experiences of his life. “It’s not just an education; it’s a life-altering

experience,” he says. “You make life-long friends, and you really need

the support system to get through it because it’s very rigorous. It’s a

major bonding experience.” The relationships with faculty and fellow

students, the CEO seminars, and the trips to New York, Washington, DC

and abroad made the program a totally unique experience that he calls

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F O S T E R ’ S F U N D A M E N T A L S

Jim Foster has a lot to say on a lot of meaty topics.

Here’s what he says about three areas that have had a

place in his career — family businesses, entrepren-

eurship, and dealing with difficult business situations.

> Family businesses: My advice is don’t do it.

Businesses and relationships between people in business

are complicated enough. But if you do do it, come in

with some expertise that the company doesn’t have and

know that you’re going to have to work twice as hard as

everybody else and still not necessarily be accepted or

rewarded. It’s definitely paddling upstream. In the end,

life is too short. Do you know what happens when you

go home for family events? You go in the back room

and you talk about business. You don’t talk about, well,

‘How’s life, son? How’s the marriage, how are the kids?

How’s life with you, Dad?’ You miss all that.

> Entrepreneurship: I’m not sure it’s something

that can be taught. I think people either have the spirit

of commitment to be able to see something through or

they don’t. And a lot of people who are natural

entrepreneurs either don’t see the obstacles or don’t pay

attention to them. Most people know whether they’re

that kind of person or not.

> Finding your way out of difficult business

situations: Assume that you will find yourself in a

difficult situation some time, no matter how good

things are going — and prepare for it. You need a

contingency plan, both financially and organizationally.

And I think the most important thing — which is

actually not obvious — is that if you build a culture of

acknowledgement and trust and teamwork, as opposed

to a culture where you beat people up to get results,

when things get tough, people will pull together.

So if you’re one of those people who barks or

takes people for granted or is the type of person who

says, ‘I never have to be nice to you as long as I pay you

well’ — the minute things get tough, people will

abandon you. Guaranteed. So it’s really pretty basic.

And not everyone can do it. To be successful in business

you have to attract and motivate great people and not

say ‘That’s good enough.’ Don’t settle, and you can be

better than 90% of the companies out there. That’s just

a fact. It really isn’t all that difficult.

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Full circle

Along with the quality of the friendships that he made, Foster’s

favorite part of the Sloan Fellows program was the CEO Seminar Series,

where CEOs of major corporations come to class to tell it like it really

is. It was here that he saw up close and personal that there are many

different leadership styles that work, and where he shaped a style that

allowed him to be himself. He calls his experience coming back to

Sloan to lead a CEO Seminar during Thanksgiving week “surreal — a

much better day and night than I ever imagined.”

Sloan taught him that to be successful in running a business you

have to take balanced risks and create an environment in which people

are given incentives to be risk-takers. “You want to be constantly

soliciting people’s input,” he explains. “To say, ‘What do you think?’

‘Why don’t you go out and try that?’ And if it doesn’t work, you have to

be able to say, ‘Thanks for trying.’”

Fostering the entrepreneurial spirit

Under Foster’s leadership, Charles River has developed a uniquely

powerful culture, which is a combination of longevity and

environment, where people are encouraged to take risks, and where

“there’s no such thing as autopilot.” Foster describes his brand of

entrepreneurship in an ongoing business — which he says is different

from creating something from scratch — as being about unwavering

commitment to the vision and the venture, to “working your tail off to

make it happen and to try never to compromise in terms of quality.”

“Everything is about people,” Foster says. “You hire the best

people you possibly can and you provide an environment that’s

stimulating and challenging and you listen to their career goals and

you try to match their aspirations with opportunities in the company.

Then you get happy campers.”

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Jim Foster, SF ’85, at the helm of Charles River

Laboratories, which was founded by his father, Dr.

Henry Foster, in 1947.

