|Business and Finance|
|By The Editors|
Steven Rattner ’74
Stephen Robert ’62
Investment banking brings with it the possibility of high returns and the risk of career-ending losses. Two alumni with remarkable careers in this field are Steven Rattner and Stephen Robert, who have both exerted considerable influence in New York City’s brutal financial community.
Rattner switched to investment banking in 1982 after nearly a decade as a New York Times reporter, a move that raised eyebrows among his Times colleagues. Nevertheless, he logged twelve-hour days as a mergers-and-acquisitions specialist at Lehman Brothers and two years later joined Morgan Stanley. In 1989 Rattner moved to Lazard Frères, where he was involved in multibillion-dollar deals involving some of the largest corporations in the world. Within a few years of his arrival at Lazard, Vanity Fair had called Rattner “the most talked-about investment banker of his generation.” In 1997 he was named Lazard’s vice chairman. Earlier this year he left the firm to start a new company.
After graduating from Brown, Stephen Robert did postgraduate work at the London School of Economics, then joined the investment firm of Faulkner, Dawkins & Sullivan. In 1968, he joined the Oppenheimer Fund and became a partner two years later. By 1977 he was directing all research at Oppenheimer and in 1979 was named president. Four years later Robert was promoted to chairman of the board and co-CEO.
As Brown’s chancellor since 1998, Robert has also been influential in higher education. He launched a campus initiative to study moral and ethical values, and guided Brown through the sudden resignation of President E. Gordon Gee, prompting a national debate on the ethics of recruiting college presidents.Russ Pillar ’87
The internet industry seems a little young for a turnaround specialist, but that’s what Russ Pillar is quickly becoming. He was largely credited with saving the on-line service Prodigy before he was hired by CBS in January to run the media giant’s new Internet division, which includes stakes in the popular sites MarketWatch.com and HealthWatch.com.
By Internet standards Pillar is a grizzled veteran. After little more than a year at Prodigy he transformed the company from a failing content-provider to PC Magazine’s Internet service provider of choice. In 1998 Pillar became president and CEO of Virgin Entertainment Group, managing its North American interests, particularly in e-commerce.
Pillar’s challenge is now to bring to the Internet savvy he displayed at Prodigy and Virgin to CBS, which is hampered by the reputation of appealing to older viewers. He has one important advantage: despite serving as CEO of three major companies, he is still only thirty-four.Ted Turner ’60
Wealthy, reckless, voluble, shrewd, funny, flamboyant, altruistic—take your pick when it comes to Robert Edward Turner III. He matriculated at Brown, never graduated, but still qualifies as an alumnus. He beat Australia for the America’s Cup sailing trophy in 1977. He bought an Atlanta TV station in 1975 and beamed its signal around the country via satellite, creating the first cable superstation; he repeated the feat in 1980 to launch CNN. He bought the Atlanta Braves and the Atlanta Hawks. He pledged $1 billion to the United Nations and hopes to leave another billion to the Turner Foundation, which funds environmental and population-control causes.
When Turner sold his company to Time Warner in 1996, he made $2.2 billion. When America Online bought Time Warner earlier this year in a $143 billion transaction, Turner immediately became the new corporate behemoth’s largest individual stockholder. Forbes has estimated his wealth in the $7 billion range.
Yet for all his money Turner seems to want to own the world less than he wants to change it. When he made his 1997 promise to give the United Nations $1 billion, he urged other wealthy people to be more generous. According to Turner, when Microsoft founder Bill Gates began giving away his billions, he wrote to him and said, “Ted, you helped call this to my attention.”
“It’s not an obligation,” he told a reporter from the Atlanta Journal-Constitution last year. “It’s your money; if you want to make a big pile of it and burn it, you can do it. But what I’m talking about is making an investment in the future of humanity, and how much joy it gives you.”Marvin Bower ’25
Marvin Bower has never really considered himself a businessman, but what he thinks and does has had a profound influence on businesses all over the world. By the end of the twentieth century, it was commonplace for a business or nonprofit organization to call in a management consultant to help it figure out a way of doing things better. In fact, it’s become difficult to imagine a time before management consultants—but someone had to invent them. That someone is Marvin Bower.