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B R I E F S

Faculty Honors

Roberto Fernandez was honored with the annual Distinguished

Article Award by Cornell University’s Center for the Study of

Inequality. The selection committee unanimously approved his

paper, “Skill-Biased Technological Change and Wage

Inequality: Evidence from a Plant Retooling.” Kristin Forbes

was named by the World Economic Forum as one of the 100

young leaders to participate in the Global Leaders for

Tomorrow (GLT) Programme 2003. The GLTs are invited to

participate for three consecutive years in a special GLT

program at the Annual Meeting of the World Economic Forum

and for five years in the yearly GLT Summit and regional

activities of the World Economic Forum. Ed Schein received

the Marion Gislason Award for Leadership in Executive

Development from the Boston University School of

Management Executive Development Roundtable. Arnold

Barnett was awarded the President’s Citation from the Flight

Safety Foundation. He is the first active academic ever to

receive this award.

Fanning the globe

MBAs fanned out around the world on their annual treks to

investigate job opportunities in various sectors. Treks this year

took students to California, Asia, and the largest one right here

in Greater Boston. These treks continue to be a valuable way

for students to not only assess the industry and economic

climate of various areas, but also to network with local alums.

Mission control

Through a process involving much community feedback and

involvement, MIT Sloan has produced a new mission

statement. The new statement better expresses the School’s

identity and aspirations. It focuses attention towards

innovation, leadership, collaboration, globalization, integrity,

and academic excellence. The new mission statement can

be found printed in full on the inside front cover of

this publication.

> F A C U L T Y L A U D E D , T E C H T R E K S , R E U N I O N U P D A T E

! R E U N I O N 2 0 0 3

save the dateAre you in one of theses classes:

1953, 1958, 1963, 1968, 1973, 1978, 1983,

1988, 1993, 1998 and 2002?

If so, it’s your Reunion year!

M I T S L O A N R E U N I O N W E E K E N D

J U N E 6 - 8 , 2 0 0 3

We have lots of great things planned for Reunion

2003! The Reunion Class committees have been

working hard planning class events and raising

class gifts.

Activities will include:

> Career Workshop: When the Going gets Tough…

> Playing the Back Nine: Positioning Ourselves

for Fulfillment in Our Later Years

> Reunion Consumption Function

> Networking Breakfast

> Back to the Classroom, “Innovation at Sloan:

What’s New, What’s Next — Now What?”

> Dean’s Luncheon

> Class Dinners

> Sloan Family BBQ

Find all the Reunion details and register online at

http://mitsloan/mit.edu/alum/reunion2003/.

See you in June!

13

D I S C L O S U R E

> Q U O T A B L E P R O F S , J A N U A R Y T E C H T R E K S , C U R R I C U L U M R E D E S I G N

Tech Treks

Much publicity was generated by the MIT Sloan Tech Treks.

The media wanted to know what students were finding at

companies as an indicator of whether an economic recovery is

imminent. Results depended on where the students were. In

Silicon Valley, there were many interviews on television,

radio, and in print. Students were interviewed on CNET radio,

KCBS-AM, and KGO-AM. San Francisco's KRON-TV, KTSF

News and San Jose station KICU followed groups on their

visits to high-tech firms throughout Northern California.

KFTY-TV, a station north of the city, covered the Sloan visit

to wine country.

Students shine

A story titled “If they can’t get jobs, there’s summer stock”

appeared in the New York Times. The story glimpses at a new,

theatrical approach to learning the human side of

management being explored at MIT Sloan. MBAs in the

Global E-Lab class visited Nepal in January along with MIT

water project organizers. Their story was covered in the

Boston Globe.

Curriculum redesign

The Financial Times recently did a story regarding MIT

Sloan’s current curriculum redesign. In the story, Dean

Richard Schmalensee and Deputy Dean Gabriel Bitran

discussed the School’s renewed emphasis on not just

leadership, but producing leaders with a social conscience.

Faculty, student, and alumni participation have all played a

key role in developing a curriculum that balances both

classroom and experiential learning.

Profs proffer

Franco Modigliani was quoted in the Boston Globe regarding

President Bush’s proposed tax plan. Dean Schmalensee talked

about the economy and business ethics on CBS Marketwatch.

The Wall Street Journal recently noted Joseph Doyle's work on

health insurance. Erik Brynjolfsson discussed IT funding in a

Computer World article titled “Why ROI is Important,” and

Amar Gupta's work on electronic check processing appeared in

the Washington Post.

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14

Using data collected in Wisconsin, Doyle controlled for

age, accident severity and other factors, including seat belt

use. “Comparisons to patients who do not have automobile

insurance [but do have health insurance] and those receiving

Medicaid suggest that health insurance status is driving the

results, not underlying differences in income, attitudes toward

risk, or health status,” according to the study.