After graduating from Brown, Bower wasn’t quite sure what to do. On the advice of his father, he went to Harvard Law School, then returned to Cleveland, his home town, where he failed to land a job at the corporate law firm Jones Day Reavis & Pogue. Bower traveled back to Cambridge and enrolled at Harvard Business School, where he hit his academic stride. After graduation he went back to Cleveland and got the job at Jones.
Among the things he worked on were corporate reorganizations. Bower had a seemingly simple idea: use the disinterested approach of a law firm to address the real-world management problems of corporations. “I felt,” he recalled later, “that business needed independent advice on managing, delivered by professional people with the standards of a law firm.” In 1933 he joined a young company begun by James O. McKinsey. After McKinsey died suddenly four years later, Bower got his chance. Under his direction McKinsey & Company has literally set the standards for the management consulting profession. By 1959 the company had opened its first overseas office, and today McKinsey has seventy-five offices in thirty-eight countries.Walter Hoving ’20
New York Magazine once referred to Walter Hoving as New York City’s “unofficial commissioner of good taste,” a fitting title for the man who headed Tiffany & Company for twenty-five years. One anecdote widely recounted about Hoving had President Kennedy ordering thirty-two Luci
te gifts for aides who had helped him during the Cuban missile crisis. “We don’t,” Hoving is reported to have replied, “sell plastic.” The order was switched to silver.
A few years after leaving Brown, Hoving joined R.H. Macy & Company, where he soon became a vice president. In 1932 he was hired as vice president for sales at Montgomery Ward and four years later became chairman and CEO of Associated Dry Goods Corporation, which owned Lord & Taylor. In 1946 he founded the Hoving Corporation, whose holdings included Bonwit Teller.
Hoving bought the controlling stake in Tiffany’s in 1955 and was its chief executive until 1980, bringing sales from $7 million to $100 million over that time. He also had firm rules about taste and civility, including no diamond rings for men, nothing silver-plated, and no charge accounts for customers who were rude to salespeople. Boxes, he ordered, were to be wrapped in special blue Tiffany paper and white bows without the use of such vulgarities as cellophane tape or knots. He was a designer’s dream: “Design what you think is beautiful,” he instructed them, “and don’t worry about selling it. That’s our job.”Thomas J. Watson Jr. ’37
Fortune Magazine once called Thomas J. Watson Jr. the greatest capitalist who ever lived. You couldn’t have predicted this from his years at Brown, which, he once said, were mostly spent “flying airplanes and fooling around.” After five years in the U.S. Army Air Corps during World War II, he joined his father’s business, International Business Machines Corporation, which made punch-card tabulating machines. He worked his way up from junior salesman to vice president, executive vice president, and president, then pushed IBM to enter an exciting but very young new business: computers.
The result, of course, was one of the greatest business stories in American history. After Watson became IBM’s chairman in 1956, the company prevailed over such competitors as RCA and General Electric and dominated the industry—dominated it so well, in fact, that the federal government filed a landmark antitrust suit against it in 1962, a suit that Watson himself later admitted had some merit. (It was eventually dismissed, but not until 1982.) IBM under Watson was an aggressive, research-intensive company led by a natural salesman. When he introduced a new IBM computer in 1961, for example, he acknowledged that it had only 70 percent of the computing power the company had promised. As a result, he said, he was cutting its price by 30 percent. Watson retired in 1971. In the nearly twenty years since he’d become IBM’s president, its stock value had risen by an astonishing $36 billion.
Always outspoken on issues of public policy, Watson turned his attention to foreign affairs. He became a fierce opponent of nuclear weapons, and in 1979 President Carter appointed him ambassador to the Soviet Union, a post he held for two years. His passion for foreign policy also resulted in a new emphasis on the subject at Brown: he saw to it that the University established an institute for international affairs, now known informally as the Watson Institute. Watson died in 1993 at the age of seventy-nine.
“He was a man of laughter,” remembered President Vartan Gregorian after Watson’s death. “Tom was an idealist, yet steeped in reality, a visionary who was master of all the details to make his vision a reality. He was an unyielding and relentless competitor, a pragmatist who disliked ideological dogmatists and exhibitionists on the left as well as on the right of the political spectrum. He was devoted to his friends and valued integrity, loyalty, and competence. A man of privilege, he considered service to one’s community, one’s nation, one’s country a social and moral obligation.”George M.C. Fisher ’66 Ph.D.
Perhaps only in this high-technology age could a Ph.D. student in applied math eventually become head of a corporate giant like Eastman Kodak, but that is exactly what George Fisher has done. Fisher, whose seven years as Kodak’s chairman end in December, built upon his technical expertise to become one of the twentieth century’s most successful chief executives.
After Brown, Fisher worked at Bell Labs for a decade in research and
development, experience that served him well when he was hired by Motorola in 1976. Twelve years later he became that company’s CEO and two years after that took on the additional title of chairman. Fisher’s leadership at Motorola firmly established his reputation as one of the country’s best technology managers, lauded for taking a moderately successful consumer-products company and turning it into a global giant in cellular phones, pagers, and computer chips.
After turning down an offer to become IBM’s chairman and chief executive, Fisher in 1993 agreed to become Kodak’s chairman and CEO, thereby taking on what would prove to be the greatest challenge of his career. Kodak, the company that invented flexible film and the box camera, had grown bloated in a traditional business that was beginning to face intense competition from Japanese companies and a future that would probably see chemical film replaced by digital images. Over the next seven years Fisher cut 20,000 jobs, sold off unprofitable businesses to pay down Kodak’s debt, cut film prices, and tried to position the company as a leader in digital cameras and images. “He cleaned up a mess of monumental proportions,” one analyst told the New York Times last year.
Although Wall Street has been lukewarm to Fisher’s Kodak, he has in fact improved the company’s profitability and leaves it in much better shape than he found it. When he announced his hand-picked successor last year, Fisher summed up his achievements at Kodak: “I have always said my job was to help the company through the transition to the digital world and to put together a management team that could run this place without me better than with me—and I’ve done both.”John Sculley ’61
It’s not easy being a business guru. Ask John Sculley, the former Apple Computer chief executive and Pepsi marketing whiz. Sculley has been a player in some of the biggest corporate dramas of the late twentieth century, enjoying a run that has had more ups and downs than the Nasdaq Composite.
After studying architecture at RISD and art at Brown, Sculley earned
an M.B.A. from the Wharton School and went into marketing. He first became known as a genius of selling in the early 1970s, after his Pepsi Generation and Pepsi Challenge ad campaigns helped the perennial number two in the cola wars make a run on number-one Coca-Cola. Sculley said later that he’d found “marketing managers make all the neat decisions—they, not designers at the drafting boards, called all the shots.”
Sculley left Pepsi for upstart Apple in 1983, when technology wizard Steve Jobs hired him to help reorganize the two-year-old company. Sculley made waves by forcing Jobs from Apple and becoming the company’s CEO for roughly a decade.
If Jobs, along with Steve Wozniak, was the genius behind the Macintosh concept, Sculley was the one who knew how to manufacture and sell it despite the overwhelming market presence of IBM. Things soured in 1993, when Sculley left Apple, which was trying to recover from some uncharacteristic missteps, especially its emphasis on Newton, an early hand-held computer that was hampered by disappointing sales.
After briefly running Spectrum Information Technologies, a wireless-technology company, Sculley withdrew from the business headlines to begin a venture-capital firm with his two brothers. The firm, which is now five years old, works with small, specialized high-tech start-ups such as Veon, which provides interactive media services.Willard C. Butcher ’48
Banking has changed radically over the past fifty years, and few people have witnessed more of those changes than Willard Butcher, the retired chairman of the Chase Manhattan Corporation.