While doctors and other providers generally insist that

insurance status has no bearing on the quality or quantity of

care delivered, Doyle’s study indicates otherwise. “In fact, it

appears that one of the first pieces of information discovered

[about people coming into emergency rooms] is insurance

status,” he said.

Doyle, a labor economist who studies health and child

welfare issues, said his research has major implications for

health care policy. “Because car crashes are the leading cause

of death for people under 35, these issues are exactly the kind

of thing we should be thinking about.”

With this week’s government report that health care

costs rose by nearly nine percent from 2000 to 2001, Doyle’s

research is also significant to health care providers. If

automobile accident victims at least carried catastrophic

coverage – which costs about $300 a year in Wisconsin,

according to Doyle – emergency rooms would receive at least

some reimbursement for treating car accident victims and

might thus be more likely to provide more of the advanced

care given to people with full insurance coverage.

“If people knew that the emergency room safety net is

really not there as much as they think it is, they might go for

at least catastrophic insurance,” said Doyle.

Health insurance status has significant effect

on treatment decisions and patient outcome

Professor Joseph J. Doyle, Jr.

Automobile accident victims who lack health insurance receive

20 percent less treatment in hospitals and are 37 percent more

likely to die of their injuries than victims with health coverage,

according to new research by MIT Sloan Professor Joseph J.

Doyle, Jr.

“Insurance status has a significant effect on treatment

decisions and ultimately patient outcomes,” concluded the

study by Doyle, who based his findings on a unique data set

that links police accident reports with hospital records.

“A lot of studies show that the uninsured get less care,

but that may be because they are less likely to go to doctors in

the first place or because of other factors,” Doyle said. “For my

study, I picked a case — car accidents —where people have no

choice about seeking medical care. Beyond the amount of care

received, we also looked at health outcomes and found higher

mortality for the uninsured. Emergency rooms are not as much

of a safety net as people think. The uninsured still get a lot of

care, but are less likely to receive the expensive critical

treatments that can save lives.”

R E S E A R C H

> F A C U L T Y R E S E A R C H N E W S F E A T U R E S

15

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identification with a particular character often prevents

typecast actors from being considered for other roles.”

While some actors have been able to break out of initial

character identities — Robin Williams and Jim Carrey, for

example — others, such as Sylvester Stallone, have proved far

less able to expand beyond their original character molds.

And if stars with such big names and box office revenues find

it hard to break the type cast, the burden is even greater on

entry-level actors. Indeed, Zuckerman found that fewer than

one third of the actors who actually get a film credit for a role

will find any further film work over the next three years.

Zuckerman said his research carries labor market

implications beyond Hollywood and the film industry.

“There’s a tendency in the media and among academics to

look at what’s called the boundaryless career replacing the old

image of the organization man moving up the hierarchy,” he

said. “And it’s true that there can be greater opportunity for

the individual to craft something unique and get more variety

in their careers by moving from engagement to engagement.

But what is underemphasized is that hiring tends to be very

category — and skill-specific.” And job applicants unable to

demonstrate that they have the skills to fill such categories

can have a hard time.

Ironically, Zuckerman said, young workers and others

may have a greater chance to take on new jobs and functions

within a particular organization than within the labor market

at large. That’s because an individual employer may be more

willing to take a chance on a worker who has already proven

her ability to do a job well than on an unknown. In other

words, the bit part can lead to a better part within an

organization. “A great example of this is GE’s practice of

moving managers across industries — something that is very

hard to do on the outside,” he said.

“People have a preconception that the overall market

provides greater opportunities (for workers) than

organizations. Our paper suggests that this isn’t necessarily

the case,” said Zuckerman.

Typecasting limits career growth,

but can also bring benefits

Professor Ezra Zuckerman

Employees may believe that moving from job to job helps

prevent placement in narrow career pigeon holes, but an MIT

Sloan School professor’s study of the film industry — where

the word “typecasting” was born — finds that the practice can

actually offer real advantages. Niche players, it turned out,

often do better than generalists in the labor market.