After graduating from Brown, Butcher spent forty-three years at Chase, ten of the
m as its chief executive. As a young credit officer ably handling loans for a number of large commercial clients, Butcher came to the attention of David Rockefeller, a banker-statesman of legendary stature who was then Chase’s chairman. Butcher was eventually chosen by Rockefeller to head the international department, one of the bank’s most exciting and prestigious units. In 1972 Rockefeller promoted Butcher to president. It was a difficult time for Chase. The bank was facing a period of declining earnings and aggressive competition. Under Butcher’s leadership, however, earnings returned to healthy levels and Chase surpassed its archrival, Citicorp.
“Bill Butcher took an organization that was flat on its back,” one analyst noted several years ago, “and brought it back to respectability, more than respectability.”John D. Rockefeller Jr. 1897
He may have been heir to the world’s largest fortune, but John D. Rockefeller Jr. was an intensely shy young man—so shy that he decided to spurn his 1893 acceptance letter from Yale because he thought he would be “lost in the crowd” on the New Haven campus.
It was a decision that worked to the benefit of young Roc
kefeller, Brown, and arguably the world, as the son of the billionaire Standard Oil baron grew into his very public role as the leading philanthropist of the twentieth century. Rockefeller would later credit his years in Providence with helping him emerge from his shell. He ultimately was elected president of the junior class and also served as senior manager of the Brown football team.
By 1901, when Rockefeller was working with his father, the senior Rockefeller was largely out of the oil business and had moved full-time into philanthropic work, a mission for which the son was well suited. In 1920 John D. Rockefeller Jr. served as chairman of a special Manhattan grand jury that investigated white-slave trafficking, an experience that sharpened his interest in aiding the poor and fighting diseases of poverty. He once said that wealth should be “an instrumentality of constructive social living,” and he spent much of his life proving the point.
In all, Rockefeller gave an estimated $537 million to charity, an amount equivalent to billions today. He built New York’s Rockefeller Center, donated the land for the United Nations complex, and during World War II helped establish the United Service Organizations (USO), the social-service agency for members of the armed forces and their families. It was during the war that he uttered his credo “I Believe”—words familiar to Brown students entering the campus library that bears his name.Barry Sternlicht ’82
At forty years old barry Sternlicht is the world’s most ambitious and powerful hotelier. Which should come as no surprise: this former real-estate boy wonder has always been at least a few years ahead of his time.
Sternlicht was still in his twenties when he was engineering billion-dollar real estate investments with perfect timing to profit from the late 1980s–early 1990s bear market in urban hotels and commercial properties. Four years ago, at the age of thirty-six, he pulled off his brashest move ever when his Starwood Lodging company bought out the giant ITT Corporation hotel-and-casino empire, beating out a rival bid from industry giant Hilton.
“I’m war-tested,” the young entrepreneur told an interviewer in 1997. “I may not be that old, but I’ve seen a lot in the last fifteen years. I’ve done over 180 transactions, and only two of them were bad investments.” One of those, however, nearly ended his career. Sternlicht was just twenty-nine when a $425 million investment in the London real estate market collapsed, leaving his partners empty-handed and Sternlicht out of a job. But within months he had jump-started his career by convincing two wealthy New York City families, the Ziffs and the Burdens, to invest millions in what proved to be a highly successful venture in depressed apartment buildings.
Sternlicht, the son of a Greenwich, Connecticut, manufacturing executive, has always known how to apply what he learned in school. After Brown and graduate studies at Harvard he helped his then-partners engineer a huge real-estate deal with the Walt Disney Corporation—a company he’d just studied while earning his M.B.A.
Industry watchers wonder how Sternlicht will handle the transition from dealmaker to manager of a massive hotel firm. His company owns more than 700 properties in 60 countries, including the Sheraton and Westin chains. He has had to battle slumping stock prices, management defections, and carping that he’s too distracted with outside ventures, including a $1.3 billion personal investment in up-and-down Internet stock Priceline.com. Still, Sternlicht has proved that betting against him means betting against the odds. His career so far is best summed up by Starwood’s ticker symbol on the New York Stock Exchange: HOT.