“If you read People magazine or Entertainment Weekly,

typecasting is presented in a generally pejorative way,” said

Professor Ezra Zuckerman, who teaches strategic management

at Sloan. “It’s seen as a barrier to the full expression of an

actor’s skills. But in reality, typecasting is a boon for the vast

majority of those who make a go of it in Hollywood.”

The overwhelming majority of acting aspirants never get

their names on the big screen in any kind of role, Zuckerman

said. But of those who do, being cast in a certain type or

role helps them to maintain their precarious foothold in

the industry.

“Typecasting provides a route into the industry by

conferring the minimum level of recognition necessary to

continue to obtain work, even if this recognition involves the

adoption of a generic identity,” the study said. “The

advantages of typecasting consist largely in the foothold that

it provides to aspiring actors by giving them a viable, if

generic, identity to assume. The main drawback is that the

> F A C U L T Y R E S E A R C H N E W S F E A T U R E S

16

As the academic year draws to a close, it is a pleasure to thank

MIT Sloan School of Management alumni, whose dedicated

interest and support through the Annual Fund help the School

achieve its mission. Because tuition revenues cover only about

50% of the cost of a Sloan education, your support plays a

critical part in helping MIT Sloan address its most pressing

needs. Unrestricted gifts through the Annual Fund support

our core academic goals and seed new initiatives that help to

keep us at the leading edge of graduate management

education and research.

At its core, innovation always has been central to the MIT

Sloan mission. Sloan alumni go out into the world equipped

with a passion for ideas and problem solving and an ability to

drive change that makes them standouts in the global

marketplace. The cutting-edge research and teachings of Sloan

faculty are the building blocks of tomorrow’s management

theory and practice, and give our students a distinct advantage

over their competition.

Make a difference

Thank you for considering a contribution to the MIT Sloan

Annual Fund. Your support helps us attract the best students

and faculty to sustain our diverse community and to redesign

our core academic programs. And, beyond that, it helps us to

fulfill our mission of developing principled, innovative leaders

who will help improve the world.

> For more information about the Sloan Annual Fund, contact

Lillian Paratore at 617-258-5656 or paratore@mit.edu.

> For more information about Reunion Class Gifts, contact Brenda

Cross at 617-253-2556 or bennab@mit.edu.

> For more information about Special Gifts, Campaign Gifts, or

Corporate Giving, contact Margaret Keller at 617-253-3989 or

mskeller@mit.edu.

> For more information about how to get involved with our alumni

activities and programs, visit the Sloan alumni web site at

http://mitsloan.mit.edu/alum/index.html.

P H I L A N T H R O P Y

> I N V E N T I N G T H E F U T U R E A T M I T S L O A N

I N N O V A T I O N

Teamwork & Diversity

“Sloan’s emphasis on teamwork helps me focus

on the important things, like problem solving.

And the exposure I got to students from a variety

of cultures is invaluable to me now in my global

role. One of the biggest innovations is Sloan’s

willingness to be upfront and open about things.

That translates well into day-to-day management

situations, where we can focus on the problems

and not on the personalities. It’s teamwork at the

very highest level and it helps me promote the

right working environment, a real ‘win-win’ for a

multinational company like Bacardi.”

Joaquin Bacardi, MBA ’98

Director, Global Marketing, Bacardi-Martini, Inc.

I N N O V A T I O N

Accessibility & Community

“Fostering an environment of innovation is, in

itself, innovative, and Sloan does this better than

most. Access to professors is amazing; they’re

more than willing to answer questions and work

jointly on projects with students. In fact, many of

the innovations and ideas at Sloan are student-

driven and institution-wide. The MIT Sloan

community is full of brilliant and creative

individuals. The Sloanies I meet are smart, good

people. It’s an honor to be part of this institution

and I’m always very proud when I get a chance

to say it.”

Kirsten Knipp

SM ’03 MBA

I N N O V A T I O N

Creativity & Leadership

“Sloan encourages innovation, and the new

Leadership Program is proof of that. We’ve been

teaching leadership for decades, but now we have

a full program of workshops, a speaker series, an

executive in residence program, and much more.

And Annual Fund dollars have contributed

directly to its development. The students get to

be creative in ways they might never have

imagined at a business school. It’s exciting,

it’s creative, it’s countercultural, and it’s

all individually focused. You can’t get this any

place else.”

Deborah G. Ancona

MIT Sloan Seley Distinguished

Professor of Management

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